The Ramsey Show - Don’t Believe the Lie That You Need Credit To Survive!

Episode Date: October 21, 2024

📱Watch the full episode for free in the Ramsey Network app. George Kamel & Jade Warshaw answer your questions and discuss: "How do I start over at age 40?" "My truck is taking over my budget," "Is it necessary to have a credit score?" "My girlfriend is giving me an ultimatum based on who I vote for..." "How do I financially prepare for a divorce?" Support Our Sponsors: 🌱 Get 10% off your first month of BetterHelp 🏥 Learn more about Christian Healthcare Ministries 🏡 Get started today with Churchill Mortgage 🏦 Go to FAIRWINDS Credit Union for an exclusive account bundle! 🥗 Save 15% on your first Field of Greens order with code RAMSEY 💤 Visit Helix Sleep for special offers! 💻 Visit NetSuite today to learn more 🗂️ Use promo code RAMSEY for18% off at The Nokbox 🏛Get started with YRefy or call 844-2-RAMSEY 🔐 Visit Zander Insurance for your free instant quote today! Next Steps 📞 Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET or click here! 📈 Are you on track with the Baby Steps? Get a Free Personalized Plan 💵 Start your free budget today. Download the EveryDollar app! 🎟️ See Dave and John LIVE in a city near you! ☂️ Protect yourself with the right coverage—take our coverage quiz! ✅ Free tools and resources to find the right insurance for you Listen to more from Ramsey Network 🎙️ The Ramsey Show   🧠 The Dr. John Delony Show 🍸 Smart Money Happy Hour 💡 The Rachel Cruze Show 💸 The Ramsey Show Highlights 💰 George Kamel 💼 The Ken Coleman Show 📈 EntreLeadership Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

From Ramsey Network, this is The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, joined by Jade Warshaugh, and we're taking your calls at 888-825-5225. You can't tweet it, you can't exit, you can't DM it, you gotta call if you want to be on the show. That's how it works. 888-825-5225. I just had to put it out there, Jade. Well, there is the Ramsey Network Question of the Day. That's true. That's the only other way to get your question answered on the show. We appreciate all of you listening and calling in.

Matthew kicks us off in Vancouver. What's going on Matthew? Hey guys. Basically just trying to get some motivation or figure out if or how I can start over at 40. Oh, what does starting over mean? Creating a life again, getting a house, getting some savings. I mean, starting over sounds like there was a rock bottom.

Like life happened to you. Was there a divorce? Did you lose everything? What happened? Yeah, basically all the above lost my business due to COVID. Oh no. basically all the above lost my business due to COVID. Oh no. Which left me with significant debts that also a divorce around the same time.

So the ex-wife sold the house and took the proceeds. Still trying to recover all that. So basically 40 years old now. So you lost your business, you lost your marriage, you lost the house, and now you're going, where do I go from here at 40 years old? Exactly, yeah. The last three years, I think, I've just been surviving or trying to survive.

Every check sort of goes out the window. What have you been doing for work? I'm an electrician by trade. Okay. And is that this type of business you had during COVID? That's right. Yeah. Okay. And so it sounds like you're starting to rebuild that or are you working for someone else now? No, I've been working for somebody else for the last few years. Okay. Is that the way you want it or do you want to rebuild the business? I'd like to have my business again. I don't know how anything is possible at this point with no credit and I'm currently whatever debt that I had. Well you don't need credit to start a business. True, that's true. And we're not taking out any loans to do this business so you don't have to

worry about any of that. So let's walk through some of the numbers here. Cause I think when we are deep in the throws of grief and loss and feelings and emotions, sometimes the facts just help us go, okay, it's not as bad as we think. And you're 40, you're not 70. And so you've got a lot of time to build a whole new life and create a new chapter for Matthew.

And I'm excited about that. So tell us some of the numbers. Well, I make about 80 to 90 a year. Not bad. That's pretty great. Okay. How much debt? Debt? I had $116,000 from the business and some personal debt that was wrapped up now in a consumer proposal. So I have to pay back, I think, $27,000 now. On top of the $116,000? No, it's like a debt. Consolidation?

Yeah. So the creditors agree on lower amounts. So it was all agreed to about $27,000 in total that I actually have to pay back. Okay. So the $116 all agreed to about $27,000 in total that I actually have to pay back. Okay. So the $116,000, the $27,000, anything else? Not that I'm aware of, no. And where are you living? In Canada. By the way, are you renting a house right now or an apartment? Oh, yeah, renting.

Okay. Now, when you said business debt, is that on credit cards or is it on a personal loan? They they were suppliers For my company and they called on their all the stuff that was owed and the company didn't have to play I had personal guarantees on on those things. So it turned into personal debt So okay, so you're making 90,. That's not bad for a single guy. Are you using a budget or are you just kind of working out the numbers in your head every month? Yeah, I just in my head.

It's basically I, the bank has this automatic thing where it sort of puts money into a small little savings account automatically. But I always find that I have to dip into that to survive. How much money do you have to your name right now in savings or in your checking account? Savings, none. Checking, probably like a hundred bucks for groceries the next two weeks.

Are you doing any investing right now? No. Okay, good. So what I think my guess is, and I don't know, we can ask you the payments. I mean, for the 116 and for the 27,000, what is that in payments every month? 460.

460 total? Yeah. Okay, and what's your rent? Or I'm assuming you're renting. 600. 600, yeah. Okay, so what that tells me is there's a lot of money somewhere that's, I don't know where it's going,

only you know where it's going, but I have a feeling if you were to- Yeah, I have wage garnishment for child support. How much? They take 1800 every month. Okay, we're still not quite there. So now you've outlined about $2,800 a month that you're spending.

Is there anything other major that I should know about? Um, not really just the standard vehicle. I don't pay anything for my vehicle. Um, have my insurance for the vehicles, $460 a month as well. Okay. And then I have fuel on top of that. Okay. I have a feeling if you were to plug all of these numbers into an every dollar budget,

you'd find that there is margin there. It's just a matter of being intentional with what we do with it. Because in this case, I mean, the only way out of this is to start paying off the debt and you can start side hustling, you can start picking up other clients. The good thing about your trade is I don't think anything's stopping you from going out and getting other clients to say, okay, I can help you with your... Yeah. What's the agreement with your employer for you doing electrician work?

They're fine with it. I don't have a proper vehicle. I can't even call any tools around or material right now. They've been talking about getting the truck. And then if I get a truck, I can obviously go and do some service calls or side work and they're fine with that. Okay, that's what I'm wondering. If you pick that up,

even in your own neighborhood and outside of that and start kind of marketing it, you know, Facebook groups, word of mouth, you name it, and say, hey, I'm available. Here's my rate. It's $75 an hour for me to do electric work. Here's the kind of stuff I do. I think you'd pick up some business right there

and start making six figures. Because the key here, Matthew, is margin. Only way to get it is to spend less and or make more. And I suggest you do both with the mountain of debt ahead of you. But think about this, if you can throw, you know, three grand a month, that's 36 grand. This thing's done in three or four years. Okay, now what if we could do four grand a month, that's 36 grand. This thing's done in three or four years.

Okay, now what if we could do four grand a month toward the debt? Well, we're gonna shave off some time. So my goal for you would be to figure out what you need to do to get this debt paid off in less than three years. Yeah, what were you making in your heyday when you were doing your own business before COVID?

I was paying myself and the family. I was taking home, I think, 120,000 a year. Okay, here and the family. I was taking home, I think 120,000 a year. Okay, here's the thing. You're not too far away from that. And that's the same guy, right? Like the same Matthew that did that then is the same Matthew that can do that today. You're just a little older and truly just a little bit wiser.

So there's no reason that you can't get, you know, back into the game. COVID was such a random, probably never ever gonna happen in our lifetime again thing. And I kind of feel like it just knocked you out, but you're down, but you're not out. You just need to go, you know what, I've done this before I can do it again.

Well, all hope, I guess. I just see my bank zero in it every month for the last. We're gonna change that. Get a thousand bucks saved. You know, and I had a bankruptcy years ago when I was younger for medical reasons. And now when that happened, they garnished stuff. They went into my bank account. They seized assets. Matthew, you have been through it, man. But I want to tell you, this is a comma, not a coma. So you can't let it hold you back. You gotta get back up and just do this thing.

And that means getting to work. This is the Ramsey Show. What does the future hold for business? Ask nine experts and you'll get 10 different answers. Economic growth or a recession. Business taxes will go up or down. AI will help us work or it will replace us all. But there's no such thing as a crystal ball. That's why more than 40,000

businesses have future-proofed themselves with NetSuite by Oracle, the number one cloud enterprise resource planning system. Ramsey Solutions uses NetSuite and you should too. Whether your company's earning millions or even hundreds of millions, NetSuite helps you respond to immediate challenges and seize your biggest opportunities. With one unified business management suite, there's only one source of truth for the visibility and control you need to make quick decisions. NetSuite's real-time insights and forecasting help you see into the future with actionable

data. And when you're closing the books in days not weeks you can spend less time looking backward and more time focusing on what's next. And speaking of what's next, download the CFO's guide to AI and machine learning at netsuite.com slash Ramsey. It's free at netsuite.com slash Ramsey. Welcome back to the Ramsey Show. I'm George Campbell joined by Jade Warshaw this hour. Triple 8 825 5 2 2 5 is the number to, and we'll try to help you take the right next step for your life and your money. Well, we're headed into the holiday season, Jade,

and it's time for a lot of people to get their money in the right place before we make more bad decisions. So join the Every Dollar Team for a free live training Thursday, October 24th, 1 p.m. Eastern, 12 p.m. Central time. You're gonna get clarity with your money, and it's free to register for this webinar. Just go to ramsysolutions.com slash webinar

or click the link in the description if you're listening on YouTube or podcasts. We've had over 100,000 people register for these live trainings in the past and it's now it's your turn. Yes. One of us, one of the Ramsey personalities is there live coaching you through

the concept of how do I take control of my money? How do I make this thing called the budget? What is it going to do for me? And it's pretty interactive. Like you get to go on there and you know, if you want to ask your question, they'll pull you up. And so it's not just us talking at you. You get to be a part of it as well. And it's really more of a conversation. So don't miss it. All right, let's get to the phones. Nolan is in Orlando. What's going on, Nolan? Hello? Hey, how can we help? Hey so I'm 21 years old I made some bad decisions when I was 18 I financed the

vehicle a new truck and I feel like I'm just swallowed in the truck payment I can't breathe I want to be able to rent an apartment and then, you know, get to the buying a house stage and I feel like I'm running out of time. And I have so much debt and not enough money. I'm living paycheck to paycheck and I just want to live by myself, you know? Yeah, for sure. Listen, I admire that. I think it's a good thing.

Tell us more about this truck that it's got you in a chokehold. What's the payment? So I have the whole thing pulled up here on my phone It's 679 83 a month I Financed it September 24th, 2021 for 75 months. Okay, and I still have 46 payments remaining I still owe 30 grand on it. And it's worth about 20.

Oh, no. Okay. Shoot. Um, okay, so you're paying 679 on it. I imagine the insurance is pretty expensive, too. What's your income right now? My income right now is about six to $700 per week. Okay. And what is that? What are you doing? six to seven hundred dollars per week. OK. And what is that? What are you doing? I do like carpentry work and kind of like odd jobs. I do car audio, kind of a little bit of everything.

Do you work for someone or is this a solopreneur? Yeah, it's just a solo thing. I do just random jobs and I have one guy that kind of I work with and he kind of organizes the outside stuff. But you don't have any rent right? You're living with parents still? I am living with my sister right now and I give her $400 per month for rent. Okay okay okay so after everything is said and done do you have any margin? Because I'm thinking okay a, $1,000 going to this car,

$400 to your sister, that leaves a thousand left, you gotta eat, that leaves 700. Am I leaving anything out that's major? The insurance, the phone payment, I'm completely independent. Okay, so we kind of talked about this on the other call with George. The equation is simple to understand,

but not necessarily easy to do, right? The only way to get out of this is you're either gonna lower your expenses, or you're gonna get your income up, or you're gonna do both, right? And your expenses are pretty low. I mean, other than you getting out of this truck, there's not much better than $400 a month for rent.

And for a guy making 30 should not be driving a truck that's worth 30. You know that now. Yeah. And so we need to get out of this truck. The goal is not to try to pay this thing off. The goal is to just get rid of it. And you need obviously the amount you're upside down on.

So we need 10K. You have a few options there, either save up the 10K plus enough to get a beater car, or you go down to your local credit union and get a loan for 15K. You pay off the, you know, you have the difference in the 10. That means you can get rid of the truck and sell it. Then you have five extra thousand dollars

to buy yourself a little beater car to get you around. And for new listeners, we never recommend debt, but this is the only time that we would say, hey, it's better to be in $15,000 of debt than $30,000 of debt. So this is the only time we'd say say, hey, it's better to be in $15,000 of debt than $30,000 of debt. So this is the only time we'd say, hey, go to the credit union, take out a small personal loan because ultimately, although it seems like

we're getting a loan, we're still lowering the debt substantially. So that's the purpose of that. The only problem is, is my sister wants to get a house and she's renting this house and it feels like she's doing it just for me so I have a place to live. And I feel like I'm holding her back. So, and every time we have the conversation, her and I, she's just like, you're going to have to figure something

out because I'm going to be leaving here soon in the next few months. Listen, that sounds like a very real issue and you might be holding her back, which is all the more reason that you've got to get going on there. So there's nothing stopping you from getting off this call and going straight down to the credit union. There's nothing stopping you from researching your options as soon as you get off this call. And then after that, you're freeing up a thousand dollars of income. What does it cost in your area to rent with a roommate? It's $400 per month. Okay, well there you go. So it's just you shifting from one roommate to another.

Yeah, yeah. And the only thing about the credit thing is I have really bad credit. Have you been behind on payments? Why is your credit bad? Yeah, so I had two credit cards. When I first turned 18, I got them midnight the night I turned 18. And I put $1,000 on each of them. And then when tax season came around, I paid

one of them off completely. So I just have like 1000 and other debt and then about two or 3000 in hospital bills. Okay, do you still have the credit cards or did you cut them up? I cut them up, but I did recently get two new ones. Why? Why? I'm trying to improve my credit, but I don't know if I can. Stop, stop.

Clearly we're not good at this game, bud. Okay, we gotta cut up the cards and say no and use our own money. That's how we're gonna get out of this and this is how we're gonna build wealth. Will you promise me you will cut those up and never sign up for a credit card again? I promise I'll cut them off.

Because here's what's gonna happen. As you pay off the debt, as you get rid of the car loan, your credit score will naturally improve, and then eventually it'll disappear. And you'll find out that it was a terrible scoreboard for winning financially, as we now know, at 21 after a series of poor decisions. But guess what, you're not running out of time.

I don't know what it is, but young people out there, Jade, feel like, well, I'm 21 and I screwed it up and now there's not enough time and I need to buy a house and I wanna be an adult now, but I made past decisions. Nolan, you've got so much time on your hands that you wouldn't know what to do with it. The key is you gotta start making the most of it. I think you kind of hit an avalanche.

It's like you were going along and all of a sudden all the mistakes kind of compiled on each other and now you're feeling it. Plus you're feeling the heat from your sister saying, you gotta get out, you gotta get out. And so I think you are feeling a sense of urgency, but listen, take it as a blessing because you needed a little fire under your butt

to get this thing done. And most people your age are broke, so at least you're not alone in that. But the key, the glaring issue Nolan is your income. You gotta be making more than 600 bucks a month. I mean, if you hadn't made $15 an hour, you'd give yourself a raise right now, just working a retail job.

So either we have to figure out how to scale this business and double or triple our income within the next six months, or we gotta go work for someone else. Yeah, how many hours a week are you working doing these odd jobs? Or about Yeah, how many hours a week are you working doing these odd jobs? Or about 40, maybe 50 hours per week and that earns me about, I think it's about 3600 per month. It's 600 per week.

So what that tells me- That's 2400 bucks a month. Yeah, and what that tells me is something's gotta move because if you're maxed out on time, if you're telling me you're working between 40 and 60 hours and I mean, you're only one human being, you can only do so much. So that tells me that what you're maxed out on time, if you're telling me you're working between 40 and 60 hours and I mean, you're only one human being, you can only do so much. So that tells me that what you're doing

is not bringing in the right amount of money. So you might need to change what you're doing or you don't have the right price set and you're not charging enough. So start playing with those numbers because you're one person, you got the same amount of hours as everybody else. So let's make it happen.

Absolutely, thank you guys. You got it, I'm gonna send you a copy of my book, Breaking Free from Broke-Know-Land. It walks through all the things we talked about. There's a whole chapter on car loans, a whole chapter on credit cards. Please read it, and I hope it gives you a terrible taste in your mouth to where you go,

I'm not doing this, and then I'll show you a better way in the book. I'll show you how to get margin. That's the margin is breathing room chapter. So I hope that gives you some hope that you're not running out of time, but time is of the essence. And at 21, you can rebuild.

Dave Ramsey filed for bankruptcy when he was way older than you. And he rebuilt. And so the key is we don't wanna make the same dumb mistakes over again. Making it one time, you'll get a pass on that. You make it two. Then they call you a fool.

Yes, that's right. Fool me once, shame that you make it to oh, then they call you a fool. Yes. That's right Fool me once shame on you fool me twice shame on me. It is oh And parents hey stop telling your kids to get a credit card as soon as they turn 18 Stop stop it. It's not helping them Nolan's future is Stunted because of this move my 18th birthday. I'm gonna get my first credit card. Midnight on the 18th birthday. Gotta get that cash back. Let me get some airline miles.

Let me get my credit score up. And here we are at 21, trying to rebuild. I'm so sorry. This is the Ramsey Show. Mortgage rates have dropped. So if you're thinking about buying a home in the next year, contact your local Churchill mortgage team right now. If you wait, more people will be in the market competing for the same homes and potentially driving up prices.

Churchill will help you do the math to be sure your budget is correct, making your home a blessing and helping you build lasting wealth. Learn more at ChurchillMortgage.com churchillmortgage.com. Churchillmortgage.com. This is a paid advertisement. NMLS ID 1591, NMLS consumeraccess.org, Eagle Housing Lender, 1749 Mallory Lane, Suite 100, Brentwood, Tennessee, 37027. Welcome back to The Ramsey Show. I'm George Campbell joined by Jade Warshaw.

Jade, we were talking during the break about something that we've been seeing, a scary trend that's been happening for 30 years now, but it's only getting worse with time. And that is the idea that the credit score is the scoreboard that you need to win financially, and it's ingrained in us at a young age. I mean, to the point that that last caller on his 18th birthday at midnight, it's like, I got to get my first credit card. And I don't blame him for that. That's culture telling us.

They're saying it's a necessary rite of passage to becoming an adult. Yes, to the point. To get your first credit card out of 17. Yeah, George, we had a caller call in last week. I think I was on with you. Maybe it was Ken, but she was so sweet, you know, and she just was like, hey, I'm just calling, I wanna know what's the best credit card I should sign my son up for? He's gonna be 18 years old.

And so of course, you know, I told her the information around credit scores and how really it's just your interaction with debt, how much debt you have, how long you've had it, the different types of debt you've had, what percentage of your debt that you're actually using to what's available. And that's how they measure your credit score.

And so as we do, we pulled that clip and posted it on social media. And the responses were wild to me because it just shows society has done a really good job of just masking the idea that you can be free and just completely taking up all the space saying, you must have a credit card. Because in the comments, if I can just read. Can I guess what they were? I'm guessing it's like these people who you would think are paid by the credit bureaus and credit card companies

to defend them. Yeah, I love this one. It says, hey, this is an idyllic response. This is not a real world response. And in my head, I'm thinking, I have nothing to gain. I'm not taking your interest. I'm just some girl on a radio, on a podcast, trying to help you out.

We're not getting paid by the debit card companies to take down big credit. Right. Then this one, it says, Jade, it is necessary. You're coming from a place of privilege. Oh, that one must have stung in a weird way. It did because I'm like, what's the privilege? I started with $30,000 and $460,000 of debt.

Such privilege. I don't know. So then this one says, Jade, it is required. The word that I kept seeing over and over is it's required. And I was like, man, the brainwashing, it has worked. It's taken full effect. I devoted a whole chapter of my book, Breaking Free from Broke, just to credit scores,

because I had to help people understand. The very first thing before we talk about any other debt is credit scores. And it's the only three digit number that Americans obsess over as much as their weight. It's crazy. And when you look into it, I walk through it, here's what the credit score is actually made up of.

Payment history, amounts owed, length of credit history, new credit, and the mix of credit, your potpourri of debt, if you will. So you have to be in repayment your entire life. You have to play their game perfectly and keep your debt, keep it a long time, keep going into debt, have a nice mix of debt, make your payments perfectly, and we'll give you this blessing of a score, which does what?

Helps you get more debt. But do you see what George is saying? In order to satisfy those requirements, we have to be in a repayment mode our entire life. That's seriously jacked. And it's crazy because that has nothing to do with how well you're doing financially. No!

You can have an 800 credit score, and you might not have 800 bucks in the bank. And as we've seen from, I mean, callers call in, I have a great credit score, but I'm in crippling debt living paycheck to paycheck. The bank doesn't give a rip about you. And people think, wow, what a blessing it is to have Capital One offer me a more credit

on this line of credit or offer me a higher credit score if I do XYZ. Yeah, they can give a rip about your freedom. I get the intent behind it. Parents are going, well, I want my kid to be able to buy a car, Jade, what do I do? Maybe avoid buying a car that is way too much for an 18 year old to have and just pay cash.

And the truth is, if you are already in a car, which most, in a car payment, which most of us were, or most of the listeners probably are, I started in two car payments. And we said, okay, now that we know that credit's not really helping us, it's not a crutch, let's sell off one of these vehicles, which we did. And then we paid off the other one over time. It took like two or three years to pay the car off. Then we had no car payments and we had one car. And then we said, okay, the next time what we're going to do is we're going to save up a little bit extra, we're going to put it with the trade-in and we're going to buy our next car in cash. That's how you get out of it. And then from then on, you just buy your

cars in cash. Every time you trade in, you add a little bit to it and that's how you trade up. So there's that. What about renting, George? Cause that seems to be the other- Oh, this is a big one I dug into. I did a whole video where I called, I contacted the rental car companies. I looked at all the fine print. Every single major rental car company has a debit card policy. Meaning there is a way to rent with a debit card. Here's the stipulations.

And usually it's a higher deposit. Sure. And so you just plan for it? Or you pay for the rental in full, plus the deposit. And so it's really not that big a deal and there's so many alternatives around it, but people always in their head say, but what if, and no, my friend said one time, that's the deposit. And so it's really not that big a deal, and there's so many alternatives around it, but people always in their head say, but what if, and no, my friend said one time,

that's the worst. Right, so it's just this idea that we're depending on what somebody else said, but for some reason they don't care about what we said. And then renting an apartment is a big one. Okay, renting an apartment, talk about that. Well, little Jimmy, he needs a credit score to rent an apartment.

I've rented multiple apartments, even houses with landlords without a credit score. Again, I called these people. I called apartments across the country. I called landlords. They said, well, are you employed? I said, yeah. Do you have a criminal background?

No, I'll pass the background check. I said, but I don't have a credit score. They said, okay, that's fine. We'll just need an extra money for the deposit. And a lot of times they just wanna see other trade lines. If you can show, I pay my utility, here's the record. I pay my phone bill, here's the record. I just don't borrow money.

I think that makes you look more responsible. Very similar process for how I got a house without a credit score. Yeah, talk about that. I didn't pay cash, I got a mortgage without a credit score. So did I, by the way. And people go, well, no lender will do that. And we're like, have you not heard of Churchill Mortgage?

They've been partnering with Dave for 30 years now, and they specialize in these loans. And all it is, it's a real person looking at your real financial situation instead of being lazy, laying the computer, automate it based on your credit score. And they go, okay, well, have you paid bills on time? Yes.

Do you have consistent income? Yes. Okay, here's a mortgage. And let the record show, because a lot of people think, oh, well, it's easy for you guys. You work for Ramsey, of course you can get it done. I had a zero score before I was even a thought to come work here and I bought a house

with a zero credit score before it was even a thought to come work here. So don't try to let that be the, we just want, what we want is for you guys to open your mind and accept that there is a way that doesn't require you being in bondage, it doesn't require you being manipulated by debt. And I get it, sometimes, isn't it weird how,

and I know I'm crossing a little bit of a line here, but sometimes when you've been abused for a while, you start to protect the abuser. And I feel like in this case, we've been abused by debt and credit and like, in America, like debt is this drug and we've just abused it. It's the devil you know. And now we're starting to defend it.

No, not my credit score, I need that. Don't take that away. I'm like, guys, let's take a breather here. And I think there's like a thousand loopholes. Like my life is 10 times harder every day because I don't have a credit score. It really does not affect my day-to-day life. And people say, well, Jade,

I need a credit score for my job. The application requires it. They're checking your credit score to see if you've been delinquent, you've had bankruptcies. That's right. If you have no score, it's not going to affect your job. People try to use that one on me all the time. And that's a good point.

That's a very clear delineation we wanna make. A zero credit score is not a bad credit score. A zero credit score simply means I have no dealings with debt. And if I did in the past, I paid it all off. And once you pay it off, it takes about six months to a year for it to roll to zero, indeterminable. That's a great point.

People contact me and say, hey, I heard you talk about the no score loan on the mortgage, I wanna do that. And I say, well, do you have a score? They say, yeah, it's bad. That's why I wanna do this. I go, no, this has to be a no score loan, not a low score loan. So big difference there.

And again, we don't care about the score, but we don't want you to have a bad score. That means you're missing payments, you've been delinquent, that can hurt you financially. That can hurt your ability to rent or buy a house. And so we want you to have no score, which means you gotta get rid of the debt. And it's amazing what happened, Jade,

when I dropped this scoreboard of having the credit score. Back in 2013, I paid off my debt. And like Dave said, it'll disappear eventually. It does. It did. And then I realized, oh, I can just like use my own money? People think, well, George, you just need to be a credit card person.

You just need to be disciplined. And I go, well, why don't you just be disciplined enough to use your own money and only buy things when you have the cash? And they go, well, you're missing out on the rewards. I go, I've done the math, bro. I got to spend a hundred grand to get two grand back. You got to spend a lot to get that.

Yes, that is insane. And so I guarantee you, I can show you how to save two grand with your everyday spending, using your own money, create your own reward system and stop helping Capital One sponsor the next Taylor Swift tour. Love that. And build big buildings downtown while you can't afford your groceries. So debt and credit not necessary, not required, and not needed is what we're saying. All you need to do is take control of your money and it'll take care of the rest. You're gonna be okay. I promise you. Just try it.

30 days, attemptempt this. No credit card spending. Use your own money. See what happens. And watch your credit score disappear and realize it was a terrible scoreboard in the first place. This is The Ramsey Show. This show is sponsored by BetterHelp. October is the season for wearing costumes and masks, but let's be honest. A lot of us hide our true selves behind a mask and costumes all the time. We do this at work, we do this with our friends, with our families, we even do this with ourselves. I've been there multiple times in my life when I'm not being my true self and it's the worst. If you feel like you're stuck hiding your

true self, I want you to consider talking with a therapist. Therapy is a place where you can be honest with yourself so you can take off the costumes and take off the mask and learn to live an authentic life. If you're considering therapy, I want you to contact BetterHelp. BetterHelp is 100% online therapy. You can talk with your therapist anywhere so it's convenient for your schedule. You just fill out a short online survey and you get matched with a licensed therapist. Plus, you can switch therapists at any time for no extra cost.

Take off the costumes and take off the mask with BetterHelp. Visit BetterHelp.com slash Deloney to get 10% off your first month. That's BetterH-E-L l p dot com slash deloni. This is the Ramsey show open phones at triple eight eight two five five two two five. Tammy's up next in Nashville, Tennessee just down the road. What's going on Tammy? Okay. Hey. Hello. Hey, can we help? What's going on? Yeah. So I have a question. My husband and I have been

following the Dave Ramsey plan for many years and we're now getting within 10 to 12 years of retirement. We currently have 2 million in our retirement funds. Awesome. And that's if we were to add no more to it, which is not our plan. We estimate that we would have about 8,000 when we retired. not our point and we estimate that we would have about 8,000 when we retired. But my husband and I are in a debate. He is sick. Um, he is five years older than I am, so he's going to retire at 65. And he felt that I need to keep working until I also reached 65 so that I would have health insurance. And I agree that I need health insurance,

but when I'm looking at the amount of money that we would have in retirement, I'm saying, why couldn't we just pay that so that we could both retire and go live like no one lives, right? Like that's the goal. Yeah, you can get health insurance outside of an employer. I mean, you can just go marketplace. And with the ACA plans,

it's not as astronomical as I feel like it used to be. Very few people are, especially if you guys aren't, you're not gonna have kids on the plan. It would likely just be you. Is he gonna be on Medicare? Correct. That's what, or he would be on my plan until then I resigned.

And then we would both go on Medicare together. It just depends on what the mask and the insurance looks like at that time. Sure. Well, that's some easy homework to do. I mean, you can go figure out what health insurance would cost outside of an employer and go, okay, we need to budget an extra $600 a month

for health insurance. Okay, that's exactly what I said. Oh, so Tammy wants to play this call to go, see, you're wrong. I called her and she said. Well, actually no, because I mean, I'm happy that I'm right, but I don't want to make a bad financial choice given how hard we've worked to get where we're at today.

Absolutely. And that's where the wisdom comes in. We're going to do our homework and make sure we know exactly what it's going to cost to make this move when we make it. And did I hear you say right now you have 2 million and you're going to retire in 10 years, where that's the plan? Yes, ma'am. Yeah. I mean, the thing, and you said that that would be 8,000 a month. Is that what

I heard you say? When you said that'll be, that'll give us 8,000 or eight, what, what do you know? Eight million. We, we, our retirement fund between now and when we retire, like if he were, he's 54. So if he were retiring six years, we're estimating that it should be around 8 million. Oh, got it. Okay, I just misheard you. I was trying to clarify that.

Yeah. Okay. Yeah, and we believe that's if we didn't add anything to it, but we're gonna continue to max it out. And then we should have our house paid off in two years. And then we will just be banking all of that money. So- Just max out all of your retirement options. Right, exactly.

And we just feel like, I just feel like we're gonna have cash on hand in the bank. We won't even have to touch our retirement when we both retire. Good. We can live off of the cash. So, I just wanted to make sure that I was thinking properly that we could go to the market.

And if the market saying X dollars, then let's just put that back now and plan for that. Just plan for it in your monthly budget. If you know it's gonna be an extra thousand, well then we need 9,000 a month instead of eight. Mm-hmm. Okay. You're gonna be fine.

Yeah, with 4 million, $5 million. $8 million. I mean, this is gonna be fine. Yeah, with four million, five million dollars. Eight million. I mean, this is gonna be chump change in your world. Well, that's what I thought, but I just wanted to get somebody else's opinion. And do you all have any resources? I kind of feel like we followed the plan, but I kind of feel like once you get to step seven,

it kind of falls off, and it doesn't really, and maybe I just haven't followed up enough, but like for retirement or you're getting close to the retirement years, what should you do now? If I were you, I'd get with a SmartVestor Pro because they're gonna be able to look at your situation as it is and they're gonna help you work with your goals to create the situation as you want it to be

for when you retire. And so you can hop on ramsysolutions.com slash smart vester. Yeah, it'll take you right there. Yeah, it'll take you right there. And then we do have an investing hub as well. If you go to ramsysolutions.com slash investing, we've got a lot of resources and calculators and tools to help you figure that out.

The problem is Tammy telling someone this is how it has to be in retirement would be a crazy thing to do because everyone's situation is so different. That's right. The plan stays the same for here's how to get out of debt. We've had 10 million people do it. When it comes to retirement, well, do you have money?

Do you have debt that largely will dictate what your life's gonna look like and what your goals are for retirement. If you wanna spend 10 grand a month on travel, your retirement plan needs to look different than someone who's going to be mega frugal. Or if you wanna retire before 59 and a half, and you want to make sure that there's money available

to you without penalty. But you got the fact that you guys already have 2 million and you still have another decade of work ahead of you and investing and maxing out, you're gonna be, you're not the ones we're worried about. Let's put it that way. That's right. Right, but we followed your plan too.

So that's how we got to where we're at today. It works. It's a very simple formula, Tammy. You get a paid for house and you have a big nest egg, your life's gonna be okay. You've got plenty of margin. You're going to outlast your retirement. You're gonna be able to leave an inheritance

to your children's children. You guys are a great example of that. So way to go and I'm happy that you were right. There it is. I'd rather be right with Tammy. I know. I don't wanna be on the great example of that. So way to go and I'm happy that you were right. That's so, I'd rather be right with Tammy. I don't wanna be on the business end of Tammy. Nick is in Fairbanks, Alaska up next. What's going on, Nick? Hey, so I just moved to Fairbanks.

I'm looking at buying a cabin right next to work with no running water for around 65K. Who hurt you, Nick? I can do, yeah. What happened in your life that you went full hatchet? You were like, all right, this is it. No running water. I got my plant fitness membership.

I'm taking my showers. I got showers I work too. So I mean, I'm still maintaining that hygiene, but. We believe you, we believe you. But why is this the option are there no options with running water I mean like there are but this cabin is 13 minutes from work and otherwise I could get a more traditional home with a mortgage but I'm looking at 30 to 45 minutes drives to work we're approaching

winter the roads are terrible, and I just can't wrap my head around a 13 minute drive to work. Are you like a handy guy? Like is this right up your alley to take this cabin and turn it into what it needs to be? There's gonna be a learning curve for me. It's gonna need time carrying renovations, but.

You're telling me there's nowhere to be 10k renovations but... You're telling me there's nowhere to live within a 40 minute radius of your employment? Correct, yeah. Where do you work? I'm a geologist. I'm a geologist so I kind of work a little bit in remote areas and mining is a big thing around here. What happens, what needs to happen to the cabin straight away for you to be able to live in it and like go through the winter?

Honestly, the cabin is livable right now if you throw in a wood stove, but you don't have any water No, but I mean like you get one of those five gallon jugs five gallon Gatorade jugs and You know, you're you're good. You have electric so Even Bear Grylls is like I'm getting running water dude. I'm not living this land of life and you're good. You have electric, so. You do. Even Bear Grylls is like, I'm getting running water, dude. I'm not living this kind of life. I mean, I just feel like in today's world,

I don't know why you would choose that level of suffering. What will it cost? When you don't have to. What will it cost to add plumbing and running water? Cause is there no plumbing, or is it just that the plumbing's not working? Tell us more. No plumbing, so not designed for it. If anything, no, I'm not gonna drill a well if anything you would give this term

Can I just ask like a logistics question? What like? bathroom facilities Yeah outhouse All right If this was like your your weekend getaway, I would be like, hey dude, all for it. Do this in cash. This is awesome. What a cool little thing.

But for your normal everyday life, how old are you? I'm 26. Okay. What are your like further life goals beyond the cabin? What do you want to do in five years, 10 years? Honestly, I want to stay in Alaska, do all the Alaskan outdoor adventures that we all see on the Discovery Channel. And honestly, I think this cabin can turn into an Airbnb

at some point when I'm ready to buy a more traditional home. With no running water, you think I'm paying money to stay there? Alaskan tourism is really, really big market. Okay, here's the deal. I don't want you to mix your general life every day with a cool investing opportunity. That's when we start to make poor decisions

and justify them. I would look into any opportunity to live somewhere with running water, even if that means a 30 minute commute. That's me personally. I cannot in good faith tell you to go through with this purchase. I think the Airbnb market wants bathrooms.

Even if you are going to Alaska, it's like I wanna go out in the wilderness by day, but at night I wanna take a hot shower. Yeah, if I wanna camp, I'll camp. And use the facilities. But if I'm paying money for a place, I'd prefer a toilet. You're not going to have a girlfriend without a toilet, I can tell you that. Well, that's a weird way to end, but that's it's why we created the Ramsey Network app, your single source for content that keeps you motivated. The Ramsey Network

app is designed to keep you laser focused on reaching your goals. Loaded with over $7,000 of Ramsey shows, this free app is the best place for uninterrupted content and no distractions. Plus you can search specific questions to get more personalized content in seconds. So for the days you need some extra motivation you'll have proven advice at your fingertips. It's time to get serious about your goals and shut out the distractions for good. Simply search Ramsey Network in the App Store or Google Play. If you're listening on a podcast, just click the link in the show notes to download

our free Ramsey Network app today. From Ramsey Network, this is The Ramsey Show where we help people build wealth, do work that they love and create amazing relationships. I'm Ramsey Personality, George Kamel, joined by best-selling author Jade Warshaw. We're taking your calls at triple-A, 825-5225. Doug is going to kick us off this hour in Kansas City. What's going on, Doug? How can we help you today? Well, thanks for taking my call, number one. I really appreciate the time. Sure. I need to know if it would be in my best interest for the

IRS to attach a lien onto my 401k. I feel like best interest is a very generous term there. Why would you even suggest this as a matter? Okay. A lot of stuff to unpack. I'll try to be concise. My partner developed brain cancer several years ago. Got on social security disability, cashed his checks, gave it to me. I deposited to my bank. He passed away after six years of this. And the IRS went back and said since he was not on my account that that was considered income. So, because you took the social security checks? Yes. Got it. Okay.

They said it was considered as rental income. And now it threw me into a different tax bracket into the 28% tax bracket at the time. Okay. With penalties and interest, it came to $71,854. Is that, have you verified that that's correct? Or is that just what the IRS is saying? No, I had an attorney work on it for, this has been in the works for four years now. Okay. Keep going. I got hit with this in 2020, two months after my partner passed away.

I'm so sorry. And thank you. It's been, I love that. Anyway, I am so very blessed in many other ways that this is just kind of a little, Murphy moved in several years ago and now we're getting ready to kick him out. Okay. So the IRS wanted to,

I'm paying them $1,100 a month to get this get paid. That leaves me with $214 a month breathing room. What's your full income? leaves me with $214 a month breathing room. What's your full income? I just, my full, I make 72,500 a year. Okay, and what of that do you bring home just so we don't have to figure the taxes? $3,937. Okay, thank you, keep going.

So they're taking over 25% of your income? Yes. Essentially garnishing your wages. Correct. Okay. So I called the IRS the other day and said, this just is not working. The company that I work for

is absolutely one of the best companies in the world. When I started there, I just put all my money into the company stocks, which I know you're not supposed to do. And the average I paid per stock was $71.22. The stocks are now $900. Wow, so you got a lot over there. Is this tied up in a retirement account

or is this just in a? Yes, it is. It's in a 401k. Just in the company stock portion, I have 1.4 million. Wow. Wow, just single stocks. Just single stock. And then I have in the other diversified amounts,

I have a little over 610,000. So basically, it's 2,086,000 into my 401k. But it's all locked into the 401k, which means if you were to access the single stock, you would be penalized. Okay. If I'm okay, I'm 57 and at 59 and a half. Would I be able to sell some of those stocks to pay my house off? And now I wouldn't be charged capital gains though, would I?

It would just be my regular. That's your traditional 401k you have? Yes. That would be as ordinary income, not capital gains. Okay. And I would be okay because at that point, and I'm actually almost 58, 20 year and a half, if everything goes right, my 401k,

I'm averaging over the lifetime of my 401k 12.8% so 12% of the 2 million would be you know a little over 200,000 so I'm not really losing anything from this point on if I cash out a hundred thousand dollars to pay my house off and to finish paying off the IRS. I would definitely do the IRS thing 100%. If you didn't pull for your house without the IRS garnishing your wages, how quickly could you pay off your home?

Well, with this $1,100 breathing room, I've got $62,000 left to pay on it. Awesome. And it's worth about 340 right now. Nice. What if you do what Jade said, you waited until 59 and a half, you made your payments to the IRS,

then at 59 and a half, we cash out the stocks as much as we need to, to pay off the rest of the IRS debt. Let's continue working and use future income and margin to pay the house off. Then we can look at what retirement looks like. Okay. You're probably in your early 60s at that point,

and you didn't touch the nest egg to pay off the house. Well, I don't live an extravagant lifestyle. So even the money that's in there, I will never go through much less the compounded interest. So I'm setting up, I've set up a charity and then I'm going to move money from my 401k to the charity so I can send, you know, underprivileged students to school and get them all the grants and stuff like that. So I just, I just didn't know if it was a smart move.

If I, I just freaking out because if it was a smart move. I'm just freaking out because I don't want to owe anybody money and I'm going to have this $40,000 looming over. And if your attorney said, hey, this is legit, you have to pay this, then there's no way around it. Let's just attack it with all the intensity we can. But I wouldn't have them put a lien on your 401k. I wouldn't do a 401k withdrawal.

I wouldn't do a 401k loan. No, I would not. I would simply just make the payments on time and then when you can get more money from that 401k without penalty, I would just knock it out. And if you can find a way to bring in a little extra income for the next year and a half, just so you have some breathing room,

I think it'd be worth it to do that. And to George's point, not touch this until retirement. Okay. Thanks so much for the call, Doug. Ooh, that's tough. not touch this until retirement. Okay. Thanks so much for the call, Doug. That's a tough one. Can you imagine getting hit with the IRS bill that much? Like out of the blue, you don't even see it coming. And just so everyone knows that's listening

and watching out there, when you have IRS debt, back taxes, whatever it is, that goes to the very tippity top of your debt snowball. And the reason is they can destroy your life. Well, clearly, because even his payment, the payment that they negotiated together, was still, like you said, over 25% of his take-home pay. And that, on top of all your other bills,

that makes things very tight. So it's not a place you wanna be. Yeah, and there's no way around it. There's no, like, you're not gonna negotiate. Like, what you owe is what you owe, you gotta pay it. And it stinks, and it's one reason you gotta work with a tax pro. A lot of people wait until it's too late,

or they run a small business and go, oh, I didn't know I had to pay taxes. You just thought a small business just gets to avoid paying taxes? But there is part of that though, that just because you get a bill from the IRS, you do need to do your due diligence because they don't always get the to do your due diligence because a lot of scams out there. They don't always get the math right.

Yeah. And a lot of scams out there were finding people claim to be the IRS and they scare you with fear to go, Hey, you owe us this money. And the IRS goes, no, that was a scam. You just gave money to a scammer and you'll never get it back. Yeah. They almost, I don't think they ever will call you. Almost every contact I believe is through the mail.

And I always go, all right, let me call the IRS myself with the number on their ever will call you. Almost every contact I believe is through the mail. So. And I always go, all right, let me call the IRS myself with the number on their website. Call them, because you can even spoof numbers now. It looks like it's coming from a legit number or a legit email, but if you send an email out or you call that number, it's the legitimate institution. I Google them.

If I get something, like I got something from Ally Bank and I thought it was a scam, I just Google it and it'll tell you if it's a scam or not. Good wisdom there. This is the Ramsey Show. I've been doing this show for over 30 years and some of the saddest calls I've taken are from situations that are completely preventable.

Yeah, and what's so hard is I feel like one of those, especially the ones that I'm like, oh, it's terrible, air, people that call in and their spouse has passed away suddenly and they don't have life insurance. When you have to think through how am I going to pay my bills in the middle of all that grief, like it's just, it is, it's terrible. So life insurance is the one thing, especially as a mom with three little kids that I'm like so big on for people to get because it's inexpensive. Xander is the place that Winston and I actually get all of our life insurance.

And it doesn't cost much because Xander shops among a gazillion different companies. It doesn't cost much. You just have to admit that someday you're not gonna be here. You gotta say it out loud and you gotta say, I'm gonna say I love you to my family by taking care of them and taking the time

to put this stuff in place. It costs no stinking pizza. To get a free quote, call 800-356-4282. That's 800-356-4282 or go to zander.com. Hey, it's Dr. John Delaney. Look, when you're stressed about money, it makes everything feel out of control. You run around like a maniac trying to make sure everything's covered, everybody's okay. I've been there.

It's the worst. But you can flip the script with an EveryDollar budget. It helps you track spending and expenses in real time so you always know what's happening with your money. Talk about a weight lifted off your shoulders. Start feeling in control of your money again. Download the EveryDollar app today for free. Welcome back to The Ramsey Show.

I'm George Campbell joined by Jade Warshaw. The number to call is 888-825-5225. Well Jade, we just launched a brand new tour. Dave and Dr. John Delano, you're hitting the road. They're coming to a city near you. It's the Money and Relationships Tour. And this is a cool event because the audience shapes the conversation every night. You get to select the topics that matter most to you, whether it's budgeting, relationship dynamics, achieving your financial goals, you get to drive the night. And they're heading to Louisville April 21st of 2025,

Durham on April 23rd, Atlanta April 25th, Phoenix on May 5th, Fort Worth on May 7th, and finally ending the tour in Kansas City on May 9th. So join Dave Ramsey and Dr. John Delaney live in person. You're gonna laugh, learn, you might change your life. Get your tickets to the Money and Relationships Tour at ramsysolutions.com slash tour. And if you're tuning in on YouTube or podcast,

just click the link in the show notes. All right, Jade, we've got a Ramsey network app question here and if you didn't know, when you download the Ramsey network app, yes, you can consume all the Ramsey content for free, get exclusive stuff, but there's also a spot to submit questions. And occasionally we'll take those on air.

This one comes in from Chris. Alright, he says, my wife and I are planning to sell our condo in Wyoming and purchase a house in Indiana. My wife is a stay at home mom and I earn $110,000 per year. We have $90,000 saved and expect to profit a minimum of 175,000 on the sale of our condo.

Our only debt is a car payment of $600 and a balance of 30,000. Should we use all of the equity in our house and savings for the down payment on our new home? Just about, let's see, you've got 90,000 saved. Yeah, I mean, once you pay off the house, you've got the 90,000, that would make up three to six months of expenses and then some.

So now we've knocked out baby step two and baby step three. And then after that, you start investing. And so yeah, if you wanted to put all of this, really, on the new home, you could, as long as you keep out three to six months of expenses. Did you see anything, Joe? Yeah, if you walk in through those baby steps, I mean, as long as you keep out three to six months of expenses. Did you see anything? Yeah, if you walkin' through those baby steps, I mean, they're gonna have $265,000 in savings

once they sell. So if you take that and you go, all right, we need $1,000 saved, got that. Next up, let's knock out the $30,000 of car debt, knock that out. Now we're down to $235, now we need three to six months of expenses, let's call that 35.

We're gonna put the rest of the 200 onto the new house as a down payment. Love that. That's exactly what I would do. Simple. Sometimes the simplest answer is the right one, but we wanna over complicate it. We go, well, I don't know if I wanna put it all in the home

and I wanna, just knock out the mortgage. Trust me. There's something about having money in your hand, you're like, maybe I should just keep it here in my hands. Yes, or I could invest it and make more, or you could not owe anyone anything. I love that. How's that?

That's a good plan too. Yeah. All right, let's get to the phone lines. Nathan is in Kansas City. What's going on, Nathan? Hi, how are you guys? Doing well. How can we help today?

So I just had a question. It's more of a relationship question. About a week ago, my girlfriend gave me an ultimatum on which candidate I should vote for in the upcoming presidential election. When you say ultimatum, it's like vote for this person or I'm breaking up with you. That's indirectly what she said, yes.

Can we know who she wants you to vote for? Yeah, I mean, I don't just for the team. Yeah, sure. That's that's fine. So she she wants me to vote for Kamala Harris. Okay. Somehow I knew that. I don't know why.

I don't know. Somehow I just knew that. Okay. And you're like, no, I don't want to. So you guys, was it like a friendly discussion about politics when it started? Or has it been a recurring thing? Does she get fired up about political issues? As I found out the other night, yes, very much so.

So you discovered a new value of hers that is not a value of yours. Are you politically charged as well on the other side? Or are you just like, nah, it's not my thing? Nah, it's not really my thing. Like, I don't care who you vote for, like, I'll go have a sandwich with you afterwards, you know? That's, yeah.

But she kinda cornered you and said, hey, wait, who are you voting for? Well, so here's the situation. We've been, I'll try to keep it as brief as I can. We've been together almost three years. We actually leave for Mexico in less than two weeks. Where I plan to propose. Yeah.

Where I plan to propose. Oh man. And then, so how it came up was, is we're gonna be turning in absentee ballots. And she just asked me, Hey, who'd you put on your ballot for the political party and you know I was vague with my reasonings why she was gonna be pretty strong otherwise why would you hide it well I don't I don't I don't feel like I was,

I don't think that I was hiding it. But I mean, I'm just saying, if you didn't think it was gonna be anything, you probably would have been more forthcoming. But something, you know her well enough to know that you could probably guess maybe who, because I'm just thinking when we vote, it's generally a reflection of something we value

and whatever that value is, we've probably displayed it to the people in our lives. I would, I mean. The people closest to us. So prior to this, I could have guessed that, well, actually she had expressed that she was interested in the, I think it was the independent candidate. What was his name? Robert F. Kennedy. Yes. And that's who she was interested in the, I think it was the independent candidate, was his name, Robert F. Kennedy.

Yes. And that's who she was interested in. And I mean, I don't know if I failed by not having a discussion about politics early in the relationship. I just, I didn't think that was, I thought that always was something you could agree to disagree on.

A lot of people do. And you can. That's the thing, it's not a like, you have to agree on politics or else, but if she is this intense about it, then this is a red flag that there, this could be a rift later on in the relationship. And I definitely drill it down because it might be a single, like I drill down and say, okay, what is it that,

what is the single issue? Is it a single issue? Is it a more than one issue? What's the single issue? Is it a single issue? Is it more than one issue? What's the single issue that you really feel that we're divided on? Because it might not be, do you know what I'm saying? Because I think right now you're thinking of it as like this candidate versus that candidate,

but it might be something that she's like, I just, you know, I grew up poor and the fact that these, you know, it could be something that's linked to who she is and that if you guys speak about it in a direct sense, as opposed to like the candidates, right? Like try to talk about it and keep the candidates out of it and say, okay, what is it that you're hoping for?

And I'll tell you what I'm hoping. And you might find that you have more in common than you have not in common. Okay. And you might be able to find that common ground. I'm not saying that you're gonna 100% agree, but you might at least be able to find some common ground because the truth is like a lot of the issues

are very, very polarizing and they do require a deep conversation in order to find common ground. That is the truth. So I would get to the bottom of this and I would avoid the headlines and what's happening in the media because what's really happened, Jade, is they've weaponized it all

and it's if you vote for them, you want democracy to die. And if you vote for that person, then it's all going down. And I just, none of that is going to happen. And so I think, I don't know her level of emotion around it, but I think getting to the bottom of it and then figuring out, okay, are you gonna be able

to respect my autonomy in this relationship to vote as I see fit? And if not, if you don't respect that boundary, then this relationship may not work in the longterm because there's gonna be another election. Well, and to be fair, like, to be fair, she's allowed to have very strong convictions and so are you.

And if you guys find, hey, we're not aligned, that's okay. Like it can just be like, you know what? I hate that it got to this point and we realized we're 100% not aligned on some things that are really, really important. Cause the truth, me just being Jade right now, my husband Sam and I, we're aligned and I can't imagine not being aligned.

Yeah, when we say politics, politics, religion, family, those are some of the key things that you tend to have to be aligned on. Now, people can make it work when they're not aligned. We have people who have mixed religions and mixed politics. They can, but I don't know, I can't speak to how easy or difficult it is. But yeah, there's going to be more difficulty,

and you guys have to be both healthy people. And if one person is unhealthy, there's not gonna be a future ahead. So you're gonna have to have some tough conversations, but I would not move forward with this relationship and propose until we get to the bottom of this. If it's true, the ultimatum, you vote for anyone else, it's over.

Then I think we need to figure out what's next. Religion, politics, money, how you raise the kids. How you like those are, yeah. Do you want kids? Yeah. Have you had these conversations, Nathan? So we've had the conversation of the four things I think you talk about before getting ready for an engagement or marriage, right? It's the how many kids you want to raise.

It's the in-laws. Well, this is the next one, man. It's not going to be fun. And I hope it works out. I hope this is not the line in the sand she draws, but that's a weird one. This is the Ramsey Show. Hey guys, I've never done this before,

but I'm partnering with a nutrition company, Field of Greens. Each fruit and vegetable in Field of greens is selected by doctors to support heart liver and kidney health plus Metabolism for healthy weight and your doctor will notice your improved health or field of greens will give you your money back I can get behind a promise like that go to field of greens comm slash Ramsey and get 15% off with promo code Ramsey field of greens dot.com slash Ramsey. Hey guys, Dave Ramsey here and I got a big announcement.

I'm coming to a city near you live on the Money and Relationships Tour with Dr. John Deloney. This is the most interactive event we've ever done. You get to decide what we talk about. You do not want to miss this. We'll be coming to Louisville, Durham, Atlanta, Phoenix, Fort Worth, and Kansas City in April and May of 2025. Get your tickets and more information at ramsysolutions.com slash tour. Welcome back to the Ramsey Show. I'm George Campbell joined by Jade Warshaw. Phone number to call is 888-825-5225. But in the meantime, on the debt free stage,

we've got some special guests. Eugene and Jennifer are with us. Hey guys. Hey. Hi. How's it going? I'm guessing by your debt is normal be weird shirt and your debt free sweatshirt, you guys are debt free.

Absolutely. Yeah. Where are you from? We're from Warmersture, Pennsylvania. It's about 20 miles north of Philadelphia. Awesome. Thanks for joining us to celebrate your debt-free scream. Tell us how much you paid off.

We paid off $173,000. How long did that take? 48 months, four years. Wow. And what was your range of income during that time? $125,000 to $185,000. Nice. Wonderful.

What do you guys do for work? I'm a project manager at the local utility company in Philadelphia, and I also did some side hustles. Grocery delivery from Walmart and Amazon Flex. Wow, not scared of work, I love it. So what happened? What happened four years ago that you guys just said, that's it, we're going after it?

Yeah, well, I guess it started when our fourth was born, Carolyn. I was kind of in a midlife crisis trying to look for ways to get more money. I was looking into you know investing people trying to I even went and bought two I spent $200 on something to try to invest in sectors, but that didn't really go so well. You're looking for a quick, a get rich quick scheme. Oh my god, get rich quick scheme.

Jennifer's shaking her head, yes, she was very desperate. And Jennifer, what were you thinking during this time? Was money stressful for you four years ago, or was he taking this on sort of solo? Yeah, he was solo. Oh my goodness. You're like, I'll let you do this on your own. Wow.

Okay, so you decided to make a change. What kind of debt was this 173? It was her house. Oh, what? Okay, plot twist. So kid number four rolls along, you get desperate to get some get rich quick scheme and then you find Dave somehow, what happened?

Yeah, so you could probably tell the story better than me, but she usually watches God People Stories, it's a podcast. Billy Graham podcast. Yeah, and she showed me Dave Ramsey was on there and like, who is this guy? I did run into some of his YouTube videos, but I'm like thinking, oh, he's too normal.

He's telling you to invest in retirement, I'm already doing that. He's like, get rich slow, I need something faster, Dave, come on. Exactly, and it's like, he's too normal. He's telling you to invest in retirement. I'm already doing that. He's like, get rich slow. I need something faster, Dave, come on. Exactly. And it's like, that's not sophisticated enough. So I started looking into these. I bought some investing books.

And as I mentioned, I spent $200 on trying to invest in sectors. And I actually opened a brokerage account and put $40,000 in it. But in three months, I ended up losing $2,600 and it wasn't fun. Yeah. Wow. So was all 173 the house?

Yeah, it was the house. So I guess, yeah, when we started, there were a couple things that led us to actually doing this. We ran into some people at church that were doing financial peace university. They were starting up a class. So I guess right before COVID,

that's when we went over to their house. We watched probably three lessons. And then after that, of course the pandemic hit, but then me and my wife were fired up. And we gotta do this. We gotta buy the Ramsey Plus membership. So we went in, binge watched probably like, you know, the remaining like nine lessons to get kicked up, kick started. And that's kind of when we were started being on the same page. And I'm like, you know, our only

debt left was the, was the house we had. Luckily we had no consumer debt. You know, ever since I started my job, I was consistently investing 10% into retirement, so I'm like, I'm glad we got that going for us, but we weren't organized, we weren't doing a budget. It was just, you know, we made a lump sum payment for the credit card at the end of the month, and you know, paid for the previous month,

this month, it was just a mess, but. And you're like, we should be doing better. Like, if we got on a budget, we could find more money and get this house paid off. Yeah. So what was the tactical piece of this? Did you guys just go, all right, we're doing the budget, how much can we throw at the mortgage every month?

Yeah, for the most part, like, I just got me thinking, I'm gonna set a goal for myself, I'm gonna pay this off before I turn 40. I think I was 36 at the time when we refinanced our mortgage and then yeah, just kind of ran it through an amortization schedule and then figured out if we put $400 extra a month for a side hustle, then we can pay this off. When you see it like that, it really changes things.

And for you guys, you did this in four years, which is fairly quickly. Explain what that felt like because we always say, you know, the first few baby steps you're going through with intensity, you're going fast, fast, fast, and then baby step six, it's more intentional. And so you guys were kind of right in the middle of that. So what was the hardest sacrifice or was there a sacrifice?

He pretended it was a baby step. One, two, three, really. He just stayed intense. He stayed intense. Yeah. And you were fine with that. You were like, all right, I'll go along. I wasn't initially. How did this affect the family, the kids? They even know what was going on? No, we stopped eating out all the time. We really got on a budget. And they didn't like form a mutiny against you guys? Like what happened? They were too young. Okay, they're too little to know or care. They just go, okay, chicken nuggets for dinner, whether it's from, you know, chick-fil-a or the oven,

who cares? Yes, exactly. That's it, that's simple. Wow. He wanted to pay it off before his 40th birthday and today's his birthday. No way! Congratulations and happy birthday.

Thank you. So what's it feel like? You have no payments. Have you had that first cycle of where the month comes and there's no payment? This is the first month really that oh wow it's that fresh yeah, and it just stays in your bank What do you do with this money now? Hopefully you're not gonna do sector trading anymore This trip was our this was it you traded a mortgage payment for a little vacation in Nashville. Yeah Can I ask what was the mortgage payment?

It was, I'm trying to think, it was 1,600 and then with all the taxes, it was like two grand. Wow. So $1,600. Wow, back into your pocket. And then you're like, hey, can we throw an extra thousand? 2,000? What was the biggest payment you made at once?

I get my bonus every year, so probably about like 10,000. Awesome. On one time. Yeah, and seeing that principle go down and seeing less interest go to the lender, making them more rich, like it is an incredible feeling. That'll carry you to the end. Yeah.

So proud of you guys. Absolutely. What's next? What's the next big goal? What's the next big celebration? I think we wanna get a bigger house just because we've been living in the same house for 15 years, our starter house.

So now with four kids and everything and a teenager, it's time to move up. And now we can do this within the Ramsey guidelines, get a 15 year fixed rate that's no more than a quarter of your take home pay. And my guess with your nerdery, this thing's getting paid off fast. Instantly.

You'll be back for a second debt-free screen four years from now. That's what I'm thinking. Way to go. What do you tell people the key to getting out of debt is? I think, yeah, consistency and just, for me and Jen, it was just our why, why are we doing this?

It wasn't until we watched Financial Peace together, where we were united, getting this done. You know, even though she's a home school mom, she had four, you know, with the four kids, but just being on the front, having her as the support while I'm doing this was just instrumental. And, you know, being able to give to, you know, ministries, not being, you know, restricted by payments

from the bank, obviously, Being able to free to do our money and then following God's will. Yeah. You just have more options now. You get to do what you want. No one's telling you where that payment's gotta go. Absolutely. Oh, that's incredible. How much is the house worth?

It's about $500,000. I just looked. Whoa. Nice. And what's in your retirement accounts, everything? It's, I just looked before this, about 700,000 in retirement and like investments and all that stuff.

Baby steps millionaires, right in front of our eyes, being weird. That's incredible. Well, we have a gift for you. Two every dollar premium vouchers that are good for one year. You can use them, you can pass them along, get someone else started.

We're so proud of you guys. Thanks for joining us. Thank you. You ready? Are we bringing the kids up or what? Yes. All right, bring them up. Quick names and ages.

Melanie's 13, Eugene's 12, Carolyn's five, and Rosie's nine. I love it all the way from the Philadelphia area to do a debt-free scream. You guys ready to scream? Yes. Okay, here we go. It's Eugene and Jennifer, Melanie, Rosie, another Eugene and Carolyn.

173,000 paid off, house and everything in four years, making 125 to 185 with the side hustles on his 40th birthday. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt free! We got a little Eugene as the champion shirt on and I think that's what they are today. They're champions. They happened to their life. They didn't just wait. They

didn't hope. They got on a plan. They followed through. They were consistent. They were on a budget and it's possible for you, America. 40 years old on his birthday, completely debt free. That's something to celebrate. This is The Ramsey Show. Folks, changing your family tree takes more than rice and beans and side hustles. It's also about transferring the big financial risks off your family by having the right kinds of coverage in place. That's why my team created the coverage checkup quiz. It only takes about five minutes to find out what types of insurance you need and don't need to protect your finances. Make

this quiz one of your regular checkups starting right now at ramsysolutions.com slash checkup. That's ramsysolutions.com slash checkup. Welcome back to The Ramsey Show. I'm George Campbell joined by Jade Warshaw. 888255225 is the number to call if you want to jump in. Arnold is in Baton Rouge. Up next, what's going on, Arnold? Hi, George. Hi, Jade. My wife and I love you all very much. Oh, thank you. That's very kind.

Excited to talk to you. So we are in a FHA mortgage, which we got before we discovered Dave Ramsey. We have no consumer debt. We're both engineers and we're paying off our house quicker. Good. And we're sitting at a six and a half percent interest and we have a savings built up where we're ready to pounce whenever interest rates like actually go down in the next year or so as they say they are. Our current mortgage payment is $1,761,

plus escrow brings it up to $2,584 per month. But we got called from our current mortgage provider, which is like the third one by now, because you know, it's game of hoppity over though. They just sell off the loan and forget about you. Yeah, yeah, it is what it is. And they're offering something called a FHA Streamline. And when you Google it,

the law says it has to be a net positive for the person getting the Streamline. They said that they will cover the closing costs of that quote-unquote refinance. And all I gotta pay is origination fees, which is about $200. And my PMI even goes down some. Now, the numbers they're giving don't seem to match. These are the people that have my numbers and yet they're telling me this monthly savings which would be about two months to gain back the origination fees

depending on how I if I go 15 or 30 which we do 15 obviously. Okay. But they're giving numbers that just don't add up so like what do y'all know about this? Is it too good to be true? I'm the youngs. That's a legitimate product. It really depends on the numbers and if it makes sense. And what you're laying out right now, if it is true, that it's only gonna cost you 200 bucks, you're gonna break even on that very quickly.

And that's what you wanna look into with this. So is it going to, number one, lower your interest rate? Do you know what that new interest rate would be? Yep, 6%. So half a percent. Not enough to refinance, lower your interest rate. Do you know what that new interest rate would be? Yep, 6%. So half a percent. Not enough to refinance, refinance, but 200 bucks, yeah. And you're keeping the same loan term? Does it make it a new 15?

I'd have to go into a new 15 or a new 30. The loan's about a year old, and we've already knocked off about four years off of it. And you don't have much equity, it sounds like. About 15% currently, because the value has gone up a bit. So by the next year, it should be, we should be at about 20%,

which would be great for refinancing for real. Is the streamlined part just this, is that just the idea that there's not a closing or is there something else that's being streamlined? I don't know, that's why I was asking y'all. Yeah, I mean, the streamlined, that's just, you know, there's less paperwork. So you get a lower interest rate

without all the paperwork and the credit checks that usually come with the standard refinance. So the main benefit because of that are reduced fees. And you don't have to provide as much documentation. Listen, that's exactly, truly, I mean, I continue to do your research, but during this time, I would be looking for incentives to refi because, A, rates will go down, but then you don't know,

are they gonna go down even more after that? And so you kind of don't wanna be caught in this feeling of, oh, I just paid closing costs, I paid all of this and now rates have gone down again. So I would be looking for some sort of incentive that lets me refinance down until I get to the best rate without having to pay a bunch of closing fees. Closing costs. It doesn't sound scam-worthy.

It sounds like it's a legitimate product and they'll make a little scratch and you'll save. It could be a win-win for everyone. And if you want a second opinion, I would reach out to Churchill Mortgage just to say, hey, here's what they're offering. Can you look at these numbers, make sure I'm not missing anything?

And we've got great folks over there that we've partnered with for over 30 years now. And they're my go-to. I've got a mortgage question. I'll reach out to my buddies over there and say, hey, will you look at this? Tell me if I'm off here, or hey, a caller had this question,

what's your experience with this? And they're very helpful, very knowledgeable. So thank you for the question and good luck on paying off that mortgage. All right, we've got our question of the day brought to you by WireFi. Private student loans are different than federal student loans like Sallie Mae,

but they can hurt just the same. WireFi refinances defaulted private student loans and builds a custom loan based on your ability to pay. So to stop feeling the pain of defaulted private student loan debt, go to yrefi.com slash Ramsey. That's the letter Y, R-E-F-Y dot com slash Ramsey might not be available in all states. Okay, today's question comes from Rachel in Wisconsin.

She says, I wanna be financially prepared to ask my husband for a divorce. He purchased our home the year before we got married and we've been married for five years. We used the $75,000 of profit from the sale of my house to update our home. We have combined finances, so we both contribute to the mortgage every single month.

However, we never added my name to the deed or mortgage. I'm worried because I don't know if I will be entitled to any of the equity in the house. We have children together and I'm scared to leave until I know that I will be financially secure to start over with them." Okay. Yeah. If you had said that, you know, we're boyfriend girlfriend or whatever. Or married six months. Yeah. But you've said that, you know, we're boyfriend girlfriend or whatever I married six months

Yeah, but you've been married five years. You have protections just being married there are financial protections in place and No judge is gonna say well, you're on your own. You didn't you your name wasn't on the deed. What can you do? They're gonna go. All right. What is equitable here? What makes sense based on the situation? And so those states it's kind, I can't say all states, but in most states, it's automatic that if something, once you're married, that you're both- Married of assets.

Yeah. Yeah, so that it becomes joint assets. So again, I don't know your situation. I would be working with a divorce attorney to figure out what makes sense here, depending on, you know, you said you have children together. I don't know what the deal is gonna be with custody and alimony and child support and all of that,

but it's not gonna be, well, you're on your own, you're not getting any money from the sale of the house. You might have to force the sale, maybe you keep the home and the kids are there half the time, I don't know, but I'm sorry you're going through this. This is not a fun situation. We say that divorce turns a marriage into a business transaction.

And I'm glad that you're at least looking into what it takes to be prepared, and if you're gonna be financially secure. But the truth is being debt free and selling this house is probably, may be the best thing depending on the financial situation. But I hope it's not too late. The way she's phrasing it, it sounds like there's no hope

for this marriage. Yeah, I, yeah, I'm not- We don't know what's going on. I don't, but something about her saying I wanna be financially secure to start over with the kids makes me think that she's kind of like trying to get out of situation here, but I would talk to a lawyer.

I would just try to do a consult for as cheap as possible just to find out what's the law in my state and what does it mean and what are the likelihoods here just based off of general information. Yeah, because income is another part. Was she at home with the kids and he was making a bajillion dollars

or were they making about the same? That's going to come into play. So, oh, I'm so sorry, Rachel, not fun at all. All right, if you're listening to the show on YouTube or podcast, some bad news, it's about to end. Good news, you can continue watching and listening on the Ramsey Network app in a distraction-free experience.

You can go further, we got calls picked for you. You can filter by topic. You get all the Ramsey shows in one place. You can ask questions over there. So don't miss what's coming up next. All you need to do is click the link in the show notes or go watch the rest of the show in the app for free. And Jade, we just had a great staff meeting update

from the Ramsey Network team about all the things they're doing in the app, what's going on in there, all the exclusive content. And can I tease that you are a part of a project that I'm hearing might be exclusive to the app? Oh, really? I don't even know about this. You tell me. Well, I'm just, be exclusive to the app. Oh, really? I don't even know about this. You tell me.

Well, I'm just, I can't say anymore. Okay. I'm sworn to secrecy by contract, but I'm very excited for the exclusive content they're gonna be putting into this app on top of all the Ramsey Network shows that are already free. The app is totally free.

We have no plans on ever charging for this app. So go check it out in your app store, Google Play, the app store on Apple. My husband watches the show in the app and he was saying the other day, he's like, it's, it is a much better experience. It's, there's less interruptions, less commercial. Like it's just, it flows. That's the plan is, you know, the third party apps are great. We're not mad at them, but to have an experience that we can control and curate is really, really cool. And people are, they're're not mad at them, but to have an experience that we can control and curate is really, really cool and people are,

they're flocking over to it, including some exclusive interviews. So go check it out in the app store because the third hour is exclusive to the Ramsey Network app. And we've got some good calls coming up. We got John in New York, Catherine also in New York.

Do they know each other? We're gonna find out. How do I talk to my parents about the money they owe me? Ooh! Stick around for that. Salty. we'll see it in the app this is the Ramsey show Hey, you're still here? What are you doing? You do know that the rest of today's show is playing right now over on the Ramsey Network app, right? All you gotta do to finish the

episode is search Ramsey Network in the App Store, Google Play Store, or just click the link in the show notes to download the app for free. Yep, you heard me right, for free. Then right there on the home screen, you can watch the rest of today's show. Bada bing, bada boom. All right, I'm getting out of here. Enjoy. We'll see you on the app.