The Ramsey Show - Don't Let Debt Steal Your Future

Episode Date: April 6, 2026

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Brought to you by the Every Dollar app. Start budgeting for free today. Normal is broke and common sense is weird, so we're here to help you transform your life. From the Ramsey Network and the Fair Winds Credit Union Studios, this is The Ramsey Show. I'm Dave Ramsey, Dr. John Deloney, number one bestselling author, host of the Dr. John Beloney Show,

and Ramsey Personality. He's my co-host today. Jenny is with us in Orlando. Hi, Jenny, what's up? Hello, guys. I'm just kind of tired of this financial dynamic that I have with my spouse for context. We've been together 15 years for almost 40, and I'm the breadwinner. I make about 170,000 a year, and he makes 65.

I'm more so now getting passionate about not carrying debt, making smart choices, and possibly buying a business. But I can't seem to change his mind about these balance transfers and buy now, pay later, programs. So I'm just trying to figure out how to navigate that dynamic with someone that use money so differently. And I typically am the one to rescue. And at what point do I stop rescuing from these, what I consider to be very poor long-term financial choices? Does he have a seat at the table with you? He does. We talk about finances every single month. And I express kind of my displeasure about these things. And it's always the same thing. It's zero person interest for 18 months and

buy and I'll pay let me I didn't ask a good question that's my bad do you all have a co-created vision that y'all are both working towards or does every month he come to the table and get taken to the woodshed by the breadwinner the boss you know what I'm saying

yes I say we're working toward the same vision and he has gotten a little bit better but I can't get him to understand like even though it's zero percent interest it's still money. He sees it as, this is 18 months. It's a Scott Free Deal. It'll be paid before then.

We just view it so differently. I'm kind of now learning. If you can't pay it cash, you can't afford it. Yeah, that's a great lesson. Thanks to you guys. Yeah, we just view it so differently. And it's just building up a lot of resentment. And I don't want to, like you said,

breadwinner, bring them to the table. Give me the credit cards. I'm going to cut them up. but also I just am not in alignment with opening more stuff just because of the bells and whistles that they're dangling on the front end. The only way I've seen this be successful, and Dave, you've got way more experience with this. The only way I've seen this be successful is you opening the hood to your heart and your spirit and you telling him not, hey, when you do this and you need to do this and this was dumb, but you saying, debt scares me. debt makes me feel less safe.

Debt makes me feel like somebody else is controlling our lives, and I want you and me to be in control of our life. And now he's getting to the source. He's not getting lectured. You get the difference? Yeah. I'm not okay. I'm not okay with either one of us.

I'm not okay with either one of us making a large money decision without the other one or in perpendicular to the values of the other one. And you keep doing that. And I'm not okay. This is not okay. But do you see how, what Dave just said? You think it's harmless and it's harming me. Yeah.

I'm not okay. This is scaring the crap out of me. I worry about our future because of this, because we're not aligned. And if you've made a bunch of expensive, like expensive purchases, you go out and buy yourself a car, you, like, you lead with that. I've made purchases without even talking to you about it. I got excited about this thing without even talking. talking to you about it. Now I'm going to own that, but I want us to start to do this together. We've got to build a thing together because, you know, us being on different pages is harming

our relationship because it's terrifying me. Yeah, I think because of how much I make, like he doesn't see 10 or 15,000 as a lot of money. I see it as money when we owe to somebody. That's irrelevant. That's irrelevant to the feeling. Yeah. It doesn't matter who makes more. It doesn't matter who makes what. It doesn't matter how much the income is versus the behavior. It's the behavior that's causing me to be terrified. Right. You introduced yourself to us as I'm Jenny the breadwinner. Does he walk around getting told that a lot?

I make more money. I make a lot of money. No, but I think it gives him that safety of, oh, it's only 10,000. It's only 15,000. It just seems like so little because I make so much. But to me, every dollar I make, I want it to grow and multiply. and he's still This makes me feel the same way

as if you brought home a half a pound of cocaine. That's a lot of cocaine, and I'm not going to go this way. Okay. This is a violation of my values, and it terrifies me. And it's not a matter of the money.

It's a matter of us doing things that are directly a spear point sticking in my arm every time you do this. Or every time I do this. do something that does that to you. We're not going to do things that we're not aligned on. So Sharon has, my wife has some things after 45 years that she loves to do that I frankly do not understand. There are purchases we make that I have zero emotional investment in,

but I can come alongside because I get the point that it's important to her to do that thing. and she gets the same thing with me. Why do you need another gun? Well, because somebody made one. So, you know, it does not emotionally, but she goes, okay, it's within our, and it's within my emotional tolerance to do something with money that I don't understand, but I know gives you joy. Same thing with her buying whatever, X, Y, or Z,

or putting some money in savings a certain way. makes her feel different than it does me. Yeah. That kind of a thing. And so all we're doing is serving each other rather than ourselves. Yes. It's selfishness versus, you know, submit yourselves one to another, scripture says. And it's the other one that's hard.

You submitting to me is easy. Me submitting to you. That one's hard. Yes. And by submitting it doesn't mean I do what you say. It means I care what you think so much that we're not going to do something. that terrifies you. Yeah, and she brought up a great point here that I see couples get sideways on, which is it really matters. She said, I want every dollar to be ROIing, multiplying, and growing.

And it sounds like she has a husband who wants to kind of just enjoy the life he's in. And that is, money just becomes the proxy war, wherever one wants to fight. The real issue is you aren't aligned on this core value. Yeah. And what you, I don't want the audience to miss what you just said, because it's important. You make a wee bit, we barely more than 175K a year. I think you sneeze that this morning. But you and Sharon still talk about purchases. We do not make large purchases or gifts without the other one being approved.

Yeah. And sometimes the approval is laughing. Sure. You know, it's like, but there's knowledge ahead of time. And we don't get a, it's like, oh, you know, well, let's let's, let's, let's, let's, let's Let's sit on that a week and pray. Okay. That's a fair answer, too.

Yeah. I don't understand. Why are you doing that? Explain? Okay, I still don't understand. All right, let's wait a minute. So yes, no, or wait. These are three possible answers.

And all tightwads and nerds can't have every dollar behaving with no fun involved. The other person's there to bring the fun. Right. So I think he's your fun person. So you use him for that. And fun people have to realize bills have to be paid every month, which is annoying, right? And we need the other side too. Yeah, there's all that thing that the grocery store wants money for those groceries.

Who knew? Statistics show that half of Americans don't have enough life insurance or they don't have any at all. I don't understand this, John. Why don't people want to take care of their family? They think they're going to die or something? Well, I used to be one of those guys. I didn't even think about it. And one of my buddies said, hey, the only reason to not have life insurance is if you hate your wife and kids.

and I immediately went and got term life insurance. That's a gut punch. And you're telling me, and for decades, Dave, I've sat across people who've lost a spouse. They've lost somebody important to them. Me too. And they don't know what to do next. Me too. I mean, you're going to have a crisis here.

And, you know, you've got two options while you're sitting and talking to a young widow. She's concerned about how she's going to invest all this money properly and not mess this up. Or she's concerned how she's going to eat tomorrow. That's exactly right. These are the two options. And take care of your dadgum family, man. Term life insurance can replace. income, pay off dads, cover funeral expenses so your family can actually have the opportunity to just be sad, to just miss you.

That's exactly what it's supposed to be. It's saying, I love you to your family, term life insurance. Jeff Zander and the team of Zander Insurance makes it easy and affordable. I've used them personally for 25 years. They're the only people I trust. Go to Zander.com or call 800 356-4282. Cody is in Chattanooga. Odie, how are you doing good? How are you doing today? Better than I deserve. What's up?

Great. Appreciate you taking the call. Hey, I am a first-time homeowner. I bought my house about six months ago. I got it on a 15-year doing biweekly payments, but I just got, in going through the process of switching to an arm loan, so a seven-year adjusted rate mortgage, I closed on it today. I've got three days to cancel it if I need to, and I feel kind of in my gut like I might have been making a bad decision, and I wanted to chat with you about it. Okay. What was the interest rate on your old mortgage? Five point six to five. And the interest rate on the arm is? It's going to be $499 for the next seven years. So five, what? The one you got rid of was five what?

It is 5.625. Okay. All right. So it's less than 1%. And your loan balance is what? It is. When I got the house, it was 192. So what's your loan balance today?

I've managed to pay it down to 168 in the past six months. Okay. So 1% is $600 a year. Mm-hmm. Is the difference. And it's not even that. So it's probably $1,400. a year is your difference. And what was your closing costs on this?

My closing costs are going to be about $8,000. So you're not even going to break even? That's what I'm looking at, too. And my goal is to pay this off in the next three or five years. Your goal is irrelevant on this. It's just a simple refinance calculation. If you save $1,400 a month and you pay $8,000 for that purpose and the loan's going to be paid off in seven years, you're not even going to make your money back and interest saved that you paid out in closing costs. Your break-even analysis sucks. Got it.

So my payment right now is $1,800. It would drop down to $1167. I need to cancel this. Yes. Cool. Yeah. Well, you see why? Regardless of what your payment change is, it's the interest change that matters.

The only real savings is the interest savings. difference in 562 and 499, which is what? 0.75, 3 quarters of a point, right? Three quarters of a point. One point is $1,680, so three quarters of a point is around $1,400. Got it, got it. And I think I had done my math wrong towards the front end of doing this. And in closing, I think I kind of started to figure that out.

Okay. So now, can I pile on now? Are you okay? Please, please. buckle up, which is really just to go back to the real reason to talk that this thing. Let's pretend that we had not found that mathematical problem. And instead, you just had signed up for an adjustable rate that adjusts one time in seven years. If you don't pay it off in seven years, it's going to adjust dramatically.

You know that, right? Yeah. Yes. Okay. And so if your plan doesn't work out, you've got a problem. Yes. Never put together a financial formula that your plan has to work for it to work. It also has to work when the plan doesn't work, too.

Yeah. Because that's the stuff that we teach is the only stuff, common sense stuff, the biblically based stuff, get out of debt, for instance, okay? That's the only plan that works when things are good and the plans work out and when the plans don't work out. Yeah. So you did a deal here that only works if it works. And those kinds are the ones that'll come around and bite you in the butt later. And so you probably would be okay because if it adjusted to, you know, nine or 10 percent or something crazy at the end of that seven years, it wouldn't be much of a balance because you would have paid it way down. But you would not be able to refinance if you were unemployed at that precise moment, which I've gotten that call. I plan to pay off this balloon in five years. And in the first. 48th month, 12 months before the balloon pops, I lost my job and my wife got a cancer diagnosis. And so we're just,

now our house is being foreclosed on, because you built a plan that only works when things work. Right. And that's, we wouldn't have a show if there wasn't. I was going to say, like, doctors and lawyers, like there'd be way fewer of them and guys like us if everyone's planned worked all the time.

Yeah. Like the one thing is your plan's probably not going to work. Like, there were functional families. We wouldn't need people. with Ph.D. in counseling. That's exactly right. If people used a calculator. But most families put the fun and dysfunctional. So, I mean, it's, you know, including mine. So there you go.

All right, fun. Victoria is in Austin, Texas. Hi, Victoria. How are you? I'm doing well. How are you? Better than I deserve. What's up? Hi. I am looking to see I am $300, $227,600 in

debt. I'm sorry, why not? I didn't understand. That was a number. What was that number? What was that number? What? $300,000. Yes, indeed. Okay, and how much of that is your home, ma'am?

$25,000. Okay, what is the other $45,000 in debt? It is student loan. Mm-hmm. And then I have a car that's $12,000, and then my air condition went out. That is $10,000. your air conditioner went out and you borrowed to get another one. Yes, sir.

That's the 2000. Okay. All right. The air conditioner go out and doesn't put you in debt. It's the buying the other one that goes you into that. Okay. So the, and what do you make, ma'am? I make between $100 to $150,000 a year.

Wow. So I didn't work any overtime. It would just be $100. If I do add overtime to that, it's good for you. Good for you. Okay. I'm caught up with you now. And your question's what?

Um, like, would it be smart for me to, um, open up a Ross IRA now, even though I'm still in debt and I'm paying off my debt or should I wait until I get all my debt off of me first before I open up a Ross IRA? That is an excellent question. And the good news is you're smart enough to know you need to be investing. That's very smart. Okay. How old are you? I am 32 years old. Okay. So you're already looking out into the future. Good for you. Well done. So what we have found is, is after studying this for many, many years and helping millions of people get out of debt and build wealth and tens of thousands of them become millionaires is the fastest way to become a millionaire, the fastest way to build substantial investments is to first get out of debt because your most powerful wealth-building tool is your income. Now, I'm not talking about your house, but we want to get rid of the student loan and the car debt and the air conditioner debt as soon

as we can. And the good news is it's only $45,000. And if you work over to, time you can make 150 and live on 100 and be debt free in one year you'll be 33 with no debt that'd be pretty cool but you're going to buckle down more than you ever have yes because you've been a little sloppy that's how we got here yes that doesn't make you bad it just makes you normal but normal sucks we don't want to be normal that's right okay so let's buckle down get on beans and rice rice and beans, get on a budget, get that every dollar app, download it off the web for free. Get your budget going. And let's knock these debts out ASAP.

And lay it out on paper where you're done in one year or less, okay? One year list, yes, sir. I will. That's 45 from 150 leaves me 105 to live on, not counting taxes. You can do that. Okay. Once you focus, because you're a person that focuses, I can tell. But now that you're paying attention, now that you're awake, game on, okay?

Game on. Okay. All right. And you can do this. And so then what's going to happen is, is that what you used to pay on car payments and student loan payments, when you start putting that into an investment, that amount alone will make you a millionaire before you retire. Yes, sir. And pay the 45 off and then open their award. Yes, ma'am.

There you go. We teach a process for getting out of debt and then building wealth. We call it the baby steps. And again, millions of people have done it. I'll send you a copy of the book, The Total Money Makeover is my gift. And it shows you exactly how to work those baby steps. And don't make up your own plan, Victoria. Do the one we have that works. It's proven. It's proven. It's not because somehow we just dreamed it up. It's millions and millions of people have done that. I've sold 20 million of those books. So we know this is moving the needle. And you're awake now. So game on. Home is one of the biggest financial decisions you'll ever make. But too many people base the decision on opinions or what the market is doing that week. Churchill Mortgage has been our trusted partner for over 30 years because they do things the Ramsey way. A lot of people think buying a home starts with going to a bunch of open houses.

But if you're buying a home the right way, you start with a budget and a trusted guide like Churchill, before you even think about house shopping. Churchill will show you the real numbers, not what a bank will approve. Buying before being ready is how people end up house poor and stressed out. Churchill will tell you the truth, and they won't push you into more house than you need. And once you understand what you can actually afford,

you can move forward with clarity and confidence. So if you're ready to buy a home, choose the right guide and stick to a plan. Go to Churchill Mortgage.com and get started. That's Churchill Mortgage.com. This is a paid advertisement, NMLSID1591, and MLS ConsumerExus.org, Eagle Housing Lender. So I'm really starting to... I mean, I was mildly amused with AI to start with, but I'm really starting to love it.

Once I understood this one basic thing about AI, here's something you got to understand. So AI obviously generates an answer for you. You pose an answer for it. But the only thing you can answer from is the data that you give it access to. And so if you control the data inputs, you're controlling the outputs. So, for instance, when Google has lost its stupid mind, and actually is when you ask Google a question, it's searching Reddit as if Reddit is some source of truth on anything. 90% of what's in there is bull crap. So why you would search that for the answer to a question is beyond me.

So the AI database is completely screwed up. And so your answer is screwed up. So, but we understand this now. and our team has built the Ask Ramsey AI tool. And what's in it? What's the data that publishes in it? Well, we put three years of the answers from this show in there. We put all the Financial Peace University in there, all the books we've written here in there.

We put all the articles that we've written in there. So there's nothing in there except Ramsey. All the answers from anywhere we've given, one of us has given, you know, Dr. Deloney, me, Rachel, whoever, and it drops in there. So when you hit the Ask Ramsey AI app, it's going to give you an answer that sounds even as smart helleck as you're going to get here on the air. I mean, it's even got some of the sarcasm in it. It's awesome. I want them to turn up to sarcasm a little bit more.

They took all my jokes about George out, though, and that kind of bug me up. Did they really? Yeah. Aw. He got his feelings hurt. Ask Ramsey about George jokes. He drove home in his Tesla in a huff, except there was no huff because there's no huff coming up the back of his Tesla. See, there's a good George joke right there.

All right. So here's some, we get questions. And we always go down and because you need to check this app out. It's at Ramsey's www.com. It's free. Ask Ramsey. If you can't get through on the air here, which nobody can because these lines are jammed all the time, you can just go over there and ask Ramsey.

So here's the number, and we always come in and give you the number one question of the week. So the number one question this week are one of the top pitfalls to avoid when budgeting. So I read an old Zig Zig Ziglar quote this weekend that said, no one accidentally got to the top of Mount Everest. I always say no one accidentally won the Super Bowl. Winning is an intentional act. And so if winning with money is an intentional act, what are the tactical things you do?

Budgeting is the main one. You tell your money what to do instead of wondering where it went. You give every dollar an assignment every month before the month begins, and that's how we even named the app, the budgeting app, every dollar. Okay. Okay. So top eight pitfalls to avoid when you're doing your budget. Make sure you give every dollar a job. Now, this is not your checking account balance.

This is your budget. And so there's no, can be no money left over. If it's left over, you need to have a category that's called leftover money. So at least then it's got a name. But it should be going to miscellaneous or fund or debt reduction or to something, right? So no money left over. Now, money left over in a checking account is good. leave a little slush in there. But your zero, your budget should go to zero every month.

The second one is then you guess at it. You do a budget and you don't follow it. You just go, I kind of thought I, no, you got to go like, this is how much we have for groceries and we're not buying more groceries than this. We run out of groceries after this day. And so, period. Then the other one was we ignore the four walls. We don't take care of the important stuff first. The important stuff is groceries and utilities and housing and utilities and transportation. Another one is you let debt steal your momentum, letting more debt in or be refusing to sell something that's got a bunch of debt on it. It's got you stuck. And so you can't get the math to spin and start to, you can't get any margin to start to make some process.

You need a miscellaneous category. Everyone needs a miscellaneous category. You need a his and her spending category. That's small, but it's unaccounted for. It's just money you can blow, money you can. get rid of. You need to be budgeting, and this is the biggest one, with your spouse. So the two of you sit down, even if it's for 15 minutes, even if it's for two hours with the kids in bed, we go over the budget, we both agree to the budget, and then we freaking stick to the budget. This is

our contract. This is an agreement with each other. We pinky swear and spit shake. We're doing this. When you budget with your spouse, you are agreeing on your fears. You're agreeing on your values, you're agreeing on your dreams. And when you agree on that much stuff, you're going to have a level of unity in your relationship. You have no other way. Another thing is, if you make a mistake and have a bad month, people quit. Don't quit. Get back on the horse. Go ride it again. I have a buddy who talks about that in the nutrition space about you have, you're on a diet and you have one bad day. And then you're just like, ah, I blew it. He said, that's like walking outside in the morning heading to work. And you see you have a flat tire. And you pull out a knife and deflate

all the other tires too. He's like, fix that tire and get on to work. And when he said it like that, I was like, oh, yeah, it's dumb. Okay, so I had pizza. I'm going to get back on in the morning. Yeah, yeah. Just get back with it. So you messed up. You're human. Oh, no. And here's the thing. You have to adjust for irregular expenses. When you first do your budget, you suck at this. You've never done it before. It's not going to be right. Your first 30 days, you're probably going to have some emergency budget committee meetings and adjust and raise one category and lower some other ones by the same amount because it's still got to equal zero. And it takes about 90 days, about three budget cycles to quit fighting about it, to get on the same page about it,

and to actually get your numbers right. Because we think we're doing one thing with food and we're actually spending twice that. We think we're doing one thing with whatever and we didn't realize. Oh, we forgot children's activities. Like, well, let me just help you. Children have activities. Or a doctor bill that's seven months old just comes out of the blue and you got to, like it just shows up. And who knew? Yeah. Yeah, I forgot about it. I forgot I went. Yeah, that's all there. So these are the, this is the top pitfalls to avoid when budgeting and straight out of the Ask Ramsey tool, almost like we said it because we did. Can I tell you something? This is a very personal

private experiment I've been doing, n equals one. And I got to tell you, you and I haven't, we haven't hung out in a while, and I'll just tell you right here on the air. Oh, my wife and I,

March 1st, canceled Amazon Prime. And the second thing is I said, for the month of March, and the month of April, I'm just going to use, I'm going to go old school and just use cash.

And at every transaction. At every transaction. Wow. In fact, today was the first thing I've spent with a card to get gas. Well, I didn't, I was like, oh, I forgot, Katz. Like, I'm still practicing. It was my first one that I didn't keep mind of the bargain I made to myself. I got to tell you two things.

One, the ability to just click it and buy it versus I'm going to plan and go to the store has so insanely reduced the number of things I buy. I never in a million years would have thought that. The second thing is I just thought like Oh I need those socks or I need that thing Or I need those light bulbs whatever I'm just click click click click click click and they just mail them to my house

When I have to get out and go to the store and plan I just buy less like we don't need that right now Oh you forget it Or the socks I got yeah The second thing is you've taught this for years As I'm just putting over cash It is painful Yep

It sticks in a way that just waving my phone over the little beep-de-beep thing. It is causing me to rethink all the stuff I buy. What gas cost. In a very visceral way. And it's just, it's a reminder at how the credit card companies, the tech companies, in an effort to make everything comfortable and quote unquote, reduce friction, have taken away our internal like metric system for this hurts. Do you really need this? Do you want this? And man, I do this. I'm, uh, I, I, I, I, I'm with you on this show, and I've been shocked at how my spending habits, frictionless habits, have taken over. Well, and your psychology brain is probably in an over-off.

Oh, dude. It's cooking. You're melting down, analyzing all this. Well, I'm trying to connect what I'm feeling versus what I'm doing. And, man, that bridge is, I need a lot less stuff. And, man, using cash really. And the other thing is, you cannot replace the weird looks you get when you pay cash for things. I did have one exchange where they're like, well, they were looking around at me like I was handing them a snake and I said, hey, that's all I got. So if y'all don't take like money, I'm going to have to, and they're like, no, no, you can do it.

We just got to, I don't know how to open the drawer. I mean, it was a whole thing. I felt like I rode up to like a store on a horse. You did. You've worked too hard to get control of your money just to let strangers control your data. Think about it. Just about every time you sign up for a newsletter, grab a coupon code. or start a free trial, your personal info, like your name, email address, phone number, and more

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That's join delete me.com slash ramsie. Zach is in North Carolina. Hi, Zach. How are you? Hey, I do. Wonderful. Appreciate your time. I call a big fan. Sure. How can we help? Yeah, I couldn't ask for a better duo. I was hoping you can help resolve a disagreement between me and my wife.

Yes, I love these. We're probably going to be right. I'm sure you're all. She would like to move back to where we're from, where more family and friends. We've got an 18-month-old baby girl, and she'd like some more help. Where is that? Where's home?

And you're in Wilmington. How far is Wilmington from Charlotte? About three, three and a half. Not bad. Okay. All right. Versus, I've built a, let's say, fairly successful real estate career over the past decade here. And just trying to resolve that issue and trying to figure it out. Because starting over in a different market is terrifying.

And just doesn't sound feasible to me and trying to find maybe a middle ground or just walk through it, if you will. What would a middle ground look like? a great question. I don't hear, I don't hear a middle ground here, so I'd love to hear if you've got one. Well, I guess I'm looking for a vice. How old are you guys? 33. Yeah. 33. And you've been in this market for 10 years? Yes, sir, 13.

Wait a minute. Has she been there 10 years? Six. We've been here. How long have you all been married? Six. We're both from... Yes, yes, sir. Okay. All right. So the baby is the thing that caused the change? Because there was probably no big deal before that. Well, Mike, I would bet the opposite.

Has this been brewing for a while? We don't have any friends. I'm kind of all alone while you're out running deals. And then the baby just brought that all to the surface? Yeah, you pretty much hit the nail, man. Okay. All right. Because that's, like, there is the draw I want to be around family.

I want all my, all of the family's chickens. and, you know, in the same roost. Like, that's common. I totally get that. But just listening to you talk about your career. Like, that makes me think she is rapidly feeling like she is living a life that she doesn't like living. You all have created a life that's mostly about you and she doesn't like what

y'all have created together. Yes, sir. Yeah, we've got, we got my folks here, but that's not enough. And she didn't have the village that she needs. So just having a hard time with that. Okay. So is the fear all market-based that you have this job? It's comfortable.

You know how it all works. And the thought of starting over again at 33, which, by the way, you're not going to be starting over. But it feels that way. And I get that. Is that what makes you nervous? Or do you also not want to live there? You don't want to be around her family. You don't want to be around her old friends.

Is that part of it, too, or not really? Well, a little bit of a combo. Not that I don't want to be around them, but I just, I don't know. It's just been taking so long to get where we're at now and just starting over. It's extremely overwhelming. I would, A, sit down with a good marriage counselor and keep talking about this for a while to keep yourselves from getting too entrenched. And then I would probably throw out the challenge of two things. And this is just old guy talking, and then I'll let the real psychologist over here answer the question.

but number one, going back, you can't ever go back home. I drove through my neighborhood that I grew up in the other day. It's not the neighborhood I grew up in. Yeah. It just is the neighborhood I grew up in, but it's not the neighborhood I grew up in. You know what I'm saying? Things have changed. And her old friends have changed.

And the comfort she thinks she's going to get from being near her mother is not as much as she thinks it is. and so she's painted this romantic picture of how she's going to step back into all of this connection that she used to have and none of those people are the same and most of them aren't still there and some of them you don't even want to be connected to and so it's a false picture to a large degree this romance of this is going to be you know it's all it's all unicorns and skittles over there is bull crap okay um that's my opinion you just can't go back. And so, I mean, I visit my old whatever, school, church, whatever.

It just, I walk in there and I'm going, what are we doing here back then? And a common refrain that you'll hear me say all the time is wherever you go, y'all are going to go with you. Exactly. And so if you all have built a life where she thinks she worked too much, she feels alone inside her own house, you all sit by each other on the couch and you're scrolling on your phone checking deals and she's trying to connect with you, but she's on her phone. Zip code doesn't matter.

That same dynamic's going to end up there. The second thing I would propose is with the help of a therapist that's keeping you guys nimble and flexible and talking and understanding each other's needs as you're going into this is I would go on a hardcore six-month experiment to build community. plug into a church, invite people to your house, invite neighbors to your house, invite church people to your house, invite work people to your house, have dinners, develop some friendships. You're not friends with anybody because you've not been friends to anybody. And no one initiates in this stupid digital culture anymore.

And if you all would initiate, you're probably going to have more friends in six months than you would ever have in any other location. but you need to work at the friendship and community building thing because you've spent zero calories on it so far, both of you. John? Agreed. Yeah, and the layer underneath that one is, I think there's some real power in sitting across the table from your wife and saying, if this is true, don't say it if it's not true, but over the last six years, the market's been up and down. Six years ago, you were living high, right? And in the last four years, you've been grinding it.

I've put this ahead of you. And I want to build an, essentially, I want to build a new marriage. What does it look like for me to walk in the door and put my phone down and be present with you? The deal will wait. What does it look? How can I love you better? And by the way, I don't want to make this all one-sided. There's stuff about her that you miss.

and you're able to say, here's ways you can love me right now. But I want you to go first. You use the word I. I haven't shown up. I have made my life about business. I've been really proud about this. And you've been telling me for two years, three years, four years, I'm lonely. Can we go hang out?

Will you put your phone down? And I haven't done those things. That changes today. Yeah. Have you protected her from your mother? I have. I think a lot of it has to do. We're in a secondary vacation, primarily home market.

We're not in Wilmington. probably, of course, the city, and she's got her sister and her kids there who are the same age as our daughter, and her best friend in 20 years is there. And just harder to make friends here than it is there. And I think that has a lot to do with it. Plus, lack of sleep and blah, blah, blah. Yeah, and I think you get into all of that. But I really would explore some new attempts at building the life there before I left there. And then if you can't, and you decide.

based on that. The only place we can build the life we both want is I will make the sacrifice to rebuild my market in another place. And here's what that's going to cost. It's going to be we're going to have a cut an in con. Like we're going to plan for this. We're not just going to be emotional and reactive about it. We're going to plan for it. So it's not going to be tomorrow. But Dave, I always want to tell, especially young hustlers like this guy that's just out there grinding, the proof of your future success is often your like past. You've shown yourself you can get in there and grind and build it. You can't. And so to say, I won't be able to. It's not going to happen. I don't think that's true. Terrifying. It's scary. And he doesn't feel like he needs to. He doesn't feel like he has to

if she just had friends. Or her sister or her cousins or her nieces and all that kind of stuff. But I love the idea of y'all two sitting on the same side of the table and putting the problem on the other side of the table and making sure, like Dave said, y'all don't come a seam at the part at the seams at each other. It's you versus me. One of us is going to win this. It is how do we build the life we want? And that includes how do you want this house to feel? Where is this going to be? What's it going to look like financially? Who do we want running around our house? So we did we did this, John. Okay. 45 years ago. What's that? When I got married. My wife came three hours from her family. Huh. Yeah. Moved into a city where she knew no one.

We did this. Yeah. We did exactly what we did. And we did exactly what I said. just then. That's exactly what we did. And she's never one time said she wanted to go back home. But we built community. If you're looking for a more budget-friendly way to save on medical costs and stay true to your values, Christian health care ministries is a great option to think about. CHM is not health insurance. It's a health cost-sharing ministry, a biblical, community-based way for Christians to share each other's medical bills. That means no enrollment deadlines, and you can choose any doctor or hospital you want. That kind of freedom is big, especially if you're self-employed between jobs, or you just need something that fits your budget better. CHM has been around for decades,

faithfully serving the Christian community. And many members save hundreds of dollars a month compared to traditional health insurance. And that margin gives you breathing room when you're working the baby steps and trying to steward your money well. And right now, CHM is offering new members a 50% credit towards their first month of membership. Get started at CH Ministries.org slash budgets and use promo code Ramsey. That's CHministries.org slash budget and promo code Ramsey. Welcome back to the Ramsey show in the Fairwinds Credit Union Studio. I'm Dave Ramsey, your host, John Deloney. Dr. John Deloney, Ramsey Personality, number one bestselling author is my co-host today. Ruth is in Nashville. Hi, Ruth. What's up?

So I'm calling because my husband and I built a multi-generational house with his parents. Now, only less than about a year and a half later, my mother-in-law has moved out and will soon stop helping with the mortgage payment. So we will either have to sell the house with very little equity in it or we will lose the house. She says she wants part of the sale of the house. But how can I move forward without feeling as much. hurt or animosity towards my mother-in-law. Could I venture a guess that before any of this was done or signed up for you, had a bad feeling about it?

Yes. So you're really mad at yourself? There's a good part of it that I am mad at myself, yeah. What happened? So my husband and I came up to my in-laws with the idea to build a multi-generational house. back in probably late 23, early 2024. His dad had had a stroke back in 2008 and was in poor health. So we were talking and we talked about how important it was for him to be with his dad

when the time came, when time came. And so we brought up this idea with them and we were very clear. We had a budget of $1,500 for our half of the mortgage. So whatever we chose has to fall within that. It ended up, like with building, ballooning a bit. And we ended up with a $3,600 payment rounding up. And so they said that they would cover, you know, whatever we could not cover with the $1,500.

We moved in in September of 24. And by last June, so of 25, my father-in-law passed away. and it was there as hurt as painful as it was to be there it was also i would never take that to me back it was kind of what you signed up for yeah that's good that part's good yeah exactly um so did you put equity into the house um me and her husband put about um a hundred maybe a little over a hundred thousand into the house and it won't bring enough for you to get your hundred out um we may just get our hundred. So we put in a hundred, his parents put in a hundred, but it was like a six hundred and sixty thousand dollars house. So would there be enough to get her hundred and your hundred out?

Probably not both of our hundred. She has, yeah, we're hoping to get close, but she has since started dating a guy in mid-July and moved in with him in August. And she was, she first that she would cover the normal part of the mortgage. She wasn't taking that away from the picture. And then January, she said, no, I have to go 50-50, which I was a little annoyed, but, I mean, I dealt with it because it was fair. And then just last month, she said, no, I'm not paying half. I will only be paying $1,500, and soon I will not be contributing to the house. So I assume there's no written, there's no written a grant.

agreement, right? No. Okay. Just her text messages saying this is what it's happening. So the reality is the house is gone. Yeah. So sell it immediately. Mm-hmm.

And deduct what she promised to pay everything above $1,500 originally, and whatever she doesn't keep her promise on, deduct that from her half of the proceeds. Okay. To make the deal fair. to make her, she's going to honor her word. I'm just taking it out of her hide. And, but there's so much to be disappointed in with this lady,

but none of it is your fault and none of it is anything you can do about. But, and really I would be so disappointed with her in all things except the house. There's just so much that she's, that there's wrong about what everything is just sad. It is. And then, and here, let's walk away. Let's walk back. Then the house is gone. You have roughly your hundred in your hand and you go start the next chapter of your life. And then the way I would quantify that, and I may be over compartmentalizing so that my psychologist over here may correct me. But the way I would do that is I say, okay, whatever money I lost, whatever tears I have shed over the stupidity of this deal was worth it for that precious. six or eight months and to be there when pop passed. Yeah. And that was the cost of that.

That's what it cost me for to have that. I traded this for that and then leave it there and walk away emotionally. Put it in the rear view mirror. And then you've got her to deal with and her misbehavior, which is just a separate issue. But, you know, she's just out of control and is grieving in a weird way. and a dysfunctional way. Well, she's met somebody, and he's whispering in her ear

because he wants that money in his pocket, not niels. Yeah. Okay, Ruth, can I use your situation, your original question as like a miniature teaching moment here? Sure. Because you asked a really powerful question, and I think this question is drowning us as a culture. How can I do these hard things that I got to do

that were not what we agreed upon and not feel sad, resentful, all these other feelings. All feelings are they're just, they're digital billboards as you're driving down the highway of life. They're giving you information. And if you think of them that way, they are powerful and they're important data, but their job is not to tell you the truth. It's to keep you safe on this road you're driving on called life. and if you were driving down i-65 we're all here in nashville if you're driving down this main artery highway that goes through our town our city and you said i want to avoid all signage right that would be a

nightmarish ride you would never get where you actually want to go and so what i want to tell you is and everybody listening and this is the pot talking to the kettle i'm a big emotional big feeling guy too, is I want us to all collectively stop trying to build lives where we try to work around feelings. Let's go right through the stinking middle of them. Yeah, if you're going through hell, keep driving. Right. Yeah. So I'm going to feel, I'm going to feel sad. I'm going to feel frustrated. I'm going to feel XYZ. This is what maturity is. This is what emotional regulation is, if you want to be a nerd. It is, can I feel this thing and then do the next right thing after that feeling? and it doesn't mean that your feelings are wrong, bad.

I don't judge feelings anymore. Have all the ones you want. What I'm going to look at is what's the thing I did next after that feeling. And so be heartbroken. Be sad, be pissed off, be all those things. And still sell the house. And still sell the house. Yeah.

And still execute on the proper way to handle the money at the transaction at the sale of the house and all of that. Still choose to, I'm going to drop a contract with this woman as we sell this house or whatever. And still, next time I have a bad feeling about a deal, I'm going to listen to it. I'm going to listen to my bad, my dad used to say when the bell rings, the bell's ringing for, listen to the bell. It's a great line. Listen to it. Listen to it. Listen to it. That doesn't mean it's right, but I'm going to at least listen to it and talk to it. When in doubt, don't. Hey, what's up guys? It's Jade. Listen, my husband and I drive used vehicles. And we really do plan on keeping those running for a long time.

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Thomas is in Dallas. Hi, Thomas. How are you? Good. How you doing, Dave? Better than I deserve. What's up? Hey, so I'm basically a subcontractor working for a company.

I have to be doing a lot of driving, need a personal vehicle. Right now, my boss is lending me one of his. I currently have a broken down truck that needs an engine, probably around a $5,000 fix. If I get that fixed, my boss will give me the equivalent of a 20 to 33% raise across the board on my job. The question is whether or not to take out a loan to do. that and then since right now the income that I'm getting fixed pretty good so I can literally what are you doing right what's that what do you do for a living I'm a clean clean swimming pools okay all right and so a 5,000 or a 6,000 dollar truck will get the job done

as long as it runs and gets you there right well so I currently have a vehicle that is broken down it needs an inch I know you told me that I don't want to fix it it crap. I'd rather just buy one that's already running. Okay. So what can you sell that piece of crap for, that's salvage? $1,500? Not quite sure. I haven't priced that yet. Yeah, okay.

What kind of year model and what truck is that that's sitting with no engine? 2001 or maybe a 2003 forward F-150. Okay, yeah. So you can buy that car with an engine running for $5 or $6,000. Yeah. Okay. And what are you making? How much do you make before he gives you this 20 or 30% raise? Net is 33.5. Gross is 30 after my 1099 taxes.

33.5, $33,500? Yes. Okay. I'm making about, yeah. Yeah. Okay. And so a 20% raise is $7,000. Does that sound right?

Yeah. 20% of 33. Okay. And so, yeah, the, so you break even after one year. Okay. If you spend $7,000 to get a truck and he pays you 20%. How long have you been working for this guy? Well, so he's the one that trained my dad. I've been working for my dad for ever since I'm 28. I've been working for my dad often. I've been 15. I recently had a life destruction event and literally have started working last week back in this job that I have like What's a life destruction event? I had a mental health crisis during the mental health crisis.

There was family violence happening between me and my wife. I got put in prison for that. Even though in Texas there's supposed to be provisions for preventing for helping people with. mental health, so not just put it in prison, but that didn't happen with me. How long were you away? Two years and a month, and then I got a violation and was back in for another five months, so I'm back out a week now. Okay.

No. Yeah, don't borrow money, please. You do not need to borrow any money. You're coming off of a highly unstable situation, and you haven't stabilized. yet. At least we don't know that. We hope you have. And you hope you have. Okay. If you told me this was all three years ago, it might be a different discussion. It wouldn't be a discussion about borrowing money. It would be a bit of a different picture. But instead, we're three minutes into this, not three years into this. So you need to sustain a life with very little stress and adding debt to this is not the thing. So thank you, boss, for the new job.

I'm sorry, I'm a minute out of prison and I don't need to be borrowing money right now. I'll have to drive your truck for a while longer until I can save up and pay cash for something. How long do you can save up six grand? That's kind of the issue. All my money is basically kind of breaking even in my every dollar zero budget. Where is it going? Well on, second. Biggest expense is $300 in gas and I'm spending.

about $105, I'm purchasing about 105 gallons a month. Come on, though, please. Cool. How much is your rent? That's it. Me and my wife are currently separated. She has a $500 rent. I have a $250 rent.

You have to pay the $500 rent? Yes. Why? Currently, because we have two kids. She's basically stay at home. Her family sometimes helps, but if I'm paying this stuff, she doesn't ask for the money. and currently because of the family lines there's a no contact order so I cannot coordinate anything with her

so I'm kind of defaulting to doing everything basically yeah well I'm going to help you you don't have to do everything you need to make sure the kids have something to eat but she also is going to have to make a life without you and so she and that means she has to develop a way to live sustainably without you feeding her okay so I um You know, right now we've got to get you up and stable. So your 250 rent. Even 500 going out for her still not used up all your money. So you've just started.

This is real fresh. Thomas, please don't go borrow money to buy a truck to work for a guy that you've been working for for 10 minutes, even though you've known him 100 years. This whole thing, everything in your life has been quick and sudden and fast. Impulsive. And I want you to slow. Go down. And just be boring for a while. That's no excitement.

You've had enough excitement to last year the rest of your life. Just be boring, Thomas. Can I paint you a picture, brother? All right. The last two plus two and a half years, somebody told you when to get up, when to eat, when you could go outside, what you were going to eat, right? Yep.

when you borrow money that bank tells you i don't care how you feel you're going to work tomorrow because i want my money you already took my truck oh you got you lost that job i don't really care you're doing this because right and so what i don't want you to do is walk out of prison and then walk right back in voluntarily and that's what borrowing money does stay free yeah that's good that's good stay free hang on i'll send you a copy of the total money makeover and we'll help you as you rebuild your life and steady steady and slow Christian, send him building a non-anxious life, too. I want to give him some tools for walking through the ups and downs

that are going to be the next five, 10, 15 years of his life as he steadies himself and builds a new version of himself from the inside out. We'll send him both of those. Yeah, very good. That's good. I like that. Mike's in Detroit. Hey, Mike, how are you?

Feeling good, I think. I need a little bit of help. Okay, how can we help? So I got my dream job in September of 2023, working for a friend. company. Everything was going swimmingly up until about November 2024 where I had to leave his company and pick up work with a competitor. While I was working for him, I was working to get myself out of university debt, education debt, and get my feet underneath me. And he is independent as possible and save up money and everything else. Unfortunately, I had a lawsuit that I had to

file against that employer, and it took everything out of my... The old friend or the second one? Old friend. Why? You only work for him for a year. Well, I was working for him on and off for about nine years, kind of... No, but the dream was, the dream lasted a whole year. What was the lawsuit for? He did not pay an invoice that I billed him for, for work that I performed for him.

After you left? Yes. Why did you do work for him after you left if you got fired? I'm sorry. I'm sorry. I'm sorry before I was hired on full time. How big was the invoice? $8,000.

Okay. I'm sorry. So how much were you making working for this guy? $65,000 a year. Okay. So have you been able to replace that income? I was working for another company, a competitor of his, but there was. are only paying half of it.

Now, so I think what I'm going to concentrate on is not being angry at him and all this, quote, dream job stuff that never was really a dream and instead be working on the future. Yeah, get out of the grief and get after something moving forward. Yeah. Go forward. Forward. When you're drowning in credit card debt and collectors start threatening lawsuits, a rep from some call center debt relief company can't protect you.

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Leslie is calling. Leslie, how are you? Hi, good. How are you? Better than I deserve. What's up? Thank you for taking my call first off. Sure.

So my husband and I have three kids and our oldest. She's 16. We share her with his first wife, and she's 16. And we want to know. Our question is, should we help pay for her driving school? Who's paying for her insurance? Mom. Okay.

So you paying for driving school gives mom a discount? Yes. Why is mom not paying for it? So that's kind of where we're at. And we also want some advice on how to navigate that conversation. How to navigate the X? Yeah. No, we're not that smart.

I didn't have that class in grad school. That's a tough. Her mom did kind of this shady thing last week. She had our daughter text. My husband said, can we talk? And then when they finally got to talk, she said that they were waiting on us to start driving school. But we are going through our own. We just started the every dollar app.

Like we're trying to get debt free. We pay her child support. And like I just don't know how to navigate. because we've paid for her braces and we were supposed to go half on that. She never once called and made a payment to the dental office, even though we told her this was the office.

Let me jump in on this, Leslie, okay? Let me jump in. Yes, yes. I want you to take, like, imagine you're sitting at your kitchen table and you have a shoe box on the table. Yeah. Inside that shoe box

is the people in your life that get a vote. Okay. Take her out of that box. because you're still trying to, like, she's doing these things, and you're spending a ton of energy trying to get inside her head and why did she do this and I bet it's because of this. And then you're making up a bunch of stories about why she did or didn't. And your stories are probably right, but they aren't affecting her one bit. So you're drinking the poison. The ex-wife.

Hoping the ex-wife is feeling pain and you're the one getting sick. Yeah. And so let's just focus on you and the kid. Your husband needs to do the same thing. My ex-wife does not get a vote. She does not get a vote in our house. Okay. Now, what our house, what you and your husband sit down and decide to do for his daughter that he loves,

regardless if she's married to a woman who's a test pilot for a broom factory, okay, regardless of that. All right. So that's a given. Okay. That's a constant in the equation. So we just set that aside and we go, okay, there's the kid. What do we want to do for the kid? In one case, she said, I'm going to do braces.

She's supposed to pay half, but she probably won't because she never does, but we're going to pay for them anyway. And that's what you did. So just let that go. You made that decision. Okay. You made that decision. You and your husband made that decision again. Any energy you give ex-wife is energy you're taking away from your home, from your marriage, from your relationship with your kids.

Don't give her that. Yeah, it's done. So then as far as the driving school goes, you guys look at it and go, how much is it, by the way? Is it $300? It's $1,200. Oh, jeez. And, yeah, we pay child support. We pay her $275 a month.

Doesn't matter. Doesn't matter. None of that matters. That's all set. We don't have to rehash all the things we do. And we paid half the braces and you didn't. None of that matters. All that matters is, do we want to do this?

That's all that matters. And we can decide that in context of all these other things. But the two of you just sit down and look at that. Do we want to do this? You don't. That's your vote. Yeah, I don't. It's your vote.

And your husband, I don't know. What's he, you know, you're, and. He says no, too. Okay, then because the, the test pilot for a broom factory is teaching her 16-year-old to be a travel agent for guilt trips. Daddy, I can't get a driver's license because you won't help. Bull crap. You could get like a job and stuff, kid. Or you can talk to your mother who could pay for it.

There's an idea. And so, no, we're not able to do that right now. I'm sorry. But I would tell the kid, we have reasons for you. We don't think this school is necessary. You're a great driver already. We've been driving with you for a year with your learners permit. Or we think you need to have some skin in the game.

Somebody else is paying your insurance. Somebody else is buying you a car. Somebody else is paying your gas. We think you should own this one. But have the reason be you and your husband looked at this young 16-year-old girl in front of you and said, we made this decision for you and here's why. And by the way, if the ex-wife was completely out of the picture and she lived in your house 100% of the time and it was your actual kid, it needs to be the same decision. That's it.

Okay. Okay. Otherwise you're going to penalizing this kid trying to get back at X. You're going to become the person that you're frustrated with right now. Yeah. That's exactly right. It's exactly right. So yeah, I think you and your husband just sit down and say, do we want to do this?

And if the answer is no, then how can we help? help. We can coach you. We can share you on. But, you know, your mom's paying for the insurance, and she's the one that's actually going to get the break on the insurance because if you'd go through driving school, you get less insurance for a 16-year-old. So it cuts the insurance premium. And so it didn't go cut it about $1,200 bucks. Good, God, that's expensive. Well, here's what's funny. I'm sitting here in real time. $300 is what I paid when I was 16. Oh, well, see, there were dinosaurs on the road. I know, I had to pull a rope to start the car I drove around in.

And I just realized my wife, when we paid for my son, he turned 16 soon to go to driving school. The number in my head, I was like, of course, yeah. I thought it was 300 bucks. I didn't know it was $1,200. Now you've got to look up and see what you pay. I got to go see what I just paid for this thing. Yeah. It sounds like it's being taught by a Formula One driver, but that just may be what the cost of.

That's the difference of 300 back then and 1,200 now. Yeah, that's how that works. Blasted inflation. Yeah, that's it. So, yeah, I, but the thing is, John, the teaching is everyone, you have to stop in the middle of these things and go, instead of replaying these, all of these scenes over and over and over in your head about the braces and everything else and just go, and she, you know, we didn't hear from her.

And then she texted us and she got the kid to text us. And all that really doesn't matter. None of that really matters. because the kid doesn't even get a vote. It's me and my wife. We decide. And we decide that for our kids when they live at our house.

You know, I mean, matter of fact, they don't live at our house now and they still don't get a vote. Yeah. And the grandkids don't get a vote. They get a wish. Sure.

They can have an opinion. That's different than a vote. That's right. Papa Dave would you, I might, but I'll have to think about it. And I think a sign of great, like, sturdy parenting is

there's seasons when your kids don't like you. That means you're doing it right. if you're if you're parenting so that your kids always like you you're going to find yourself in some real dangerous territory and worse your kids going to find themselves in some dangerous messes like part of parenting is saying here's why we're doing this and it's okay i'm strong enough to withhold your dislike for me right now it's part of it and in addition to that if they're teenagers your job is to also embarrass them with all of your with all possible energy embarrass them exactly find some way to give them a ridiculous hug and a kiss at the in front of all their friends. On behalf of mental health practitioners across this great country, embarrass your kids a lot because we need your future business. Yeah, it's good. Dave, I don't know what to do. My daughter's in fourth grade, I can embarrass her by just smiling. My son is seemingly impervious to embarrassment. He has this, I wish I could bottle it up and sell it because I would be richer than these AI.

guys. It's amazing. I make a joke and he's just like, I hope that felt good, Dad. And I'm the one like, ooh, that was... Hit the ball back across the bed. The other night at the dinner table, I made a crass joke, but it was a good one. And you don't know shame until your 15-year-old looks at you without a smile and goes, Dad, when are you going to grow up?

I was like, oh, man. Well played, son, well played. And he was right, too. That was the worst part. Ramsey Show. Question of the Day is brought to you by Why Refi, Defaulted. Private student loans don't define you, but dealing with them does. Y-R-R-R-R-E-FI helps you refinance into a low-fixed rate payment that you can afford so you can take control of your money and get back to working the baby steps. Go to Y-R-R-R-E-F-Y. That's the letter Y-R-E-F-Y.com slash Ramsey might not be in all states.

All right, this is an awesome question, Dave. Today's question comes from Megan in New Jersey. Megan writes, I was recently in a car accident and my vehicle was totaled. My emergency fund paid for my hospital bill and my parents lent me five grand so I could buy a reliable used car. Most of my remaining debts are smaller than their loan to me, but I hate owing them money. They've said to pay them back, quote unquote, whenever I can, but I feel terrible whenever I talk to them. I have $25,000 left in student loans and another $5,000 on credit cards. Would it be okay to just pay them first and then resume my debt snowball?

I like that question because I, in my gut? it's out of order from how we teach it, but own my dad money feels worse than own the IRS. You know what I mean? He can't garnish my wages. But man, I get that feeling she has. Yeah, I understand. It's an honorable person, too. No kidding.

That's good. Yeah, so, Megan, we list our debts smallest to largest, pay minimum payments on everything but the little one and attack the little one first. So that would, you know, I'm guessing you said credit cards and $5,000. And so I'm guessing there's lots of little ones or a few little ones that total up to $5,000. So you would knock those out first and then you would knock this out. The good news is that $10,000 from now you're done except for student loans. And so that's a really, really aggressive part-time job for just a few months. Just to like and channel that.

Yeah, just channel all of that discomfort. That discomfort right at those credit cards first. Cut them up and then list them and get yourself on a super tight. budget, like beans and rice, rice and beans, and then add income. Look around, what can I sell? What can I sell? Here's another thing I will throw out that's not asked here, but it's a $5,000 car, so the answer might be that she didn't have insurance on it.

But I want to remind all of you that when you get in a car accident and your car is totaled and you have insurance that pays for the car, that is. is not a reason to upgrade, replace it, and go further into debt. So I'm guessing, though, that maybe she did not have collision on a $5,000 car. And so when it got totaled, it was just lost it. Sure. Just lost the money. And I want to add something else that's not in here.

And this is coming from a parent who my son's about turned 16. Like, there's a chance this is me, right? I hope not. But it can feel like you're helping bail out at your kid when you loan them $5,000. I would much rather her parents give her $5,000. then create this tension in there. If they feel like they want to help, they want to support their kid or whatever,

I would much rather that be a gift. And obviously, who knows what happened here and there's so many different things. But, yeah. But dad participates in making this an awkward relationship too. Yeah. I'll just jump in on that side of this equation and say, from our perspective here,

from almost 40 years of doing this, helping people with their money and clean up money messes that they have made, I'll make a bold statement. Parents should never, under any circumstances, loan their children money. I second that, period. As a matter of fact, you should not loan any relatives money under any circumstances, period. If you have the money to help them and you want them to have the money, give it to them. If you're not willing to give it to them, shut up. But I want to be paid back after I helped you with your misfortune, and I'm going to feel good about me when you pay me back after I helped you with your misfortune. That's bass-acwards, people. So, no.

You know, if you want to help them, help them. If you don't want to help them, don't help them. But don't make them owe you money because Thanksgiving dinner tastes different when you eat with your master. And the borrower is slave to the lender. The interest payment on that is your relationship. Oh, that's the interest. It leaves notches in the belt at a minimum. Yeah.

Wow. James is in Lynchburg, Virginia. Hi, James. What's up? How you doing, gentlemen? Great. How can we help? I have an interesting dynamic going on.

So we own a small rental home that we are close to having paid off, and it's probably worth about 175 at the current market. We own about $15,000. left on it on our current home and land that we the land that the current home that we live in is on is is we owe 15,000 left on that and we cash rolled and self-built the home itself so we don't have anything on the house. So 12, 15 months or so we'll be done paying on both of these things. Now I put all eggs in that basket for the last 10 years. How old are you?

we had went into that. So with the host that in the plan that how old are you at 10 years I am 40 almost okay all right so um you know with that we wouldn't have to worry about being for our home ever again because we've been doing for long enough I wouldn't have done that but we're there how can we help yeah no no doubt um so I have no appreciable uh retirement savings uh obviously for putting all those eggs in that basket. Yeah, which is why I wouldn't have done it. Okay. Right, I understand.

Obviously, that's some level of stressful for me. And, you know, here soon enough, there'll be, you know, wide open rental income that will come in associated with that. We'll have, you know, freedom from the mortgages and things like that. What does the house rent for? Currently, it's at 1,000. I have a, it's valued more, but I have a, I have a widow in there. and I can't charge her any more than we currently are. So.

Okay. Okay. So you've got an asset that's not maximized. Okay. That's fair. Yes, correct. Yep. All right.

Correct. And, you know, I'm looking, I'm just juggling around this and my wife and I've been kicking it around, mostly me kicking it, mostly her telling me not to do it. Of selling it and investing that money then into some form of retirement savings. And I wanted some feedback on that. instead. Well, not counting the arrangement, which I endorse you helping a widow, endorse anyone helping a widow. That's biblical. And you're making, you know, about 7% on your money, because $175,000, you're making $12,000 minus expenses. So you're probably making probably 5% on your

money on this rental house, plus it's going up in value. It's not a bad investment. And someday, you will be able to get full rent out of it whenever she's gone, okay? Right. Or whenever that arrangement stops for whatever reason. Sure. What keeps you from beginning your retirement investing now fairly aggressively since you don't have any payments? Well, I do have payments on the property that we built on.

How much do you owe on it? 15,000. I know, but you're going to be done in just a few months on both of them, you told me, right? Yes. That's what I was calculating. So nothing. A few months from now, you're 100% debt-free. What's your household income? About an 85 to 90. Okay. So start saving 20% of your income into good retirement or 25% of your income into good retirement.

You don't even have a stinking house payment. Right. Fill up your 401K, fill up some Roth IRAs, and get with a good SmartVestor Pro at Ramsey Solutions. And that account alone will be millions of dollars when you're 65, 25 years from now. Okay. And keep the houses. Okay. You don't have to give up the house to have a retirement plan. You've got plenty of time and you have a good income and you have no debt.

But make space in the middle of your chest for this feeling that's going to come. I thought that if I had a house outright and I had a rental house outright, that then me and my wife could just do whatever we wanted with our money. Nope. And you have a debt to pay to future you. Of course. Right. And so you're still going to have to watch your income. You're still going to be putting a sizable chunk away.

It's not going to go to a house payment, but it is going to go to future you. Right. And so expect to feel like, oh, man, I thought we were going to be free of all this budgeting. No, man, we still got to stay tight on it because we're going to get 85 or 90 years old one day. Yeah. The same intensity you were using, or maybe not quite as much, to clear up these two mortgages, we're just going to turn most of that cash flow and some of that intensity into a retirement planning system into 401k's and Roth IRAs with your smart vestor pro,

and promise you do, that's going to be millions of dollars, that one thing alone. Welcome back to the Ramsey show in the Fair Winds Credit Union Studio. Dr. John Deloney, bestselling author Ramsey, personality is my co-host today. Clay is in Harrisburg, Pennsylvania. Hi, Clay, how are you? Hi, Dave. Good. How about you guys?

Better than I deserve. How can I help? Yeah, so I'm just kind of really overwhelmed. I don't really know how to attack my debt. A majority of my income is going to rent and a car. And I need both of those things. I need a place to live, and I need a car to drive to work. So, yeah, just need help getting out of here. Gotcha.

What do you make? I make about $2,200 a month. Okay. I think we found the problem. What do you do? Yeah. So I currently work in construction. How old are you?

33. And how much do you owe on your car? It's a little under 20,000. Okay. And how much is your rent? I did make, sorry, I did make a little bit more, but a portion of my wages are going to some tax debt and student debt. Yeah, okay.

And how much is your rent? $750. Okay. All right. Currently also dealing with a pest issue that's taking some more of the income. A pest issue. Yeah. That's why you rent, brother.

Your landlord would be taking care of the pest issue. Yeah. It says it's on me. But, yeah. Like, there's not an easy way to say. this, you got to make a lot more money. Okay. What do you do on a construction site?

So I work in an office, like a design office. Yeah, we provide products. But I mean, are you in some sort of apprenticeship that this is all going to double and triple and quadruple in two years, four years, or is this kind of it for you? This is kind of it. Before that, I worked in behavioral health as a, like a tech. and just kind of ran out of options there and looked for another field and construction was kind of up and some good opportunity there. But the opportunity construction is, are you a builder, are you a craftsman, right? But you're the guy servicing those guys, right?

Correct. Yeah. I get the projects in the door. Yeah. So, I mean, there's several things going on, but one of them is that you just have an income problem for sure. And there's two ways to fix that. One is the extra part-time job in the meantime while you're developing a career track where you go, instead of making $30,000 a year, you go try to find a way to make $90. And that's very doable in today's world.

And it may take you a few, it may take you a hot minute. You may have to go take some classes. to do you don't have to get a four-year degree but you may have to learn some things you don't know now but you're going to have to set your sights differently than just whatever the next job is because you're starving to death that's thing one thing two is if you have a low income it does not give you a pass on math and I how in the world someone loans you $20,000 on a car that wasn't smoking crack I don't know You don't make enough to have a $20,000 car debt.

No wonder. You're dying. Yeah. Yeah. How much could you get for that car if you sold it today? So I did a quick, like, estimate on, and they offered nine out of them. Yeah, I bet they do. Look up Kelly Blue Book, what the private party sale value is.

Yeah, and that's probably more like 16. Yeah. Okay, and then dig up the difference and let's get the car sold. Yes, you need a car to get to work. No, you don't need a $20,000 car to get to work. You just need a, you need a beater, a hoopty that runs and get you over to work. Because you're not driving to a $200,000 a year job. You're driving to a $25,000 or a $30,000 of your job.

And you're driving a $20,000 car over there. That doesn't fit in this picture. It shouldn't even be in this picture. We shouldn't be having this discussion. There's no possible way. It's not good for you. It's bad for you. So I'm going to move you out of that car into a hoopty, get you out of debt, and increase your income.

And then I'm going to start learning about what my lease actually says about pest control. In most states, the landlord is in charge of pest control unless the tenant is such a freaking slob that they call. Rats to be in the place, in which case you may be in charge of it. So I don't know what we're dealing with. But Clay, I want you to reframe this. The way you described your life is as as though this is happening to you. And I want you to visualize yourself getting in the driver's seat of your own freaking life and hitting the gas and going forward that way. Your taxes didn't just not pay themselves. Captain of your own destiny. That's it. Your taxes didn't just not pay themselves. Your boss is paying you what you're accepting. You bought a car that like,

I want you to own this thing. And that's the only way you're going to get out of it because life just keeps happening to me over and over. Get in the driver's seat and say, what do I want this thing to look like in a year, two years? And let's head that way, a thousand miles an hour, man. Yeah. The people that, um, that they get along in this world that we call successful are the ones that leave the cave, kill something, and drag it home. they don't sit in the cave and wait on a duck to fly in already cooked. And that's what you're talking about is Dr. Stephen Covey's book is a great one to read Clay.

It's called the seven habits of highly effective people. The number one habit of the seven, the first one, is to be pro, the highly effective people are proactive, what John's talking about. They happen to things. Things don't happen to them. That's the definition of proactive. And so, you know, when in doubt you bust something, not get busted. When in doubt, you know, we're going to.

hit something something when in doubt we're going to be a man of action uh when in doubt we're you know and and we're going to be slow enough that we're wise enough that we don't buy 20,000 dollar car and we make 25,000 we're going to be slow enough and wise enough that we pay our taxes on time be slow enough and wise enough that we're reading the lease and um or not leaving a dump in some guy's landlord's house so that he has a pest problem because you brought it there or you didn't bring it there and he's being a twerp and we need to hold his feet to the fire. Hey dude, yeah, the law actually says you fix this. And here's what your lease that you gave me says. It says you fix this. I own a bunch of rental houses. We do all the pest control. And I don't have any tenants that

create pest problems. If I do, that tenant doesn't stay there because they're turning up my house is what that means. No, thank you. So, you know, these are proactive things that I do. So that's- Dave, I just got to say, again, I don't want to shoot my own horn here, but I was a dean of students at the law school in Texas. I drove a $3,500 truck. And when I got my job here at Belmont, Nashville, I drove a $17,000. I really upgraded, man, to $17,000. You're making a lot more than... Right.

So it's like, listen, man, like, drive what you can afford. Happen to your life. Yeah, I got to do this. You don't, man, especially when it comes to a depreciating asset. Hey guys, Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now, you can get that same kind of help any time with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show.

Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to Ramsey Solutions.com and try Ask Ramsey today. That's Ramsey Solutions.com. Tax season is upon us to get free checklists and guides that will help you file. Free. Go to Ramsey Solutions.com slash taxes. Shelly is in Washington, D.C.

Hi, Shelly. How are you? I'm doing good for you. Better than I deserve. What's up? All right. So I'm pretty new to watching your show. And so I just really wanted to reach out because me and my husband are in a big mess financially and we can't seem to get on the same page. I'll kind of run down some numbers for you. It's pretty bad. We have a student loan debt for my student loan debt, $52,000. We have federal tax debt $12,000. We have a more tax debt. We have a more debt. 175. And then we have personal loans that total about 331,652. We have credit cards altogether that total 152,168. And then we have business loans that are 199,382 in business credit cards that are about

65,156. So we have a big mess. So you have a business that is failing? Yes, the business has been struggling in the past. Yeah, you're not making money and you've been financing it with all these loans. Correct. Having too many people in payroll and not having enough money. You're not making a profit for whatever reason and you've been financing it for how long?

How long it's been since you made a profit? Well, I mean, technically I did make a profit these last two years, but obviously I'm paying loans. So the interest is obviously the only part I can deduct, but cash flow, I don't have any cash. Yeah, but you've been using, I mean, you didn't use these credit cards, these business loans, these personal loans, these other credit cards, all to finance the purchase of the business. You've been operating it at a loss and feeding it. Yes, so from my portion, yes, I've been feeding the business with the debt. And all of this debt was created by this business?

No, no. My husband, he had an idea to pull money, balance transfers off of his cards and his personal loans to put it in the stock market. to invest. So the first year, he made a lot of money. We had a big tax bill. The second year, we had a lot that we owed, and he's never repaid those loans and credit cards that he pulled money off of. So his debt is about 360 of this, which is from him pulling lines to credit and got a business loan and business credit cards. So does anybody around there work? Yes. Like for a job to make money?

My husband has a W2 job. What does he make? About 120 a year. Yeah, and what was the profit on your business that you paid taxes on last year? $57,000. Okay. Do you all both agree that you'll have a mess? Yes. Do you all both agree that you wanted to go away?

Yes. Okay. It's just the method of, so my husband got a bonus for about 12,000. And so since I've been listening to you, I was like, well, it would be the snowball, pay these debts, the smaller debts off to free up about $500 a month. He wants to pay on a personal loan that's for $40,000. And he wanted to put it towards that to get the balance down. But as soon as he was, we're arguing about it, and then he called. and it went into collections.

So now it's in collections because he hasn't been paying it, and he didn't have enough money to pay it. So the money that he made on the stock trades, he put back into the stock market and lost it? Yes. So he was day trading. He never paid any of the, like, I know he didn't pay the taxes,

but also you said he made a profit that caused taxation. That's where taxes come from. And then that profit, he might not, which means he meant not only made the money back, So he borrowed $60,000 on a credit card or whatever, and they put it in the market. He got the $60,000 back plus money, didn't pay the taxes, and put all of that back into the market and then lost it. So the first year that he did that, which would have been 2020, he did pay our tax bill. It was like $25,000, I think it was.

Where's the money? Did he lose it or not? He had the money and we paid it in full that year. Now the money that he made. in the stock market, where did it go? He put it back in the market and lost it, didn't he? Yes. Okay, that's all I want to know.

You don't have any money is what I'm trying to establish. Yes, that's correct. None of the money that was made is there anymore. It's all gone. Okay. Do you own anything other than your home? He, his car, he doesn't have a loan on them. And then I have a vehicle that I don't have a loan on.

Okay, so your business doesn't have any assets. Oh, it does. Sorry, it does. I have desk, computers, tables, laptops. What's your gross revenues on the business? 330 or 25. Okay. How many employees?

Right now, I'm down to one. Okay. I let them go. What do you do? What's your trade? What's your skill? I have a tax and accounting business. Couldn't you make more than 57 working for somebody else?

I actually did the end of 24. I got a job, a full-time job, making 110, and then I got laid off in August. Okay, you need to go get another one. Yeah. Yeah, because you need the income to be able to lean into this. Okay. And then back to your original question, y'all are arguing about what to pay off. first and so forth.

Not counting your mortgage, you have a long road ahead of you. So the first thing we need to do is establish two principles before we begin to attack the debt. Principle number one is no more day trading. 97% of day traders over a three-year period of time lose money. So no more stupid schemes. Okay. Second principle is businesses that don't make a profit are a bad hobby. They're not a business. If it's not making a solid profit, if you work your new full-time accounting job and you can run 57,000 out of this thing on your own as a side hustle in profit, and you know the difference in profit and gross, then keep it open.

but if you can't make a profit, you do not borrow any more money to keep it open. You close it. Okay? You fed this thing enough. And he's fed his craziness enough. Can I throw a third principle in, Dave? Third principle, Shelly, is for this to work, you're going to need all the, like, synchronicity and momentum that y'all two can muster together.

And so y'all are going to have to decide. This is our debt. We both have done some dumb things. We've both done this, and we're both going to tack this stuff together. You will never conquer this thing if he's responsible for paying off his and you try to pay off here. Exactly. Then pull the mortgage out of the equation, list all of these debts individually, smallest to largest, and begin to pay them in that order after the $12,000 tax bill is paid. $12,000 tax bill is the first thing, and that should have been paid out of his bonus.

If he's got that $40,000 bonus laying there, pay the IRS. You do not want the IRS. I mean, you're in tax and accounting. You know this. You don't want the IRS money. It's not only expensive, but they have ridiculous power to screw up your life. List your debts, smallest, the largest. Now, if he's making 120, you're making 110, you're making another 50.

We're up in the $300,000 range now. We're living on nothing. And we begin to attack this. It's probably going to take you four or five years to clean up this mess. But it took you six or eight to make the $300,000. the mess. Hey guys, George Camel here. Do you ever feel like insurance companies only care about your money and not what you

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Go to ramsysolutions.com slash insurance. Ramsey Solutions.com slash insurance. Dave is in Pittsburgh. Hey, Dave, how are you? I'm doing good. Thank you for taking a call. Sure. How can we help?

I'm a huge fan with you guys. I've been watching for five years. I just want to say you guys are doing absolutely miracle work. So the question is, right now, me and my wife are thinking about relocating and that we are thinking

about having a kid as well within one year to a year and a half. So our planning definitely want to buy a house to build a good memories for future kids. So they can have a good memory and kind of build a good foundation with that. And so my question is we either want to do 15 years fixed mortgage or 30 years fixed mortgage or we're thinking about paying cash. I know your answer probably it's going to be around the 15 years fixed mortgage or paying

cash. However, the problem is we're afraid we're not going to have enough cash flow because that my wife is planning to not work. taking care of kids and that I will be having the only single income that we'll have. Okay, so you don't have the cash. So right now we have my salary is 70K and she's doing 55K. I mean, we possibly net around. Do you have the money in a pile to pay cash for the house?

That's not really an option, is it? There is. So right now you're going to be very happy to hear this. I graduate my grad school and I did. did paid off all my student loan debt with around 100K. And then we both net around $1.2 million. It just invested in the mutual fund, ETF bonds, and stocks. So you have a million dollars in mutual funds and bonds and stocks?

Yeah, that's approximately right. Yeah, depending on the valuation. Bro, lead with that next time. Yeah. So, way to go. So, no, I would not borrow money when I have a million dollars in investments. I would just take some of that and buy me a house. Simple.

Right. You know why, Dave? Why, Dave? Because you have a million dollars. So how expensive a home are you thinking about buying, sir? So we're looking at 350 to 380K. Perfect. So 350 leaves you 650 in investments.

You have no house payment. There's no strain on your budget. Your wife can stay home with the babies. Mm-hmm. That's awesome. Why would you not do that? Help us out. Why would you not automatically do that?

Pitch us on why this is a scary ideal. Right. I think I'm just running the two scenarios that usually the market return 10%. However, you know, when you pay down a house, you're going to guarantee return back 3.5% on the real estate. And also you have to avoid paying the same. But your wife has to work. Right. And her plan is to not work once you have to get it.

You missed the point. You just took out a house payment and put her in a job for your little. investment scheme that you think is real, but you left out the fact that you're taking on risk and the piece that when your head hits the pillow, it goes to sleep. When you have no payments, you make different decisions than when you have a house payment. So don't do that to your family. You have worked very hard and done a very good job saving money. Use that money to buy a house or don't buy a house. Be a renter. Right. But I mean, Are you, what do you, do you own a home now?

So right now we are renting. Okay. We are waiting for. And what is your income, Dave? So I do 70K a year. What does she make? She do 55. She do 55.

How did you get a million two with that income? I think there was, I got lucky with some of the investment and also fortunate and unfortunate because we got some inheritance. How much inheritance did you get? She roughly got around 200 to 300 and kind of grew. And then I got around 300, 400 and kind of grew in the both kind of get around one meal. Okay, there it is. All right.

So whoever passed away and left you all this money bought you your first home, and that's their blessing to you. And you pay cash for it. And that's what you're going to do. If you're smart, there's no way you need to be playing around with all this stuff. Emily's in Denver. Hi, Emily. How are you? Good. How are you? Better than I deserve. How can I help? Hey, so I've carried most of the financial responsibility in my marriage,

the almost like past six years. My husband says he wants the same financial goals, but he feels the need to constantly spend, doesn't follow through, and won't take accountability. He also has a history of addiction, and he recently racked up, as of what I know, at least $6,500 in credit card debt on things like 7-11 and used money I gave him for, or money that I saved for a trip on his own personal spending and then added me as an authorized user to a credit card that I didn't agree to. Is he using again, Emily? Is he what?

Is he using again? I don't know. You know. You know. You know. What do you think? I don't. I think his behavior doesn't line up, but I can't prove anything. If behavior is a language, what's he telling you?

Just using. Yeah, he's back. He's back. He doesn't want me. Well, he wants the addiction. He's in the addiction. Yeah. An addict can have no access to money.

None. Okay. And somebody in recovery knows that. Somebody who's back to using again, and you've been down this road with him before. are world-class manipulators, world-class distortors of reality, and they make you feel like you're crazy, right? Yeah. Yeah.

Very much so. So here's the deal. You're going to get, if I'm you, you sit down with him and say, okay, we're going to get you back into rehab, we're going to get you back in some help, and you're relinquishing all control of all money until you've been dry for two years. And you need to put a freeze on your credit report

is second you hang up this phone call and that way nobody else can add you to any more debt how do I do that freeze it you go on the line go online and you can freeze your credit report it's very easy to do and it will do it across all three of the crediting credit reporting bureaus yeah but you're this is hardcore kiddo the only chance he has is um and the only chance your marriage has is for him to stop using and the first step is a complete confrontation and And, you know, he gets into a program.

If he's not willing to get into a program, there's nothing you can do to save your marriage or your money. You have to get away from him as fast as you can. Because 100% of addicts burn down their world. 100% of them are broke. Until they get some healing, until they get the other side of the addiction, get some sobriety. All of them, regardless of what they're addicted to, whether it's sports betting or whether it's pornography or whether it's heroin, the 100% of them burn their world down. We work with them every day because we are there while their finances are burning

because you just light money on fire when you're addicted to something. Just burn it right there in the middle of the kitchen table. And this guy's doing it. All the symptoms are there, aren't they? Yeah. Yeah. Yeah. And, you know, I know you don't want it to be true.

We don't want it to be true either, but we also don't want your don't want it to be true thing to allow you to, walk around and act like it's not happening. It's happening. Yeah, it drives me crazy because I can't prove it. I don't have to prove it. We've got all the signs in front of us. And by the way, if he's not using, let's go one step darker.

Where is he doing with the money? He absolutely doesn't care about your marriage, about how you feel your safety at all. Because he's going crazy with his stuff. Right. You what I'm saying? Yeah. Thank you. If he's not using, then, man, he's not using.

and then, man, he's got some other issues. Some character. Yes. Challenges. Yeah. Not even worse, but or worse or as bad in a different way. Maybe it's a better way. You're going to need to get yourself your own checking account and get on your online bills.

I'm sure you already have this, but where you're paying that you got electricity and light and like you're going to have take ownership of this for a season. Yeah, you have to take over everything. You have to take your name off, his name off of everything. He cannot have access to money unless you hand him cash. I hate this. kid. That's so he can butt gas in his car with cash, which means he puts gas in the tank and walks into the store and pays for it and walks back out to the car like we used to do. I did that recently. They took it. I know. It's amazing. It was awesome. That little walk changes your what you pay for gas.

Hey good folks, Dr. John Deloney here. Don't you think life is too short to hate Mondays? Listen, you're worth loving the work you do and where you do it. So guess what? Ramsey Solutions is hiring. If you're ready to join an amazing team that's all about changing lives and spreading hope, we want to see your application. Right now, we're hiring for technology, sales, marketing, writing, copy editing, and creative roles. Check out all our job postings at ramsysolutions.com slash careers. That's ramsysolutions.com slash careers. Our scripture of the day, Matthew 626, look at the birds of the air.

They do not sow or reap or store away in barns. And yet your heavenly father feeds them. are you not much more valuable than they? Earl Wilson said money in the bank is like toothpaste in the tube. Easy to take out? Hard to put back. I like that. Pretty cute.

Mary is in Minneapolis. Hi, Mary. How are you? I'm good. Thank you, Dave, for taking my call. Sure. How can we help? Well, I have a little bit of a dilemma.

I became a widow four years ago at the age of 38. Wow. Oh, man. And my husband was a farmer. He was 51. And he left me with quite a bit of assets. He left me with farmland and, of course, our home, and then a million-dollar life insurance policy on top of that. Man.

Wow. Along with that, there's debt against the farmland. Oh, there's debt against the farmland. Yes. How much? close to 2 million it's about 1.8 and what's the farmland worth around 6 million okay so what does the last four years look like um i continued to run the farm for three years i had a farm hand that has been trusted he worked with him for a very long time and he took over the farm i took over the business

and we ran it for three years um successfully we did We did very well. And then he bought the farm from me a year ago, 2025, January 2025. So I sold the farm. I didn't sell any of the farmland, but I sold the farm site and the equipment to him. I'm sorry. What is the difference in a farmland and a farm site? Well, the farm site has the shop.

There's a home on it. There's hog barns. And then it's just where it's just the home base for the farm. And then the farm land is what they grow the crops in. So are you on the land still? I own the land, yes. And you have the debt still? And I still have some debt against the land, yes.

Okay. So where are we today and how can I help? So I'm looking at trying to pay down some of this debt with the life insurance proceeds. I have about $1.1 million in cash. It's in an investment portfolio. but I wanted to pay down some of these smaller debts, and I just was wondering if this is the right thing to do with this money. What are the smaller debts?

The smaller one. So there's one land mortgage for $40,000. My home mortgage is $85,000. And then there's an SBA loan for $125,000. Okay. Is there a business separate from the actual farm operational? operation? No.

Okay. All right. So the SBA loan is associated with the farm? It is, yes. Okay. Now, when you sold the other piece of ground the other day to your farm hand, what did it sell for, and where is that money? It sold for $800,000, and that is a contract for deed with him.

So that's where my monthly, my income comes from is that contract for deed. Okay. So he's paying you how much a month? Um, 72,000 or 7,200, sorry. Okay. Is he also leasing the land from you that he farms? He is. He's also leasing the land and there's a 10-year lease on it.

So he will be farm, it's 500 acres. He'll be farming it for the next 500, or 10 years. And that brings in about 120,000 a year. But he also put himself in kind of a pickle because if you sell this land or, If in 10 years you want to do something else, he's bought this farm equipment, but he won't have anything to farm, right? Right. He farms around 2,000 acres, so he has some contracts with other farm landowners. So the balance on the farmland is now down to what?

The balance on the farmland, let's see. So I have 1.1 million in one piece of land, and then there's 383,000 in another piece. And then the smaller one is just 40,000. I got you. Okay. All right. Okay. So I think I've got the picture right. If I do, what I would do is to do what you're suggesting. I'd take $250,000 of your million and pay off the SBA and the 85 and the 40, right? Okay. And then you're 100% debt free except for the two land mortgages. And you have an income of $7,200, which you can easily live on. Yes. And 100% of the profits from the farm go to reduce debt on the land. Yes.

Yes. So the profits coming from the land, the land rent, is covering the payments for the... No, not just the payments. You're making more than that. Right. In a given crop year on the acreage, your portion, when he farms it on your behalf, your portion is how much? was 300 grand, wasn't it? Or 150 grand?

Yes, 120, I guess. 120, okay. And you have 300,000 on the small mortgage and a million on the other mortgage. So in two years, the small mortgage is gone because you can put that whole 120 on it. Oh, okay. Okay. And then we're going to do the same thing until we get rid of that whole million. And so by the time his lease is up, his 10-year lease is up, before it's up, this farmland is going to be free and clear. Yes. And then you're sitting on a $15 or $20 million net worth at that point.

Correct. Because the value of the land will have gone up, plus your investments will have gone up. Because you've got $650 invested that you're not touching either because you're living off the $7,200 from the land contract when you sold him the property. Did I get that right? You did, yes. Yep, that sounds about right. Mary, can I throw an alternative reality at you? Yes.

I spent a big chunk of my life out in West Texas where there's cotton farmers and cattle farmers. The conversations I had with those, especially those older men, the thing that I felt at the end of the day was given them their coronary challenges was the debt on their farms. It took one bad year to start a debt cycle that they could really never, ever get out of. Is there any part of you that wants to sell this thing for $6 million and be done with it? And go have a different life? There is not. No, I'm not opposed to selling maybe 100 of the acres down the road. If I run into that issue, I don't think I will.

But I don't want to sell the land. I want to hold on to it. It's family land. It's my husband's family land. And some of it was passed down. He actually bought 200 of the acres right, like a year before he passed away. And that's where that $1.1 million came in. I'm more nervous about this than you are, so I'll keep that to myself.

But just, man, I just watching those farmers just get crushed. We're getting rid of all the little mosquito debts right now. And then we've just got two big ones to knock. And the smaller one of those will be gone in two more years. So pretty quickly we're down to, and the land goes up in value. So we got an $8 million, two years from now, we have an $8 million. And two years from now, we have an $8 million piece of ground with a $900,000 loan on it. Yeah.

And that doesn't scare me as much because then we're whittling away at it, whittling away at it. And you love it, and you're comfortable. And you've settled into this with a great rhythm. I'm very proud of you. Yeah. I mean, you really stepped into this, kiddo. Well done. And what's your husband's name?

Your ex, I mean, your husband who passed away? Kevin. Kevin, pretty awesome guy. Oh, my gosh. He was amazing. Yes. He was an amazing farmer, an amazing husband, a great dad. Yeah, he was a great guy.

I just always want to take a moment and, hey, honor somebody by saying their name who passed away. But I also want to honor a husband who gave his wife the privilege of you got to grieve for as long as you wanted to. Yeah, a million-dollar life insurance policy and a business that was right-side up. You got to be sad for a season, not worry about where your next meal is going to come from. And that's noble and honorable and good for Kevin, ma'am. Yeah, he's a good man. he took care of his wife and she took care of business afterwards. Pretty incredible.

The dynamic duo there. Yeah. Yeah. Very cool. Congratulations, Mary. We're proud of you. Very cool. Thanks for giving us the honor talking that through with you.

Yeah. Pretty crazy. So, yeah, just always be looking for a way where the end of the story is. I got zero debt because that always leads me to more wealth and more peace. That puts us our of The Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to face. financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.