The Ramsey Show - Don’t Try To Solve an Income Problem With More Debt

Episode Date: October 31, 2024

📱Watch the full episode for free in the Ramsey Network app. Jade Warshaw & Dr. John Delony answer your questions and discuss: My business partner owes me $16K. I'm struggling to keep my finances above water. Talking to my parents about their budget What are FICA withholdings? Should we buy a brand new car? Support Our Sponsors: 🌱 Get 10% off your first month of BetterHelp 🏥 Learn more about Christian Healthcare Ministries 🏡 Get started today with Churchill Mortgage 🏦 Go to FAIRWINDS Credit Union for an exclusive account bundle! 🥗 Save 15% on your first Field of Greens order with code RAMSEY 💤 Visit Helix Sleep for special offers! 💻 Visit NetSuite today to learn more 🗂️ Use promo code RAMSEY for18% off at The Nokbox 🏛Get started with YRefy or call 844-2-RAMSEY 🔐 Visit Zander Insurance for your free instant quote today! Next Steps 📞 Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET or click here! 📈 Are you on track with the Baby Steps? Get a Free Personalized Plan ❓ Reconnect with the NEW Questions For Humans Conversation Cards: Intimacy, Couples, Friends, Parents & Kids Editions  🛳️ Live Like No One Else Cruise 🏖️ Invest in Your Future With a SmartVestor Pro 💵 Start your free budget today. Download the EveryDollar app! 💼 Connect with a RamseyTrusted tax pro for help with payroll and more Listen to more from Ramsey Network 🎙️ The Ramsey Show   🧠 The Dr. John Delony Show 🍸 Smart Money Happy Hour 💡 The Rachel Cruze Show 💸 The Ramsey Show Highlights 💰 George Kamel 💼 The Ken Coleman Show 📈 EntreLeadership Ramsey Solutions is a paid, non-client promoter of SmartVestor Pros. Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

From the Ramsey Network, it's the Ramsey Show. I'm Jade Warshaw. Next to me is Dr. John Deloney. We're going to be taking calls about your life, your money, your relationships. You guys already know this, but Dr. John is the resident relationship. Can I call you a guru? Call me anything you want to. The guru would be the nicest thing somebody call me today.

I'll go with guru. And I'll hit you up on the money side and we'll cross paths as needed. If you want to get involved, this is a live show. So you can call in right now. 888-8255-225 gets you on the line. All right, we got Eric from Seattle, Washington starting us off. What's going on? Big E. Hi guys. Thank you guys so much for having me. You're welcome. How can we help?

A little bit nervous. So I'm currently a small business owner and I'm looking for your advice on what to do legally, morally, and ethically. So I started a business two years ago with a good friend of mine, well just knew him professionally, and after one year he called me out of the blue and told me that he has cancer and I felt really bad and we decided to you know kind of close up you know our business. At that time we had about $16,000 of outstanding balance that we owed in various debts at that point I just messaged him once to see you know if he's okay with covering his share he didn't respond so I didn't want

to press him because you know you know he has cancer so I just paid the 16,000 from my own pocket and we closed the business it's been about two years now I've been kind of just calling him just not even mentioning money is like hey are from my own pocket and we closed the business. It's been about two years now. I've been trying to just calling him, just not even mentioning money. He's like, hey, are you okay? How's it like, is everything okay? He hasn't answered me, doesn't reply.

I was wondering what you guys would do, like legally, morally, and ethically. Should I just let it go? Should I try to pursue it? So do you feel like he's ducking you because he thinks that you're going to ask about this money? Um, what do you think?

You know the guy and you know what your relationship was like before this, or is it that he's quite sick and he's kind of off the radar? I mean, knowing him, he's a little bit, I feel like it can be both really. Um, my gut tells me that, you know, he's actually sick, but I feel like he can be both really. My gut tells me that you know he's actually sick but I feel like he can at least answer a text or a call in you know three years. I mean you guys were friends right about the money. You were friends. We weren't like friends we just knew each other like professionally from like previous work. We worked at the same place and yeah. I mean what was it like when you guys closed the business? What did that look like?

Because I can't imagine running a business with somebody that I'm not in direct contact with on a daily basis. I mean, you're doing everything together. So what happened? Something happened that caused you guys to kind of, we don't talk much anymore. Something had to have happened. Am I wrong?

Yeah, well, so we were just planning for our next stages of expansion. He was in charge of, you know, like tracking down new clients and trying to expand us. And he just called me like one day and says, Hey, like, well, he hasn't been picking up my phone lately. And, you know, he finally got back to me after a week and he told me that, hey, I'm currently dealing with some health issues. And I was like, what happens? Like I currently have had cancer and I know he's a single dad. Okay, so you know, I just wished him all the best. And then on the same call, we're like, okay, well, like, you know, let's close up the business then, cause I

want you to focus on this and I can't carry this on without you. Um, so the next step was we called our accountant and you know, we termed, we submitted the, you know, the notice of termination. We got his signature. Um, and you know, then, you know, our accountant sent us the bill as well. And after that, didn't really hear back from him. Here's my thoughts, dude. On any front, let's say he's a total scumbag and he's just playing you. To run a two or three year, I've got cancer,

I'm a single dad, ruse, dude, I want nothing to do with that human being. Let's say he does have cancer, maybe he's in remission, he's working really hard, it scared him to death, he's just trying to keep one foot in front of the other. Or I just go back to the emotional and spiritual calories you have burnt over the last two years for $8,000. Which is a lot of money.

Yeah, I don't wanna minimize it, but bro, I mean, if I'm in your seat, I'm brushing my shoulders off what I'm going on about my life. Interesting, John, interesting. Because either you're gonna sue a guy that told you he's got cancer, right? Yeah, I don't think you have to go to that. I mean, can I just ask have you I know that you're saying? Hey, I'm contacting him and I'm contacting him under the guise of like seeing how he is

But have you just actually said hey, I don't know if you realize this but when we close the business there were 16,000 I just paid it but are you know? Truthfully we went into this together because business is business. This is not your brother, this is not your uncle. It's not your dad. Business is business. And so there's part of it that I would be like,

hey, I would love for you to pay your half because I came out of pocket on this and $16,000 is a lot of money. And then maybe he does say, bro, I'd love to pay you, but here's what's going on. I don't feel like there's anything wrong with opening up that conversation. There's nothing wrong with it. Okay. But what let me put it this way. What you're doing is not working. Yes. So either you're a true friend and your buddy's dying of cancer, your

former business partner and buddy, and you go knock on the door and you say, Hey man, I miss you. You're not returning my calls. Are you all right? Um, or you let this thing go, but you just like bot lobbing a text every once in a while or log lobbing a voicemail. It's just not, it's, it's making you crazy. And if there is a hurting person on the other end of this phone, uh, on the other end of that line, it's not working, it's not getting through to them.

Okay, so you recommend just visiting him in person or just forgetting about it? I mean, I think, I mean, Jayden, I mean, I think she's exactly right, business is business. And so if you wanna go track down your $8,000, the way you're trying to track it down isn't working. So either knock on his door or send a letter from a lawyer. That's really your two options.

Or you've tried for two years or two and a half years, you either he's a scam artist or he's just struggling, man. And either way he doesn't, he's communicating to you through his behavior. He doesn't want to talk to you. So let it ride. Yeah, for me, you've said nothing about this guy that denotes, man, I had a great relationship with him and I really want to keep that together

Like there's been nothing of like we used to be best friends or good buddies At least you haven't said that in this conversation so in many ways it's like if you kind of press this there's nothing it doesn't feel like there's much lost if you press this and He kind of gets you know, he starts feeling some type of way about it, right? It's not like it were your dad or if this were your best buddy. Am I right? Or is there more that you didn't tell you? You're completely right. You're completely right. Yeah, I'd press it.

The truth is, if somebody says, I don't I'm not going to give you this money. Yeah, you're not going to get it without some sort of a legal situation going on there. And you get to decide that. But I'm with John, man. I'd press him. I'd find out where he works or I'd find out where he lives. And I'd pay him a visit. I'd be like, Hey, man, what's going on? You just dropped off the face of the earth and check in with them first. But then it's like, Hey, let's talk about this $8,000 because that's not a little bit of money. Most people feel that greatly. So thanks for the call. Are you struggling right now financially? No, no.

I mean, $8,000 is a lot of money, but it's not like it's gonna kill me or I'm gonna be homeless or anything. I have like about some savings. Okay. Do you wanna be friends with this dude? Are you genuinely worried about him or are you reaching out just to get your money back?

At this point, I think it's more about the latter than the former. Cause it's just giving me a little more, like my suspicion is just growing more and more. Um, just because it's been, you know, about two years and I just even haven't heard from it back. Is he alive? Or, you know, That's what I'm wondering. Is he with us?

I have no idea. Yeah. So you're, you're creating stories that are keeping you up at night, not him. So I would say act. Either make it a point in your spirit just to let this thing go, go get in a car and go visit him, or go contact a lawyer and have a lawyer write a letter.

But those are the three direct things. You can drop it, you can befriend it, or you can make it a legal action, but you just sitting around spinning up stories about what he may or may not be doing That's making you crazy on the inside. It's not worth it. This is the Ramsey show Okay, here's the hard truth your investment dollars could be winding up in the pockets of companies that hold positions You don't agree with people are unknowingly putting money into tech giants and household brands that don't match up with their core values. But here's good news. Timothy Plan is at the forefront of biblically responsible investing. That

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contained in the prospectus or summary prospectus available at timothyplan.com. Read carefully before investing mutual funds distributed by timothy partners ltd and etfs distributed by foresight fund services LLC. It's the Ramsey show. I'm Jade. Next to me is Dr. John Delaney. Happy Halloween. If you celebrate that sort of thing. Are you a spooky Halloween like creepy Halloween? I like scary movies and haunted houses and I love eating my body weight in candy and having everyone not like look at me like I've got something wrong with me. So I want to have a normal night without everybody looking at me like I'm crazy. Yeah I mean you can just mainline candy and everyone's like that's Halloween so

I feel like I get a pass but also I like going to bed like at nine o'clock. So this is a tough night for me. Yeah, I hear that Are you like a chocolate or like a candy like hard candy person? I'm not super discerning. Okay, I'm not super discerning I always get frustrated with the Jolly Rancher folks But other than the Jolly Rancher people and I got I got a stiff dad tax I'm trying to teach my kids about the future of the world they're gonna be inheriting with high, high taxes. And so when they get home with the candy, I go through it and dad tax it pretty hard.

Got you, got you, got you. Pretty hard. Listen, I always say payday is very underrated. I get sad every Halloween, there's less and less paydays that are given out as candy. I know. And that's one of my favorites. Kids like mine ruined it.

Yeah, there's less and less butterfingers going out. That bothers me deeply.'s one of my favorites. Kids like mine ruined it. Yeah there's less and less butter fingers going out that bothers me deeply. With all of my heart yes. Kelly knows what I'm talking about. All right well because I talked a lot of I used to make fun of everybody when I was a kid and that's how what the universe gave me a peanut allergy kid. They're like oh that's what you get. So it's kids like mine that are ruining it. I got you. I didn't make that connection, now I know. There should be, oh my gosh, if there was an adults only peanut candy party. Let's move on. I realize I just wandered into some fragile territory there.

That's not what I meant. I was just saying, there was a bunch of people that got together and they were like, hey, let's all bring paydays and butterfingers. It'd been awesome. It would be awesome, John. Let's go out to Mobile, Alabama and talk to Michael. let's all bring paydays and butterfingers have been awesome it would be awesome I just got to Mobile Alabama Michael what's up Michael hey how's it going that was a little bit weird with the adult party it was weird that makes perfect I'm glad you called it out

Michael we're sorry what's up what's up good good what's up dude Stop it, stop messing around. How are y'all doing? Good, good, good. What's up, dude? Yeah, so I was actually calling. I live paycheck to paycheck, man. I make like right under 40 grand a year. My wife doesn't work. She stays at home with the kids. I've cut costs, I mean, as much as possible. And we're still just not really saving any money.

Like I just feel like I'm beating my head against the wall and I'm trying to get us into a house and things like that. But my main question is, what is the best way for somebody like me? I have no retirement, I have no savings, I have nothing for the future, I'm 32. You gotta, hey, Michael, you gotta make more money, brother. Like you're not making 40 grand.

What do you do for a living? I'm a cemetery maintenance manager. And you know I work 40 hours a week or whatever. But I started my own business this year. Landscaping and stuff. What's that bringing in? It's gone pretty well. I brought in right at like 18,000

this first year. Okay. But I've also spent every single dollar getting new, better equipment, just, you know, stuff like that. So you invested it all back in here. You didn't. Yeah. And next year I'm actually in a good spot to, I think actually make a profit, but I haven't paid myself out of that business and I feel like I'm just killing myself trying to juggle everything and then not getting anywhere yeah on top well let me let me bust in here um tell me tell me a little bit more about your financial snapshot because we know that you're making the 40 000 that it's I'm not going to lie to you it's going to be tough to to to make your way with that.

And then you started the side hustle, but you're reinvesting all the profit, which in this case, if it's a side hustle, pay yourself and grow the business later right now. You need cash. So let's find out about the debt. Do you have any debt going on? Is that robbing you? Well, so the past year and a half that I've been here, I've focused on paying all my credit cards down.

I have like practically no credit card debt. How much? Like 150 dollars. You know, and the main things I have are mine and my wife's vehicles. Okay, tell me what they're worth and what you owe on them. What they're worth is... And what you owe on them? I mean, probably, collectively 20,000 together and

I owe probably collectively 30 on both of them tell me individually tell me what you owe on it and tell me what 41% interest rate and I'm actually refined I'm in the process of refinancing it right now But it's really all I could get at the time. And so I took it the truck. I bought it for 15,000 okay 40 41 percent back which Yes. Yes Okay, and what what's it worth you bought it for 15,000? What's it worth now if you were to Kelly blue bucket private sale? It'd probably be about about 9 or 10,000, what's it worth now? If you were to Kelly Blue Book it private sale. It'd probably be about about nine or 10,000.

Yikes, okay. And what's your payment on it? My payment is $445 a month. Sheesh, okay. Now tell me a little bit about your wife's car because I'm gonna try to find you a way out of some of these payments because these are what are, you can't breathe, you know? So tell me about your wife's car because I'm going to try to find you a way out of some of these payments because these are what are uh you can't breathe you know so tell me about your wife's car

she has a Tahoe it's a 20 it's a 2013 okay um we got for 25 000 oh my years ago hey yeah what's going on here is your cars your cars are almost what you make in a year Oh my. A couple years ago. Golly, dude. Hey. Yeah. What's going on here is your cars, your cars are almost what you make in a year. Trust me, I know. Yeah, that's a problem. I mean, it takes literally, I can buy weekly and it takes one of my checks to pay both of the vehicles and most of insurance. Okay.

So now that you've, now that you feel that, then I don't need buy-in going forward. We know we've gotta get rid of one or both of these vehicles, some way or somehow. So hers is worth 25, or you paid 25 for hers. What's hers worth if you were to sell it? Not trade-in. Probably 12,000. Ugh, what's going, why are you?

I'm sorry, go ahead. Why are you going into these subprime loans? Why are you paying 41% interest and doing all this? What's the, what does it get you on the, on the Tahoe? We got like an 8% interest rate. I got a pretty good interest rate on there. Um, the thing is just, it was so, it was just older, but a real, like an 80 year old woman had it. It had like 60,000 miles on it. It's still going great today. Yeah, but here's where I want to get you to.

Here's where I want to get you to. I want to get you to the point where you look at these vehicles and you go, this was the worst decision. This is getting me nothing. As long as you look at it and go, oh, well, it was kind of good or I needed this or that. There's not going to be much I can do to help you. You have to look at this and go, that was the dumbest thing I ever did. I'm never doing it again. That's how we know there's a turning point that's going to happen. And I hope you get

to that point because truly something's behind this for you to make $40,000 a year and have almost $40,000 in vehicles. I mean you You're shooting yourself in the foot at that point. So Can I say Michael I think I think I know what it is You don't make any money, but y'all are living a life that you want to be living and what I mean by that is Bro, you can't afford for your wife to stay home right now You don't make that kind of money and I know you want that and I want it for you, but you can't afford it.

And I have three kids as well. No, I- And that's the main reason. That's an even more reason. I totally get it, dude. But you got cars that are nice and they may be old or whatever, but that you can't afford.

It's like this, I wanna have a Tahoe. I wanna have this nice truck. I wanna, we're gonna be a stay-at-home single income family all of that works good on paper and it looks good on Instagram it doesn't look good in reality how old are your kids man 13 10 2 and my wife's pregnant right now with another one okay so you have two that are in school and you have a two-year-old right? Yes. Is she homeschooling also? No, no the the girls are in school and she she stays at home with my youngest and like I said she's she's seven months pregnant now okay so she hasn't been working for

I guess it's been the past two years. She took off for my youngest. And now this has happened. We're gonna run out of time here. I just need to say this out loud, bro. You gotta look yourself in the mirror and I want you to, like there's no ability in the job that you do. There's no ability in starting to side hustle.

You've gotta go make more money. You've got a family of five and another one on the way. You gotta get rid of these cars, right? You gotta figure make more money. You've got a family of five and another one on the way. You gotta get rid of these cars, right? You gotta figure out these car loans and stop doing what quote unquote looks fine. You gotta go scorched earth with cars, no debt. Hang on the line, we're gonna give you FPU as our gift. I want you to watch those videos. And Ken Coleman's career assessment because your core income is an issue.

No side hustle is gonna help you get out of this. You need to change career paths and Ken Coleman can help you with that. What does the future hold for business? Ask nine experts and you'll get 10 different answers. Economic growth or a recession. Business taxes will go up or down. AI will help us work or it will replace us all. But there's no such thing as a crystal ball. That's why more than

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the future with actionable data. And when you're closing the books in days, not weeks, you can spend less time looking backward and more time focusing on what's next. And speaking of what's next, download the CFO's Guide to AI and machine learning at netsuite.com slash Ramsey It's free at netsuite.com slash Ramsey You're listening to the Ramsey show I'm Jade Warshaw next to me is the doctor dr. John Delaney, uh I'm really excited because the time is running out yet again to book your cruise John I've told you many times because the time is running out yet again to book your cruise, John. I've told you many times if you don't book it.

You gotta book it now, they're more than 90% full. And so if you were thinking about going on this cruise, now's the last chance and there's no guarantee that you'll have another chance, so you better book it. And there's the, yeah, it's gonna go as a Christmas gift. And don't forget the Ken Coleman pickleball challenge and the George Camel cannonball in the pool challenge.

He's taking on all comers. If you wanna go see that. Interesting, okay, speedo required. Speedo required, well that's George's personal request. That's right, that's right. Well, I do need to say we're talking about all of these fun amenities, but it's not your average cruise.

This is actually a very premium cruise. Holland America is top draw, if you will, John. It's a nice cruise. And we're going to really nice destinations. I've cruised a zillion times. I've been to all these places. They're actually really, really great. Turks and Caicos, Puerto Rico, St. Thomas,

Bahamas and more. Holland American's new Staten Dome ship is beautiful. The way the theater is, John, it's like around and all the way around. 360 basically are LEDs. And so it's a very immersive experience. So it'll be really, really fun. Really great food, really great entertainment.

There's specialty restaurants on board. There are excursions that you can do. So this is- The food's all included, right? Everything's included. Room service is included, everything's included. Man, you can have a hot dog at 3 a.m. and no one's gonna stop you.

And will they bring you indigestion, anti-diarrhea? That you might have to provide on your own. But all the Ramsay personalities are gonna be there and I keep saying by the end of this, it's a seven day cruise, by the end of this we're gonna be BFFs forever. Best friends. Well we're gonna be NFFs. We're gonna be no forever friends.

I think we'll be BFF. I think we will too as long as nobody wears a Speedo. But there's gonna be lots of celebrity guests. It's just gonna be great. So book your cruise. ramsaysolutions.com slash cruise is how you do it. Or you can click the link in the description if you're listening on YouTube or podcast. All right. I'll see you there. Let's go to the phone lines. Shall we which talk at Kansas? We've got Drew. What's going on, Drew? Hey, I appreciate you guys taking my call. It's a little embarrassing of a phone call, but here we are my wife and I bought a car two years ago and we are Absolutely upside down in this thing

Kelly blue book I can trade it for $3,000. I could probably do a private sell of $5,500 to $6,000. We owe just about $14,000 on the car. Whoa! We are trying to figure out, do we just let this thing get repossessed and deal with the money that we're gonna have to pay later on to free up that $500, $600 today or do we keep it? No, I would not do a voluntary repossession. That is going to drop an atom bomb on your credit, which is unnecessary. And you're still going to be on the hook for it.

It's it's it's not I would not make that option. What's the what's the payment on this for you? What's it costing? We $450 a month. Okay, that's a lot. Tell us about your income. So I my wife and I stepped down from ministry, just obeying Holy Spirit and rest. And I am currently driving a semi truck. So I'm gone a lot. What do you make? Right now I'm sitting at about $40,000 to $50,000 a year. $40,000 to $50,000 a year. What are you taking home?

What's it look like monthly after taxes, after all your expenses are taken out? What's it look like that you're bringing home in your check every month? It just depends on miles. after all your expenses are taken out, what's it look like that you're bringing home in your check every month? It just depends on miles. Obviously we're looking probably two to sometimes 4,000 a month. Okay, two to 4,000. And is your wife doing anything during this time? No, she is a stay at home mom.

She's actually, we're having a baby tomorrow. Wow, okay. And it's this gonna be your first child or how many do you have? Number three Wow, okay. You know what this this in many ways this call is very similar to one We took earlier this hour Regarding the car you're probably gonna have to bite the bullet and pay this thing off. Is it your only debt? We have credit card of like a thousand dollars and then we have student loans which are probably about 20 and that's all the debt that we have.

Okay. Because here's the thing. If I said, hey, go to the credit union and get a loan for the difference, but then also keep some money out to buy yourself a cash card, you'd be right back at 14,000, right? And so there's really no way getting out of, the only difference is you might have a slightly lower payment every month, but not by much, okay? So for that reason, I would say, you're gonna have to bite the bullet,

and how quickly can you pay off $14,000? That really needs to be the goal. This could be a lot worse, you know, John, we're not talking about a $45,000 situation. This is a $14,000 car plus a $1,000 credit card. If you both decided it's, and I'm not saying this to be ugly, but it's adult go time and we've got to work and we got to bring in an income,

then you can clean this mess up very, very quickly. But the problem is making $2,000 to can clean this mess up very, very quickly. But the problem is making $2,000 to $3,000 a month, it ain't happening. Yeah. Yeah. I hesitate to get into this, but when you say the Holy Spirit told you to stop working at the church, what does that mean? Did something happen?

Did y'all get in trouble or did you just say my time here is done? It was a little bit of church hurt with it. I'll be honest there, but we definitely needed rest. My wife has had some health issues through this pregnancy. We just needed to focus on us and our kids. That way later on in life they did not you know hate the church and hate being totally get that if if if if if I can be honest just listening to your voice you sound terrified a little bit yeah okay you've got a you've got a pretty brittle tenor you got a baby coming tomorrow you have a job that is putting you on the road all the time You're not home. Your wife's not doing well. You still got it is there's

My dad was a minister for a while, too There's there's a hurt like no other when your church family turns on you, right? I Think you're worth more than $40,000 in your current area Okay, and I applaud you for going to do the next thing you could do to get a paycheck to take care of your family that's noble and that's good. But if I were you, I'd go down and see what I could make being an assistant manager at Walmart or stocking

or something like that. Because you need to be around your family when you have this other kid, and if your wife has had health issues, I know that's weighing on you, and I want you to make more than 40,000 bucks. Yeah. Okay, it's a scary moment right now.

Is that sound tenable? Every trucker I know is struggling right now. It's just a reality. It made a jillion dollars three years ago and people are gnawing off their arms and legs to try to make it work right now. And so I'd rather see you walk away from that and go work at McDonald's and make 11 bucks an hour and go from there and then go down the street and throw boxes

at Walmart until 11 o'clock at night and do the night feeding so your wife can go to bed. I'd rather y'all figure that out the next six months and even if you're only making 40 or 50 grand doing that until you cobble something else together. But man oh man oh man I can hear it in you, dude. I mean, the truth is, when you really put math to this, if you just say to yourself, okay, let's take it $1,000 at a time, I need to make $1,000 more. If I can make $1,000 more a month,

for the most part, I can have this car paid off, right? I mean, that's what we're whittling it down to. And if you do that, you're out of this car. And you do a little bit more than that, you're out of the car. And you do a little bit more than that, you're out of the car and you're out of the credit card, right? And then the next year you start tackling the student loan. And so just breaking this down into bite-sized pieces, because again, similar to the call we took earlier,

this is a core income issue. I don't know if your plans are to go back into ministry or not, but whatever your plan is career wise, it has to shift from where it is right now. And I'm not gonna sit here and act like that's a light switch. I think that that's more of a journey that you're gonna be going on. But in the meantime, do what John said

and take the jobs that you can get. Cause a lot of them are paying a lot more than what you're making right now. And you miss your family, don't you? Absolutely. Yeah. Don't, if you were making $140,000 a year and this was a season, I'd give you a hug and say, man, this is a season.

You're making $40,000. It's not worth missing everybody in your family, in your life, and watching your little baby be born without you to do that. Not when there's $40,000 worth of jobs down the street, if not more. And you can get on an assistant manager and associate manager track and then go make yourself some good money down the road here. I'm proud of you man.

Let's reverse engineer this thing and congratulations on having a new baby and Jayden and I will be cheering you guys on that you guys have a healthy birth and everything's good to go this time tomorrow. Blessings man. This is the Ramsey Show. These days it's not if your identity gets stolen, it's when. And the only ID theft protection plan I have ever recommended is from Zander Insurance. It helps real people with real-life situations. Like the call we got on the show recently where a woman's abusive ex opened a credit card in her name and racked up

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Ah, today's Ramsey Show Question of the Day is sponsored by YRefi. Hey, it's hard to make progress when you're trapped under an avalanche of defaulted private student loan debt. But YRefi helps you dig out and get momentum with custom refinancing based on your ability to pay and a lump sum payoff option that you could qualify for after 24 months. That's a good thing. So go to why refi.com slash Ramsey. That's the letter Y R E F Y.com slash Ramsey. Remember this may not be available in all states.

All right, today's question comes from Isaac in Arizona. At my current job, I was given the option to take a voluntary severance package, which I accepted. I'll be leaving at the end of the year with roughly $150,000 before taxes. My wife and I have a $175,000 mortgage, five grand in credit card debt, and we owe 40 grand on two cars.

I'm already job hunting, but I don't have anything lined up yet. Given the current bloodbath in the tech industry, pause, hey, you know what we should do? Let's make a bunch of things that make our jobs obsolete. Yeah, that sounds great. I'm praying for the best, but planning for the worst. Assuming I'm still jobless in a couple of months,

would it be better to leave the money alone until I find a job and pay myself every two weeks for living expenses or go ahead and work the baby steps regardless of my job situation? All right, so off the top of my head, you tell me if I'm wrong here. I don't feel like Isaac's taking this seriously enough and what I mean by that is you have no job and you're looking on the horizon and the prospects for the war, I'm assuming he works in tech prospects are going away, okay, and so

This is a Sell cars. This is a scorched earth We're gonna live like as though we just lost our job because we did and yes I guess I don't think you pay yourself a salary for living expenses But you cover your living expenses with the set and that's what a severance is for right to pay for the fact guess I don't think you pay yourself a salary for living expenses, but you cover your living expenses with the, and that's what a severance is for, right? To pay for the fact that you don't have a job. Yeah, I think that you're half right and mostly right.

This is a storm mode situation. So my goal would be to not touch this 150. He listed out, and there might be some information missing here. He told us how much debt he has, but he didn't allude to the fact that he had any other savings laying around, which makes me think, okay, now's not the time

to take this money and pay off a bunch of debt. Now's not the time to be walking the baby steps. Now's the time to pause and go, okay, this money's sitting there in case I need it, but let's make sure we don't need it. And get up at six o'clock in the morning, go to the grocery store, start working. Yes.

Start bagging groceries, dude. You don't have any money. Otherwise, you're gonna look at this and it could be a false sense of security. That's exactly right. And it could cause you to kind of like sit back on your haunches a little bit, wait for the perfect job to roll up,

as opposed to no, I'm gonna act like this money doesn't exist. I'm gonna go get it. And you know, it might take a while, but I've said this to Ken, and this is just my thought. When you're unemployed, take any job until you can get the job.

Any and all jobs, multiple. And when they say like, I'm searching, how long does that actually take? Yeah. Like an hour, two hours. Of course you can take time off if you get an interview. Right, right, right. But you're shooting emails, you might be having coffee every once in a while with somebody.

You're making phone calls and texts, go work and then work on top of that and then work on top of that. You're unemployed, you might be having coffee every once in a while with somebody, you're making phone calls and texts, go work and then work on top of that and then work on top of that. You're unemployed, you have no job. Yeah, because the last thing you want is to feel like the longer you go without a job, the less your self-esteem is there, right? That's exactly right.

And it just, you bring that into the interview. Yes, and you, it sounds so lame, but this is how it works, you guys. I'm sitting here because I gave a talk at a university and one of the executives here was dropping her daughter off. Show up in other places. And it might be that you're bagging groceries

in somebody that you used to work with who also took this bias, who found a new job, is like, bro, what are you doing? You're like, dude, I'm taking care of my family. And they'd be like, I got you. So go be seen. Go bag groceries, go drive, go get out and take in any kind of job you can get kind of job.

I might, if I have 150 before taxes and you'd probably take home 100, 110,000 or whatever that would be, I might pay off this $5,000 credit card. I mean, like maybe clear that if that's all the debt you have and I'd probably try to sell one of these cars because 40,000 bucks total in cars is going to be what, a thousand bucks a month?

Oh yeah, he could get it. He could definitely get out of those cars. Definitely. And I'm not mad if you paid off the 5,000 but you definitely don't have to yet. But listen, I'm with John. Go work and then go work and then on top of that go work some more.

And go do things that cause you to form relationships with people because that's where the opportunities are in the relationships. Yes. All right, we got Brandon. He's in Grand Rapids, Michigan. What's going on, Brandon? Hey, thanks for taking the call. I appreciate it.

You're welcome. How can we help? I have $140,000 in student loan debt and a house mortgage of $75,000. My wife and I just started on the Ramsey program. We're trying our best. I think there's a lot of fear that the mountains just really big. Welcome to the cult, Brandon. You're in good hands, man.

I started having panic attacks, different things. Welcome to the cult, Brandon. You're in good hands, man. You're in good hands. I started having panic attacks, different things. I picked up a second job. So working full time plus a second job. Just trying to figure out how to get them out and taken care of. Okay. As quick as I can.

Are they private? That's the only debt we have. Are they private? They're fed? Okay. I'm still paying on them because they're in the forbearance right now. So I'm still making payments on them. Are they private? That's the only debt we have. No, that's federal. They're private? They're fed? Okay. I'm still paying on them because they're in the forbearance right now, so I'm still

making payments on them. I've knocked about actually about $10,000 off already. That's great. On my student loans. Awesome. Good for you. What's the monthly payment combined? My monthly payment on the IDR is $182, but I'm putting about like three to $400 on it.

I think you're doing everything right as far as these student loans are concerned. You've utilized a payment plan to make sure the minimum payment is as low as possible, and that allows you to free up all of that extra money to throw out the smallest student loan. So are they lumped? Is it all one lump thing or are they individual loans? So I have one that's consolidated for like 101,000 and some change and then individual ones that make up

the rest of that total. Okay, and you're throwing all the extra money at just the smallest one, right? You're calling it in or you're going on there to make that principal payment? I can on the services website, I can dictate. Excellent. Okay, so where the money goes, I can on the services website I can dictate. Excellent, okay so. My payments where the money goes. You're doing that exactly right.

I wish there was a easy button that I could hit for you. The only thing that's gonna make this, I know and I wish it was. The only thing that makes this go faster is you making a bigger shovel but even that, I mean there's gonna be a time aspect to this. But tell us about the panic attacks. Yeah, I think, Dr. John, I've read your book,

and I think the panic attacks are my body doing what it's supposed to, as uncomfortable as it is. Yeah, I was gonna say, I wonder if your body's telling you the truth, right? Yeah, they started years ago when I tried to just shove the debt thing aside and forget about it. I mean, I never did not. I was always making payments.

I never shoved it aside at that point, but it was always something like, oh, I'll just pay it for the 20 or 25 years and be done with it. And then it just kept building and my body was like, which is always waiting for other shoe to drop. And it didn't, my body was like, Nope, we're not going to wait for the other shoe to drop. Good for you. And what do you do for a living? So I work, believe it or not, with panic attacks. I work in community mental health. Okay.

So I'm a community based mental health worker. What's your, what's your schedule like? I work about 7 a.m. to 4 30 p.m. I'm a salaried employee. There might be times where I might have to work a little bit on weekends, but I try and protect that time as best I can. So can I tell you something and you're not gonna want to hear it, but this is me just trying to help, okay? Yeah. I did a lot of my internships at a community mental health program And they're some of the most amazing people in the world and i've got a big heart for those programs

They also they they hire people who are service oriented who are in this for something other than the money And I love that in this for something other than the money. And I love that. But you can't afford to be doing this right now when on the other shoe you could go do private practice and take 120 bucks of cash and get your loans paid off. Okay. And so it might be a season where you go see

what that would look like and I'd probably tip, dip my toes into it and say on Saturdays, I'm gonna do private clients on my own. Do they, would they allow you to do that or have you signed your life away? I have not signed my life away. I would be allowed to do that. Okay I would recommend you start going to see clients on Saturdays. All day Saturdays at a hundred bucks an hour do cash or 120 bucks an hour do cash and

begin to build a client list and if in two months and three months if you're like a lot of good therapists in town you'll fill up real real real fast and you can get up to a hundred grand or 150 grand in cash, just cooking, and then go back to community mental health when your family is in a more secure place. You just can't afford to be making 60 grand with that kind of debt right now. That's awesome.

And there's like little to no overhead on that. Amazing. All right, that does it for this hour of the show. Thanks, John, for hosting with me. Thank you to the folks in the booth. We'll see you next hour. Do you ever feel like you're finally making progress towards your goals only to get quickly distracted

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We're going to help you build wealth. We're going to teach you how to do the work that you love and create amazing relationships. That's what we do here. So if you want to get involved in the conversation, we'd love it if you did. It's a live call. Triple 888-825-5225 is the number. I did a lot of eights. Do that again. 888-825-5225.

It's a lot. It's Halloween. We got lots of Kit Kats. Yeah, it was spooky the way I said that. All right, if you want to get involved, call the number and who's back there? Christian, I can't see. We'll pick you up and get you on the number and who's back there Christian? I can't see we'll pick you up and

Get you on the line. We got a jazz Christian He answers the phone. Oh, yeah, is that is that what you get? He's got the best phone entering voice on the planet Interesting. I've never heard that voice Christian whenever I see you in the hall. It's like hey Jade. What's up? No, he answers the phone. He's like he's like laid-back., good to know. I got Vince. He's in Indianapolis, Indiana. What's going on, Vince? I guess thanks for taking my call. You bet. So I'm currently working through the baby steps right now, but my question isn't about me, it's for my parents.

How do I get them to be gazelle intense and start budgeting, working through the baby steps? What can I do to get them on board? Listen, when you find out, tell me. Bro, write that book, you'll make a billion dollars. And hey, your second book will be how to teach my parents about sex. Oh man. The two things that no parent wants to hear from their kid about is get lectured on is money and sex. Oh man. The two things that no parent wants to hear from their kid about is get lectured

on is money and sex. So tell me what is happening that has landed you here. Yeah so I mean I just sat down sat down with them earlier this week just to kind of get a financial picture for them and you know what their retirement's going to look like. They're both 53 right now. So they got another 10 years or so before they retire. If they can afford it. Right, exactly. They've got about 100 grand in debt, 100 grand on a mortgage. And to my knowledge, I'd say they probably have around

800 in retirement. Okay, and what do they make? My dad told me that they're around the $200,000 mark which is you know a lot of money. Yeah they're doing great. They're doing good I mean the truth is this lump sum, a lump sum is gonna double every seven years so this 800 at some point is gonna be 1.6 and on down the line it'll double again. They have a house? Yes they do they have about 350 in it and they said they can sell it for 450. So for all intents and purposes your dad mom are millionaires right? Almost I think yeah I think if you tacked on the debt it'd be just shy of it.

Okay. But obviously you know that that's gotta last them 20 years in retirement or whatever else. Did you call the financial picture meeting or did your mom or dad call it? You know, I kinda called it just to make sure that they're gonna be okay. Okay, good for you for having the courage to do that and good on them for sitting down

and walking you through where they where they are Most parents wouldn't do that. So that's That's a pretty cool situation. You found yourself in good for you Here's the truth. Um In 20 21 years, they're gonna have 6.4 million dollars Doing nothing different All right, and they're in their 50s. So that puts them in their 70s They're they're what I would call normal in that way of hey, we're they're clearly putting aside in their retirement But they're also carrying debt, right?

That's kind of the normal American way to their point to the into their credit at least they've continued to save in retirement And so I I'm with you. Yeah, I want them to pay off the $100,000 of debt. I want them to be mortgage free before they retire. I don't know that you will be able to convince them to do that. I like that you're thinking about that, but either way, what I thought you were gonna call and say is if my parents don't get their life together,

I'm gonna be on the hook for taking care of them. But I don't think you're gonna be. Because I think they're gonna have plenty of money to be able to float what they're doing. It's not gonna, it could be more peaceful to your point, but I think they're gonna be okay, because they'll be able to live off the interest that this floats off.

John, what can you do? I mean- Here's what I'm gonna do for you Vince. We're gonna give you a copy. We're gonna give you a copy We're gonna give you a I think it's a digital link here to Financial Peace University, okay, and it's all nine lessons. I'm gonna hook you up with it and I want you to share that with your parents and All you all you have to do is say hey dad mom

It really means a lot to me that y'all y'all sat down and walked me through the finances here. Most moms and dads won't do that or they can't do that because they don't even have their house in order to even know. Thank y'all for doing that. This is something that's meant a lot to me. It would mean a lot to me if y'all listen to this, if y'all watch these videos.

That's it. And if your dad wants to ask you questions, cool. He's probably not. He's like I say, he's got a million dollars, right? All full, right? He's probably feeling pretty good, yeah. And so he's probably got a plan and that plan's different than yours.

We're gonna love him anyway. And what we're gonna do is we're gonna live consistently and we are gonna like reverberate peace. We're gonna eat anxiety at the dinner table, at Thanksgiving, at Christmas, and eventually your family members will ask, Hey, can we go for a walk? Tell me what you're doing. Okay.

But we'll give it to you and you give it a shot. But I think it's done fully respectfully and with gratitude for the transparency which with which they met with you earlier. But don't get your feelings hurt if they say no. And I want you just to keep living the values and principles that you believe in. It's good for you. Yeah, thank you for the call.

That's tough. I mean, what I thought he was gonna say was, what he ended up saying was a lot better because so many times we get the call where it's like, listen, my parents have misbehaved with money. I'm in my 40s. I've got my own kids. I've got my own kids who are going to college and they're hitting the age where it's like it will all hit the fan at the same time.

Right? Right? When my kids are going to college is right about the time that my parents are going to be going to social security age. Social security is not going to be enough. They're going to be hitting me up for funds. Right? And when you see that oncoming train, you want to have that talk with your parents to say, Hey, let's talk because I don't wanna be on the hook for this, I can't afford to be on the hook for this. But then to your point, John, you have to deal with the fact that they're not having it a lot of times.

They're thinking this is my life. I don't have to tell you what I'm doing with my money. Who are you to tell me what? That is a very difficult situation. And parents, if you're listening, please don't do that because it's in many ways, it's not that they're trying to control you. It's not that they're trying to tell you what to do. They're trying to get themselves in order.

That's right. That's right. And I think any in 30 or four year old person who's got any sort of thinking about tomorrow in their mind and spirit is thinking about, am I gonna have to care of my parents? Yeah. I wonder what that's like, are they gonna have to move in? Like you mentioned, I mean, we're gonna hit college,

right when they're hitting their late 70s. And I'm hearing more and more, Jade, that the boomer generation owns a big chunk of the real estate with a ton of equity in these homes. But they're saying, I'm not moving, this is my house. And why would they? The interest rate, I mean. But it's like, oh, your nest egg's in this house Yeah. Like, yeah, I'm moving though. Like what you can

help out with groceries. You know, it's like, no, no, no, no. That's why we have this. You can sell it. I'm moving. Well, and then the painful part of that is it's and forgive me if this sounds any sort of way, but it's like if all the equity is tied up in that nest egg and you're thinking, OK, like, you know, when they pass away, this is going to the family. But then if they have a bunch of debt and you also know, like, not only is it, but the debt is going to eat up that estate. That is just like, ah, so parents, if you can, I know it's tough, but if you're in your 50s and your, your kids are sniffing around, trying to get information,

they're not trying to tell you what to do. They're not trying to get up in your grill. They're just, we just want to make sure we are planning. Invite your kids over for dinner and tell them about your financial situation. Just tell us. We want to know, do you have life insurance? How much? We want to know what you have in your 401k. We just, we want to help us. We're trying to help us by knowing about you. This is The Ramsey Show. This show is sponsored by BetterHelp. October is the season for wearing costumes and masks, but let's be honest.

A lot of us hide our true selves behind a mask and costumes all the time. We do this at work, we do this with our friends, with our families, we even do this with ourselves. I've been there multiple times in my life when I'm not being my true self and it's the worst. If you feel like you're stuck hiding your true self, I want you to consider talking with a therapist. Therapy is a place where you can be honest with yourself so you can take off the costumes and take off the mask and learn to live an authentic life.

If you're considering therapy, I want you to contact BetterHelp. BetterHelp is 100% online therapy. You can talk with your therapist anywhere so it's convenient for your schedule. You just fill out a short online survey and you get matched with a licensed therapist. Plus you can switch therapists at any time for no extra cost. Take off the costumes and take off the mask with BetterHelp. Visit BetterHelp.com slash Deloney to get 10% off your first month. That's BetterHELP.com slash Deloney. Hey Dr. John Deloney here.

Data suggests people who have amazing marriages are happier and they're healthier. But in the modern world, marriage, especially a deep intimate marriage, can feel impossible. And that's why I'm thrilled to announce the launch of Questions for Humans Intimacy Edition. These cards will help you build a stronger marriage, help you learn to feel connected, and yes, there's a lot of questions about the aw yeah stuff. Get yours today at ramsysolutions.com slash store or click the description if you're on YouTube or podcast. You're listening to The Ramsey Show. Thanks for hanging out with us. I'm Jade Warshaw. Next to me is Dr. John Delaney.

We are your hosts for this hour. Something exciting coming up. We're heading into the fall. And you all know that. Before you know it, it's gonna be Thanksgiving, and then it's gonna be Christmas, and then it's gonna be New Year's. And if you're not careful,

your money can go down a slippery, slippery slope, John. But we're here to help you. We're doing a series of webinars, and we've been doing them a couple of months here to make sure that you have everything you need not to lose control. And so join Rachel Cruz and the Every Dollar Team. We're doing a free live training. This one is Monday, November 4th at 1 p.m. 12 p.m. Central Time. This is your lunch break, right? I just got off of one and it's great. There's so many people on there. Over 100,000 people have registered over the lifetime of these events and people love them.

If it's your first time, you can do it. If you've been to a couple before, but you still have more questions, you can still sign up. And by the way, if you're not available right at that time, still sign up because you can watch it later on when you are available. And so the way to register is you just go to ramsysolutions.com slash webinar and this, that's it.

We'll provide the rest. This is the number one way guys, for you to eliminate your debt. This is the number one way for you to learn to build wealth. The number one way for you to get on the same page as your spouse and the number one way for you to eliminate stress. It all starts with the budget.

So get help with what you need. These Every Dollar webinars are popping off again. That's Monday November 4th at lunchtime. We'll see you there. All right John you ready to go to these phones? Let's do it. Let's go out to Harrisburg, Pennsylvania and talk to Shannon. What's up Shannon? Hi thanks so much for chatting today. I very much appreciate all of the advice we've gotten from you and FPU over all these years. So it's great to talk to you. Thank you so so much. How can we help? So my husband and I are 54. We are debt-free except our mortgage which will hopefully kick off next summer. Wow, congrats. Yeah,

thank you. So we have three children. Our oldest is halfway through college and doing well. I'm sorry, our youngest, but our oldest is 25. He's also a college grad. He's got a great job, works with Excel. He's a numbers guy and he's paid off all of his student loans that he had. He's a great saver. He's thriving by pretty much any measurements you put out there on paper. He lives with us still, not because he couldn't live on his own necessarily, but he has autism and by staying with us he stays connected

socially and emotionally, which is definitely in his best interest, but not something he would necessarily do on his own. We think at some point down the road he will likely move out on his own but as much in his life has been it's just kind of on a later track. So we're trying to think through how best to help him be well positioned for that independence when the time comes, personally and financially. And I would welcome any guidance or input you have on us helping him be well set and think through those things. Yeah, I mean, kudos to you all.

It sounds like you all have done a lot of work and walked alongside him in the places where he's accelerated past those who would his like the normed age of development and those times when it's been slower right and it's just taking more time to get there so good for you guys yeah over the course of my career I've worked with graduate students I've worked with law students I've worked with any number of students who are somewhere on the spectrum and in fact where I went to grad school, the connected to the college of education where I was in, the Burkhart School for Autism was there.

And it was a magical place where I saw them do some amazing things with young people, transitioning in and out. I think the, here's some, I can just throw it out there and only you will know where your son falls in terms of where his spectrum disorder is and how he does socially. Let me ask you this one question

before I start just throwing things out there. If he finds himself alone, meaning like you go out, you guys go out of town for a week, does he end up just watching YouTube over and over again or watching videos over and over again or playing video games over and over again? He that is certainly his bent when we have gone out of town will have like Friends or family kind of check in and make sure he gets invited to dinner or to movies or something so that he's

not dinner or to movies or something so that he's not either working or being on a video game. Okay yeah I'm hearing that more and more that young professionals who are on the spectrum disorder at some place, on the spectrum someplace, the allure and the way they've engineered these screens and social devices in the games, it's like their brains have been hacked. And it's tough for any of us, much less somebody with some sort of processing challenge. So I would recommend this.

One, and this is a hard thing, this isn't me indicting you, this is just my experience working with parents, you and your husband, y'all check yourselves first. Sometimes, not always, but sometimes letting go of the leash a little bit or a lot robs a parent who has spent their whole life advocating and defending and fighting for their kids

with special needs or exceptionalities or specific challenges, it robs them of their identity. And so make sure that you and your husband are intentionally together and you're intentional about feeling that loss, that sense of purpose as you let him go into the world. The second thing is I would get with a, an ABA usually works with younger kids, but I'd find any sort of group or any sort of connection

where he can begin what I would call a, this is the wrong language, but some sort of outpatient where he can go hang out with some guys in the evenings, hang out with different groups in the evenings. You might host them at your house, but we just want a group of people that he's going to be able to stay connected to. And then you guys are gonna watch that closely.

And for some students, they fly. I mean, it's just been, I remember it was amazing. There was one group of students at the Burkhart Center that got involved with the theater department and they were a part of theater performances that unlocked parts of, it was magic. I was out there in a wet pit, all these shows. And then there's some students who, at 28, 29, 30 years old just slowly loop their way

back to watching YouTube 12 hours a night and then never sleeping until they collapse, right? And so you will truly come to know your kid over time with space and distance, with intentionality after you're out. And it might be that he's never fully on his own. It might be that he, part of a special needs trust after you're gone, will get him a garage apartment in one of his brothers and sisters houses or in like an extended care kind of place. But I think

you guys just just facing that reality head-on. Right. On the financial side, like I said, he has a great job. He is a phenomenal saver. So what are some ways that beyond us considering a special needs trust, like we have him set up, he started the Roth IRA this year. What might be some other ways that we can encourage him, even as he is such a saver, to be making that investment in his future? I think a lot of the things that you would do for yourself, you just transfer it and teach him how to do it. So if you're a proponent of the baby steps, then we're teaching that

same method of managing those finances. The fact that you're doing Roth IRA is great. If you max that out, then now we're going to a brokerage account. And so having that money there, does he make enough that if he were able to live on his own that he could? Oh yeah. Yeah, I think that's great.

I think at that point, you're managing the funds the same way you would. You're teaching them about how to budget. We're saying this is how much we're spending and we're giving every dollar a name. And then we're going and saying, okay, beyond that, what are we investing for? Are we going to buy a place? Is there going to be a property that he lives at? And you guys are, again, with the social things, I think John has given you a good construct there. But I think if you find

that there's a time where he moves on and out of your house, I think it's great to have those assets in his name. And then all of that stuff can transfer to him when the time comes and his care. Or maybe a brother or sister that's got their name on the accounts too, just in case they need to step in. But also I always want to lean in the direction that's opposite of my kid's natural bent, special needs or not. And so if I have a kid that's a natural spender, I'm going to teach them really, I'm going to let them watch me save.

And if I had a natural saver that's just obsessed with saving, I'm going to show them the joy of spending money every once in a while and the joy of giving. So and your kid will be none the different. Congratulations. Hey folks, Dave here. If you haven't booked your cabin on the live like no one else cruise, now's the time because it's 90 something percent sold out. You do not want to miss joining me, the Ramsey personalities and amazing guest entertainers for the ultimate debt-free celebration. We'll be sailing the Caribbean March 22nd through the 29th 2025 stopping at the incredible Turks and Caicos, Puerto Rico, St. Thomas and the Bahamas.

Hurry to secure your spot with a $600 deposit today at ramsysolutions.com slash cruise. You're listening to the Ramsey show. I'm Jay. Next to me is Dr. John. We're taking your calls this hour. Get involved.

Triple eight, eight, two, five, five, two, two, five. Hey, has there ever been something money related? And you're like, I know I should know this, but I don't like I've been at the, on this planet for a long time and I should know what the lingo is. I should know the jargon, but I just don't. And you're, you're embarrassed to ask. So we started a new segment here asking for a friend. And listen, I'll be honest,

I may have been one of these people that for the longest, I was really confused about like what comes out of your paycheck when you get paid. I still am not confused. I just get mad. Listen, I know I'm not the only one. And when I saw this clip, I was like, that is that is me. Take a look at this. My first paycheck.

Look at the window. There's my name. Hi, me. Isn't this exciting? I earned this. I wiped tables for it. I steamed milk for it. And it was totally not worth it.

Who's FICA? Why is he getting all my money? Relatable. That's so true. Like you look at your paycheck. I mean it happens all the time here. People call in, I'm like, how much do you make? They're like, I make $100,000 a year. But then, like, by the time what they actually take home after the taxes after.

Take home $11. Or it's fine to me, I get madder now when I hit pot holes. I'm like, no, no, no, you took my money you fixed the potholes. Well, let's talk about what is it like what's happening with this payroll tax? What is FICA? Asking for a friend, you know some of you are gonna be today years old when you figure this out But it's basically these this is federal insurance contributions act right? This is that's what FICA stands for This is what you're required to pay into basically as an American citizen.

It says the FICA tax, also known as just payroll tax, just refers to taxes that employers and employees have to pay. And these are programs like Social Security and Medicare, right? And when you, when that money goes out of your check to fund those programs, it's funding them in real time It's not like I'm just setting this aside for me for later

It's for everybody goes into a big pool for everybody And so big picture is when you pay those FICA taxes your money just goes into that big pool a big fund and it's for Whoever's currently receiving Social Security whoever's currently receiving Medicare That's why we say all the time to people like, hey, go on ahead and fund your own retirement because you don't know what social security will be when your time comes. I think they're really clearly telling us

it's not gonna be very much. I mean, I feel like they're telling us like, we don't know and they're like, we're gonna run out of money. It's like, yeah, but we don't know. I just wanna know what happens if we do. I want my refund back because I've been paying. Yeah, right. So FICA tax, it breaks down into two categories.

Like I said, you've got the social security and then you've got the Medicare. And if you're wondering like, how much is this? So for employers, you're withholding 6.2, they're taking 6.2% of your taxable gross, which is, it can be pretty high depending on how much you make. But, and then they take that and they match your contribution.

So, 6.2 on your end, 6.2 on their end, and it goes into that big pool. And then for Medicare, it's 1.45% of your taxable wages. And again, they match that. Now, the kicker is, if you are like self-employed, you pay both sides, because you're the employer and the employee, and that hurts like, you know what? Especially when you're trying to get a small business off the ground.

Man, what? Yeah, yeah, that's tough. I remember my mother-in-law, she always helped us with our taxes, because she's a bookkeeper, and when she explained that to me for the first time back, back, back in the day, I was like, my jaw was on the floor.

I was like, it's so much money. But even if you're self-employed, still got to pay old mr. Fica. So Freelancers, like I said independent contractors self-employed workers. They're required to pay both ends Yeah, and so again just make sure to plan. Yes, you can't stop it. It is the force of the government There's there's nothing you can do you got to pay it but at least you know what it is And if you were so excited to earn your paycheck, and then when you looked at it, it was a little bit less, that's probably where it went.

For more information about taxes, go ahead and visit ramsysolutions.com slash taxes, or you can click the link in the description if you're listening on YouTube or podcast. And think about this, if you're like, wait a minute, 6%, like that's not very much, I pay way more than that. This is not state income tax and federal income tax. This is just the other numbers.

Yeah, this is just social security and Medicare. That's right. That's it. And I love, Dave said this once and it never occurred to me. He said the greatest scam the government ever pulled was automatic deduction. Facts. He said, if you had to write, and honestly, when it comes to Medicare,

taking care of the least of these in our communities, I don't think that'd be the uproar. I think the uproar would be that state and federal tax, if we had to write a check every month and give it to the government, I think the average US citizen would be much more, no, I don't think we'd be where we are, because it wouldn't be this money that just

out of sight, out of minds, and just given to a small group of people who just do whatever they want to with it. I think people would be much more invested as citizens. Like you're gonna take my money, you're gonna demand it legally from me, then I'm gonna demand my voice be heard with how you spend that. I mean they've basically tapped into what we say all the time about credit cards, which is when there's no friction

You don't feel it and you're like, yeah take my money. I'm fine with it And then they came up with scam number two, which is Every year some of y'all we're gonna send you some of your money back and you're gonna think you won something, right? They're gonna think you scratched something off and got it. Isn't that crazy? We think that we're getting like a treat or a prize when really they've just. They held our money interest free. Interest free. By the way, they lent it out

and are making money off of it. Right, right. They're making interest off our money. Listen, we could go on and on all day. Maybe we should, John. Nope. Let's go out to Phoenix AZ where it's still a thousand degrees,

even though it's October and talk to Scott. What's up, Scott? Hi, thanks for taking the call. How are you guys? You got it. Bro, what's happening to your weather out there? It's actually really nice right now. Did it finally break?

It's been bananas. That were good. Wow. Well, that's good to hear. How can we help, man? Well, we're looking to replace our family minivan and I'm debating how much to spend and whether or not I'd feel okay buying something new, which is something I've always thought I wouldn't do. And I can

hear Dave's in my head talking about how much a new card depreciates as soon as you drive it off the lot. So I'm just trying to balance being responsible and not being a cheapskate. I love that. I love that Dave's voice lives rent free in so many Americans head. Okay. Well tell us, tell us what it is and we can tell you if it's a good idea or not, or at least point you in the right direction. So what are you thinking of getting? What is it cost? We're looking at the 2025 Kia Carnival, which was just updated and I'm expecting it to be around 52,000 or so. Wow. Which previously we were looking at the 22 to 24 models

and this is gonna be 10 or 12,000 beyond that. So a 20, 24 would be what, 40? Yeah, like about 40, that's what we're planning. Okay. My wife is at home with the kids full time, but she's a rock star and still brings in an income too. And she's just been saving up like nearly all of her income for a while. So she saved up like $38,000.

So we were going to pay cash for it. Then we started looking at the newer one. And then I actually, fortunately, happened to get a bonus. So we actually do have the money that we could pay cash. For the $52,000 one? Happen to get a bonus. So we actually do have the money that we could pay cash I'm going to get over the mental barrier of the depreciation and of the new one Well, let's walk through that a little bit. So you've got cash. There's a couple boxes We need to check to get the green light. So you've got cash. That's good Let's talk about what your combined income is

What do you and her make together because again, this needs to be no more than half of your annual salary, give or take. So what do you guys bring in? Yeah, together it's about 190 or so. Okay, okay. So we're firing on that cylinder. Well, how much is your car worth? Maybe eight to 9,000.

Okay, so we got a checkbox there. Now, if you're talking about doing this 20, 25, a brand new vehicle, you know what has to be in place next, don't you? All the insurance and registration that goes into that, that's way more too. Yes, but there's something quite critical to buying a brand new car. You need to have a million dollar net worth. Oh, that's good. And here's why, here's why have a million dollar net worth. I'll match it. And here's why, here's why,

and this answers the question that you're talking about. When we're talking about this depreciating asset, you've gotta basically be okay with putting that money right in the center of your living room and burning it and saying, I could care less that this thing is gonna lose 60% of its value in the next three to four years. Yeah, the million dollars is an arbitrary number, but it's right.

It's a good like, like it checks you. It checks your gut. It's a gut check to go how, how much can I really afford this? How meaningless is this money to me? Right. And donating 20 or 30 grand to the car dealership. Yeah. So a couple of years.

The truth is, if you have a million dollar net worth, all boxes and all roads lead to you being able to do this. That's right. But if you don't you need to go with the 2024 and pay cash. This is the Ramsey Show. I think we'd all agree that it's a lot harder to run a race if you don't know where the finish line is. But nearly half of all Americans have no idea how much money they'll need to retire with dignity. If you're ready to stop hoping for the best and start planning for your future, then check out the SmartVestor program. A SmartVestor Pro can teach you everything you need to know to get in the driver's seat

of your own financial future. Connect with a pro at ramsysolutions.com slash smart vester. Ramsey Solutions is a paid non-client promoter of participating pros. Learn more at ramsysolutions.com slash smart vester. This is the Ramsey show helping you with your life, your money, your relationships, your career. I'm Jade Warshaw. Next to me today, the doctors in the house, Dr. John DeLoney. What up? How's it going in your world? We're did I'm we are busy busy We had a wild and adventurous money marriage this past weekend, and it was off the hook. Did you spoke at it?

It was the deepest probably most impactful thing I've ever been a part of yeah. Yeah, what you got right there I got these questions for humans the intimacy deck. They actually sold out on campus. They're gone Get them online now waiting I'm waiting for our own new shipment back. This is the only deck that exists in this building. But it's just questions about sex and intimacy and connection and communication and couples trying to find their ways back to each other with all the anxiousness and schools and games

and stuff and stuff and things we gotta do and ah. Like it. Just sit down across the table and get to know each other again. I like it, I'll be getting a deck. All right, let's go to the phone lines. We got Wes Evansville, Indiana is where he's at. What's going on, Wes?

Hey guys, how you doing? I appreciate the time. You got it, Wes, what's up, man? Yeah, for sure. So this may be, man, maybe a question for more of a counselor that might need some serious therapy, but let me lay it out here for you if you can give me just a second.

Go for it. So I feel like I got a couple problems, and basically they deal with internal conflict, you know, within myself. I feel like I got a value disorder, meaning- Lay it out there. I'm seeking- Lay it out there. Yeah, yeah, yeah.

So I feel like I'm seeking comfort while I'm trying to seek my, my dreams in, uh, in my business. Uh, I've got a money problem debt versus cashflow and then a self belief. So let me lay it out here. I'm 35. I'm divorced. I got two kids living on with me over half the time. I started a window cleaning business 12 weeks ago and I've made 12,000 bucks in 12 weeks. My expenses are about $5,000 a month and I make $4,000 a month as of like what I've shared with you.

I got 32 bucks in the bank. I'm behind on two credit cards, my light bill and my mortgage as of 30 days ago. And here's where I'm basically looking for some counsel here. Um, I'm kind of frozen in time with building this business and getting gazelle intense, um, because of the, you know, where I'm at financially. And so I'm struggling with getting gazelle intense to climb myself out of my hole You know with my business of my own

I'm a one-man show and basically I'm at a place where I'm considering Getting some You know getting a debt relief company to do their thing Alright West, okay do their thing. No, you're not gonna do that. I can do that. Alright, Wes. Okay. Hold on. Yeah, go ahead. Did I hear you right? You make four thousand bucks a month, but you, it cost five grand a month to run this thing? Yeah, so there's, yeah, basically my expenses. There's hardly any overhead. I'm a one man show going door to door getting window cleaning businesses and home services gigs. But how does it, how does it cost? I feel like I can

make probably. How does it cost five grand a month in expenses? Is that just business or is that your personal stuff rolled in? It's basically all personal because there's really no overhead. Like I'm banging on doors and so to clarify, you're going out, you're hitting the payment, you're making $4,000, you're pocketing it all as income you're one man show that's fine but to run your personal life is $5,000 your personal budget is $5,000 a month so you're a thousand dollars deficit every month yeah so give or take 4,600 bucks one month okay you know and how do you how do you account

for it is it going on credit card what do you account for it? Is it going on a credit card? What do you do when you're, when you're at a loss? Yeah, I, well, it's only been 12 weeks, but I'm behind on those, those, you know, you just don't pay them. You don't, you're just not paying them. But are you putting more debt on a credit card is what I'm asking. Well, I'm maxed out everywhere. so I don't really have anywhere to go. I'm kind of at a place where my credit's toast.

I can't get any more. OK, OK. I just need to put energy into this thing. No, no, no, no, no, no, no, that's not it. That's not it, dude. OK. What? How long ago is your divorce? So it's finished about a year and a half ago. Is that still hanging around your neck? It was a crazy divorce.

Yeah, it's trauma, man. It was crazy. It was a circus. It was, but I'm talking about is. Sit with me for a second. Uh huh. You back and forth, you toggle to keep yourself safe from the past and oh my gosh is crazy to the future It's all coming down. I want you to sit right here in the middle right here in the middle Is it still weighing on you that the person you said I do the mother of your kids that y'all had to blow up like this Yeah, I mean I'm still I'm still kind of hoping that we can kind of fix it. Okay, you gotta let that go.

We're in process doing it. Are you dating again? No. Okay. So, here's the thing. I think you have a core reality problem. Okay? I don't think it's a...

I feel like it's a value disorder, yeah. Yeah, but it's not a value disorder. It's that you want things to be, you want to be your own boss, you want to be a present dad, you want to re-get together with the ex-wife that blew your life up. You want to do all this stuff all at the same time. I do. I want to do it all now. I know, but in the meantime, math is working

against you because math doesn't care what your dreams are. It doesn't care what pain you've been through. It just keeps doing math. And you're... It keeps doing math, yes. You're getting further and further and further behind, and your kids absorb that tension in your house. And you want to have a different mindset. People think they can just, they can just think their way to confidence. Confidence is built through. And I can't. You can't, you gotta go do.

And dude, you're grinding and I'm proud of you. You're making four grand a month on a brand new business. That's amazing. And you can't eat on four grand a month. No, dude, it's been a bummer. Yeah, and so here's what I want you to do. I want you to not think about, okay, I'm gonna grind here. I want you just to exhale and sit in reality and most people most of the time myself included when you have to face reality you have to grieve it for a minute.

That woman's gone. This job, this dream we have of going all in, it's not a right moment right now. I wanted my kids all the time, I only get them half the time. That's exhale. And then I'm gonna go get a regular, boring, bummer job where I'm throwing boxes somewhere, but I've got health insurance and I'm making X number of dollars an hour and then I'm also knocking on doors and putting up flyers and washing windows when I can to get this thing going. And you're gonna find out that the life of a solopreneur

is wall to wall 24 seven 365 until it finally takes off, if it ever does, right? And then your kids are gonna have this ringside seat to a dad that got his knees capped in a divorce, but he got back up and he started grinding and he was still a person of integrity and character. And you're gonna wake up in two years and three years, you're gonna be really, really confident.

Not because you thought your way to some mindset moogly boogly, but because you just went and did the next right thing. And the next right thing is you got to make enough money to eat. Yeah how many hours are you putting into this every month every week? Yeah that's that's where it gets embarrassing because I'm putting about 20 hours in but the rest of it the time I just can't get myself to move I'm frozen. Okay. Then let that dream go. The thing is, if you, here's the thing though,

if you're putting 20 hours a week into this and you're making $4,000, imagine if you put, yeah. So why don't you want to do it? What's causing you to not do the other 20 hours? What's causing you to not do the other 20 hours? That's where my value disorder comes in. The seeking comfort versus the dream. I mean it's hard, stinking work. I'm good at what I do, man. I can get jobs every day I go out.

It's not a value disorder. It's not a diagnostic. Don't call it that. What is it? Hell, I just need to figure it out. Here it is. There's nothing to figure out. It's not a diagnostic. Don't call it that. What is it? I need to figure it out. Here it is. There's nothing to figure out. It's a choice. I like this work. I don't... I want to make this solopreneur thing work. I don't like this work and I'm not going to do this solopreneur thing.

It's just a choice you have to make. Or you go and pick up another job for the other 20 hours. But either way, you gotta work. As an adult, we have to go to work. That's it. It's not a disorder. It's not a thing. It's just, it is. You gotta make a choice.

Do I wanna do this job or not? Yeah. And Jade, you and I, we have on the outside, it looks like a, the dream job. These jobs are hard. You and I get frustrated. There's a lot of hours. It's early, it's late.

I'm wearing makeup right now for crying out. Oh wow. It's a whole thing, right? Yes. Every job's got hard, hard, hard seasons. Every job does. Yeah. You gotta decide, is the hard season worth the work, man? That's it. This is Hey, you're still here? What are you doing? You do know that the rest of today's show is playing right now over on the Ramsey Network app, right? All you gotta do to finish the episode is search Ramsey Network in the App Store, Google Play Store, or just click the link in the show notes to download the app for free. Yep, you heard me right, for free.

Then right there on the home screen, you can watch the rest of today's show. Bada bing, bada boom. Alright, I'm getting out of here. Enjoy. We'll see you on the app.