The Ramsey Show - Get Fed Up With Your Debt and Get RID of It!

Episode Date: July 30, 2024

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Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. George Camel, Ramsey personality, number one best-selling author, breaking free from broke. He's my co-host today. Open phones at 888-825-5225. You jump in. We'll talk about you right in front of you. Josh is in Charlotte, North Carolina. Hey, Josh, what's up?

Hi. I hope you guys are well. Better than we deserve, brother. How can we help? First, thanks for your time. My question is, how should me and my wife go from two incomes to zero? What do you mean? That's so confusing.

How do we go from both? Tell me what the flip's going on i don't understand so i lost my job yesterday oh why um well it's a lot of details but basically um i wasn't performing performing the job up to snuff. Okay. What were you making? Uh, 40 grand. What were you doing? I was a market research assistant. Okay. And how long had you been in the job? Six months. Okay. And she lost her job yesterday too? No. Um, she was actually planning to leave. She gave her notice about two weeks ago and she's working through, um, mid August. Oh, so just really bad timing. Why was she leaving? Um, she's been just overwhelmed with the work, um, and she didn't like it.

So she was trying to pursue something that made her happy and she was, and nothing was lined up, but she doesn't have a new job. She just quit. Uh, correct. Wow. her happy and she was and nothing was lined up but she doesn't have a new job she just quit uh correct wow well that decision came back to bite you okay yeah like you're supposed to have the boat pull up the dock before you jump off the dock yeah and you get wet otherwise yeah oh yeah my boat was there and then it sank not yours hers yeah oh have the new job before you give notice um she was gonna not work for a few months why i made enough uh because i've made enough to cover our 40 grand yeah you're rolling in it you guys have kids no do you have any debt uh only one student loan that's not due until

november 2025 yeah how old are you two we're early 30s i'm 33 she's 32 okay all right so um the the situation is is that you have two career crises simultaneously, and the answer is that there is a short-term answer and a long-term answer. The short-term answer is both of you go get six part-time jobs today. Today. I want you delivering pizzas, cutting grass, walking dogs, picking up dog poop, cleaning toilets. I don't care. I want you to working hard today,

which is something neither one of you have been doing a lot of lately. Can I give you some more details about kind of what happened with my job? How does that affect what you've got to do from today forward? I have to determine if I can still work. Okay, all right. My father passed away in April and I have a bunch of mental health disabilities. And since he passed away, I've been going through trauma therapy. And I got diagnosed with PTSD today. And I'm kind of broken a little bit. Um, cause I've been having panic attacks and that's the reason I lost my job is because my mental health has deteriorated to so much.

I couldn't understand, um, what they wanted. And, um, I was doing really, really well. And then my mental health just fell apart.

Mourning of abusive parent is another beast entirely. Yeah, it is. We worked very, very hard. I'm sorry. It's okay. I didn't want to give too much info at the beginning. Well, I mean, it affects the advice, so you're wise to do that. All right. There's a couple things here number one can i give you one piece of

info please please that's okay apparently our overhead is extremely extremely low we only spend about 500 on bills and we live for free because we live in a family home that's paid for. We, you know, so we don't have very many bills. So that's why we have the safety of three to six months savings because we have over a year and a half savings just to live on. But we're not going to. But that's the security blanket we had so that she left her job. And then my dad died and just it all blew up okay all right um so the the the thing is you have to pursue a path of healing for long term part of extreme trauma i'm not a the therapist that would be Deloney,

he's not here today. But part of dealing with trauma is, he talks about it all the time, facts are your friends. And the thing that we do know from the financial side of the equation is that panic attacks are made worse when you have no income and you're broke and you have no sense of purpose so the dignity that hard work gives you even if it's mindless work uh can actually help with dealing with depression anxiety uh and panic attacks that's what deloney tells us and that's also from a very practical standpoint what we've seen, because being afraid about money while you're afraid about and dealing with all the other trauma issues at the same time makes it worse.

Does that make any sense? Yeah, and the great thing is I'm not worried about money in the least. We've, like I said, built our overheads way more i got that i got that but you should be you're 30 years old and you have no income coming in that should worry you i don't want you panicking over it and i'm not trying to throw you into a tizzy here, but you're pretty chill about something you shouldn't be chill about. And oh, by the way, so is your wife. Okay?

Let me rewind just a second, okay? My husband is dealing with mental health issues. His dad passed away last April, several months ago. That has made his mental health issues and trauma and PTSD and panic attacks come to the forefront. He's really not functioning well at work. So what am I going to do? I'm going to quit my job because I don't like it. That's completely unwise. And ridiculous.

Yeah. Do what? I take the blame. Why would you take the blame? He said he asked her to quit her job. Yeah. Okay. And by the way,

losing the job is more trauma. That's another trauma that you've got to add to this now. Both of you being gainfully employed, short-term and long-term, as soon as possible, is helpful to mental health issues. It's also wise. I'm going to sit at home and try to heal on my couch while doing nothing and my money runs out.

It's not a good mental health plan. It's not a good financial plan. It's not a career plan. So you guys need to go back to work at some level, whatever level you can function, and she needs to yesterday. You know my philosophy on planning and preparing. Being proactive is always better than being reactive. We have a provider we recommend that can help you stay prepared for unexpected medical situations. I have a medical emergency kit from the doctors at the Wellness Company.

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That's promo code Ramsey at UrgentCareKit.com slash RAMSEY. George Campbell, Ramsey Personality, is my co-host. Open phones at 888-825-5225. It's a free call, and some say the advice is worth exactly what you pay for it dave is in orlando hi dave how are you uh dave i'm wonderful how are you better than i deserve how can i help well so first thing i want to say is thank you so much because my wife and i followed your steps and we we were debt free and have been debt free for quite a while um the reason i'm the reason i'm calling is i live in the villages um I'm widowed, unfortunately. Two

years ago, my wife passed away. I have no children. So when I go, everything's basically going to get liquidated and given away as donations and things like that. My house is paid off. It's worth about $410,000, $420,00020 and i want to get your opinion on in my situation if you think i could get a reverse mortgage to go out and have some some fun with that money um you you have any other money yeah i'm i'm i'm good yes, what's good? How much money do you have? Well, I've probably got about $1.2 million. In your mutual funds, in your retirement accounts? Mutual funds, retirement accounts. And how old are you?

I'm 65. Okay. And so why would we not use $1.2 million for a fund? Well, I'm just saying I hate to see a lump sum of, you know, $410,000 just get liquidated and donated out there. If there is an, if there is an opportunity to go maybe grab a little bit of that cash and, you know, go on a long trip or something like that. Um, you know, I just want to find out if not a reverse mortgage, do you have any other advice as to, you know, how I would be able to get my hands on some of those funds yeah just just for enjoyment because it's just sitting out there well you

got 1.2 sitting there too yep i know so you got a lot of enjoyment ahead of you congratulations by the way you've done very well and um the number one, let's just state up front, reverse mortgages are a very bad product. Okay. Okay. They have higher interest, higher fees, and a higher foreclosure rate than any other type of mortgage. And, of course, there is an end to it. They'll only go to about 60, what, 60, 65%, George? Yes, I believe so loan to value on it and so you really can't get that much of this out um but i i understand

the basis for your question here's the here's the problem with your question you're 65 over the next 20 years if you live to be 85, which if you're healthy, actually there's a fairly good statistical case to be made that you would live that long. Do you have any major health problems? You know, just a little bit of high blood pressure, you know, as with all of us, a little overweight, but nothing other than that. Yeah, okay. Nothing 20 pounds dropped wouldn't fix.

Okay. I don't know a guy like that, but nothing other than that. Yeah. Okay. Nothing 20 pounds dropped wouldn't fix. Okay. Um, the, uh, I don't, I don't know a guy like that, but anyway, yeah, you and I are about the same age, but the, uh, anyway, so, uh, what would I do in your situation? Um, the problem is if you put this property in danger by having debt on it of any kind, or you sell it to cash out of it, then you're very vulnerable in the largest, most expensive item on your budget, which is housing. And housing goes up every year if you haven't done something to lock in the cost. By owning the $400 the 400 000 property you've locked in all your costs and so you've got a very stable retirement situation um so though no i would not touch it because you're going to need a place to live for 20 years and if you want to mortgage

it um you know the last two years that you're alive if you happen to know what that is if you want to mortgage it and go blow the money somewhere that's fine uh but i mean you pretty much got to blow a million six between now and the time you die if you don't want to leave anything okay yeah what is your retirement income now? Where does it come from? I'm bringing home about $6,000 a month. From what? Social Security and some current investments that are paying off for me now. Some annuities and stuff like that.

So you're not even touching the 1.2? I'm touching it a little bit, but it was kind of built to start paying me after I turned 65. And I just recently turned 65. So over the next few months, things are going to start paying out. Okay. So you could set up a situation where you had a $200,000 a month, $200,000 a year income, pretty easy. Yeah. And really, you would be deteriorating it maybe, but not a bunch.

Okay. And with your other income that's coming in too. And you can do anything you want to do with $200,000 probably. Yeah. And not really mess up everything here. Now, again, if I were in your situation, the last thing I would spend through would be the house. If you want to blow some money and have some fun blow through the million two obviously leaving yourself enough to

eat of course in your in your ancient years how much are we talking here you said you want to go on a fun trip is this like 10 grand 20 grand he just doesn't want to leave this he didn't want to sit around do nothing and leave all this money to nobody that he cares about. Correct. That's the bottom line. If you could actually figure out a way to have spent through almost all of it by the day you die, you'd be happy. That'd be your mathematical goal. That is my goal, yes.

Only we knew that date. That would make things a lot easier for us. I'd lay out a 20-year game plan what using the rate of return on your investment portfolio okay and uh have a 20-year game plan and so okay that dictates if if i want this 1.2 at a current growth rate of 11 on the mutual funds or whatever whatever growth rate you want to use um i need to spend x number of dollars or give away x number of dollars while i'm alive per year to end up with nothing to end up with nothing when i'm 85 but a paid for condo that makes sense yeah you could you could kind of back out a portfolio game plan that way it's just an aggressive spend where you've been the opposite for your whole life that's how you've got a 1.6 million dollar net worth and barely touched it it's just an aggressive spend where you've been the opposite for your whole life that's how you've

got a 1.6 million dollar net worth and barely touched it it's amazing that's impressive i think you'll get joy out of doing some things generously with the money and spending some of the money on just fun stuff um it way in excess of what you're used to it doesn't sound like he's been he's been spending a lot no that's my point yeah he's not broke so there's no need to add risk into his life at this juncture the the house should be the last thing you mess with though because that is your that's your point of sustainability your point that gives you a place to live in peace no matter how old you are you know and i guess i'm going to add one other thing because i dave the other thing that sharon and i are doing uh you know and our net worth is even uh more zeros but uh you and you're at a place you can

do this too you you don't need to go to a nursing home if something happens you can pre-arrange with whoever friends or family or around you to uh help you hire full-time help and you can stay in that condo you know the rest of your life and you know literally into your last days and so you can hire a medical butler and have some higher quality of life. And just have somebody there to serve you. And you've got your own assisted living game plan and a huge quality of life. You've got the money to do that. And so I want you to hold back enough to cover that too. Well, and think about over the next 30 years, property taxes will go up. His homeowner's insurance will probably go up. So there's some factors to think about yeah that's that's not going he's not going to run out of money on that but if you want to budget um in the last five years of your life um an extra hundred thousand dollars a year for help that's that's a good way to also be called

fun you know that would also be because i'll guarantee you that if something happens that i'm debilitated or Sharon is, we're not going to assist the living. We don't need to. I mean, we've got a beautiful home, one level, elevator, whatever. We can do whatever we want to do, and I'll just fill it up with help. Get one of those Stairmasters? Don't need that.

Don't need got the elevator. But thanks, George. I just thought it was cooler. There's nothing cool about that at all george but the uh anyway you see what i'm saying you self-insure and you just bring in but people like us that have like that dave and this dave that have gutted it from the ground up we don't think about bringing in help it's not we're not those kind of people but you need to think about it. It's a good idea. Absolutely. 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.

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Go to Zander.com to learn more more call 800-356-4282 they say that memory is activated by smell primarily if you smell a certain smell it'll take you back um the other thing that causes you to lock a memory in is deep emotion if you're extremely angry or afraid you have a clear lock on that memory i have a clear lock on that from 35 years ago i remember exactly where I was in Witchkroger. I could take you there right now, and I could show you the aisle. Wow.

Like five aisles across, I was the second one in. Because that was the moment when I reached the point that I said, this isn't working. I'm standing there paying for food, and as I'm writing the check, because in those days you wrote a check, as I'm writing a check, I didn't know if there was money in the account. And I didn't know if there was money in the account, if I was actually using money that should be used to pay the light bill. In other words, am i trading this bag of groceries for my electricity getting

cut off and that for some it wasn't a panic attack i guess today you might call it that i i don't know i just became overwhelmed with this feeling of how stupid i was and how this level of terror this constant knot in my stomach about if i'm if i'm can't even cover basics of life because i'm buying another basic of life food and that's the last time i had that feeling what happened after that did a budget that was it i took away all the yeah because if you have if you have a budget laid out and it says you spend i'll make up a number today 800 bucks on groceries 700 bucks on groceries right thousand bucks on groceries whatever it is i don't know you just put it in there you're going to spend that you also have the number in there for electricity so you know what you've got to spend on the grocery.

And there's not all this chaos and stress and fear associated with every single money transaction. Because it's simply a boring plan. Every dollar has an assignment before the month begins and it gets rid of that that i don't know grocery store terror attack whatever you call that what do you i don't know what you call that spill anxiety i'm sure there's a technical the gen z's come up with a trend but you know it's distinctly remember being afraid. Which is unlike you, I might add. I'm not afraid very often.

I'm not a fearful person in general. But everybody gets afraid sometimes. But I remember going, I'm out of control. And I've got little children and a wife and I suck at this, you know, and, and, and you have a finance degree at that point. I got a finance degree and I was making, you know, I had made and lost a million dollars by then, you know, and it didn't matter. I can't even buy a bag of freaking groceries without being overcome with fear because I don't know what else I'm screwing up while I'm buying food for my family. You know, that's so basic, right? It's so, that's so dumb. And so I went home, got a yellow pad out,

put the, okay, this is what we've got coming in this month this is what we're going to spend every dollar had an assignment you know we we're a christian so we're going to tie that our church that's the first thing we're going to do our generosity then we're going to do this then we're going to do this we're buying food we're going to buy lights we're not doing all this other crap and we're not going out to eat until we've covered these basic walls and we started living that way and and we've not had a single month of our lives that we don't have a plan for every dollar of our because it just gives me such peace and that chaos is gone that's why we named our app every dollar that we built come a long way since the yellow pad yeah and there's like tens of millions of people using it and i guess you're you know and i hope most of you are having the same result where you don't have this

overwhelming fear that no plan and chaos gives you plan and no chaos no disorganization only organized planning and all sudden peace. It sounds so nerdy, but it really happens that way, folks. And you feel like you got a race. Oh, absolutely. Because you realize, oh, I thought we were spending... Where the flip has this money been going? We're not spending $200. We spent $500. We got to do something about this. Where is this money going? So it helps you choose reality to go. Here's how much we actually made. Here's how much we

need to spend in order to hit our goals. And I remember sitting in a small group. I stopped by. I was over in Knoxville, Tennessee. And I was actually in a suburb of Knoxville, up towards the mountains. And I stopped in this church that was doing a financial piece. They said, hey, if you're coming, if you're around, come by. So I stopped in there doing a financial piece class.

And I went and sat. I was sitting in a small group. There was about 15, 20 people sitting around. And I'm just sitting there listening to them and they're they're some pretty funny stuff i mean but this one old guy sitting there in overalls and he's like yeah i done figured out why we got no retirement we've been eating it we got to eat every freaking night it's twelve hundred dollars last month he goes that budget's revealing you know that was a genius you know he's like i know why we got no retirement we've been eating it you know that it's exactly that's a typical american

right nothing's changed plus or minus the overalls in the accent but oh come on i prefer the accent that makes it better well it's a true story i mean it's exactly how it happened was it were they weirded out that you were sitting in the class yeah yeah it was like like elvis showed up to your jam session or something but yeah but the uh um but anyway they were the guy was just he's like this thing's revealing it is kind of a light you when you sit down and you do a budget on your every dollar app and you and your spouse are in agreement for the first time ever maybe you've had a sane discussion about money that didn't involve drama, hyperbole, and a knock-down, drag-out freaking argument, right? So we actually are in agreement and alignment on our money instead of like, well, whatever you want to do, honey, with your eye roll, right? And that kind of crap, right?

That sounded personal. I feel like you've done that. Well, that definitely has happened. I can promise you. You've been on the business end of that line. I've been on the other side of that one yeah it's like whatever you want to do honey means i think you're stupid and you're about to wreck the car stop driving it that way that's what that means if those of you that don't know if you don't speak passive aggressive that's what it means so um but that this the budget gets rid of every bit of this

because it's like you don't get to say I messed up the money because we did it together. If it's messed up, baby, you was in it, too. You know what I mean? That's the thing. So we decided this crap together, and that's why this EveryDollar app is so freaking successful. So you guys go download this thing as fast as you can. You get it at the App store for free and Google Play and all that. And you can go to everydollar.com if you want and do it on your desktop. I don't care.

And if you want the upgrade version, it's a couple of bucks. It's not much. And you can connect to your bank and it's got all the paycheck planning features and the baby step features in it and all that stuff. But tens of millions of people are doing this now. It is the world's best budgeting app. And it was born because this redneck hillbilly standing in line at Kroger 35 years ago going, you're an idiot talking to myself. I'm not living like this anymore. I don't want to be this scared anymore. I don't want to be this incompetent anymore. I don't want this taste on the back of my tongue that tastes like regret i don't want that anymore and that's how this app was born it's not like well we decided we're going to do a budgeting app no this is like

bull crap this stuff stops we need to do this this stops now and if you're there we got the tool baby this this will do it it is a financial epiphany if you want to start reading from the same sheet music instead of having just musical chaos in the house wondering what the flip's going on this is it it's that shared thing we both look at for accountability and go we both agreed to this and if we stick to it we're going to have this thing called money yeah and i promise you if you're married your spouse is not like you if two people just alike get married one of you is unnecessary y'all are different one person hates your spreadsheet i married, one of you is unnecessary. Y'all are different. One person hates your spreadsheet.

I guarantee it. One of you is a nerd. One of you is a free spirit. One of you is a saver. One of you is a spender. One of you is screwing with the thermostat all the time. And the other one is like, don't you understand how thermostats work? Don't touch it.

Leave your hands off the thermostat. If you turn it way down, it cools faster no it doesn't that's not how it works this is how marriage works boys and girls if opposites attract you need to get on the same plan together every dollar.com this is the ramsey show what does the future hold for business ask nine experts and you'll get 10 different answers economic growth or a recession business taxes will go up or down ai will help us work or it will replace us all but there's no such thing as a crystal ball. That's why more than 40,000 businesses have future-proofed themselves with NetSuite by Oracle, the number one cloud enterprise resource planning system. Ramsey Solutions uses NetSuite, and you should too.

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George Campbell Ramsey personality is my co-host today. Thank you for joining us. Maya is with us in Atlanta, Georgia. Hey, Maya, welcome to the Ramsey Show. Hi, Dave. Hi, George. Thank you so much for having me. Sure. What's up? So I wanted to first say that I am 27, and I'm currently in my master's program, and I'm making $35,000 a year. At the end of my master's program, I'll make between $70,000 to $85,000. Cool. What's your master's in? It is in applied behavior analysis um so um yet helping people uh change their

behaviors who are known for autism work right now excellent good good career feel good for you thank you thank you um so i wanted to uh bring up a question um so i am in a awesome relationship and with this individual, he is a soldier and we've been dating for a year and a half now. We've gotten to see each other, have we worked financially, meet each other's families, and we've now started to have the conversation about what it would look like to come together, right? He's been married before. He is open to being married again. And my hesitation is because we're both believers and because I know that I have $46,000 in debt,

it was not my plan to come into a marriage with this amount of debt, right? So I'm starting the baby steps now. So when we do get married, it's not a baggage that I'm bringing into the marriage. So my question is, as a woman who has a boyfriend, right? How do I present this conversation to him of, hey, let's, let's, A, right, let's do it right and get married after he comes back from deployment and he has a daughter and I've met his daughter first, or we think of another option, because I don't want to

shack, right? I don't want to play house at all. Is that what he's wanting? Yes. He said that it would be for the progression of our relationship. And for me... That's not a thing. Yeah. Okay. She knows that. What's not a thing. Yeah. Okay. She knows that. What's his rush to do this before getting married? I think it's because he's seen me

in a hard place for the past year financially. And I was living with my mom, and so by him seeing when does he come off when does he come off deployment um so he comes from deployment september of 25 where is he not currently so he's not currently deployed um but he is away but um he will deploy in January. He goes to Europe. Okay.

So if you were married, you would go with him to Europe? No. It's a combat zone, so I wouldn't be able to go. Okay. How long will he be deployed in January? Nine months, so from January to September. Okay. All right. How long will he be deployed in January? Nine months. So from January to September. Okay.

So if you were married, you would be at home with your husband deployed for nine months. Correct. Okay. And where he lives, my current job, I could just transfer there because there's another office. Yeah. Okay. All right.

Well, I would not delay marriage on your 46 000 if both of you were of the same mind that we get rid of the debt as fast as we can i'd get married regardless of when the debt where the debt is i would not use that um i agree with you i would not move in together and so then based on that we just got to figure out when we're going to get married and it sounds like sooner rather than later a good friend friend of mine's daughter got married a couple of years ago to a Green Beret. And four weeks after they were married, he was gone for seven months. And can't even talk about where he was. Totally top secret missions, right? And so, because the Green Beret SEAL teams and those kinds of folks go places and

most people don't know they're there so matter of fact that's the whole goal is nobody knows they were there they're in and out and mysterious things happened and then they come home and so um you know that kind of stuff so that that's uh that's what you're marrying and you're going to have some of that so she she married, got married literally. And I think they had a month together and then he was gone for seven or eight months. And, and, um, that was about four or five years ago and they've got three kids now. So, um, and, and he's still good. He still goes out on missions and, um, young,

very young couple. But, um, anyway, that's what you're signing up for. It sounds like. so i i'm saying they didn't wait until his deployment was over they got married and then he went on deployment you know he took off and did a mission and it was not he was gone seven eight nine months whatever it was and so it's kind of like your your guy so my all of that to say if I'm in your all shoes and you're both ready to get married, get married. Okay. Now. Okay.

You know, and it solves all your problems. But the progression of our relationship is absolute bull crap. Yes, sir. I don't think your debt needs to have anything to do with this. Exactly. You pay it off as you can pay it off. If it's paid off before you're married, that's great. If not, it's our debt together. I don't want you to feel like

this is some shame and baggage you're bringing into this because guess what? He gets Maya. That's way better than some student loan debt that we're going to knock out real quick. Correct. Correct. One last question. I'm not a very forward woman, right? So I don't want to be the one to say, hey, I know we've had this conversation we talked about this let's go get married that's not me i could well what i what you can say is uh you said you said you wanted me to move in and you know i've been praying about this and thinking about it and as a christian i think the bible tells us not to do that and so i'm not going to do it so when you're ready to get married we we'll move in together. When do you want to do that? Okay. But, I mean, you're answering his question.

You're not asking him to get married. You're just saying, you know, I'm okay with the progression of our relationship being an engagement, a short engagement, and a marriage. Followed by an event. And after that, we will live together. And that's how I'm willing to do it. That's what you know uh and you know and after that we will live together and that's how i'm willing to do it that's that's what you told us your values are you said we're you know i'm a believer i'm a person of faith meaning you want to follow what the book says and you think that god has a plan for your life and it's not shacking up it's what you said and just you know that just tell him that that's not forward it's answering his question you're not forward you're just responding and he's a soldier he can handle direct feedback trust me it sounds like he's uh

sounds like some of the stuff he's doing right now he's in a situation where he gets direct feedback a lot i don't need it at home too i suspect that yeah yeah and just go you know uh if you want to talk about how we go forward in our relationship in that context, we can do that. But I need to give you the answer to your question, and that is I'm not going to live in the same house with you, sleep in the same bed with you until we're married because it's against my values. And that's an okay answer. It's not prudish. It's just it's who you are, and you're allowed to be you, by the way.

And here's the alternative that we have seen time and time again well dave we've been together for nine years and we live together and i just don't know if he's ever gonna that's what happens well and you know i'm still confused about who owns the mustard exactly well we still split the grocery bill like we're roommates oh gosh you know it's just nuts i can count on zero fingers how many times I Venmo'd my wife. It's just not a way. It's not how God intended. It's not what Venmo is to be used for.

It's just weird. I can count on zero fingers how many times I have Venmo'd. There we go. He's not there. Sharon prefers checks. Period. She's old school. Period.

I'm just saying. At all. At any time to anyone ever. So I don't even even have the app i don't even know how it works i would love for someone to venmo request you for like dinner we split that dave i need 548 it's happened i just said you know here's 10 you know give it up and so you have now you owe me so there we go you've got the costanza like being in debt d Dave has the George Costanza wallet, but instead of cards, it's just filled with cash. It's amazing. Not true.

That's funny, but it's not true. This is The Ramsey Show. Do you ever feel like you're finally making progress towards your goals, only to get quickly distracted by something else in your feed? Well, that's why we created the Ramsey Network app, your single source for content that keeps you motivated. The Ramsey Network app is designed to keep you laser focused on reaching your goals. Loaded with over 7,000 hours of Ramsey shows, this free app is the best place for uninterrupted content and no distractions. Plus, you can search specific questions to get more personalized content in seconds. So for the days you need some extra motivation, you'll have proven

advice at your fingertips. It's time to get serious about your goals and shut out the distractions for good. Simply search Ramsey Network in the App Store or Google Play. If you're listening on a podcast, just click the link in the show notes to download our free Ramsey Network app today. Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. George Campbell, Ramsey personality, is my co-host today. His book, number one bestseller, is Breaking Free from Broke. You jump in. We'll talk about your life and your money. It's 888-825-5225. Nyree is with us in Atlanta. Hi, Nyree. How are you? Hi, I'm doing good. How are you? Better than I deserve. What's up?

Yes, sir. So I am 36 years old. I'm a single mom of four. I make about $55,000 annually and I have about $28,000 in debt, credit card debt, personal loans, a title loan, and I'm kind of in the rear on my mortgage. I recently filed bankruptcy in May, but I realized after watching your show and I have your book, The Total Money Makeover, I decided to dismiss the bankruptcy case because after I added up my debt and then I looked at the fees that the lawyer was going to charge me over five years, I was like no like so I'm extremely excited but I'm nervous at the same time and I just wanted you guys to tell me am I making the right decision okay did you actually file bankruptcy So May 2nd, the attorney filed the bankruptcy, and then recently, I'd say about two weeks ago, I told him to file a motion to dismiss. Okay, so you did. You filed bankruptcy.

You filed a Chapter 13, and then voluntarily dismissed your 13th. Okay. So you're still behind on your mortgage. Yes, I'm still behind on your mortgage yes i'm still behind okay and um all right okay uh well here's our rules uh no one gets paid anything out of your income until you have food from the grocery store purchased for your family. Your lights and your water are paid. The gas for your car to get to work is paid, and we catch up your mortgage. Don't pay any credit card bills. You got a title pawn on your car? Yes, sir. Oh, geez. Okay. And that's about $8,000. Yeah. And you have a monthly on it, right? Yes. And that's

about $304,000. Yeah. You better pay that one because they'll pick that car up in about 30 seconds. Yeah. They're not going to screw around. And you got a personal loan as well? I have personal loans. Yeah, no, they don't get a dime, and credit cards don't get a dime. But you pay your car payment, you pay your lights, water, and we get your mortgage current before we do anything. Okay, so the credit cards are in collection.

Good, just let them sit there. Okay. And we need to get on a written budget. And how old are your babies? Okay. So I have a 5-year-old, 8-year-old, 12-year-old, and 15-year-old. Okay. All right. You got family in the area?

Barely. I have one good sister friend that helps me out when she can, but that's about it. Okay. So I'm searching for a way with a house full of kiddos for you to get some extra income because the more income we have, the faster we turn this mess around. Agreed? Agree. What are you doing full-time for work?

So I get compensation from the military. That's my main income. I just got hired at Chick-fil-A. So I will be starting working with Chick-fil-A in three weeks. And I do DoorDash sometimes. So that's like, you know, some things that I'm trying to do. So you've not been working a job? So I have not been, like, working, working in the past year.

It's just been military compensation? Yes. All right. Okay. Thank you for your service. Thank you for your support. I think the kiddos are going to have a single mom that now has a full-time job. Yep. And, uh, uh, unless you're managing a Chick-fil-A or in a

management program, if you're just going over there to fry chicken, uh, no, thank you. Uh, you need a real job. You need a real career on top of your military disability enough to be able to afford daycare or day or you know after school care or whatever it is so that you can go make another 55 i want your i want your income i want you to get a full-time job and get back to where you know you have a choice you're a single mom that's broken and behind on her house so sitting at home collecting the military is not cutting it for you You don't have a choice. You're a single mom that's broken and behind on her house. So sitting at home collecting the military is not cutting it for you. It's not working for you.

So we have to change the recipe if we want a different kind of cake here, right? And so, yeah, you need a full-time job to go with your military disability, and it needs to be a substantial good career for you that you look back 20 years later and you've made a lot of money and you've helped a lot of people and you've done a lot of good work. And I want you plugged into something like that. I'm not mad at Chick-fil-A. We've been friends with those folks for a very long time at the company level on a personal level, and I eat their chicken sandwiches all the time.

So I'm not mad at all about Chick-fil-A, but I think you need more than that. Yeah, we need an actual sustainable career that she can sink her teeth into and get out of this debt fast. Because if she can even create 30 grand extra in income, well, we can knock this debt out in under a year. Yeah. Now, I'm going to send you a book by Ken Coleman called Find the Work You're Wired to Do, and it has the get clear assessment in it. You give you a code and you'll jump online. I'm going to give it to you free. And I want you to jump online and take that and pretend like that you were 18 years old

or 19 or 20 years old and you didn't have any kids. And you said, okay, what am I going to do with my life? What's my career going to be? What's my future look like? Because you've been reacting to life rather than happening to life and um and it's gotten you into a mess and so i want you to get on the other side of this and start dreaming again about what a prosperous wealthy nairi would look like and how she would get there and that involves involves a, you know, it may be some steps to get to a different career, a big time. Maybe you've always wanted to be a, an X, whatever

X is, and you may be need to go take a class or two or get a certification to be one of those. I don't know what that thing is, but, um, but I, I want you to have some direction for you you've lived your life for others so far and it's not even serving them well it's so i want you to create some vision yeah what you want your life to be like some big time big time goals of where i'm going to be in 20 years yeah yeah so hang on christian will pick up and we'll get get you that and good good stuff good question open phones at 888-825-5225 just clarify for everybody listening a chapter 13 bankruptcy is a payment plan that takes 60 months to go through you pay 100 of your student loans, 100% of any secured debt, like a car loan or title loan as an example, your mortgage. Everything gets paid 100% except unsecured debt, which can be paid a percentage of.

So the credit cards, personal loans could be 70% of what's owed, 40% of what's owed, depending on how the formula worked out, over five years. Usually, folks can do a better plan themselves and get out of debt a lot faster by increasing their income. 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 means Timothy Plan uses a strategy that lets investors chase competitive returns while staying rock solid in their beliefs.

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Mutual funds distributed by Timothy Partners LTD and ETFs distributed by Forsyth Fund Services LLC. George Campbell Ramsey personality is my co-host. Kyle is in Boston. Hey, Kyle, how are you? Hi, Dave. I'm good. How are you? Better than I deserve.

What's up? So I just paid off a little under $50,000 in consumer debt. Good for you. Since March. Way to go. Consumer debt and an auto loan. How'd you do that since March? Using the EveryDollar app.

Do you have a pile of money in your bank or something when you started? No, I'm in my second year of owning an event rental business, and it's been pretty good. Okay, so you're just making a lot of and then $179,000 in mortgage. So I'm kind of looking for your advice on the next steps in paying this off. I do okay financially. What's your income? Teaching is about $65,000 and then the event rental business is a little bit over 100 wow so 165 are you doing the event rental stuff part-time uh it goes from march to november and then the school year i mean it overlaps with the school year a little bit but okay amazing so you're making 165 if this keeps up? Yes. Okay.

Yeah. So the student loans would be next and your debt snowball. Are those broken down into several different student loans? Yes, they are. However, I kind of had a question on the order of paying these debts off because... So, I mean, I have no kids now um but I could see myself settling down and having kids in the next few years um I'm really trying to like hammer away at all of this before I have kids and get married um and when I think about like what's more important to me as far as priority and having peace of mind when I have kids I keep going back to the mortgage before my student loans which I know is opposite of what you typically teach. And then being a teacher, I'm also in a master's program right now and will be for the next year and a half or so.

So I'm able to defer them for a bit. So I just didn't know your take on that. I still don't think kicking the can down the road is going to be a blessing to you. And is there a person in your life right now? Are you dating somebody? Or is this just future thinking one day I want to, okay, I wouldn't worry too much about all of that and what the mortgage is going to be one day. I would focus on knocking out all of your consumer debt right now. And the mortgage will get paid when it gets paid. And it's also going to appreciate as long as you have that home, it's going to go up in value. And the student loans, I would not kick down the road.

Do you have the money to pay down these debts in the next year? I mean, you make $165,000. You paid off $50,000 since March. You'll be done by, what, October? So you're throwing $10,000 a month. Almost everything I made was being dumped into it. I know, but I mean, you just keep doing that. You'll be done by October with your student loan.

Well, it does slow down a bit. My business slows down a bit. In November? I'm living. Yeah, in November. That's what you said. I said you're going to be done by October. You paid $50,000 since March.

Pay another $50,000 and be done with this thing. And you'll free up all the payments from those student loans. And then pay off your mortgage. And, you know, next year, next two years, you pay off your mortgage. Dude, you're killing it. You're a stud. Do you have money in savings, Kyle? About $15,000.

Okay. Is that partially for the event rental business, or is this just sort of your personal savings? That's for the event rental business. Okay. Well, I think you can knock out these student loans, free up the payments, get a fully funded emergency fund, and start investing and then begin paying off the mortgage. Here's the thing. At the end of the story, three and a half years from now, you have zero debt either way. If you pay off the mortgage first and then pay off the student loan, you pay off the student loan first, which is the correct thing to do, and then pay off the mortgage. Three and a half years from now, you're done.

I guess I'm just kind of planning for worst-case scenario, like let's say just everything. You know what? Why did you pay off the other debts then? Well, the monthly payments were just so ridiculous. Somebody convinced you that you needed to get out of debt, and then you called them and asked them, should I to get out of debt, and then you called them and asked them, should I really get out of debt?

Yeah. Do it, man. Knock out the student loan as fast as you possibly can. Don't wait until everything's paid off. Quit screwing around with your math theories and knock this stuff out. Knock it in the head. It's worked for you. Don't quit doing what is working.

It's working. Finish. And it's very successfully working. It's very fast. And let me tell you this, Kyle. Do not wait until your mortgage is paid off to start a relationship or get married or have kids. I'm from Boston. Half my family is like this.

They're working on their third master's degree, and they're going, well, one day when I day when i'm settled i'll no one day it's not going to happen just if you want to be in a relationship start a relationship you want to get married get married the debt will solve itself as you begin your life you're doing great just finish just finish the plan you see you're you're you're doing it don't stop knock the student loan out do it in the next do it by october sit down today when you get off the phone sit down lay down and lay it out. Lay it out on your little spreadsheet, because you're a spreadsheet guy, I can tell. And $56,000, you've already done $50,000 since March. I can do it in my head.

You're done in October, okay? Just do it again. You know, all you did was you were gazelle intense. Don't let your foot up off the gas. List those student loans out, smallest to largest. Work your debt snowball attack attack attack attack attack attack drop a freaking atom bomb on that thing and be done with it quit screwing around with well i don't know if i'm gonna pay no get rid of it

this is what you got to do done done i hope that was clear. Nick is in Minneapolis. Hey, Nick, how are you? Hi, guys. How's it going? Better than we deserve. What's up? So in March, I started a landscaping company. Since then, I have netted $250,000 and some change. Wow. And I have not paid myself whatsoever out of it, and I'm just kind of curious how should I go about that,

if I should put myself on payroll or if I should do like an owner distribution. You have $250,000 sitting in a checking account for a lawn mowing business. So not doing lawn mowing, it's building patios. Okay. In your patio business, you have a checking account and it has $250,000 sitting in it. It's got just about $375,000 because that's what I grossed. You got bills to pay out of that? Not out of that, no. All my equipment I own outright.

All your cost of materials and everything for those jobs has been paid correct okay now okay and you have a separate account for your business correct correct good good for you wow that's under my llc you're freaking amazing is it just you or do you have a big team listen just write just write this down. Send it to Dave's Bahamas Fund. There we go. I'm just kidding. P.O. Box. Wow.

Oh, my gosh. Very cool, man. I'm so proud of you. All right, stud. Here's what we do. When you move money out of your business that's an LLC and you take the money home, you need to withhold 25% on yourself because that's going to be your taxes. So if you take $100,000 out and move it home,

move $25,000 into another little savings account over here to the side that you never touch because you need to be filing quarterly estimates on a small business or you're going to get penalized. And you're supposed to be filing quarterly estimates on your profits. And if you don't do it in the first year, you don't get penalized. But in year two, three, and so on after that, you'll get penalized. So go ahead and get with an accounting person, get with a tax person, and get your quarterly estimates set up.

They're not hard. It's a one-page form. It's, you know, what I took in minus my expenses is my profits times my tax rate, and you've withheld on yourself, and you got that $25,000 out of that $100,000 sitting over here in the account, and you'll have the money to pay your quarterly estimates. Otherwise, you're going to get behind with the KGB, and you don't want those people calling. I mean, the IRS. You don't want them calling on you okay okay so that's then then how much can you take home i mean you could take home anything that doesn't leave the business and

and threatened if you're paying all of your expenses whatever's left is profit you can take it all home and use it on your use it on your baby steps and i would way to go, stud. That's impressive. Man. That's some patio building right there. Patios. Yeah. Meanwhile, over in wherever, I'm unemployed. With a four-year degree that I can't use. Yeah. With student loan debt.

This guy makes $375,000, $250,000, whatever it is, building patios. Love it. He's got to be good at it. This is The building patios. Love it. He's got to be good at it. This is The Ramsey Show. This show is sponsored by BetterHelp. This is the season for Halloween. It's October. We're wearing costumes and we're wearing masks. If you haven't started planning your costume yet, get on it. And while you're thinking about it, I want you to be honest. A lot of us hide ourselves. We hide our true selves behind costumes and masks all the time. We do this at work. We do this around

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Just fill out a short online survey and you'll be matched with a licensed therapist. Plus, you can switch therapist at any time for no additional 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. George Campbell Ramsey personality is my co-host. Thank you for joining us, America. Open phones at 888-at-home mom for 26 years, and I'm afraid he's going to leave me and our kids who still live at home with nothing. What do I need to do to put myself in the best possible position when he finally pulls the plug? How do I protect myself and our children? I haven't been able to trust him in our marriage, and I know I won't be able to

in the divorce proceedings either. I'm willing to do the work, but I just need to be pointed in the right direction so I don't waste time and money getting myself together. Leslie, I'm so sorry. That is awful and especially scary for stay-at-home moms who are very vulnerable in these situations because they haven't had the income for this long. So I, you know, step one is kind of get a lay of the land and as much as you can about what's actually going on in the finances. He's probably been like, honey, I got this. Don't worry about it. And left her out of it on purpose. No, it's very possible. You're not you're not half of all the assets and a whole bunch of his income for alimony because you've been in a long-term marriage and a whole bunch of his income for child support. So he's the one that's vulnerable.

He's just so dumb he doesn't know it yet. So, yeah, what you need to do is go get an attorney today. You need to talk to a divorce attorney today, and they will tell you what the laws in Nebraska will demand that he does. He doesn't have the choice of leaving you with nothing. The law doesn't allow it. And so you need an attorney to tell you how life works and how the law works because apparently neither one of you, you or him know that. And, um, that'll give you some peace because you'll

know, Hey, I got, you know, we're going to sell the house and there's, you know, $500,000 worth of equity and I'm going to get 250,000 out of that. And Oh, he's got 150,000 is 401k. I get 75 of that. Oh, he's got this. We've got that. I get half of that. So you're're you're okay on the short term now long term uh sounds like you need a new career and so what are we going to be when we grow up what's our what's the next uh chapter of our life what's the new version of leslie goes to nebraska look like yeah i mean she's got all the kids sound like they're grown and gone if she's been a stay-at-home mom for 26 years uh leave me and our kids who still live at home. All of them?

I don't know. There's a question. I don't know. They should be approaching age to leave, or maybe they're 22 and need to leave. I don't know. But, yeah, you need to go get a job, and you need to start having a career,

and what are you going to do with your life? What does retirement look like? If you were 20 when you got married, you 46 if you were 25 you're 51 and so you've got a lot of life left ahead of you there's an encore here there's a chapter two a second act whatever we want to call it and you're going to have a great life and um you're you're not going to you're going to realize when you're super happy and prosperous four years from today how miserable it was living with this sap so um good riddance is what it sounds like i'm sorry you're going through this but that's the way that's the way the story's

going to end if you will embrace two things one is get some legal counsel and two is start developing you a career path as soon as you possibly can and so you know what what am i what's the next thing for leslie um this this this chapter is coming to a sad ending but it is ending and what do we go what do we do from here what's our next thing ouch no fun at all no doug is in san jose hey doug what's up? How are you, sir? Better than I deserve. How are you? About the same, I guess. Probably better than I deserve, but

I'm working on it. Cool. How can we help? I'm calling. I own a small construction company. Married. My wife's a nurse. We own two homes in San Jose uh and we're broke why are you broke if you're got if you're a nurse and you got a construction company

uh because i uh i don't know how to manage money oh okay how much debt do you got? So I have an SBA loan for the company, $130,000. I got a HELOC on one of the houses for $150,000. One of the houses I owe $700,000 on and one I owe $600,000 on. Okay. What about the one you live in? The one that I live in, I owe $600,000 on. Okay. What about the one you live in? The one that I live in, I owe 600 on. Okay. So you're 700 plus 150 helix, 850. What's the other one worth? The one that I live in? No, the other one. The other one is worth about 2 million, between 1, 8, and 2, 2. Okay. And so if you sold it, you could be debt-free?

Yes. So why are you hanging on to the investment property? Because for my kids, I imagine. I mean, that's because I don't have a 401K, and I kind of figured that would be my money that I could give to the kids. Okay. Well, and then you call me and you're broke, so this is not working. Yeah, so I'm looking for a plan.

Basically, you borrowed a HELOC and SBA loan and kept a home mortgage in order to buy an investment property. That's in essence what has happened, or in order to keep an investment property, to keep from selling it. See, if you had sold it, you wouldn't have the HELOC, and you wouldn't have the SBA loan, and you wouldn't have the mortgage. And so now you can still sell it and not have all of those things. That's a good start. That's probably where I'm starting.

Is that the only debt you've got? I believe. Actually, I probably have $20,000 in credit cards. Okay. And then we need to sit down and start living on a plan, a budget, so that you and your wife sitting together with the EveryDollar app, you go through Financial Peace University. I'll give you both as my gift if you'll do it. Okay. Go through the class.ollar app. You go through Financial Peace University. I'll give you both as my gift if you'll do it, okay? Go through the class, sit down, start writing out a plan. So what do you

build with your construction business? What kind of buildings do you do? It's actually, we work, it's a waterproofing company, and we work on commercial buildings mostly and apartment buildings decks and underground parking garages and podiums and so you have to uh i presume you have to present a detailed plan and a bid to uh to to your customers don't Absolutely. And then you have to execute that detailed plan and bid in order to make a profit and in order to deliver the service as promised. Is that right? Yes. Yes. All we need to do is apply that exact same skill set to your monthly budget. We're going to lay out a plan for where our money's going to go in detail, and we're going to execute the plan. And the two of you, you and your wife, need to agree to that plan before the month begins,

just like you and the customer agree to the budget and the schedule of the job when you get the new job, when you're bidding a job. And so building a, you know, doing construction work in detail. Now, some people do it out of their hip pocket, right? But you're doing it professionally. And if you'll apply that exact same mentality to your monthly budget, tell your money what to do before the month begins and then go do it, you and your wife, then you don't accidentally end up with credit card debt

or accidentally go, oh, God, we've got to clean up this mess with a HELOC. Because the HELOC was to cover a mess, wasn't it? Actually, it was to build. I pulled it to build on the house. But yeah, I should have not borrowed the money. Yeah, yeah. So if you're doing that, then you're not doing any more damage. And you've got peace.

And you've got this great income with no payments in the world to prosper by selling the rental. I would sell the rental and get myself on a plan. I can breathe just thinking about selling this thing and being completely debt-free with money left over for an emergency fund and then restarting with this fabulous income in California. Now, if you do that and you don't change your habits, you're going to be right back in a mess again. So it's a two-part answer. You've got to change your habits, get on a plan,

start executing like you were doing a job with your spouse in agreement. Hang on. Christian will pick up. We'll get you signed up for everything for free. And if y'all will go do it, we'll help you do it. And then you'll be safe to sell the rental. If you sell the rental and keep doing the stupid stuff, you're going to be right back in the hole with no rental to sell. Don go do it. We'll help you do it. And then you'll be safe to sell the rental. If you sell the rental and keep doing the stupid stuff, you're going to be right back in the hole with no rental to sell.

Don't do that. If you live like no one else later, you can live and give like no one else. You pay a price to win. If you've done that and you've gone through baby step three, meaning you're out of debt, except your home and you have your emergency fund in place, then you're in baby steps four, five, and six simultaneously saving for retirement, kids, college, paying off the house. And at that point is when we say, okay, go out to eat again,

buy the couch, go on vacation again again that kind of stuff but when you're in baby steps one through three you don't do that so that's why we named our cruise that we're doing in march the live like no one else cruise because it's for baby step four and beyond obviously if you want to come and celebrate your debt freedom or celebrate your reaching the baby steps millionaires pinnacle or whatever it is you're doing. We want to celebrate with you on the Live Like No One Else cruise. 100% of this first class, high class Holland America ship will be Ramsey people. It's going to be Sharon and I and all the Ramsey personalities. Manit Chauhan from the Food Channel is our friend, our friend and she just incredible she's going to do

some cooking demonstrations steven curtis chapman um multi dove winner multi uh uh what i work what am i trying to say uh what's the other award dev awards grammy awards grammys i couldn't remember trying to give him an academy award there's too many the reason i got distracted is steven was at my house last night and guess what last week he was inducted into the he's the first christian artist to ever be inducted into the grand old opry no way that's incredible he played the grand old opera he was 19 years old when he was doing shows at opry land it's a great story and messed and messed the words up because he was so nervous on a George Strait song. Oh, wow.

Or a George Jones song. And so he tells that story all the time because he's humble, he's funny. And so Ricky Skaggs, friend of his, friend of mine, was there to do the induction, and they surprised him. He didn't know it was going to happen, and he told the whole story last night. It was just fascinating. That's special. Add another one to his resume.

So Grand Old Opry inductee, Stephen Curtis Chapman, will be one of our guests on the cruise. We love having him. story last night it was fascinating so that's special add another one to his resume old opry inductee steven carter chapman will be one of our guests on the cruise we love having him dina carter uh country artist obviously he'll be there very one yeah strawberry wine there we go we got magicians we got comedians songwriters a lot of people going to be with us um one of our favorite pastors is going with us we're going to have it's going to be all ramsey all week we're going to have stuff i mean there's no shows on the thing it's all stuff it's all of us speaking and teaching and and doing different things and all these different other performers and things will be doing their thing it's it's going to be a blast can't live like no one else screws oh by the way we're also going to turks and caicos

saint thomas puerto rico the bahamas it's pretty incredible so uh the it's almost sold out it's march uh 22 through 29 but you can still get a cabin if you go ahead and get it right now don't screw around with this because you're about to miss it yeah i'm looking at the site now the suites are all sold out one of the state rooms is sold out there's two state rooms left you could even book two two types two types yeah not two not just two yeah but there's more than two rooms but not many i mean there's a handful so you need to get this done and uh put up you can put up a 600 deposit and before the cabins are gone and then if somebody drops out if you want to upgrade you could upgrade you can do all kinds of stuff but you got to get

your foot in the door here and you got to get this locked down before it gets away ramsey solutions.com slash cruise again it's on one of the top holland america ships it's almost new it's a fabulous fabulous product and um we're excited it's gonna be it's gonna be the first time we've ever actually done one of these and it's gonna be gonna be gonna be big gonna be ready it's gonna be amazing all right tyler is in cincinnati hey tyler hey dave and george how y'all doing today better than we deserve what's up hey uh long time listener second time caller here i'm gonna ask my question first and then provide some uh family and financial contact that's that um the question is i've been maxing out my 401k since I began gainful employment about 10 years ago. I now have the opportunity to contribute to a 401k Roth. I'm just not sure what percentage

to contribute to that. 100? 100%, even though the 401k has a significant balance to it. No, I'm not moving the significant balance. I'm talking about contributing. What you put in from this day forward should be Roth. 100%. And any guidance or recommendation on the risk of the funds? Aggressive, moderate? Well, you'd stay, if you were in the same, you know, we talk about four types of funds. If you're diversified across those four types,

you'll still invest in those same funds. You just get the Roth treatment, which means it's after-tax dollars that grow tax-free. So it doesn't change the way you're investing. I'm sorry. We recommend four types of funds, growth, growth and income, aggressive growth and international, putting a fourth into each. Did you know that already? I did. Yeah. Okay. So that doesn't change whether it's Roth or whether it's traditional.

You do the same exact mix of funds. So you just leave the traditional alone. It'll continue to grow. And you begin investing any new income into the Roth portion. How much is in the funds in the traditional today? $300. And what's your household income? Household $270. And are you out of debt, house and everything? The only debt is the mortgage. How much is it? My wife and I, the mortgage $400. Okay 400 okay yeah when you get that knocked out i'm going to begin to move some of the traditional with out-of-pocket cash so like

let's say the house was paid off you're still making 300 you're you know by then you probably are right you're still loading everything up as much as you can load it up i'm going to move 100 a year out of that $400. And when you move $100, it's going to cost you about $25 out of pocket, give or take, or maybe $30. And so just take that $30 out of your pocket, move the whole $100 over into the Roth. And that is the equivalent of having invested another $30.

Now, for my family situation, I'm wondering if this changes the strategy. I'm married with three young kids. We have a fourth due in September. My wife and I both work. We're both 35. We've both been maxing out our Roth IRAs and 401ks since we started employment. We have 529 set up for the three kids. We'll have it set up for the fourth one in September. In retirement right now, we have about 1.3

in savings. And with that context, does it change anything with that plan? And if we reach a salary point where we cannot contribute to the Roth 401k, is there a way to begin that 401k back up and still contribute? The Roth has the exact same limitations as the traditional on a 401k. The only reason you would reach a salary point you couldn't do a 401k would be if your company had a problem with highly compensated people, and it was out of balance and they had to back down how much you could put in.

There's an income limit for the Roth IRA but not the Roth 401k. There is no income limit for the Roth 401k. Correct. Okay. And even with the IRA, you could do a backdoor Roth IRA. Yeah, I'm vaguely familiar with that. I need to do some research on my end. You need to just sit down with your smart investor pro.

Also, by the way, let me back up a little bit because you've done such a great job saving money. Congratulations. You're a millionaire at 30. I mean, you're amazing. You've done a great job. But if you're going to follow the baby steps, which is what we suggest, you would only be putting 15% away until you got the mortgage paid off. And I think you're putting more than 15% away.

That's about 40K total. So if they're both maxing out their 401Ks, that's already over that amount. Yeah, okay. So you may want to back down slightly, put more toward the mortgage, knock it out. It's a minor detail in your situation. But the wealthier you are, the more important it is for it to be Roth. Because Roth doesn't force you into, when you're 72, into required minimum distributions that would throw you up a tax bracket. Because Roth is 100% tax-free and does not have required minimum distribution.

And the traditional does. It gets you into a pinch. So, like, dude, when you get out to my age and i've got you know a bazillion dollars in my stinking retirement and uh because i've been doing it a long time and maxed it for a long time there's a lot of money in there so i would be i've moved it all to roth years ago and paid it out of my pocket the difference like i discussed with you if you uh haven't done that the um know, like I had a guy call in the other day was $8 million. Wow. And he's the, the amount he's required to take out

throws him in the top tax bracket. Even 10%, it's 800 grand. Yeah. But the required minimum distribution is 72. So he's screwed. He got it. He got backed into the corner with the traditional. The Roth allows you to escape that. This is The Ramsey Show. Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. George Campbell Ramsey, personality, number one, bestselling author of the book Breaking

Home, Breaking Free from Broke, is my co-host today. Open phones at 888-825-5225. Wolfgang's in San Antonio. Hi, Wolfgang. How are you? Doing well. Thank you so much for taking my call. Sure. How can we help? So my question's about eating out. So I'm 29, trying to increase my

savings budget a little bit more this year, and part of that is eating out less. But I do, I'm doing fairly well financially, and it's been hard or weird or, I don't know, maybe guilty to say no to friends and coworkers who I know make less than I do. And they want me to go out to eat with them, and I'm just trying to make that budget decision. So I'm looking for some guidance just on that thinking process. So are you running into situations where they're going like, oh, come on, man, and you're going, hey, I can't do it. I'm on a budget. What's the conversations like, and what's the pushback? I never say I'm on a budget, but I have been packing my lunch more at work and just sort of saying no to things, you know, saying I'm tired or, you know, I got some commitment and sort of

making excuses to get out of that, but the driver is budget. what what is it you would feel guilty about you're doing what you want to do why would you you haven't done anything wrong why are you guilty um i guess it's because i like i said i do um i make over a hundred thousand dollars a year um got a couple side gigs going and um i drive a reasonably nice car and it just feels weird um the social aspect of saying no to it, just for the money reasons, even though that is a goal I have financially. Yeah, it doesn't feel weird to me. I think it's just you're just smarter than most people.

I mean, most people, other people run their lives, and instead you're actually running your life. You know, the people that build wealth and the people that are successful in anything long ago quit taking a poll from the public you know and that's you you quit taking a poll it's just but it just you know you're just kind of wondering am i am i a goofball or something, you're not a goofball. I think what you're doing is very wise. Now, if you said, I never go out to eat under any circumstances and I make $100,000 a year because I'm just a complete freaking tightwad,

I'd probably tell you to loosen up a little bit, but that's not what you're saying. You're just saying they go out to eat every freaking day and most days you bring your lunch. Whoopie. Who cares? Are you saving for an emergency fund wolfgang or is this for another savings goal uh this is long-term savings i have uh you know some in savings some cash savings and generally debt-free but i guess i'm just not quite happy with the trajectory and just looking to build

that a little bit yeah and so you get more joy from the trajectory than you do avocado toast for sure yeah that just makes you like a grown-up you know you're not being driven by other people's desire for you you're being driven by your desire for you um you're making adult choices and you know you're always going to have to tell somebody no the rest of your life you don't ever have enough money to not say no and pretty soon they'll get the memo you say no enough times they go eh i think he's good today and you know i'll tell you this in my life it's not money but it was for a long time i struggled with well so and so wants dave to come and speak or i want to i need some of dave's time i need to do this with dave dave dave dave dave this kind of crap and um

you know there was a whole lot more requests than there were hours in the day and so i had to learn to go okay i have to choose what's best for the things i'm working on you know in the business or my family priorities you know and so i'm going to choose to be home this weekend because my teenage daughter has a prom over speaking for your event over here in some other state which i could have easily done and so i had to tell someone no well tell the right people no. You know, I'm not going to tell my daughter no. So consequently, I was there for every problem because you need to be there to threaten the young man that is taking your daughter out.

And so... And it worked. It worked. It worked perfectly. So, you know, but I'm saying you're always going to have to... In my case, I had to learn to say no and not feel guilty because I'm saying yes to say no and not feel guilty because I'm saying yes to the right people. Okay. You don't get to, you don't get a vote over my kid. You

don't get a vote over, you know, something that, you know, I've got the opportunity to work on something inside this business, or I've got the opportunity to help you with your business. Oh, I think we'll be working on this one. This is what I do. You know? And so, uh, and that, that doesn't mean I'm bad. It's just, I have to learn to say no to something so I can say yes to something else. And that's all you're learning is there's always a trade off, but you're never, you never reach enough income or time management or delegation or whatever that you have enough time or enough money that you never say no to anyone that's never going to happen for any of you so the art of saying no to others and to yourself in order to achieve a greater yes is an art form so it's a good question absolutely

well it's boundaries right there and you know dr henry cloud or the best-selling book on that and he's a friend of ours and that's a hard thing to do, especially when you're younger. And I'm like him. I'm a people pleaser. So the one thing I want to do is just go, yes, absolutely, I'm in. And when I was getting out of debt or whenever I had a goal, I had to say no to a lot. But you'll find that the right friends stick around through that. Yeah, I mean, it's not like you never do anything, number one.

And number two, it's just – but i think i think the sooner you can uh learn to say no graciously and just i'm sorry i can't i'm i got other stuff i gotta do can't make it all that's so smart and you know we joked that my personal assistant patty she's been with me for 23 years and she has a sign sign out right in front of her thing. It says, no one gets to see the wizard. Not no one. No way, no how. Right?

The line from Wizard of Oz, right? And her office is in the path to get to Dave. You can't get to me without getting through Patty. And I would not dare darken the door. Don't you dare. It's not good for your health. And, you know, we joked for a long time. Patty's job description was, no, Dave can't come. You know, because we had to learn to say no. And, you know, we joke for a long time, Patty's job description was no Dave can't come.

You know, because we had to learn to say no, and it wasn't because we were stuck up. It's because if you don't say no to something, you can't say yes to the right stuff. And in your case, Wolfgang, you're saying yes to my long-term financial goals by saying no to avocado toast with my buddies. That's right. And you can initiate hangs that are on your terms that

don't involve always going out to eat. There's a lot of things you can do and spend quality time without just always going out and spending money. Absolutely. Absolutely. It's a good question. Yeah. I mean, we have the money to have someone come into our home and cook every night. My wife is an old fashioned Southern cook and loves to cook. Uh, but but even then if we get to the point that she's cooked every night for everyone else she'll go no if we're gonna have a bunch of people over everybody bring a dish you know it's not because we can't afford the dish that's not it it's enough enough time enough burn on her energy enough burn on her time and you go our buddies get together and do a potluck like we're a bunch of you know a potluck like we did when we were poor. The old supper club.

Exactly. Never goes out of style. It's wonderful, though. There's an idea for you all, gang. You get to spend time with friends, and it's way cheaper than going out to eat. And you've got a lot better quality atmosphere. Everything's better. That's right.

Everything. So there's all kinds of ways to say yes. But I think it's an interesting philosophical discussion. One of the best skills you can have is learning to say no. Yeah. The Power of No. That's my next book. I like that.

Ramsey said no. There it is. This is The Ramsey Show. George Campbell Ramsey, personality, number one-selling author of the book breaking free from broke is my co-host today selling a house in this weird real estate market buying a house in this weird real estate market is weird it's hard. It's different. And it adds a level of uncertainty to the whole process that really shouldn't be there, but is there. And if you want to get rid of that, get with a pro. Now, the problem with a real estate business is it's fairly easy to get in. You got to pass a

little test. It's not much, and it's fairly easy to get out so when times get tough all the people that aren't that are kind of half butt doing the business they bail and as soon as it gets uh jumping again they jump right back in and so what you want to do when you're selling your largest asset or buying your largest asset, hundreds of thousands of dollars or millions of dollars, whatever your case is, you definitely want a pro. I mean, you want somebody that's, you know, they're not Aunt Sally who got her license three weeks ago because she thought it'd be fun. You know, that's not a good idea right there.

You really want to get somebody that sells, you know, 30 to 300 houses a year and, and they know what they're doing. Well, that's what the Ramsey trusted real estate agents are. They're people that we have vetted for their level of performance. We coach them. They understand the Ramsey advice and systems. And so you're going to have an experience unlike you will get anywhere else. And you're going to get the house sold or the house bought or whatever it is you're trying to do because the Ramsey trusted real estate agents are freaking amazing. They're the best. And so if you want to know who the Ramsey trusted real estate agent is in your area, you can find out for free. Just go to Ramsey solutions.com slash agent ramsey solutions.com

slash agent monica is in new orleans hi monica how are you hi i'm well sir how are y'all better than we deserve what's up okay so my employer matched 401k uses vanguard so i scheduled a phone consultation with a vanguard representative because I couldn't tell. Where'd you go? I wanted to make sure that I had 25%. Whoa, whoa, whoa. Did you drive under a bridge or something? Okay, you scheduled a phone call with a Vanguard representative, and then what happened? So I wanted to make sure that I had 25% going into each of those four types of mutual funds that you guys recommend,

the growth, aggressive growth, growth and income international. Well, I couldn't tell based on the names that Vanguard gives their mutual funds, what types they were like, they're very confusing names. So I wanted clarity on that. Well, while I had the Vanguard representative on the phone and he's going through and explaining which types of mutual funds are which, he kept impressing on me that I needed to maintain like 15 to 20 percent in bonds. And I said, well, bonds aren't really what I'm looking for. He said, well, you have to have a certain percentage of bonds. And he seemed rather insistent on it. And I said, no, I want 25 percent in each of these four types of mutual funds. And I was just wondering, why did he find it so important that I have some percentage of bonds? Well, the theory in the – how old are you?

52. Okay. The theory in the financial world is that bonds are lower risk than stocks. The problem with the theory is it's not true. Okay. So if you go pull up the bond market volatility and lay that beside a growth and income stock mutual fund, um, volatility, you'll see they're about the same. If you'd like looked at a chart of the volatility, the price is going up and down. Okay. The market volatility. And so they're not less. And here's the other problem. Bond prices are dictated by the interest rate environment. And they work on an inverse of interest rate, meaning if interest rates go down bond prices go up if interest rates go up bond prices and values go down

so this guy's an idiot interest rates have been increasing in an increasing interest rate environment if you buy bonds you're going to lose your butt you're going to you know so but what he's going on is the overarching theory that you need some bonds in your portfolio to have a lower risk profile, and the problem is that the theory is absolute hogwash, and he's just a kid on the phone that they trained to read a script. Right. Yeah. Okay.

It's just sad, but that's where it's coming from. And again, you know, here's how bad the theory is, okay? The financial planning world also adopts a process that I don't agree with, or a theory I don't agree with, called asset allocation. Let's just talk about it even worse, okay? Let's get nerdier. Asset allocation, and you probably heard this one, Monica, is the older you get, the more conservative your portfolio needs to be. And so by the time you're 65, you need to have moved out of growth stock mutual funds into bonds and money market instruments. Right.

Have you heard that one? Yes. That's the asset allocation theory. Here's the problem with the theory. I'm 63 if i move the millions of dollars that i have in my mutual funds into bonds and money market type instruments high yield savings that kind of thing and i live 25 or 30 more years it's going to destroy my wealth because they're not even going to keep up with inflation for 30 freaking years. And so if you're going to die in two years, yeah, you would move it away. But if you're

65 years old and healthy, you're high likelihood you're going to live into your eighties or nineties. And so the asset allocation theory is absolute hogwash. But the problem is the financial planning community, not all of them, but by and large are a bunch of freaking lemmings. They follow each other over a cliff, and they don't stop and do independent thought. So like you're running into this studying for your CFP, right? Oh, absolutely. George is studying for his certified financial planning designation, and the asset allocation is preached like it's biblical truth.

Well, and the theory is, well, if the market tanks, I don't, you know, you have a little bit of a hedge because of the bonds. And so they won't be calling me yelling, where'd all my money go? It went down with the market. The problem is when the market's up, you don't see those returns. Well, what happened? The market did 20%. I only see 12.

And based on asset allocation in the old days, the financial planning world would say, all right, we're going to take your grandmother, who's 70 years old, and we're going to put her in bonds. If you did that a year and a half or two years ago, she lost 50% of her value. That's what happens with the banks. They invested all this money in bonds.

And they got screwed when the bond market tanked because interest rates went up. So that's what happened in scale. Remember remember as rates go up values go down rates go down values go up so you put we would we would we were always told in the old days oh you could put grandma in some fannie may bonds just put her in some freddie macker fannie may bonds mortgage bonds right they're safe they're mortgage-backed securities they're very safe it's not going anywhere bullcrap as soon as mortgage rates go up the stinking value of that portfolio goes down like a tank i mean it makes an aggressive growth stock mutual fund look like a wuss it's amazing how bad it is and

and but we were taught that this is somehow low risk it's not low risk especially in a rising interest rate environment oh my god and they found there was an interesting study dave i need to find the chart but they found that when you had a equities portfolio versus a bonds portfolio it lasts longer in retirement no duh well a 30 year retirement it's going to make more and therefore last longer. It makes more. And here's the other thing. Let's say I've got, let's just say somebody listening has $5 million, $4 million in their retirement account, okay? You're not going to use the money anyway at retirement. If you've got $4 million, you pull off 10% a year.

That's $400,000 a year, and you didn't even touch the principal. So you're not going to use it. So it's not like you have to worry about it goes up or down or goes up or down. You're not using it anyway. You're living off a paltry percentage of the money it's throwing off the money it's throwing off so it's yeah the whole the whole thing just pisses me off because it um somebody decided that was a uh thing to do and then they all adopted it and then they act like anyone who goes against that is is blaspheming or something dave the blasphemer dave the blasphemer well that's me boys and girls and you know what that has caused that it's not real blasphemy, by the way, but it's just financial nerd.

Not biblical blasphemy. It's financial nerd blasphemy from the certified financial Pharisees. There we go. Yeah. Not all of them are that way, but some of you people in that world, stop it. George Camel, Ramsey Personality, co-host of the Smart Money Happy Hour with Rachel Cruz. He's my co-host today. Open phones at 888-825-5225.

Steven is with us in Seattle. Hey, Steven, what's up? It's an honor to be able to talk to you today. You too. And my question is, I have a zero interest loan that was a medical expense, and it sits around $15,000. And is it smarter to pay it off or to just pay it every month compared to inflation. I'm making money just by paying it every month.

It would seem that's advice I was given. What do you make a year? What's your income? I make approximately $80,000 a year. I have several income sources. I don't know who's giving you this advice, but you need to stay away from them. They're not very smart. Here's why.

If you make 10% rate of return because you didn't pay this off and you kept $15,000 in a 10% investment, you made $1,500. Okay? $100 a month. $100,500. Okay. A hundred dollars a month, a hundred dollars a month. We have surveyed 10,167 millionaires. 89% of them became millionaires starting from nothing. The number of them that became a millionaire because they failed to pay off a medical debt

and instead invested the money and made 10% made $1,500 was precisely zero. Millionaires don't believe crap like this. They get out of debt, stay out of debt, stay away from debt, build an investment portfolio, and that's how they become wealthy. so this is like you know well you should get all the airline miles you could get or you should you're going to get rich on one percent back from discover card which means by the way you spend a hundred thousand dollars on your discover card you get a thousand dollars back now under what circumstances do you trade a hundred thousand for a thousand and that make you wealthy uh None. Okay. I'll help you with that. And so this is the same kind of stuff.

So quit playing some kind of intellectual games with tiny little amounts of money. That's not going to make you wealthy. If you call me up and you said, I got a million, 500,000 interest free. I guess we could talk about that. It'd be worth at least talking about. I wouldn't do it, but you could at least have a discussion about it. It's just not even worth talking about. Well, it doesn't sound like he has $15,000 sitting in a savings account. Otherwise, he probably wouldn't have gone into debt for the medical.

So I just – Pay it off as fast as you can pay it off. It is living in your head rent free, considering you called about it. And for that reason alone, just get rid of it. It's not worth the mental energy and brain calories. Yeah, exactly. You're burning up stuff. You don't need to burn up here for pennies, just pennies, a couple of dollars a day. Jackson's in Calgary. Hey Jackson, what's up? Hey Dave, thank you very much for taking my call. How are you? Better than I deserve. How can I help? I have a question. I'm in this situation. I admittedly did not take your advice. I purchased a home with somebody before we were married.

We are common law. We do have a prenup and we've been together for quite some time. So there's no, I don't think we're at the risk of breaking up, if that makes sense. We're at the stage of getting, you know, proposed, married, that sort of thing. But my partner has a line of credit and I am super against debt. I'm into following the baby steps. And I've created a bit of a investment portfolio myself and I've gotten rid

of all my debts, my credit card debts and that sort of thing. I don't have any student loans. But I'm just wondering how do I approach or how do I, I guess I have approached, how do I get through to my partner that getting rid of this line of credit as a fallback. It isn't needed in our situation. We don't need an emergency line of credit. What is the line of credit for? Is this a credit card? Is it a personal line? It's the personal line of credit that the bank was willing to give.

I think it has a maximum of $20,000. What's the balance? Is there any balance there is there's a small balance of it would be between six and eight thousand dollars which i'm certainly you know what did that go to sorry what was that for uh the i think most of it is personal purchase um because it had nothing to do with fallback or emergencies. It was overspending. So she's justifying spending money on stupid crap that she can't afford by saying, well, it's there for emergencies.

And so therein lies the problem is she's justifying a spending problem or addiction with this line of credit. And so guess what you can't do when you don't have a line of credit? Go into debt. And it sounds like you guys aren't aligned on your financial values, which is scary because you're in this situation now and locked into this. So you said there's no risk. I think there is risk here. This adds a real rift in the relationship because I don't know that you can change her mind. It may take a long time. She may never change. Yeah. So the bottom line is the reason she wants this is it allows her to do whatever she wants to do. Right. Instead of looking in the mirror and going, I have to tell myself no.

And that's an immaturity issue. Do you guys have separate finances right now? We do, yes. We do have a prenup as well. So we put contributions for the mortgage payment and the house payments into a separate account. And then our individual accounts are all protected by prenups. So you have no debt, you have an emergency fund, and she has debt and has no emergency fund. Correct. Well, I think the whole thing is it's not a matter of convincing someone of your way of thinking. I would back up and just say, hey, let's dream together.

Okay. My goal would be if I was doing, if this is you talking, would be that we become wealthy and we're able to be extremely generous. We're able to travel. We're able to have nice automobiles on our own home, pay it off, have complete stability and become millionaires or multimillionaires. My goal is to do that. That's my dream. Now, what is the shortest route and what principles does the actual data tell us that gets us there now if she says oh yeah that'd be cool let's do that okay then if we're going to become wealthy how do we do that

and it's not by overspending eight thousand dollars and putting it on a emergency i mean putting it on a home equity line of credit that's supposedly there for emergencies and and that purse was definitely not an emergency credit that's supposedly there for emergencies and and that purse was definitely not an emergency so that's not how we get there and so what we need to do is we need to align and say this is what you know what are the processes it's like if you sit down with your personal trainer you hire a personal trainer and you're overweight you say okay what's the goal what must be, what's the goal? What must be true?

What's the goal? Okay, I don't want to keg anymore. I'd rather have a six-pack. And so I'm going to get rid of the belly. How are we going to do that? You have to do these things. I don't want to do those things. I don't care.

That's how you get rid of the belly, you know. And this is, you know, then you've got to decide if you're going to align your behaviors with actual truth that takes you to your goals and um henry cloud says you you once you identify a desired future and that's any couple could sit down and say we're gonna have a dream date this is our desired future and we're going to be in agreement on our desired future then the next thing you have to say is what has to be true that is not true now. Well, we, you know, we obviously, the things we've done so far have not gotten us to that desired future. So we need to do some things differently than we did before. You reverse engineer it. Exactly. From the dream.

Exactly. And then you say, okay, you know, what's my desired future? I don't have a belly. Okay, then what must be true that's not true today? No freaking donuts. You know what I mean? Calorie deficit. You know, back up from the, do some pushbacks from the table as well as pushups, you know. And so there's some things.

That's Dave's workout plan. Both of these things have to happen. And so caloric, you can't outrun a Big Mac. And so your caloric intake is an issue. And so what has to be true if you want to get to that desired future? And any couple can do that on any subject. We want to raise kids that are good kids. Well, I didn't.

Sharon and I decided we didn't want to raise kids that were good kids. We wanted to raise kids that became great adults. It's a different goal. Different strategy. Different goal. I'm not trying to raise Stepford children. I'm trying to raise kids who have some poise, some confidence that can articulate and have a conversation with an adult and look you in the eye and shake your hand and, you know, not be intimidated by everything around the block. That's a different goal. This is the Ramsey Show. Our scripture of the day, Isaiah 30 and 21, whether you turn to the right or to the left, your ears will hear a voice behind you saying, this is the way, walk in it. Warren Buffett said, you only have to

do a very few things right in your life so long as you don't do too many things wrong. So simple, but so wise. Oh, it's very true. Chelsea's with us in Baltimore. Hi, Chelsea, how are you? Hey, I'm good you better than I deserve how can I help yeah so my question is um should me and my husband do rent to own on my in-laws house while they live there no while they live there yes so why would you rent someone else's house while they live there well we would so we would be in the top half the house and they would be in the bottom half the house oh they'd basically be like you know we each have our own separate

yeah no don't do that. What is the benefit here? Are they cutting you a crazy deal? So, basically, it's a family property, and you know, me and my husband would like to purchase it from them at some

point. What does family property mean? The property was given to them by um his grandfather and um it was meant to be for us or for him so will it go to you guys will it be inherited by by your husband um so they are also in a little bit of a sticky situation with some other debt and stuff too so i don't know if that would end up coming to us or not they're in a sticky situation with what with some other debt and other debt basically yeah all right so is this what is this property an unusual property and is it like a bunch of acreage or um i mean it's uh it's a house they built and it's i mean it's 17 acres um and like i said it's in the area the family all is in um okay here here's your problem all right you guys are trying to do 73 different things at one time and it's not going to work

and here here's what's happening all right the parents-in-law have been irresponsible gotten themselves in debt and they need the income that you would be giving them to rent and so you're doing it to do them a favor you're also trying to honor grandfather's idea that your husband would end up with the property and yet you've still got to turn around and buy the property instead of just end up with it. That wasn't grandfather's idea. He left it to his son. He didn't make him buy it.

Now his son is trying to not do that with his own son. Am I missing something? No. Yeah. So we're trying to honor grandfather. We're trying to help the in-laws who have been irresponsible by paying them rent. And you're going to be in a miserable living situation, all to try to keep everybody happy but you and your husband.

No. Don't go do this. I mean, it is really important to us, too. And if we can kind of help them out now, I guess their goal is that they can sell the house to a reduced price. Yeah. So what is the property worth? A lot of the numbers we've been throwing out is like around $500,000.

Okay. Let's just pretend it's worth $500,000 for a minute. What do you and your husband make? I think he's going to be making about 90,000 this year and then I'll probably be making about 45. Okay so you have 135,000 household income. You can afford a half a million dollar house. Just buy the house. So we actually just talked to a lender, and they said it could be approved for about $400,000. Okay. How much money do you guys have saved?

That's the other thing, because we don't have, because we just got married like a year ago. How old are you two? She's 21 and I'm 22. The weak cannot help the weak. Only the strong can help the strong. You are too weak to help them. You are not in a good enough financial.

Listen, you do whatever you want to do you called and ask my opinion my opinion is i would run from this like my hair was on fire because these people are irresponsible they're going to end up with judgment liens on this house and they're going to be unable to give you the house or transfer it to you because they're not going to pay their bills and they're going to get their butts sued because they're going to continue in their pattern of irresponsibility and you sweet little 21 year olds are trying to help these grown adults who are doing a piss poor job of running their lives and they're going to screw over their own kids accidentally in the process please run from this please so here's an alternative you guys go rent somewhere on your own yeah building your

own financial foundation. Go have a life. And if one day you inherit this thing, that's great. Or later on if you want to help them, fine. But you're not multimillionaires and you're 21 years old. You've been married 10 seconds and you're not in a position to go help these grownups who have been irresponsible. You're not strong enough.

Quit doing this. And you're going to end up in the basement of people paying them rent. They're going to screw you over accidentally because they don't know what the crap they're doing. They can't find their butt with both hands and they're going to cause you guys to drag, to drag, be drugged down with them. Please don't do this, please. They don't mean to, but they're screw ups and they're going to gonna and they're doing this to their own kids it aggravates the crud out of me don't people don't screw over your own kids with your irresponsibility don't do it and and please don't do this they're gonna end up with this property clouded on the

title with something because of the way they're acting and then you're not going to be able to get the property that you signed up that you thought you were getting in a rent to own crappy deal. Please just go rent you something and let these grownups muddle through their mess. And maybe the property will come out the other side of it. Maybe it won't. You're not in a position to buy it. If you call me up and you were 32 and you had 3,000, 30 or 40 or 50,000 bucks laying around and you want to put a down payment and go buy the house, we can talk about that. But you're not in that position. You're not in a strong enough position to be of help to them. And you're going to go do it anyway, even though I'm going to tell you a thousand times not to do it.

I can tell. There's no stopping you. You'll be a caller on the show again. Laura's in Philadelphia. Hey, Laura, what's up? Hello. How are you guys what's up? Hello. How are you guys? Better than we deserve.

I'm a little short on time because I'm ranting. How can I help you right quick? Okay, I'm going to be quick. I have $75,000 coming to me next month, and I have another payment coming next August. And this is like the last two payments from a divorce that was eight years ago. So here are my questions. I know I'll be happy to be done. Um, I'm currently married again and, uh, we don't have any debt. We do have three homes. Um, two are rentals. One, um, that is one of the rentals does not have a mortgage. This has a HELOC. Here's my question.

I want to know if what we should use each of these $75,000 towards if we should pay down mortgages, the HELOC, or should we save it and purchase a third rental? I would pay down mortgages and HELOC. Okay. What's left on your primary? Okay. What's left on your primary? Okay, so my primary, we owe $243,000, but that's our lowest interest rate. Well, I don't care about the interest rate. What's your household income? Oh, I'm sorry. Our household, it is $1,800 net per week. $100,000 a year. Okay. Okay.

And what's the balance on the HELOC? HELOC is $40,000. I'll definitely clear that then with the $75,000 when it comes in. But let's get about the business of getting your house paid off. And when the house and the rentals are clear, you'll have tremendous cash flow to buy your other rentals with that cash flow. So no more rentals, though, until we start clearing these debts. Until we clear all the debts, including your personal residence. That's what I would do if I were in your shoes.

It's a good question, Laura. And you're thinking clearly with a horrible, sad situation, but I'm glad you got a great, bright future. That puts us out of the Ramsey Show and the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. Hey guys, I'm Rachel. And I'm George. And you've probably heard our voices before on The Ramsey Show. And do we have a surprise for you. Yep, we have our very own show, Smart Money Happy Hour,

where we talk about pop culture, current events, and of course, money. George, it's a great show. And what else do we talk about? So much, Rachel. Not enough. And yet too much. We talk about guilt tipping because tipping is out of control and I won't stand for it anymore, which is why I'm sitting.

I'm glad you're taking such a stand. And we also talk about something else I'm passionate about, Disney adults. Oh, George. Why is it a thing? Listen, some adults still find the magic. Sure. We also talk about toxic money traits and girl math. And if you don't know what those are, you have to listen to the podcast.

Yeah, there's a lot there, you guys. It's pretty fun. We keep you relevant is what I'm trying to say. And if you don't know what those are, you have to listen to the podcast. Yeah, there's a lot there, you guys. It's pretty fun. We keep you relevant is what I'm trying to say. We help you out. So pull up a chair to the happy hour you wish your friends were having. We promise you won't regret it.

And if you don't have friends, we'll be your friends. We will. We're great friends. So make sure to check it out on Apple, Spotify, YouTube or the Ramsey Network app.