The Ramsey Show - Impose Your Will on Your Money With a Budget!

Episode Date: June 27, 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. Number one best-selling author, Ramsey personality, co-host of the Smart Money Happy Hour, Rachel Cruz, my daughter, is my co-host today. Open phones. The phone number is 888-825-5225. The call is free, and some say the advice is worth exactly what you pay for it. Phil is with us to start this hour in Fort Wayne, Indiana.

I got a problem with my deal in here. Just bring it up. Bring up Phil for me. Hey, Phil, how are you? I'm fantastic. How are you guys? Can you hear me? Better than I deserve. What's up? Well, Dave, my wife and I are having what we believe to be is a financial meltdown. We need some help. We need some advice. We're tired of owing people money. We want to get out of debt ASAP. And frankly, the arguments and the stress is making it hard to sleep at night.

We're on the verge of divorce due to this. Wow. How much debt have you got? I can go through it quickly. I've got $38K in a personal loan that's rollover from credit card debt, $29K in a car loan. Of course, that's upside down. $28K student loan, $12K in consumer debt, and $8K in the car loan. Of course, that's upside down. 28 student loan, 12 in consumer debt, and eight in another car loan, the daughter's car loan. And then we got the house. We owe $150

on the house. If we sold it today, it'd be worth $250, $270 it would sell for. Have you got a beeping in the background at your place, or is that a technical thing on my end? That's us. That's us, Dave. Oh oh it is yeah okay yeah all right thanks my brain's about to be fried over this okay sorry so uh what's your household income oh no did we lose him now we lost him okay we're breaking down yeah it's all falling apart okay well Hopefully we'll get him back up because that was a lot, a lot of numbers. And we're finding continually it's a consistent issue of money becoming such a major part of people's marriage issues. I mean, this is a thing that has continued to be an issue. Can you concentrate?

No, I can't. But that's okay. You're right. I think we're but that's okay. You're right. I think we're getting Phil back now. We're getting it. We're getting it. Okay. Phil, we will have you on, I promise.

We're going to try to help you here, buddy. Okay. Are you back, Phil? I'm here. Okay. Sorry about that. I'm sorry about that, guys. No, that's okay.

We blew a fuse over here somewhere. But anyway, so you guys are, how long have you been married? 18 years this year. Yeah, and what did you say your household income is, sir? Together we're grossing $174. Okay, so why are you not able to pay these bills with $174? They look payable to me. And when we actually sit down and look at it, I agree 100%.

But frankly, we have never sat down and truly have done a budget. Okay. And if we're fighting over money all the time, why would we not do that then? Just a communication issue. I mean, if you sat down with your wife tonight and said, Honey, look, we have to map our way through this in a way that we can agree to so we don't kill each other and we make enough money to pay these bills we just need to get aligned on how to do it would you sit down here and help me write

this out and us be in agreement and neither one of us raise our voice could you not do that we're getting there. No, I mean, really. No, I'm talking about tonight. Why couldn't you do that tonight? Does she know about all these numbers, Phil? Does she know the amount of debt? She does?

Okay. Absolutely. So what's the stick? What's the fly in the ointment? You're going to have to tell me. I think it's just a fear of buckling down and actually handling it i think on both of our parts okay and and you said your daughter car you have a teenage daughter you don't want to tell no to that difficult to do yes yeah the other part is she just got accepted to a local uh private college both for academics and athletics

uh that's scaring me to death also because are you supposed to pay for it after she got accepted that is a correct statement yeah well i don't i don't care i can't i can't afford it honey unless we figure this out so one thing you figured out already I figured out in 35 seconds talking to you, is your teenage daughter has a vote in this and she shouldn't. It's not her money. She's causing, you're not saying no to her, either one of you. This kid needs to hear no. It's part of what's causing your problem. Now, I'm not saying you're going to have to say she can't go to that college

or you have to sell her car, but you might have to say both you make 174 000 a year you make plenty of money to pay these bills agree 100 yeah and we're not behind on anything by by any means yeah but i'm tired of making the minimum payments i want to get these things paid off yeah absolutely and you're out of control y'all just spend and spend and spend and spend with no plan. And because nobody hears the word no in your place. And so the grownups in the place are going to have to circle the wagons, you and your wife, and say, all right, as grownups, we're going to do what's best for this family in the long term. Which means in the short term, we're going to say no to some things to ourselves and to all the non-grown-ups in the family who don't get a vote. Understand.

Is that old-school dinosaur stuff or what? I like it. I mean, that's really what you're going to have to do. So one of the things I did, Sharon and I said this when we were fighting like crazy. We were going bankrupt, losing everything. Rachel was a brand-new baby. And we said, all right, if we ran a business and it was our job to handle money for that business,

to be the CFO of that company, the chief financial officer of that company, we would get fired for incompetence. You would lose your job, Phil, if that was your job. Y'all suck at this. Well, I agree. And so we said that to ourselves, too. So I can say that to you. So I mean, I'm not picking on you. I'm agreeing with you on this dance. But we kind of said we got to get above this and treat it like we want to keep our job because God gave us the job of running this household, and we're not doing it. We're incompetent.

We're not doing a good job of that. And so we're now going to become professional money managers of this house, and we're going to tell our money what to do instead of wondering why we're sitting here stressed making $174,000. And if you and your wife can get into agreement on that type then you can go anywhere you need to go from there does that make sense yes sir yeah well and i was going to say too phil that when you said earlier how we can't sit down and just have a conversation because we can't even like communicate about this because there is so much fear there is so much heightened emotion and i think what's going to start to come to the surface as

you guys dig into these numbers is you're actually going to see a lot of, oh my gosh, we've broken down in communication on a lot of life, not probably just this situation. And what we do find, which I hope gives you hope, is that for so many people that walk a journey, that choose to really be intentional about a part of their life, and we're in the world of money, so this is what we hear all the time, is we're going to work on this money problem together. And then suddenly you start to realize, oh, my gosh, a lot of our marriage problems, it's not that they're being solved, but they're coming up to the surface. We're seeing them.

And because we're able to communicate well and on the same plan on one area of our marriage, like money, all these other areas seem to start to have a commonality and that unity starts to be built. So it's kind of the chicken or the egg of like marriage stuff and money. But this money stuff, if you guys can choose to get on the same page, it actually can be the thing to help improve your marriage because you're going to work as a team for maybe the first time in a long time. Yeah. If you can get aligned on your spending, you've aligned yourself on your value system. Your fears, your dreams all come into line. A budget can actually be used to heal a marriage. It actually is used all the time.

Marriage counselors do it. So I got great hope for you guys. Hang on, we'll get you into FPU. You've worked, saved, sacrificed, and been gazelle intense with your financial game plan. But do you have the right defense in place, like the right health insurance? Look, you can't walk past a doctor's office these days without getting a massive bill. And if you don't have health insurance, a major medical situation can undo all of your hard work. That's where my friends at Health Trust Financial can help. They work for you, not the insurance company. So they find you the right health insurance and they save you money. Ramsey has recommended Health Trust Financial

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healthtrustfinancial.com today. healthtrustfinancial.com. Rachel Cruz, Ramsey Personality, is my co-host today. The Bible says, no discipline seems pleasant at the time, but it yields a harvest of righteousness. The way we say it around here is, if you'll live like no one else later you can live and give like no one else met a couple at the break rachel and i were out having pictures so 14 years ago we got out of debt and i said well you have to be a baby steps millionaires and he goes oh yeah definitely so that's what happens there's a live like no one else so later you can live and give like no one else.

If you are on baby step four and beyond, which means you are out of debt, have your emergency fund in place, and you're now working on investing and paying off your house and your kid's college and that kind of stuff, now you're in the investing phase of your financial plan and our baby steps. Now you can go on vacation. But until then you should not be on vacation. You should be going, uh, getting out of debt and you should be in, uh, and you should be building your emergency fund, baby steps one through three. But if you're foreign beyond, we want to offer you the live like no one else cruise seven

days in the Caribbean, Holland, America. and this is the nice cruise ship line not the cheapo this is the good one this is a fairly new ship almost brand new and it's all the ramsey personalities plus a bunch of country music and christian music folk on there with us we're going to be doing all kinds of special events no one will be on the ship except ramsey people all of them will be living like no one else. So if you want to celebrate your milestone of reaching that, Turks and Caicos, St. Thomas, Puerto Rico, and the Bahamas might be a good place to do that March 22 through 29 of the year 2025. So about 10 months, 11 months from now, we'll be going. There are just a few cabins left. You can still go, though. We

want you to go. You can put down only a only a 600 deposit secure your cabin before they are gone uh we are selling out rather rapidly and i you can get a cabin though you need to get on the phone you need to get on the website and start talking about it right now this is the ultimate debt-free celebration includes steven curtis chapman and it's going to be fun. We planned out the itinerary and saw, you know, the speakers for the night and sessions we're all going to do. It's going to be fun. It's going to be enjoyment, some learning, some celebrating. We will all be on there the entire seven days with you.

So come out, hang out with us. It's going to be awesome. RamseySolutions.com slash cruise. You don't want to miss this. It's going to be awesome. RamseySolutions.com slash Cruz. You don't want to miss this. It's going to be incredible. All right, I want to circle back to Phil's call and the concept for a second. Families making $174,000. They've got the money to pay their bills, but they're out of control.

So we have seen for years, going through Financial Peace University, learning to be on a budget together. You mentioned it to him, has healed many a marriage because it forces you to negotiate every part of your life because money flows in and out of almost every part of your life. You know, are we going to give to church? Are we going to save for kids college? Are we going to have the kids in a private school? Are we going to, all these questions have money attached to them and they all represent something you care about, your values. And when you can get aligned on your

values, when you can agree on your spending, you're agreeing on your fears, your dreams, you're agreeing on your problems, you're even agreeing eventually on the order on which to attack the problems and decide if the kid goes to the private school the kid wants to and the kid keeps the car that has an eight thousand dollar loan on it or not um now how do you get to phil's place it's where most people are they're out of control and chaotic and any system including a family and the operation of a family is a system believe it or not it's it is science more than it is art um the any system left to itself without an outside force holding it in place deteriorates and becomes chaotic families that don't plan to do things ever eventually it catches up with them the chaos over. And that could be in the money section. It could be on, you know, we're not planning for college.

We're not planning for retirement. We're not planning to buy the next car. We're not planning anything. And it always surprises you then when Christmas is here in December. And so what this does is it forces a family to impose its will it forces the husband and wife together to agree on and impose their will on the chaos and force it into order that's what budgeting does and it forces you to discuss the things where you are not aligned and that's why i give great hope for ph Phil because he was answering.

He's over it. He's ready to fix this. Sure, sure. He's ready to say no to himself, to his wife, to his daughter. Yep. And impose our will on this broken mess. And so, folks, I want to tell you, I don't care how broke you are. I don't care how out of control or stuck you feel.

You can impose your will on the system using a budget. Just start writing it out. Sharon and I would just write out a list of debts that we had. We wrote out a list of goals that we have, and then we put those in order. Which thing would we do? If we had some money, what would we do first? We dreamed again after we went broke. And we had yellow pads full of dreams, yellow pads full of goals,

yellow pads full of debts and problems, and yellow pads full of dreams, yellow pads full of goals, yellow pads full of debts and problems, and yellow pads full of a budget. And those things eventually, as we imposed our will on that system, eventually became our life. And it's what we've been teaching you guys now for 30 years. That's how you run it. Yeah. And I wonder, too, the caution when it comes to even making that first step of imposing your will and just doing a budget.

Because I think it takes either a moment in time of a crisis, kind of where he was at, and we call it your I've had it moment. I've had it. I'm done. It's either that or it's just this big humility pill that you have to swallow to say what I've done obviously isn't working and I think that's hard for anyone to admit right they're like a part of your life that's falling apart realizing that you've done that like it there's a level of of self-acceptance there oh yeah that can be so hard oh it's very hard um and I think those are the barriers but when you push through those emotions and you actually sit down and do it the change occurs you know you start to actually

start walking it out but that even that first step for people emotionally the weird thing is you change when you have a crisis but you can create the crisis yeah in his case the crisis is coming from the outside it's a marriage problem and everything's blowing up there's tension in the home but i've had two debt-free screamers this week who i asked them what their i've had it moment where you finally just go that's it I've had it and in both of those two cases they said I was disgusted that we make this much and we're this broke that's a created crisis yep you're not in you're not about to be foreclosed on you don't you know but you look up and you go we make too much money we work too hard to have freaking nothing i've had it and you can just reach that down inside and when you do that that's

that's when the switch flips that's when you say okay i don't care what the teenager thinks i don't care what your mother-in-law thinks i don't care what the neighbor thinks i don't care what your mother-in-law thinks. I don't care what the neighbor thinks. I don't care what anybody thinks. We're fixing this crap. And when you do that, now you're imposing your will on the chaotic life, and you will bring order to it, and it's your only hope of not believing your whole life broke. So good.

It's so true. It is. And the other element of that that I think is difficult is that change it is it's it's embracing something new and that's one thing i just did a video on my show right before this um this show and just talking about just the simplicity of the baby steps so you can list out seven right there's seven but the order of that brings order to people's lives too that's one reason i think that this plan out of majority of financial people out there is the most successful financially, because in order to have change, you need to have a plan that you have confidence in. And there's a level of submitting to that,

that this works. So even if you're listening to this and you're new to it, just having confidence in, okay, I'm going to have change and submit to a plan, create order, everything that you're saying, but you're doing it to a system that works and that's been proven, which is the confidence that we get to bring every day on the show, which is great. And that comes into almost anything. I mean, why would you push down on the accelerator if you didn't have confidence that the car was going to go forward? And if it doesn't go forward, then people just stomp on it because you're surprised that it doesn't go forward, forward right why would you push down on the brake if you didn't think the car was going to stop you have confidence in the system and you know it that's why a lot of people fail at uh something

like a diet because they try it for a little bit and they don't get any result and so they lose confidence to your point in the system and they bail and so they lose confidence, to your point, in the system. And they bail. And so they stick with it like a whole 45 minutes or something. And, you know, I will freely admit that I have no confidence in kale for anything. Actually, I read a thing that it's actually not that good for you. I have a lot of confidence in donut avoidance. Donut avoidance has worked real well for me, although my life is lesser for 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. So 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.

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If you want to help us out, we could use your help around here. It's a huge help if you're listening on a podcast and you subscribe or follow. It changes all the numbers over at their platform and causes them to promote us. And it's a huge help. It really is. It changes the algorithm. Same thing's true over on youtube if you follow or subscribe if you share the show some of the platforms have a share button

and you can just send a clip to or send send a you know uh the link or you cut the link out and just copy paste and send it that'll work too there's all kinds of ways to share it if you're listening on talk radio just tell people about us. We would appreciate it. We know you are because all of our numbers are up dramatically, and the only marketing we're doing is you. So yeah, we don't have $300 million to buy a stadium like SoFi. So we're just here to help you, and you're helping us by telling people about us. So thank you for that. We appreciate it. Open phones here at 888-825-5225. Logan is in Chicago. Hi, Logan.

What's up? Hi, Dave. Thank you for taking my call. I'm in a big pickle right now. I just lost my job, and I have a lot of debt that I don't know how I'm going to pay that off. That's scary. How old are you? I'm 19. Whoa. You're on your own? No, I still live with my parents, but I made some pretty terrible decisions in the last couple of years. Okay. What kind of debt have you got, sir?

I have a car loan, about $24,000, and then I have about $5,500 worth of credit card debt that I still... I don't know how I'm going to pay this stuff off. So what happened to lose your job? Tell me about it. So I, I, I came into work and then they told me that they didn't need me. They, and then he just, he basically just relieved me from my job. And then that was, um, Tuesday. So what were were you what were you doing

i was a manager at a travel stop um i was in charge like supervising employees doing um paperwork things like that so they do need the job done. They fired you. Why'd they fire you? They told me it was because of performance, and they found somebody better suited for the job. Mm-hmm. Okay. Anything about that that you learn? What's your takeaway from that?

To be honest, I don't even know. You felt like you were performing? Yeah. And I just don't know what happened. It was just confusing to me. What were you making? I was making around $40,000 a year. Okay.

How are your parents doing with you being there and job loss and everything? How's your relationship? They're good for the most part. It's just trying to find another job before I lose my car or anything like that. So you owe $24,000 on the car. Have you looked up what it's worth? Yeah, the car is worth $18,000 the last time I checked on Kelly Blue Book.

And who do you owe the money to? Who's the $24,000 with? It's a Kia finance company. So it's a high interest rate? Yeah. What's your interest rate? Actually, I wouldn't say it's a high interest rate yeah what's your interest rate actually i wouldn't say it's high it's probably like i think it's eight percent less on my checked this is a local finance company i don't know they have a branch near you they do not okay so you just bought that you bought

this from a dealer and they stuck you in this crummy loan yeah yeah okay because you're a 19 year old and they screwed you okay and you bought a car you're in a ball and you know that right yeah yeah okay all right okay so what uh how's the job hunt going? I'm really not getting any work that I would have hoped. It just isn't going anywhere for me. I just don't know what to do. Okay. All right. Does Uber have a 21-year limit?

Yeah, I know for sure Uber does. Does DoorDash? No. Okay. I'll be dashing doors as soon as you get off the phone, dude. Might as well run the wheels off this $24,000 car and go make you some money. I want you, I don't, listen, and listen, come Friday night and Saturday night, your butt's working.

You're not partying. Okay. Okay, yeah. And period. You haven't got, you haven't any money to socialize, and you don't have any time to socialize because you're broken. You're calling me afraid. So you can't go hide that fear in a party you got to go you got to go get her done you got to go leave the cave kill something and drag it home you can do it i know you can um and and your

performance this time is going to directly cause your income to go up so i'm going to dash doors and i'm going to talk to three pizza places before night fall today the three neighborhood pizza places regardless if they're a chain a known franchise or a local and ask them if you can deliver pizzas for them today i want you standing in their lobby i don't want you on the phone i don't want you on their website and i certainly don't want you texting or some stupid butt email i want you standing in the lobby with your beautiful smile and your hair combed and you go get some jobs okay you can do that can't you i know i can do it yeah i mean you got you got three or four hours before they before dinner time and logan we just talked about this in the last segment about how it takes humility to step into something new and i'll say this logan i would think as a 19 year

old guy you went and got a salary job 40 grand a year you're kind of like this is awesome and then you're like no i door dashing and pizza delivery was not what i'm supposed to do my next step is supposed to be even better than where i was at but i think it's during this time it you're back to like four or five side hustles put together throughout the week and working seven days a week. Until you land the good job. Until you land the good job. I'm not saying that's a good point.

Yeah. So just keep applying. But Logan, this is going to be, it's kind of a hit to the ego to be like, I'm delivering pizzas when I thought I was going to be having some corporate job or whatever you were thinking you were going to be doing. So, again. I want you doing anything that's honorable to make money until you get a good job. Yep. Yeah. Here's what happens, okay?

Let me tell you why I'm telling you to do this. Because when you're broke and scared and terrified, I can hear it in your voice. And so can everyone listening right now. And when you go into a job interview, you sound desperate. You walk desperate. You scream desperation, and they're not going to hire you. But if you've got cash stacked from DoorDash and Pizza, your car payment is there, and you've got $2,000 in the bank

until you get into the job. Now you swagger into the interview, and your confidence is good, not cocky, but you're not screaming desperation and terror in the interview because an interviewer can smell this. You follow me? Yeah. And I'm trying to get that stink off of you so you can go win and the way you do that you get a little bit of margin between you and the wolf that's barking up your butt right now you're getting your butt chewed off by that car payment thinking you're you're thinking i'm gonna get repoed trying to

keep from losing the car i heard you say it and I don't blame you. I appreciate that fear that, but let that fear be a motivator. Your first step is stack some cash to change the way you walk and talk in an interview. And then your next step, I'm going to send you Ken Coleman's book, proximity principle and the get clear assessment. Good Rachel. And, uh, we'll do that in the, and I want you to take all of that stuff for your long-term career goals, and I want you to read everything on KenColeman.com on his website about how to get and land a job and go get that and solve this. And then learn from this process to never be in this situation again. Oh, and by the way, when we get to the other side of this,

you need to have $6,000 so you can sell a stupid butt car and pay it off and get rid of it and get you a $5,000 car like a 19-year-old should be driving that's broke or that anybody should be driving that's broke. This is The Ramsey Show. Are you working the baby steps? One of the smartest and most impactful changes you can make is to ditch your cash value life insurance plan, if you have one, and replace it with a term life policy. Listen, the only thing a cash value policy is good for is overcharging you for the life insurance and then paying you a crappy rate of return on your overpayment. Stop wasting your money and really focus on getting out of debt and

growing your savings. For over 25 years, I've trusted and used Zander Insurance to find the best rates on term life insurance from the top rated companies. They keep the whole thing simple. You can apply online or over the phone, and they even have low cost plans that don't require an exam. Go to Zander.com or call 800-356-4282. Even if you don't have a cash value policy, if you're one of the 70% of people who have no life insurance or not enough, it's even more important to get-host. I have been in a position financially where I was terrified, and I did not know what the next thing to do was. And that's how we ended up doing this show, was to help people who are in that situation, whether they're 19 or whether they're 59.

I will tell you the thing that I was telling that last caller, our 19-year-old friend there, and that when you encounter fear, not if you encounter fear, but when you encounter fear on something, I guess there's several possible reactions, but two come to mind right now. One is you go into fight or flight, right? You either are going to attack and do something active or you're going to freeze like a deer in the headlights.

And for those of you who have heard the saying deer in the headlights and for those of you who heard the saying deer in the headlights we live in tennessee literally when a deer is caught in the headlights they freeze and the stupid animal will stand there and destroy your car so and their life and their life in the process yeah and so by the way fly bambi bambi will total a car i'm just saying because they freeze so those are three things fight flight and free well flight is freeze i mean yeah it's the same category i mean it's they run forward or back so what i have discovered though on especially on financial things like losing your job as an example or uh just waking up one day and going oh we're about to be repoed because we're so

freaking out of control here or we're about to lose our home or we're going to retire and have to eat alpo or whatever it is you discover that's on your doorstep that scares the p what p at p wadden out of you so um if you're in that situation i have always found that the best reaction is not flight and not freeze. It is attack. And everyone wants to get all analytical while you're in the middle of this, and that's a form of freezing. And George Patton said it beautifully. He said a good plan violently executed now is better than a perfect plan executed next week.

So when you're in that situation, square your shoulders, lean into it, and get after it. Even if what you're doing is not perfect, like you're doing things you don't want to do in terms of, I don't want to be in a career where I'm door dashing for the you know when I'm 35 years old at starting at 19 right you know that's something you don't want to do but I've done a whole lot of things in the name of activity because activity solves these things more than the freeze does or the flight you can't run away from it it'll chase you down and you can't freeze and stand in the road you'll get run over so you've got to go into attack mode even if the plan is imperfect and trust me you're terrified your plan will be imperfect but the other two are are a death nail you've got to get it you got to lean into it and get it and when you look back later that sheer activity will change

your your neural pathways it will change your attitude uh it will change your spirit uh i'm feeling blue and depressed one answer for that not the answer not it's not a psychological dr john deloney might not agree but one answer for that is activity well that's what they even exercise is always a company with solving depression yeah that's what i'm going to say that's why they say like if there's if there's major anxiety go for a walk like go out so like move your body no i think that that is sunshine yeah i mean there's sunshine and exercise hello but from the financial aspect that is just go get a job the version 19 years do something do it do something sitting and saying oh this is bad i don't know what happened i'm gonna you just you're standing like the deer in

the headlights then and so and it's it's not because someone has a lack of character it's because we and we uh you're paralyzed well fear like fear you're going to deal with the fear you just got to decide on purpose how to deal with it is what I'm suggesting because it's going to come. You're going to be in those situations. Nick is with us in Knoxville. Hi, Nick. How are you?

Hey, good. How are you, Dave? Better than I deserve. What's up? I'm wondering if it was the right time to purchase a home. I am on baby step four, currently debt-free after being in almost $50,000 of debt, so on the right track there,

but I'm not sure if it was the right decision to purchase a home right now. Right time in what regard? In the economy or in your life? In my life. And was it or is it? I mean, did you already purchase it? I did purchase it, yes. You did, okay.

You're in Baby Step 4, so you're debt-free and you have your emergency fund in place. That is the time we would tell you to do it in terms of Baby Step. Was it too much house, Nick? Was it too much? Are you stressed about the payment? Is that why you're calling or you're just curious? I'm kind of wondering if it's the amount that I owe. And it freaks me out a little bit. I've never been in this much debt.

The mortgage is $236,000. I make about $90,000 a year. I'm based salary and commission, so that's roughly what I'll make this year. You're single? And I sold some land that was worth about $120,000, so I could use that as a down payment. So your mortgage is $230,000 or your purchase price was $230,000? Mortgage is $230,000. I put down $60,000. $60,000.

What did you do with the rest of it? I haven't saved away right now. I'll have to pay taxes the rest of it? I haven't saved away right now. I'll have to pay taxes on some of it because it was inheritance. And you have to have an emergency fund. Correct. Okay. And that used up the other 60.

Correct. Okay. I got you. That makes sense. How old are you? I'm 30 and 24. Okay. Wow. I don't hear a single thing in this that sounds bad. How much is your payment compared to your income? My payment is going to be $1660. I'm just wondering, I took out a 30-year. I know you guys recommend a 15-year, but I was— I would pay it off then as soon as you can pay it off.

I wouldn't refinance it just to do that. But you're 24. It's the first time you've done this. The first time you do anything of scale or size, you feel the weight of it. That's normal. You should. That means you're wise. If you didn't feel a little bit of pinch

when you do something the first time you pick up 300 pounds you would feel it right you picked up 230 pounds you feel it 231 pounds right and you you know and so that that just means you're wise you're you're uh but the numbers that you're giving us are all fine, and the order that you did everything are fine. We would have done a 15. You're right, but I would just challenge you to get to paying on it. Let's pay it off in seven or eight years. You can probably do that because you're that guy.

Yes, sir. I'm also wondering, at least for a year, I'm going to have a friend rent off me who's looking for a spot. So I think that will help out with the mortgage but i wasn't sure if that'd be a good plan also moving forward to help pay it off faster yeah i mean if you're single anything you can tolerate you want to yeah i mean i think you want your your i mean you're okay though what is it i still not if you called us and asked, should you do this, everything you said follows the guidelines,

and we would have said, Nick, buy the house, only we would have put you on a 15. But other than that, everything else lines up. I don't hear anything here to be concerned about. Is there something I'm missing? No, I'm just making sure that that follows. Yeah, no, it's great. And Nick, and honestly, because we tell people if they're in a position, go ahead and get in because housing pricing, house prices continue to go up.

We have no clue what's going to happen with interest rates and everything. But like it's to the point that if you have the money and you're able to buy now go ahead and get in now because it's going to be more expensive next year and the next year in the next year and there's not a bubble there's not a crash coming i mean none of that's happening so if you have the ability to get in go ahead because it's terrible i mean like just i mean we were looking at numbers last week and just i mean from you know for your generation gen z this is the toughest time home buying has been in 50 or 60 years. I mean, it's tough right now. It's not going to be forever, but right this second, it's tough.

High prices and salaries. Income has not kept up with it. So it is. If you want to know more about this, folks, you can go to RamseySolutions.com slash real estate. Or if you need to get a good agent in your corner, go to RamseySolutions.com slash agent to help you buy. And if they're Ramsey trusted, they'll make sure you're doing it the way we teach. They're not going to assist you in doing something stupid

if they're Ramsey trusted agents. So go to RamseySolutions.com slash agent. You did good, Nick. Live from the headquarters of Ramsey Solutions,'s the ramsey show where we help people build wealth do work that they love and create actual amazing relationships rachel cruz ramsey personality multiple number one best-selling author, co-host of the Smart Money Happy Hour, and my daughter is my co-host today. Open phones at 888-825-5225. Samantha in Vegas starts this hour off. Hey, Samantha, what's up? Hi, how are you doing? Better than I deserve.

What's up in your world? Well, I called in because I'm just tired of toiling in debt. I have been a single mother of six, and my youngest is now 21. Yay! You got them out! You did it, Mom! You did it! I got them out. Did they all survive? Way to go! Into that next bedroom. No, they all just do really well, very well. However, except for the youngest one, he's still finding his way.

But, you know, during the course of this, I find myself in close to $100,000 in debt. I am still paying my youngest car note. I'm paying one of my children's college debt deal. She graduated NYU. So I have a little bit of debt there and I'm back in college. So I just don't even know where to start to attack these bills with me already from paycheck to paycheck. Okay. Why does a 21-year-old need his mommy to pay his car payment? Because it's his mommy's name, and he's not working yet.

Well, he was working, but they just laid him off, so I bought it for him as a graduation gift. You bought him a car payment. Okay. How much do you owe on your car? I owe now about $12,000. What do you owe on your car? I owe now about $12,000. What do you owe on his? Oh, on my car, I owe nothing on his $12,000.

Oh, I see. Okay, so what's the other $88,000 in debt? NYU? Yeah, it's NYU, and then, of course, credit cards. How much is credit cards? Oh, gosh. Credit cards is around $3,000 or $4,000. The rest is NYU.

So you got $84,000 for one kid. Yes. Wow. Yeah. Was it a parent plus loan? Samantha, is it in your name or is it in her name? It's an,

it's a parent plus loan. Um, and she does work for, I mean, she worked, she's in a situation where her loans can be forgiven, you know, after so long. I'm not.

Parent Plus, you're on the hook for. Nope. You've got to pay it. So what do you make? Well, I make just under $100, but with bonuses, I make about $110, $115 a year. What do you do? I work in health care. What are you studying? I am studying to get my bachelor's so I can move into a higher position in health care into a director's role.

And what are you paying for that? You know, the company does reimbursement, and I'm doing Sophia credit, so I'm not really paying for that. Just taking up time. That's good. Just opportunities. Very wise. Good for you. Just taking up time. That's good. Just opportunities. Very wise. Good for you. How long is the program, Samantha?

Oh, gosh. If I keep doing the Sophia credit, I'll be done by mid-next year. Okay. Excellent. That's great. Great. I'm trying to fast track that. Yeah, what will you make if you're at about 110 with bonuses for the new position?

What are you expecting? With this company um you know it'll probably start around 120 without bonus probably 130 140 with okay good well you're making progress good for you how old are you 55 uh you're good i'm 53 i'll be 54 okay well i mean you told me your story your Your story leads to that. Okay, good, good, okay. Well, you're a warrior princess. I mean, you fought through raising six kids by yourself.

You're amazing. You could fight through a lousy hundred grand in debt. You could do it. Are you ready? Are you ready to get after it? Because, you know, you're used to fighting battles, and I'm getting ready to put you on the front line again. Draw your sword. You ready to go? I am so ready. I got my pen and pad, and I'm getting ready to put you on the front line again. Draw your sword. You ready to go? I am so ready.

I've got my pen and pad, and I am so 100% ready. I'm tired. I mean, the first thing I would do, Samantha, is I'd cut up your credit cards today. I'd get rid of them, and I would force yourself to live on less than you make with the income you have, and that's going to include these debt payments staying current, but it's going to force probably a different lifestyle to a degree i know you're i know you're not out there all

bougie and glamorous and stuff but i mean it's going to be like hey i'm going to be eating in more uh i'm going to be cutting out i'm going to be cutting subscriptions extras like it's going to be putting you on a tight budget living below your means without credit cards because the credit cards have become the slippery slope for you they're kind of your your safety net and i want samantha to be my safety net yeah no life and then i have i mean and then honestly samantha the the car loan for the son and that's going to be a really hard conversation but it's but it is a hey we're either transferring the loan in your name son or or i

don't even know i wouldn't even do that i think i would just sell it i mean i would get to a point where you're like no no i say listen honey you got you got 90 days to get your button gear with this car and uber eats and everything else and pay it off because otherwise i need to sell it because i'm getting out of debt okay that was my question give him a little time to pay come up with 12 grand and if he'll work 24-7 between now and Christmas, he can pay that car off and then keep it. How easy is it to transfer the time? I mean, he'll have to pay it off, though.

But if he gets behind on payments. If he gets behind on payments, he's done. It's in her name. Done, instantly. Right, right, right. He's either paying the payments starting today, ready, set, go, or we're selling the car. And he's going to pay it

off and get it out of your name because we're getting you out of debt because this is a this is a at best a contingent liability meaning you have to pay it if he doesn't uh at worst it's just straight up you owe the money on the car so rachel's right about that but what i want you to do is get on the every dollar app we're going to put you into financial peace university i know you're already in class but i'm going to put you in another one and show you and teach you how to handle money properly i'm gonna pay for it because i think you're cool oh why thank you i think a woman that can raise six kids as a single mom's a freaking hero and so i want you to go win it's time for you to go win for you but that's no eating out no vacations no whining no life until

we get this stupid nyu thing off the books we're not waiting around on her to work a stupid horrible backwoods job so she can maybe get forgiveness that doesn't come through most of the time on the loan instead i want you to just pay it off fast. I want all these loans gone in two years. Oh, wow. Okay. Yeah. Oh, that would be great. Well, I'm talking about $4,000 a month.

Gulp. Yeah. Okay. Yeah. That gets you out of debt in two years. And that means you have no life, you're working all the time, and you're eating tuna fish sandwiches at work. Hello. And if extra by the way i hate tuna fish yeah i used to eat it when i was broke and when i smell tuna fish i smell broke i can't stand it so samantha is there is there a lot of

opportunity to pick up overtime a lot of health care in that industry we find a lot of opportunity to pick up overtime? A lot of health care in that industry, we find a lot of people are able to get some great overtime opportunities. Is there? Well, I'm salaried, and I'm a department head in the patient access care department. So it is a little different. Okay. Is there anything you can think of as a side hustle while you're going to school that is possible? I have truly thought that up, and I really don't. The only thing I have is like you

know a brief or something and i can't really you know i i can't do that you got to get through school i want you to get through school i think that's important because that's a better future play but i don't know i think you can do this if if a boy child takes care of his own car and um and you lean into this and you chop up the credit cards like rachel said and we get you on an every dollar budget i think you can do this in about two up the credit cards like Rachel said and we get you on an every dollar budget. I think you can do this in about two years. I really do. And then you're going to be up another $40,000 in salary

that can be thrown to this next year when you get your new position. That's going to help. That's going to help you do it even faster. Hang on. Christian's going to pick up and we'll get you signed up for Financial Peace University. We'll show you how to do this, kid. It's what we do. This is The Ramsey Show.

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for the visibility and control you need to make quick decisions. NetSuite's real-time insights and forecasting help you see into the future with actionable data. And when you're closing the books in days, not weeks, you can spend less time looking backward and more time focusing on what's next. And speaking of what's next, download the CFO's Guide to AI and Machine Learning at netsuite.com slash Ramsey. It's free at netsuite.com slash Ramsey. It's free at netsuite.com slash Ramsey. Rachel Cruz, Ramsey personality, is my co-host today. Thank you for joining us. Chris is in Bozeman, Montana. Hi, Chris. How are you? Good, Dave. Thanks for taking my call.

Sure, man. What's up? So I'm going through a job transition right now, and I'm hoping I'm not shooting myself in the foot. I work for a company down in California, and I live obviously remote. I'm taking a slightly lower paying position to try and improve my quality of life. You work remote. Well, I work remote, and if I'm not remote, I'm traveling all around the country. So where's your quality of life going? How often are you traveling? It depends. It's kind of sporadic. I never know when I'm traveling. The most recent request, they called me at 10 30 PM on a Wednesday and wanted me to fly out the next morning, Wednesday night. Is that normal? No, that's not typical. Okay, so that's an exception. What's the average month that's killing you look like? Well, again, it's sporadic. I had six months

in a row where I was gone a week. Like every other week, I was gone for a week. So I was home for a week, traveling for a week, home for a week, traveling for a week. And then now I've been sitting at home. So what were you making? Probably $3,000. $70,000 salary plus benefits. And what are you making now? I'll be making $30,000 an hour with the opportunity for overtime, but no benefits.

What's that translate to? I'm sorry? $60,000 base. I think it's $'m sorry 60 base i think it's 60 days 60 so you're going to take a 10 000 pay cut but with ot possibility and loss of benefit yep and you're at home and it's a 40 hour gig uh when i'm home it's 40 hours when i'm traveling it's oh it's now travel the new one's got travel the new one's not traveling local home every night with my wife that's what i said yeah you're taking a 10k pay cut you're coming off the road yeah yeah but my travel time like if i'm traveling that's a 60 hour week sometimes or typically was you know yeah so i don't get paid for that overtime so this new overtime if

i have to work a 50 55 i gotcha you'll get paid for it i see i see what you're saying yeah does the new job include travel no no well i have to drive around my local town no yeah he's saying i know i was trying to get that i'm trying to get a handle on it all right so um okay anyway um so what's your question is did you goof up taking that yeah am i making a bad financial decision because i do have only if it doesn't take you where you want to be when you're 10 years older how old are you now 33 okay is the 43 year old mad at the 33 year old you not from what i can see okay all right then you fine. So I don't want you to take a permanent step back, but taking a step back to get your life under control so that you can step

forward. In other words, does the new position have some upward mobility, some things you can do with it over the next decade? Does it take you where you want to go? But if you're taking a job, you're just going to be stuck in and you're spinning your wheels and you're going to make less and you're going to make less and you're going to make less and you're going to make less then yeah I would have taken another

job I don't necessarily think you have to stay with that old job it was a bad gig for you but but but you know I don't hear anything here that's devastatingly bad if you took a pay cut in half uh i would say you really screwed up but um uh yeah and his point too was the 70k included weeks of travel and you don't get paid for those extra you know so like even if he picked up some ot if he worked the same number of hours at the new gig he'd make seven that's right or more yep that's right that's right if they'll give him the ot but i don't know if they will or not yeah and especially if you're in a position where you guys can live on that and you're not putting your family in a financial dire strait like i just know for our in a life like yeah if you have the ability to not be gone for a week if you're married with

kids that's real nice real nice you know so that that's fair for sure. Absolutely. Now that in general for folks out there, um, sometimes when people say work life balance, you mean all kinds of different things. All right. Um, and, uh, sometimes people, uh, I need to leave this job that's toxic or I need to leave this job that is horrible. And I'm really not referring to Chris at all. I'm just referring to the subject. Then, um, you know,

I, and the only way I can do that is to make less. Well, I would challenge that. Okay. There, there's two times that people come to us in the last 30 years and they come to us every week,

every week with these two times. I want a better quality of life and so i'm going to change jobs and make less number one which he's not really making any less probably um but the other time they come to us is i lost a job and the new job i'm going to get that I don't even know what it is, they assume is going to be less. Both of those are wrong answers. If you have answer A, a job that's miserable, answer B, a job that makes less, you have not enough answers yet. You need C, none of the above. Remember taking multiple choice? C, none of the

above. And none of the above means I want a job that's not miserable or that is a new job because I lost my old job that pays more. And guess what? You won't find that if you don't believe it and aren't looking for it. People have a negative assumption immediately that in order to be happy, I have to make less. Well, let me help you. You're happier if you make more. And in order to get a new job, you have to make less. What?

Hold on. Unless the new job is terrible, you don't feel happier if you make more and i know but this idea that the only way to be happy is equated with working for a non-profit and i make less money than i've ever made my life no no that's just dumb but i do think there's an assumption that if you've been in a company and you continue to get raises within internally and then you step outside that it could be harder to find the same equal opportunity not if you not if you earn those raises because you're qualified to run that position that you're doing it's that company yes well and i would say if you're overpaid because you're got promoted beyond your competence sure then that would be true and i will say out in the marketplace to

find a job that pays more is out there like we see that a lot you know all the time you're getting paid 20 grand more i mean like it's all it is wild we see that even from internal and we've had people leave here because they get paid 30 grand more yeah hey I'll help you back that's great man it's awesome happy for you so yeah there are there so to your point though you you don't equate okay I'm gonna have a better situation because of the toxic work environment I in or the schedule that I hate that I'm in I can find a job that I love and enjoy and I can make the same or more and that I'm passionate about and good at yes all those things and make more right so this I but but the human nature is to assume the negative yeah yeah and I'm saying push back against that as

an act of your will and assume the positive good Good stuff. All right. Renee is in St. Petersburg. Hi, Renee. Welcome to the Ramsey Show. Hi, Dave. Hi, Rachel. Thank you so much for taking the call. Sure. What's up?

I just have a quick question. I was wondering, I'm on babysit to paying off my car, and now the engine needs to be replaced, and it's an $11,000 repair. I only have $1,000 in emergency funds, so I'm wondering what I should do. Should I take out a personal loan to get the car fixed? No, no, no. That car is gone. How much is it worth? Well, with the engine needing to be replaced, it's worth $5,000, and I owe $20,000 on it.

If it had a new engine, it would be worth $15,000. Wow. Oh, but if it was fixed, it'd be worth $15,000. Okay. Are you single? No, I'm married. All right. The two of you need to sit down and understand that there's lots of places to buy car engines

and the car dealer is the worst one. $11,000 for an engine? What the flip are you doing? Buying NASCAR? No, you're broke. You're going to a junkyard and get a used engine that has 20,000 miles on it, and the car got totaled, and you're going to have some guy under a tree put it in out back of his house that's called a shade tree

mechanic by the way and it's cheap and that's how you do it no and that's going to cost you three or four grand and you're going to save up money and do that real fast you know eleven thousand dollars no no no no no no no no no, no, no, no, no. How do you find an engine, though? They don't even call them junkyards anymore. They call them salvage yards. So you call a salvage yard and just say I need an engine? It's all computerized now. They'll

shop all over the nation. There you go. I'll have an engine. A guy under a tree. That's not what I was expecting. It's a shade tree mechanic. It's an old saying. Y'all heard of it? Anyone out there? Everybody. Oh my gosh.

Okay. Thank you. Thank you. This is The Ramsey Show. Rachel Cruz, Ramsey personality. My daughter is my co-host today. Our question of the day comes from Brandon in Maryland. He says, I've had several friends whose parents took out our parent plus loans and had them go sideways once they graduated. What's

your stance on them? Obviously, they're a bad idea, but if they were taken out, whose responsibility should it be to pay them once they come due? Well, legally it's the parents um name on the bill and so i mean i guess from like a legal perspective it's the parents i mean what what what's frustrating about this whole thing though is that and i've we've heard this multiple times is that you know the student agrees with the parent that they'll pay it, but the parent takes out the Parent PLUS loan. The student fails to tell their new fiancé, and then they get married, and four years later, mom and dad go,

you remember that time you said you were going to pay this loan? And they go, no, I didn't. Yeah, that's what happens. We hear that all the time, don't we? Well, that or the student doesn't pay, and then the parent's like, well, I guess guess i have to pay it and then they're frustrated i mean like it's just it ends up being this like tangled mess relationally uh but whose responsibility once it comes due whoever promised to pay it morally if the kid promised to pay it

then they should go back and pay it they're not not legally liable. So if you said, Mom and Dad, if you take this loan out so I can go to the college of my dreams, and Mom and Dad are stupid enough to go do that, then they sign the note, they're legally liable, but you made a promise to them to pay it. That's you keeping your word. You go pay it. Okay?

Mom and Dad took out the loan and nobody ever said anything to nobody. And then mom and dad come back later and go, you need to pay for your college. No, I don't. I didn't tell you I'd pay it and I'm not going to pay it. So there's no moral contract and mom and dad are up a Creek. Bottom line is you can avoid all this by staying away from the stupidity completely no student loans of any kind are good in no freaking circumstances parent plus loans are stupid that'll help you yeah there you go it's hilarious to me that when people are stupid about education that's an oxymoron isn't it we've lost our stupid minds on the subject of education i will say do you feel like in the most in recent years in the last two years or so since covid i feel like people have

woken up to this though i think that they're in loans yes i think that there has been a backlash against just collegiate in general like just i mean i think people are higher education has gotten a backlash in general yeah i just think that there's some of it was they wanted to charge you the same amount while you were while they wouldn't let you come to campus yep and made you work made you uh study remote and they want to charge the same amount everybody went well listen i was already getting ripped off and this is really screwing me i don't think so so but i mean, I think it's waking up, and I hope that Borrowed Future, our documentary that was award-winning and highly viewed,

had something to do with it. If you haven't watched that, you can watch it on YouTube free and many other streaming services as well, but it'll blow your mind how crooked and backward this whole student loan thing is. And the politicians, you you guys you congress people somebody ought to just smack one of you y'all are just it's unbelievable the student loans are horrible we need to forgive them while we continue to make them that's so intellectually dishonest if they suck and they hurt people why don't you stop it hello the poor little victims of the student loan is and you keep making them and you're the villain

congress it's your fault if you just stop it nobody would have student loans that'd be an awesome thing and the universities would probably lower tuition because nobody's gonna be getting it because people couldn't afford to pay it this the demand people would wake up and go wait a minute this is like real money in my hand that i earned i'm gonna make better value choices about what i study i'm not gonna study left-handed puppetry and pay somebody eighty five thousand dollars a semester for that and call it an Ivy League education. And I'm furthering my thought patterns. Oh, bull crap. You're just shoveling money out.

And by the way, it was my money because I'm the taxpayer. And now you're not paying it because you got a degree that's worthless and you're a barista. And so that's what happens. It's just the whole stupid thing is a scam and so higher education is to blame the congress is to blame weak parents that won't tell their spoiled freaking children no are to blame everybody in this thing and you used to say it a thousand years ago before we had borrowed before we had borrowed future and all of it out you said we don't have a student loan problem we have a parenting problem because you talk to these college students to your point that graduated 21 years old with

120 grand in debt to not an ivy league i mean they're charging insane money now and they want to go and be a missionary or do something you know where they're not making a ton but they got all of this debt. And I'm like, well, how did your parents direct you? Well, they didn't talk to me. And you're like, oh, my gosh, like an 18-year-old is sitting here making a decision that's going to affect them for the next decade of their life. And a parent didn't step in and at least have the conversation. Like, nothing is being said.

Or we get a call like, my daughter told me she's going to this school that we can't afford so we're going to have to take out student loans see there's the problem because um i love rachel but when rachel was 18 and we were spending my money she didn't tell me nothing i told her some stuff but she didn't tell me anything that's not how this works that's backwards so uh there wasn't much dialogue no there wasn't it's like you're going to go to this school and I'll pay for it that's pretty much how it went all three of them went to the same school the dialogue was if you take all these classes you graduate in four years so take the freaking classes yeah that's fair because yeah and I did

that was the dialogue and to be transparent you guys paid for our education but we had to stay in state yep we had to take in-state tuition and we had to graduate in four years if you went four and a half you had to freaking behave and if you did yeah and if you went out of state you don't get to go off the reservation and get my money that's not how it works i'm not going to support your freaking insanity that some communist professor told you to engage you i'm not going to do it you know i went partying in my head i went partying in college if you went off the reservation that meant partying not well i'm talking about losing your freaking mind and you know you're i'm gonna you're confused what you're there for you're there to take

these classes to get this degree and if you take these classes and pass them it's magical you graduate in four years and and the uh we go we're sitting in the orientation at the university of freaking tennessee where the kids went and i went and they they said very proudly we have a 57 percent graduation rate of the people that are sitting in this room 57 are going to graduate and i'm thinking to myself i almost raised my hand and said if they make a 57 in class don't you give them an f you wouldn't be bragging about that that's called failure oh and then they pipe up and say and only 20 of the ones that do graduate will do it in four years and i wrote across my oldest daughter's little orientation packet so have a freaking plan in black magic marker while this

idiot was on stage telling us this i mean how are you bragging about a 57 graduation rate that's failure and this is another lesson that you take out loans and you may not even get the degree and you're paying money back for a degree you never received either yeah 43 percent of the time yeah apparently you don't get the degree oh well brandon from maryland's question of the day hope that uh hope that segment that was for Well, I mean, really. Guys. I know. I know. It's hard. You can go to college debt-free.

You choose a school that is reasonably priced. It's typically an in-state school. Yeah, but honestly. $12,000 a year will put your little butt in a state school right now. 14. I mean, community college. It's getting worse and worse. It is.

It is. Okay. And you can go. It's getting worse and worse It's worse and worse It is Okay And you can go It's not going to be that fun For free in most states You can go to a community college For two years To get your prereqs done

Yes I mean there's a plan To go about it It's not the most glamorous You're not studying anything That matters in the first Two years anyway usually Yep

Yep So there is a plan And it probably doesn't look Like the shiny plan That you always thought Of college And here's an idea Get a degree

It'll help you get a job. Whoa. That was insightful. This is The Ramsey Show. Rachel Cruz, Ramsey personality, is my co-host today. Thank you for joining us, America. The best way to make the most of your money is by telling it what to do. Creating and sticking to a monthly plan known as a budget, the dreaded B word.

Every dollar needs a name. Every dollar needs a mission. Every dollar needs an assignment. So we named the world's best budgeting app, EveryDollar. It's the EveryD dollar budgeting app tens of millions of people have downloaded and are using the app you can keep a pulse on your spending make progress on your money goals tell your money what to do instead of wondering where it went pretty amazing guys download the every dollar app for free in the App Store or Google Play or even at EveryDollar.com. Free. Jarrett is in Indianapolis.

Hi, Jarrett. How are you? I'm doing good. How about you, Dave? Better than I deserve. What's up? Just wanted to give a quick shout-out to Mr. Haney. He put me on the Dave Ramsey Show seven years ago in high school,

so I just wanted to give a quick shout-out to him. He's been amazing, and he's the reason I know you man he's awesome love it love a good high school teacher good stuff man how can we help today yeah yeah so my question kind of comes more long term than short term so me and my wife were kind of thinking about buying a house like whenever we kind of get settled in with the economy and everything. And we're just trying to think about it long-term because she wants to be a stay-at-home mom, which obviously like would take away her income. And we've talked about it. She would be open to doing a part-time job, but probably not full-time, you know, with the kids and everything. So we were just curious on like, how do we save up for a down payment on the house whenever like that down payment?

Like it would be saving with two incomes and then we'd go down to one once we move in. So I'm just trying to avoid being house for honestly. Yeah, I mean, I would just do the math that you're I would do the math on one income versus two. You could save up the down payment pretty fast with two incomes. But once you guys move in and you want to go down to one i would make sure the formula worked with that one income do you guys have kids now uh no no it's like very long term we're just trying to plan ahead as much much as we can so that when that moment comes we're like you know we're we're ready for it yeah so rachel's right run your house payment on the remaining income after she comes home

being no more than a fourth of your take-home pay on a 15-year fixed but i wouldn't do that now i mean you guys don't do that today but when you're doing the purchase but you don't have kids right now yeah and so you know and we don't know what you're going to be making yeah that's what i was going to say too so it's not what you make now so right now your job is stack cash because here's the other thing the more down payment you put down uh the bigger a house you can buy with that exact mortgage let's say that at a fourth of your take-home pay you can afford 250 000 on a 15 year at your then income whatever you're making at that time and she comes home with and stays home okay then it you know obviously

$250,000 is the loan amount but if you had a hundred thousand saved that means you're at 350 if you got 200,000 saved you're at 450 and so the bigger the down payment the bigger the house or the bigger you know that you put down on the house so the less the payment or you take you know you take out less of a payment than the formula allows. But Rachel's right. You just need to be doing, for today, your job stack cash and then just be cognizant when the purchase time comes to run the formula based on the remaining income.

Because if you run the formula based on a fourth of your take-home pay with her income and then she comes home, you are going to be house poor. That's going to strap you. And that's not going to work for you. Travis is in Buffalo. Hey, Travis, what's up? How are you doing? Better than I deserve, sir. How can I help?

Well, I was calling basically because, you know, I've heard it said, you know, a lot of times basically in summation that your number one wealth building tool is your income. I say it all the time. Right. Now, for the person like myself, I'm on the lower end of the income ladder. I'm bringing about $40,000 a year or so. And I've been paying attention to what you've been saying.

And I was thinking was thinking like you talk about mutual funds and investing and i have limited to no knowledge so i was wondering how somebody maybe in my position could start to build towards retirement okay yeah well i can say this first and foremost i think the phrase and you correct me because you say it, but the idea that your income is your largest wealth-spending tool because your income, Travis, the reason we say that is because if you use your money for you, meaning for your investments, you're going to be earning interest for you versus if you have two car payments and a student loan payment

and all these payments, debt, and your income is going to those things, and then interest on top of that paying for the bank, you're making the bank wealthy versus making you wealthy, if that makes sense. So I think it's less about the exact number of your income, and it's more that philosophy of, hey, I'm going to use my money, regardless of income, for me, and making myself wealthy and not the bank.

A Toyota motor credit being wealthy is not my concern. My concern is my family building wealth, and so I'm not going to give Toyota Motor Credit a car payment or whatever bank you want to name or car company you want to name. So how old are you, Travis? I am 41. Good, good for you. What do you do?

I run, I manage a restaurant. Good for you. Okay do you do? I run, I manage a restaurant. Good for you. Okay. And how long have you been in the restaurant business? About 12 years. Good for you. It's hard work, man. A lot of hard hours, too.

It is. And you put up with a serious amount of crap. You're right. All right. So our goals, what we teach you, is a process called the baby steps, which is to first have $1,000 saved as a starter emergency fund, then second, become debt-free everything but the house using the debt snowball, third, build an emergency fund of three to six months of expenses,

and then fourth, start investing 15% of your income. In your case, if you had no payments but a house payment and you save 15% of your income, well, 15% of $40,000 is $6,000. That's $500 a month. If you invest $500 a month from age 41 to age 61, you will be a millionaire. Wow.

And that's if you never get a raise and i suspect you're probably going to get a raise i suspect if you can manage a restaurant in buffalo new york you probably could manage a better restaurant in buffalo new york that pays 75 000 instead of 41 so some career goals are probably going to cause you to make more throughout your life i doubt you're stuck at 41 in perpetuation it's just where you are today yes yeah well i appreciate that i mean i should point out though i mean i don't know if this would matter but as of today um i have no outstanding debt good okay then you're on your way you have an emergency fund of three to six months of expenses? Oh, yeah, yes. Good.

How much do you have saved? Well, in the savings account, I got about $45,000, a little bit more. Excellent. Excellent. You are on your way, man. Way to go. Way to go. Do you have a 401K at the restaurant?

Well, I didn't. See, when COVID came, i was with a financial advisor and no the the restaurant doesn't offer direct unfortunately but uh when the market collapsed she advised that we should postpone maybe looking into investing you know you know the beginning phases of that yeah okay so let's let's get you let's get you somebody set up to do a Roth IRA for you and your wife, and let's get going. And let's get $500 a month going in, minimum. And it's 15% of your household income.

So if you're married and she makes money, that's part of the formula too, by the way, and that accelerates things even more. But if you want to know who we tell people to go to in your area, just go to RamseySolutions.com and click on SmartVestor, and you'll find a SmartVestor Pro there that has the heart of a teacher, and they'll sit down and show you the numbers I was just talking about. You already know how to live on less than you make. You don't have any debt. You already know how to save money. You have $45,000. You're already a champion. We've just now got to convert some of those habits into making you into an investor, not just a saver.

And when you do that with your Roth IRA, if you'll do that every stinking month for the next 20 years, you'll be a millionaire. Promise you. So, folks, the numbers are $100 a month saved from age 25 to age 65 is $1,176,000. Now, he's 41, not 25, but he's at $500 a month, not $100 a month. You're following my math here. I hope you are. I didn't just dream that number up. It actually ran through my little brain.

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. Rachel Cruz, Ramsey personality, number one best-selling author multiple times over, and my daughter is my co-host today. Open phones at 888-825-5225. Sarah is in Fresno, California. Hi, Sarah. Welcome to The Ramsey Show. Hi, Dave. I'm so glad to speak with you. You too. I was hoping you'd help me with some situation. I have so much. There's just a mounting of stress, death.

I don't know how I don't see a way how I'm going to get rid of this. I've been listening to you for a couple weeks now and I'm getting familiar with your baby steps, but I don't know how I'm going to be able to climb out of this pit hole that I've dug myself into. I'm sorry. Tell me about it. What kind of debt have you got, kiddo? I have over $165,000

in unsecured debt. That includes cars, personal loans, credit card. Yeah. Give me a little breakdown. How much do you owe on your car? I have three cars. One is $45,000. I currently owe. I have a $31,000 car and a $14,000 car. And a 14 or a 40?

$14,000. So $45,000, $31,000, and $14,000 on cars. So I take it you're married. Yes, I am. I have a $67,000 in personal loan. I have $20,000 in credit card. I don't know what I must have. It just occurred in like two years after I had my baby.

I guess I went crazy. why do you have three cars um the first one it was a very old car i had about 20 years so that one died it was over 200 000 miles so i went and got a a car a van that kids and then I should have had I found you earlier maybe I would have not made all these decisions but I mean you still owe money on the car I guess the dead ones sitting in the driveway I'm driving it that that's my that's my personal car you're dead when you know work the dead one is yeah oh so it's running it didn't die it's really dead um no you drove it to work oh no that that's my new car no i'm asking what happened to the dead car the 14 000 where is it

oh no no i'm so sorry uh the one i got to uh the old one that i had over 200 000 miles that one is still sitting on in the driveway that's what i,000 miles. That one is still sitting in the driveway. That's what I said. You have a dead car sitting in the driveway that you owe $14,000 on. No, I don't owe anything on that one. Okay, what's the third car you owe $14,000 on? So you have four cars. Yeah, one dead, three that I still owe loans on.

One is for my daughter, and one is my husband, and then the van is mine. Okay. How old is your daughter? She is in college right now. I see. Okay. And how much do you make, honey? I make over $100.

What does your husband make? My husband makes about $35, so our combined income last year was $156,000, I think. And this year is probably maybe the same. I'm not working as the full crazy load, so it's going to be roughly around there. How do you think we can best help you hon i don't know i i i'm listening to your show watching your show on youtube and i've seen that you've helped out a lot of people and i don't know i'm thinking of maybe just following bankruptcy but you're not bankrupt you just got to stop some of this you just got to stop some i don't know if i should return the call or i don't know why slow down slow down slow down

okay it's just so it's overwhelming so when i breathe a second okay take a breath take a breath so here's what we got to do are you guys ready to turn your life upside down to keep from feeling this way? I am. I feel so lost. What about him? I think he is too, and I just need to get out of this. I make him about around close to $9,000 a month, and all of those money goes to the bill.

It goes to car payments. It goes to everything. Because you guys just buy a car every time you change clothes you guys got to quit buying cars you need to sell some cars okay so the dead car in the driveway should be sold immediately and you need to sell the other two and get you two five thousand dollar cars that you pay cash for you got you got two twenty five hundred bucks a month going out in car payments yes yeah yeah no wonder you're broke it's sitting in your driveway all your stress is your cars because the personal loan and the credit cards came from the fact that you didn't have any money

because you gave it all the car company and so you went and used a credit card because you're broke right okay is that right okay so you're gonna have to sell some cars sarah okay you have to get out of these stupid cars you cannot afford them they're killing you they're causing you to be on national radio crying you need to be rid of these cars amputate the van it leaves you need to get rid of these cars and the one the driveway i mean you just can't keep collecting vehicles and be anything but broke and that's what you guys have been doing so and a conversation with her with your daughter that she's not she you guys can't afford a car so yeah she can't either she's going to get a job while she's in college and start paying the payments on that 14 or we're

going to sell her car okay yeah yeah rich people give their kids cars not broke people okay and you're broke and stressed and telling me you think you're bankrupt you don't give a college kid a car when you think you're stressed and bankrupt. So you're going to have to undo some of these, and it's going to be painful, but it's going to be less painful than the way you feel right now because you can't even breathe right now. No. Yeah.

I'm sorry, honey. I've been where you are. It's no fun. But I will tell you this. I can show you what to do, and your life is going to be hell for the next 18 months, and then you're going to be free. It's going to be very uncomfortable for the next year and a half, and then you'll be free for the rest of your life.

But you're going to sell everything in sight. People are going to be mad at you. People aren't going to like you saying no so much. And I don't care. And you can't care anymore. You've been trying to fix everything for everybody and you just run around and buy stuff. You've got to stop it. Yeah. And hold on the line, Sarah. Christian will pick up and we're going to get you FPU, the nine lessons, and you and your husband need to sit down this weekend and binge them. Watch all of them. Yes.

And do a budget, and we'll give you every dollar premium for that. And sit down and control these expenses as well. And that's going to be cutting your lifestyle. Drastically. You live in Fresno, one of the most expensive places to live. Drastically cut your lifestyle.

Rachel Cruz, Ramsey Personality, is my co-host today. Open phones at 888-825-5225. So, apparently when I am out on vacation, you guys take calls and the people commenting and on YouTube don't think I would have given the same advice you give or something like that. It will happen every now and then. Which is usually wrong, by the way. I mean, you guys are very consistent, just like I am.

Yeah. I mean, yeah. Some of it's a very black and white issue, right? What do you do? You sell the car, you know, all of it. And then sometimes you get a call that you're like, oh man, I mean, here's what I would do in your situation. I don't know if Dave would do this, but this is what we would do. You and George had one, you know, about an elderly lady a few days ago that y'all went back to his call. So I told Dave today, I was like, I want to go back to a

call Ken and I had because it's gotten close to like 2 million views on Instagram. We clipped some of it. Good Lord. And in the comments, people were very opinionated that we gave the wrong advice. And so I was like, well, and everyone's like, I wonder what Dave would say, because he sells, he says, you know, rice and beans sell everything. And the kids think they're next. You know, he's on this you know rampage against debt and he would not have probably given this advice so I asked James did you clip it James okay we're gonna play the clip and I'm just so curious if you agree with me or not

my daughter is 22 and she just graduated from college with some student loan debt and about a year ago she was able to get on the pre-sale and buy three tickets for her, my older daughter, and myself to go to a Taylor Swift concert in Indianapolis. We got them for like $209 a piece. So now I'm seeing these resale prices. Oh, it's crazy. Oh, it's crazy. It's insane. And so I told her, like, why don't we sell those tickets and you can knock down so much of your student loan that you'd be so far ahead? She says, absolutely. It's non-negotiable. It's a bucket list item. She's like, probably you, Rachel, a swifty. And this is, you know. And it's her money, right? No, it was my money. Oh, OK. It was my money so i paid for them but you know i mean this is and for me too i'm looking at like you know she's iconic i would love to go to her concert my daughter of all the people that she could take she wants to take her sister and me you know i

mean that's great it's going to be a fun thing and what would your what would your take be what rachel now walk us through what do you think you could make on these tickets? I'm thinking they would average out between three, four grand. A ticket. Yeah, per ticket. So her student loan debt is $24,000? Correct. And that's what you would want to put the money towards? Absolutely.

100% of it would go to there. Would you be putting $9,000 plus towards her student loan if you hadn't bought these tickets? I would not. I wouldn't resell these tickets. Here's the deal, Jill. You weren't planning to cut a check for $9,500 to put on your daughter's student loan ever. I was not. So my whole point is...

This is like a windfall, right? If $9,500 fell into my lap, I might do that. I get it. But this is your daughter's and it's a once in a lifetime concert. Oh yeah, I agree. You go, Jill. Go to the concert. You weren't going to do this anyway.

And I think your daughter said absolutely no way. And I think it creates an unnecessary tension. She's 22. She needs to pay the thing off herself anyway um there's a lot of reasons i want our audience to know i'm not just i just think when i will look at something like this this is about the emotional not the fight rachel i fully expected you to be a swifty i'm very disappointed in ken anything having to do with disney or taylor swift rachel's completely on board so um i was shocked that ken was like he just jumped in there as a swifty i was so happy about

it and listen i gotta tell you i'm a huge admirer of what taylor swift has built i do not i'm not a consumer of her music but that's just because i'm an old guy um and you know uh but uh she's amazing uh performer business person yeah what she has built is iconic yes i mean she's it's you have to stand back and go wow regardless i mean just for 14k um but the uh um but but yeah but that's uh uh okay so now now but and you know what i try to think about things like where is it hard for me because what would i because it would be hard for me personally like if a guy calls up and and he's got a bad he's got a ski boat okay which i love my mastercraft ski boats okay that mastercraft is the best ski boat i love them and telling a guy

to sell his mastercraft to get out of debt is very hard for me yes yes so for you telling somebody to sell a taylor swift concert or avoid a disney vacation is very hard okay disney i could put this is like a once in a lifetime thing oh whoopty doopty it's a concert if you had a here's this if you had a no by the way it's a ski boat i'm putting it in perspective for you though if you had a trip booked with daniel and his son eli you got because this is what it was for her her daughter right um a trip booked and you had you had planned it out Daniel had student loans we can go here for a second Daniel had student loans notice it and you could sell the trip for three times from what you bought it for would you do that and have and put it put it towards Daniel's loans the the nuance in the call that that does change the answer for me okay is she gave her daughter a gift of some money 600 bucks of tickets no she gave her daughter 600 and the daughter

bought the tickets with it yeah for the tickets though yeah yeah she gave her so she gave her gift so she's no longer in control of this. Oh, I hear what you're saying. Yes. So the mom is not in control. The daughter is in control of it. Correct. And she bought tickets. Now, if the daughter called me and said, my mom gave me these tickets, gave me $600 to buy these tickets, and I can sell them for $12,000,

I would ask her, if you had $12,000 sitting in the middle of the table and you didn't have Taylor Swift tickets, would you put it on your student loans or would you put it on the things? And I would tell the daughter to sell the tickets. But I'm not going to tell the mom to renege on a gift. Yes, yes. Okay, that makes sense. Yep, that's kind of what our train of thought was. Because the mom, that's a control issue.

When you give someone a gift and then you try to take it back, that's not a gift. And there's some politically incorrect things we used to call that, okay, that you can't say anymore and shouldn't. But anyway, taking something back after it's a gift, you shouldn't do that, right? And so the – and I would never recommend to someone to do that. Yes. So for the mom. So so the mom is who called you.

You tell the mom. I would advise the daughter to sell the tickets, though. Yes. So if it was the different person in the situation calling. So Daniel called and said, I'm in debt and I can buy this for three. And I know and I can sell these tickets from a trip that I have planned with my dad and my son, should I? Yes. Yes. Because, let me just tell you, I mean, what is more important in the scope of the next 50 years of your life?

Getting a student loan paid off or going to a Taylor Swift concert? I don't know. The memories are forever. No, they're not. Yeah, they are. I don't remember a memories are forever no they're not um yeah they are i i remember i don't remember a lot of the concerts i went to i went to for other reasons for other reasons dave no just because it was a long time ago i can't even tell you that all the concerts i didn't go to but um i remember my first concert with my with mom and denise

okay that's wonderful and then you still think about it to this day. Oh, yes. Celine. What a woman. And that's worth how much? Not much. Probably not even what we paid for Celine at that time, because that was a Vegas thing, if I remember.

No, no. She came to Nashville. Oh, she was in Nashville. Yeah, this was way back in, yeah, my heart will go on days. Okay. Like Titanic. I know, but that's what's hard about life that's what's hard about life is a trade-off there's always a trade-off and you just

have to make a value decision and one way you make decisions is if i had that amount of money in the middle of the table if i have 24 000 in student loan debt and i wake up and there's 12 000 laying in the middle of my kitchen table do i go buy taylor swift concerts or put it on my student loan you put it on your student that's not it's a no-brainer for me now that's talking to the daughter but i'm never going to tell the mom to go back so i'm not really going to say your all's advice was wrong yeah but it's a great it's a great discussion particularly because we get to discover that to my great disappointment ken coleman is a swifty this is the full letdown of the call right here i'm just saying so good i mean he just jumped right on it he didn't even let you do it i know

you should go just go i couldn't believe it's taylor freaking swift you should go it was so great it was so great and by the way by the way we all are fans of taylor in one way or another rachel is a worshiper of town. No, I do love her. This is The Ramsey Show. Buying a home, selling a home in this market, if you do it wrong, it could be a curse and not a blessing. And real estate's not always a blessing. It's only a blessing if you do it right and you do it in the right way within your own finances. We'll help you do that. And one of the things we've learned to do is to identify

high octane, high protein, get her done real estate agents. Now, this is not your uncle Charlie who got his license three weeks ago and hadn't sold a house yet and wants to sell your largest asset. No, you don't use Uncle Charlie. Not if you're smart. You just say, Uncle Charlie, I love you, but you're not my real estate agent. No. Or your little friend down at church who's never done anything. You got no, no, no.

You get someone that knows what they're doing and has done a lot of transactions to help you with your deal. And then you'll get your deal done, and you'll do it right. We call them Ramsey Trusted because we have vetted them, and they are trusted by us. So if you want to find the Ramsey Trusted real estate agent for free that will help you buy or sell the way Ramsey teaches and that are professionals and that are high-producing agents,

just go to ramseysolutions.com slash agent. Catherine's in Salt Lake City. Hi, Catherine. How are you? Hi, Dave and Rachel. Thanks for taking my call. I'm excited to talk to you. You too.

What's up? Okay. My question is, should we – well, I hope this isn't my inner child coming out, and maybe you'll have to talk to the president to me, but my husband and I would like to buy a vacation home. And I'm wondering, in order to do that without debt, we would need to sacrifice part of our retirement for this. Okay.

So I wanted to get a take. Okay. It would depend on the ratio. Okay, because whatever we put into the toy is going to stop producing income, and what we have left has to produce enough income to make us all smile. So what's the size of your nest egg? Total, our net worth is $3.6 million. Good. Okay. And how expensive a toy are we buying?

Probably $400,000 to $500,000. I would buy it. So you would sell an income-producing piece of real estate and buy it? Or an income-producing mutual fund and buy it. And by the way, I have. Okay. I have a nice lake house. Really nice lake house. And it's one of my favorite it's

one of my favorite places on the planet and um not only that i'll go back further we bought that house for 104 000 in 2000 the lake house um the kids grew up skiing off of the dock we put on at that time and later on we bought the little house next door which was the same size gave picked them up and moved them and gave them to the local sheriff's department for rehab houses and built a big house across where those two used to sit and that's where we are now we've been in that house since 2012. So we upgraded. So I've done it twice. The $105,000 felt like it was a lot more than the big house did. But it was a bigger percentage ratio-wise. Your ratios are fine.

I'm curious, Catherine, the $3.6, I'm just curious, what are they in? Because you mentioned selling and income producing all real estate, or is it some mutual funds? 2.2 is investment real estate. And then our home is about 530. And then 401K's IRAs is 770 and about 160 in the bank. How old are you? We're 54. Okay.

All right. So the only way to get out the money is sell one of the pieces of real estate, because otherwise you'd be penalized on the 401k money. Yeah, that makes sense. Yeah. I would do it. Where's the property? Just curious.

It's in St. George, Utah. Okay, so it's a mountain property? No, it's the Red Rock kind of desert. Oh, got it. Oh, okay. That's fun. That's cool. Yeah. Because, I mean, mean yeah but i'm looking at

ratios all right so if you call me up and you told me you had a net worth of 1.5 million and your house was 500 and you want to put 400 into a toy i would say no because it would leave you with only one third of your whole net worth working for you. The rest of it's sitting. Your house and your toys are sitting. Does that make sense? Yeah. That's why I answered it, by ratios. And so it's a small enough percentage of your world that it won't burn your world down.

Okay. Yeah, you guys have done a very, very good job job did you inherit a bunch of money how'd you end up with 3.6 at 54 we we bought the total money makeover probably 15 years ago uh highly in debt and we worked our way through it and um yeah so we came actually a year and a half ago and did our debt free scream and we've and we never will go back. So you're Baby Steps Millionaires. Way to go. What do you guys do for a living, Catherine?

I'm just curious. We both work at a university. Okay. That's great. Good for you. Well done. Yeah, excellent. You're heroes.

So, again, it's the ratios. That's what we're looking at. And another way of looking at that folks for katherine is um if you're going to buy a toy if you're going to consume the money okay which is what you're doing when you buy a vacation property because it does not create income unless you rent and if you have to rent it out you probably shouldn't do it because it's going to drive you nuts if you want to own rental property on rental property, if you want to own a beach house or mountain house, buy it. Okay. But this idea, I have to rent it to justify it means you're probably too broke to buy it. So, um, anyway, the, the rule I

use on stuff like that, if I'm going to buy a car or I'm going to buy a toy, a property or something like that, that's not going to create money is, uh if i put that my amount of money in the middle of the fire pit and burned it does it destroy my life in other words if we took 400k of your 3.6 and burned it your life doesn't even change other than the tears right yeah and that's that's the way i'm looking at it i mean it doesn't your life does not change i mean it does not substantially change you're 54 you have 3.6 which means when you're 74 you're going to probably have 20 to 25 million dollar net worth and that's not going to change dramatically by this one purchase and this purchase will go up in value it just won't create income while it's going up in

value you know the lake house has gone up dramatically it's crazy how much money i've made on that and um yeah and you just add dave ramsey rumors to it it even gets better or worse i don't know well i mean it's just people just make up stuff i mean my neighbor told me the day he heard i sold it for 22 million i said i would because it's just people just make up stuff. I mean, my neighbor told me the other day he heard I sold it for $22 million. I said I would because it's not worth anywhere near that. Sold. Sold. But the rumor's going around, you know?

So anyway. Yeah, Catherine, do it. You're in good shape. Great job. Buy the Taylor Swift tickets. Do it. Dave's in a giving mood. I'm just being so kind to oh my

gosh everybody do whatever you want um but is there is there an element though that you run numbers i mean because you didn't hear in this scenario but to say okay by the time you're 62 you're going to be in retirement age uh you want to be able to have x amount coming in like that four to five percent you don't even mean like do you get granular with it though like this was a little flippant. You could, but the ratios will take care of that for you. So in this case, she said they had $780,000 or whatever, $800,000 in their 401Ks, okay?

If that's in good mutual funds, it's going to double every seven years. She's 54, so it's 61. That'll be 1.5. At 68, that alone will be $3 million, just her 401K money. And the bulk of theirs is not in their 401k bulk of theirs in real estate right and the real estate's going to continue to go up too and create income so you just run those numbers out and that's how that's how i can get to 25 million pretty quick with them or 20 million and they're also savers they're going to continue to save

and they obviously i'm guessing also that they have a pretty substantial income to create that in 13 years. Right, right. They turned that around very quickly, pretty dramatically. So they're rock stars, man. They touch down. You win the Super Bowl. That's what it's for. And so you live like no one else so that later you can live and give like no one else.

You don't drive a hoopty because it's fun. You drive a hoopty so you never have to drive one again. It's not a badge of honor. You drive a hoopty so you get a good car later. This is The Ramsey Show. Our scripture of the day, Ecclesiastes 10.10. If the axe is dull and its edge unsharpened, more strength is needed. But skill will bring success.

Tom Brady said, to be successful at anything, The truth is you don't have to be special. You just have to be what most people aren't consistent, determined and willing to work for it. I would say that I'm probably 80 to 90% in agreement with that, but it's hard for me to say out loud that Tom Brady wasn't special. One of the best quarterbacks to ever live in the NFL. I mean, there's no question he was special. But his work ethic, and, you know, I don't know Tom personally.

I know Peyton, and I've spent time with him. And what was special about Peyton, not only is he a physical specimen, but, I mean, he's huge. But he's got hands like a ham and so he has a different grip on a football than I do I can just tell you that okay but he also had one that he and Tom are both renowned for their film work their their commitment to proper exercise and proper care of their bodies. Their commitment to the mental aspects of the game. They both had a work ethic that shamed everyone else on the team in both cases. And they're both iconic. Some of the best quarterbacks to ever live.

And again, I don't know that as much about Tom as I do about Peyton. But just looking in from the outside, I suspect that's true. Malcolm Gladwell said it in the book Outliers. He said you need to spend 10,000 hours of excellent practice, meaning getting better each time you do the repetition, not just doing it over and over wrong, but 10,000 hours at something and have a little bit of a gift at it to get to be Tiger Woods, to get to be Brad

Paisley at a guitar, to get to be Peyton Manning or Tom Brady with a football. You have to spend 10,000 hours to get to world class. Yeah, because I think the argument would be you could spend 10,000 hours and never be that because you're not Tom Brady. Yeah, I could spend 10,000 hours and never be that at NFL. Right, right. But then I could spend 10,000 hours and never be that at NFL. Right, right. But then I would also say that there's like, you know, athletes, athletic people in the world, in the history, but because of the work ethic and mental game,

they never got there, right? That they had the. Because they didn't have the work ethic. Exactly, exactly. Yeah, yeah, yeah. Oh, definitely. So it's a both and for sure. It's aggravating as crud for coaches.

You know, somebody who's got the talent and won't apply themselves drives you nuts so but um yeah you have to spend and you know our situation is not different i've got more way more than 10 000 hours on this microphone you're probably approaching 10 000 hours on the microphone and on stages and so forth at this stage and and you know again major nationally known brands uh you look at our social footprint the number of people that brand recognize one of us um if you were to do a survey on branding and so forth we know what our numbers are it's but but um i've done this for 30 years so in in this space which is a fairly little tiny space but you know that's where we that's where i've applied myself and that's that's where this comes out so it's interesting it's an interesting discussion there's a combination

between talent and sweat and um i think there are people that you could put them in front of a microphone uh for 15 years and they still would suck you know i mean i think that's true i think that's true about me in football right i'd still suck and i'm not i don't have that natural physical ability never did uh had a little bit but nowhere near that stuff paul is in uh california hi paul what's up hey david it's a pleasure talking to you how are you guys doing today better than we deserve how can we help so uh first of all i just want to say i took care of my mom for about seven years and i used to listen to your show every day when we were going through chemo and all this stuff. And we had a ton of debt at the time, and your show seriously got me through it

just because I could see a light at the end of the tunnel of what to do in the future. And so I just want to say thank you genuinely. Where I stand today, and I want to hear your thoughts, so I'll keep it brief, is I'm 30 years old. I'm getting married in August. I currently live with family, so not paying any rent. I'm purchasing a home in August and putting $150,000 down. My gross income is one 80 a year. I have a $45,000 emergency fund fully funded for six months or even longer. I have in terms of investments, I have only one real investment, which is Apple

stock. I have about $50,000 that I just never touch. It was something that, you know, I just wanted to purchase and I keep. So my question is, now that I'm buying a home and putting a significant down payment and I've followed all the rules, I don't know where to start with investing and doing it with mental peace because a few years ago I made some money on Tesla and that was, although it worked out great, I look at it now and it was just a super stressful time and it almost kind of affected my own relationship, which is, she's amazing now we're getting married. But my question is, where do I start with investing and how do I know how much to put towards paying down my mortgage versus investing versus retirement?

Yeah, I mean, it's a great question. And I think the bulk of the stress came, Paul, because all your eggs were in one basket. I'm like, you're not diversified when you were investing and still aren't with the Apple stock, right? The single stock way, it is going to be more volatile and it will be more stressful. And so when we look at investing in general, but specifically with retirement, it will be in more of a mutual fund aspect, which is 90 to 200 of those stock. So your diversification through it is going to give you more peace and your outlook on it has to be different. You's, you're not worried about what it's doing today or next year or in 10 years, you're really saying, Hey, I'm putting

this money in and I'm not going to see it until I'm 59 and a half when I can take it out without penalty. And so it's a long game you're playing when it comes to investing, where it kind of just sounds, it sounds a little bit like you've played the short game uh and so the that mentality i think would shift and i think would lower your stress too so paul um you're getting married in august yeah congratulations and you're closing on a house in august yeah 10 days before the wedding did she pick out the house um it was a mutual decision we both wanted the we both out the house? It was a mutual decision.

We both wanted the house. Okay. So you didn't buy a house and then tell your new bride, ta-da. No, no, no. It's been a journey we've been on to find the right home. It's a new construction, so it just ends up closing 10 days before the wedding. Gotcha. Okay, good.

That solves number one problem. Dave thought Paul was just taking over. Well, he's a man on a mission. I can tell that. So now you've been listening to us for years. Yeah. So you know the baby steps, right? Yes, I do. Okay, so you know that you don't have any debt and you have your emergency

fund in place and so that that baby step four we would tell you to do what 15 for retirement there you go that's your answer you and your spouse are going to sit down start putting 15 of your new combined household income. Yeah, how much will she make or is she making? She's a florist and she's starting her business, so it's going to be about $25,000 initially. Okay. Okay, so whatever your household income is, 15% of that at Baby Step 4 goes into retirement. You don't have children yet, I assume.

No. Then baby step five is moot. And anything above 15% going into retirement, you either consume it, you give it, or you put it on the house. And you probably ought to do some of all three with the money above 15% of your income. You should not put 20% in and you should not be doing any investing other than retirement until your house is paid off. Okay. So I appreciate that. I know you talk about smart investor pros. Is there a specific book because I follow all you guys and I watch, there's just a lot of content to consume, just busy with life, but is there a place to go to understand what to invest in and kind of where to start doing it the right way, I guess? Yeah, it's pretty basic. I mean, again, if you've listened to us this much, you've heard me talk about the four types of mutual funds, growth, growth and

income, aggressive growth and international. And I picked mutual funds that hopefully have a 10 year or longer track record inside your 401k. We're looking for Roth. We're looking for match first, Roth second, traditional third, and good mutual funds, long track record. And that's how I do it. It's really not much more than that to it. I'll send you a copy of the Baby Steps Millionaire's book, which has a lot about investing in it because it shows you what the millionaires have done and it'll help you in your um because you're going to be one pretty quick at the rate you're going and well done paul yeah i mean even with the your mom's taking care of your mom and yes you've done it you've been you've been a stand

up guy across the board yeah well done that puts us out of the ramsey show in the books we'll be back with you before you know it in the meantime remember there's ultimately only one way to 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 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. 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.