The Ramsey Show - It’s Never Too Late to Clean Up a Financial Mess

Episode Date: January 10, 2025

💳 Share your thoughts and you could WIN a $500 Gift Card! 💸 Start taking control of your money in 2025 at our free livestream 📱 Listen to the full episode for free in the Ramsey Network app. George Kamel & Dr. John Delony answer your questions and discuss: "We have over $2.5 million of debt," "Where should we start investing?" "What's the best way to buy our first home?" "Should I pursue public service loan forgiveness?" "Where should we build our dream home?" "My husband hasn't filed taxes in 20 years" Support Our Sponsors: 🌱 Get 10% off your first month of BetterHelp ◎ Get 10% off Byrna product bundles and more! 🏥 Learn more about Christian Healthcare Ministries 🏡 Get started today with Churchill Mortgage 🔒 Get 20% off when you join DeleteMe 🏦 Go to FAIRWINDS Credit Union for an exclusive account bundle! 🥗 Save 15% on your first Field of Greens order with code RAMSEY 💸 Learn more about opening a high-yield savings account with Laurel Road 💻 Visit NetSuite today to learn more 🗂️ Use promo code RAMSEY for 18% off at The Nokbox 💵 Learn more about Timothy Plan 🏛 Get started with YRefy or call 844-2-RAMSEY 🔐 Visit Zander Insurance for your free instant quote today! Next Steps 📞 Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET or click here! 📈 Are you on track with the Baby Steps? Get a Free Personalized Plan 🏠 Get organized and prepared to buy or sell a home.  💵 Start your free budget today. Download the EveryDollar app! 🎟️ Get Tickets to the Money & Relationships Tour 💰Watch 90 Day Money Makeover. Listen to more from Ramsey Network 🎙️ The Ramsey Show   🧠 The Dr. John Delony Show 🍸 Smart Money Happy Hour 💡 The Rachel Cruze Show 💸 The Ramsey Show Highlights 💰 George Kamel 💼 The Ken Coleman Show 📈 EntreLeadership Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

From the Ramsey Network, this is The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Kamla, joined by my good friend Dr. John Delaney taking your calls at triple 8 8 2 5 5 2 2 5 you jump in we'll help you take the right next step with your life your money your mental health your relationships whatever is going on and hey before you go what's going on yeah before you go and I think it's important just to let our friends and colleagues and family members in Los Angeles just know we see it.

It's a disaster, man. I'm rarely speechless and just watching some of that footage. I've got friends in Pepperdine. It's just devastating to see. So it's one of those things you feel helpless sitting this far away and you're watching on your TV or watching on your phone. But what we can offer right now is to let people know they're not alone. We see it. And our thoughts and we're praying for you

guys big time. Yeah, our hearts are with you all. And speaking of which, John, our first call is from California out here. Nitish is with us. What's going on Neetish? Hey folks, thanks for taking the call. Sure. And appreciate your sentiments on LA Fire. Right now I have a question that my wife and I bought a house worth around 2.5 million.

And we have another house which is worth around 1.3 million and it has 500k remaining. We have rented it out it's around four thousand dollars per Our salary is around $900,000. And yeah, so we were just kind of concerned whether to kind of keep the rental property or sell it off. The rental is coming pretty nicely. It's around $ 4,500, which is kind of like covering all the mortgages and any other insurance and stuff like that.

So I was just wondering what your thought is on that. Yeah, what is the mortgage on your current home? It's around 2 million. Okay, so you've got two and a half million. Do you have any other debt outside of these two mortgages? Just a car loan, maybe 40K. Okay. Well, you're calling us because your plan isn't working as you wanted it to. There's some stress here.

And I would feel it. If I was over two and a half million in debt, regardless of my income and how great things were right now, in the back of my mind, I would be knowing this is a house of cards. It could all come crashing down any minute. Yep. And so you wanna reduce risk in your life.

You're using language like, well, it's just a 40K car loan. That's kind of what gets us here, right? You guys have an just undeniably insane income. And yet what happens is you just go, well, we can acquire more and handle more payments. And it leads us to this place where we have to decide, do we wanna keep going down this road or do we want a more peaceful path?

So if I was in your shoes, I'm gonna try to reduce that risk. So you have an amazing income. How much extra margin do you have at the end of each month? So you have an amazing income. How much extra margin do you have at the end of each month? So we have around cash coming in around 25K after all the 401K savings and everything. We have around 1 million in stock

and around 401K is around another million. Okay, and the stock is non-retirement, right? It's vest fully vested? and around 401K is around another million. Okay, and the stock is non-retirement, right? It's fully vested? Yes, that's correct. So you could sell a whole bunch of that and knock out a lot of this debt. You could knock out the car loan instantly and knock out the rental loan instantly

and make about, you know, what, a quarter progress on your own mortgage. That's absolutely correct. My wife and I, like, so my wife kind of feels that the rental is self-paying, so why should we worry about it? Let's just like, the lentors pay for our mortgage pretty much. And I'm trying to convince kind of like lowering the risk.

So I don't know. Do you remember, I don't know if you remember, it was a while ago, there was this thing called COVID and people quit working and then the local government said they don't have to pay rent and you can't evict them. Yeah. Remember that? Yep, yep, I do.

So I would assume the mortgage on your rental property is not very safe. Because you don't ever know. And especially in California with the squatting laws, I mean, y'all have good tenants and God bless you. Because those tenants can go south in a hurry and it might be 30 days, 60 days, 90 days, 6 months, 2 years. You guys get tied up in court,

but the bank doesn't care, they wanna get paid every month. And the other risk is having all this money tied up in a single stock, in a single company. So I like the idea of offloading it for other reasons, other than just getting debt free. My mom worked at this company called Enron that used to do that, gave everybody a lot of stock,

and I had friends who went to bed, millionaires who woke up one morning with zero dollars because all their retirement was in stock in that company. So yeah, man, if you're talking to me and George, our families, our houses, we'd sell that stock and start paying off everything we own, man. I'd much rather have two tangible assets, two homes I can go see than a company saying, no, no, no, I promise we're're worth it I'd much rather that man okay especially you're too rich to be holding a depreciating alone on a depreciating asset like a vehicle man okay sounds good so I have some extra like five thousand dollars per month that I can contribute towards

my mortgage do you recommend me putting that into the mortgage too yeah once the cars paid off then your next step know, if you're filtering this through our Ramsey Baby Steps, you should be completely consumer debt-free with a fully funded emergency fund, then begin investing 15%, then any money beyond that can go to kids college and paying off the mortgage early. Okay. And with your income, I think sit down with your wife, show her, okay, here's where we're at, here's where we could be. And if we go down this path, we sell the stock, we become debt free, we free up that rental

mortgage payment, we're free up a car payment, we have all this extra money, we could tackle our own mortgage and probably be done with that with your income in under five years. Yeah. That's pretty amazing. And how old are you two? We are 39 and 40. Think about that. You're in your mid 40s and you will have, I'm not even saying sell the rental property, you could keep it if you're gonna knock it out and reduce some of the stress and increase the cash flow. You'd be sitting with a about a

four million dollar net worth of paid for property in your mid 40s. And a million dollars in your retirement fund. Yeah. So you're worth five million bucks, free and clear, and here's the thing you have then that you don't have right now. Absolute freedom. Peace. And guess what?

Your buddies are going to think this advice is stupid. They're going to be like, you should buy nine more properties and leverage all the debt and do a HELOC on the first one. That's what's going on out there in the culture, but they don't live your life. They don't pay your bills. They don't know what happens inside your home, what's happening inside your body, how you're feeling about it. And that's where John and I go, we're solving for freedom all day long.

And you're in an amazing position where you have a million dollars sitting there in stock. You have about a million dollar income. This problem is pretty easy to solve. But the hard part is the choice and getting your wife aligned on this. I think the new, um, the new wealth moving forward in the 21st century, George, is can you fall asleep on your pillow at night? I think the new, the new status of wealth, like Dave used to say, it's not the, it's not the BMW.

I think the new status of wealth is nobody owns me and my family. Me and my family have freedom, we've got peace. And man, I don't care how little or how big your salary is, solve for that, man. You change everything in your home. Well said. Thanks for the call, Nateesh. Good conversation. This is The Ramsey Show. Remember the good old days of the Internet before it was a privacy nightmare filled with spammers, scammers, hackers and fraudsters? Simpler times. Now I don't have a time machine but I do have the next best thing, Delete Me. Think of Delete Me as your online bodyguard helping to protect you

from the risks of online scams and data breaches. Here's how they do it. They scour the web to find and remove your data from the sketchy data broker websites and this includes your name, your phone number, your email, your address and more. And Delete Me will send you a detailed report of what they did and how much time they've saved you. And they've saved me 66 hours so far, which is more time I can spend trying to nail the wordel of the day on the first try. Delete Me has been around for over a decade and they now have over 100 million data removals, which explains why they have a mountain of rave reviews and an A-plus rating from the Better Business Bureau. It's been great for my

family and I love getting fewer targeted ads, fewer spam texts, and fewer creepy robocalls. So this holiday season, share peace of mind by gifting a Delete Me subscription to someone you love or even just like. Their individual plans start at just nine bucks a month and you can sign up today at joindeleteme.com slash Ramsey for 20% off. That's joindeleteme.com slash Ramsey. ["Ramsey's Theme Song"] Welcome back to the Ramsey Show.

Open phones at 888-825-5225. Dan is up next in Jacksonville, Florida. What's going on, Dan? Hey, guys. Thanks so much for taking my call. Can you hear me? Yes. How you doing?

Good, man. Good. So my question is, I just got married about two weeks ago to my wife who was lucky enough to inherit a Roth from when she was young and right now it has about $75,000 in it and all of it is in Apple stock. So I know how you guys are going to feel about that. And then I also have $30,000 in a bond from my grandpa. And I guess my question was just how to best go about

just investing that and what using it for, whether it put it towards the mortgage or if we're saving up for a car or just kind of how to best utilize those funds. Yeah, so what you said it's in a Roth IRA, the Apple stock? It is, yup. Okay.

And then you got 30K in a bond. And what is your next financial goal? As you guys look at this new marriage, do you guys have any debt you're looking to clear? Yeah, we have about 8,000 right now on a credit card that was originally hers, and we're looking to knock that out real soon. We just got a bunch of money from the wedding,

so that's kind of what we plan on doing. So should be debt free and honestly, at the next like week or so. Awesome. And then how much do you guys have in savings for an emergency fund? Right now about 19,000. Well, just knock out the credit card today.

What are we doing? Yeah, no, you're 100% right. And after hearing that, I definitely think we will. Make a declaration in front of America, Dan. You're going to do it today. That leaves $11,000 in your savings, plus this $30,000 bond. That's plenty. That should be more than six months of expenses for you guys,

right? Of course. Oh, yeah, definitely. And then you have a house together? We do, yup. So I think there's about 165 left on the mortgage. So I think the next big goal would honestly just be to get that knocked out as soon as possible.

Yeah, so you could use that. I mean, I know there's some required distributions from that IRA, I believe with the new Secure 2.0 Act law. So I would look into that and see when you need to deplete that account by. Okay. But you could use part of that money to knock out the mortgage. You could use future income and just let that money ride and continue growing for you.

But I would use any money beyond your emergency fund to start knocking out that mortgage. Okay. Can you take, George, can you take the distribution, the mandatory distribution and turn around and buy a new Roth with it? Yeah, you could do your own investing. Just flip it around and do it again. Yeah, so I would sell the Apple stock and be in a more diversified investment fund.

Like you were saying, hey, there's, Apple is a great company, I used to work there, I had some Apple stock, there's worse companies you could have invested in over the last several decades. But I still would sleep better at night knowing that was in a broad-based index fund that had a lot of Apple in it, but it wasn't 100% Apple.

Right. So I would do that either way, and it's up to you what you wanna use those funds for. Okay. All right, perfect. How old are you two? Is it, so I just turned 26, and she is gonna turn 30 next month.

Amazing. You guys are gonna knock this mortgage out fast. What's your combined income now? Right now combined, and obviously this is super recent, but combined right now is about give or take 90. Okay. Great. Well, debt-free making 90 grand with a 165,000 mortgage, you guys are gonna be completely debt-free within, my guess is, three to four years,

if you do this the right way. Wow, yeah, that would be amazing. What about by your 30th birthday? You guys have no mortgage. Yeah, that would be something, man. That would be awesome. It's not something, it's just a choice you make today. You get what I'm saying?

It sounds cool, but then you're like, crap, I gotta put extra on the mortgage every single month without fail consistently. Right. Can I do that? And then here's what y'all will do. Y'all will figure out the romance, the sex and intimacy, the dates, the fun. Y'all will figure out your life over the next four years

and how to have fun and laughter and joy and friends over and potlucks and whatever and then you're gonna suddenly find yourself with no mortgage four years in and then the whole world opens up. You get what I'm saying? Like I think a lot of times people go crazy the first two years. They put everything on the credit card, they go bananas, they buy all the fancy stuff and then they realize oh we spent a lot of time on external stuff and we didn't take the time to have to do the hard work internally. You guys, if y'all flip that around

and you're just intentional, like we're not gonna have any money because we're gonna put it all in the mortgage and we're gonna make a run at this thing. Whew, dude, that would rule. Dude, you know, no mortgage at 30. I can't even wrap my head around that, man. Yeah, and this inherited money,

that's just leap-progging you. So I'm gonna use that to create a legacy for my own family. Yeah, no, that's just leap-progging you. So I'm gonna use that to create a legacy for my own family. Yeah, no, it's definitely lucky. So, but yeah, no, that'll be the goal. So I like that, by 30. So that'll be the goal. That's it, man.

That kind of goal and that kind of intentionality, you start to get your new wife excited about that. You guys are aligned with money, like John said. You can stop talking about money. You can do more fun things with your life than have money fights. So we're rooting for you, dude can stop talking about money. You can do more fun things with your life than have money fights. So we're rooting for you, dude. Awesome, congrats.

You could do things instead of money fights. That's what it's all about. Luis, let's talk to Luis in Medford, Oregon up next. What's going on, Luis? Hey guys, nice to meet you guys. How are you? We're doing great. How can we help today?

Yeah, so I'm 24 years old, married. My wife is also 24. Our household income is about 90 to 100K a year. About eight months ago, I started hearing about your show. Immediately, we went debt free. It was no brainer. Now we have an emergency fund and we are currently renting and in the process of getting money for a down payment for a house.

So the question is, um, what advice would you guys give us, uh, for, as our first time home buyers, should we save 20% down, um, uh, 20% down payment or should we do an FHA loan, conventional? What would you guys recommend? Great question. I'll give you the Ramsey parameters and we can dive into your situation after that. We recommend at least five to 10% down

for a first time homeowner and only choose a 15 year fixed rate conventional loan where the payment is no more than a quarter of your take home pay. And I know once you crunch these numbers, Louise, you're gonna go, oh my gosh, these guys are out of touch. How could anyone do that?

We can't change the laws of math. So a lot of people go, well, I guess it'll just be 60% of my take home pay going toward this mortgage and I'll be stressed forever. And so that might mean you need to choose a different house, choose a different location, choose a townhome instead of a single family home, save up a bigger down payment.

So knowing all that, where do you guys stand financially? What's your goal? We would want to get like a single house, family like three bedroom, two bath, something like that. We always have family over. And what is a reasonable home in the area you want for those parameters, what's that gonna cost?

We're looking around 400,000. Okay. And how much do you guys plan to have down? That's kind of the goal that I'm trying to set. I'm fine with waiting until we get 20%, but if you guys recommend 15, 10, or something before, we can pull the trigger as well. Well, I think based on the mortgage payment

with the current market and rates where they're at, I think that's gonna be a hefty mortgage payment that you guys won't be able to stomach. That might be 70% of your take-home pay. So it's not as much of a down, how much down, five or 10. It's, we might need to save up 30% down in order to make this mortgage work for us. Which means we need to get our income up

and we need to rent for another two years. So those are, that's the kind of sacrifices you'll need to start looking at. Are we willing to compromise? Are we willing to do a three-bedroom townhome that's $300,000 because we have urgency to get into a house? Yeah, because talking about sacrifices, I own a business and when I was a little younger, I think I made a rookie mistake of buying an $85,000 work truck.

It paid off but if you don't mind asking the second question, should I sell that truck and buy a $34,000 truck and then that would speed up the process of downpaying. Absolutely. If you can do your job with a $30,000 truck, sell it today. Got it. Today. Yes, get rid of that thing, dude.

$80,000, jeez. It's not like if you get double the truck, you're gonna make double the money. Right. That's not how business works, you know that. So I would definitely make the sacrifices needed. And if that means downsizing in truck, I'm doing it. If that means working overtime for the next six months

to get this down payment going, I'm gonna do that. So you guys decide, you can pull all the levers you want, but don't take any shortcuts doing these first time home buyers, 0% down type loans. They're not in your favor, my friend. This is the Ramsey Show. Music For free tools and resources to help you reach your home goals, go to ramsysolutions.com slash real estate or click the link in the show notes.

Mortgage rates have dropped, so if you're thinking about buying a home in the next year, contact your local Churchill mortgage team right now. If you wait wait more people will be in the market competing for the same homes and potentially driving up prices. Churchill will help you do the math to be sure your budget is correct making your home a blessing and helping you build lasting wealth. Learn more at ChurchillMortgage.com. ChurchillMortgage.com. ChurchillMortgage.com. This is a paid advertisement. NMLS ID 1591, NMLS ConsumerAccess.org,

Eagle Housing Lender, 1749 Mallory Lane, Suite 100, Brentwood, Tennessee, 37027. ["The New York Times"] Welcome back to The Ramsey Show. I'm George Campbell, joined by Dr. John Delaney. The phone number to call is 888-825-5225. Well, there's a lot that goes into buying and selling your home, and all of those decisions can feel overwhelming, and you shouldn't have to do it alone. And that's why we created Ramsey's Real Estate Homebase.

It's a place with all the tools and resources you need to get prepared to buy or sell your home with confidence. You're going to find calculators, start to finish guides, how-to articles, a podcast, a book, and even a video course all packed with actionable steps to help you navigate this process. So if you're ready to take those steps toward your home goals with peace of mind, go to ramsysolutions.com slash real estate or click the link in the show notes and description if you're listening on YouTube or podcast. Cindy's up next in Fort Worth, Texas. How can we help Cindy?

Yes, hi. Me and my husband are reading your total money makeover book and we are trying to get serious about getting out of debt. But we currently have about $300,000 worth of debt and we're just really struggling to make minimum payments on credit card, let alone save up the $1,000 emergency fund. Wow. Does that include your house? Yes. Okay. So how much do you own not including the house? So it's 140. Okay, can you break that down for me?

So we've got about $50,000 credit card, $50,000 car loan, that was 75,000. I just sold my car to get out from under that and about $40,000 home equity loan. You got it all. You've collected them all. So hold on, you sold your car but you still owe $50,000 on it or does he have a car? Yeah, we have, we are, we're financing three cars and now just two. Okay. Tell me about the other two you're financing. My husband's car is a 2022. We owe about 33,000 on it. And then my daughter's car is a 2022 Corolla and we owe about 17,000.

So we're going to sell both of those in the next 15 days, right? Are we? Yes, I think we are. Y'all are scary, scary broke. If you can't come up with a thousand bucks, then these cars have to go. You guys are, I mean, these cars are robbing you from a different future.

You can get nice cars later. We're not saying you can never have these cars again, but this is part of the issue. You get rid of these car payments, you can breathe again, right? How much do you and your husband make? I think it's about 130,000 a year before taxes bring home probably right around 100.

Okay. Are you guys doing any investing right now? No. Okay. In our 401k. What's? No, in our 401k. What's that? Just in our 401k. Well, that counts as investing. That's investing, yeah.

So if you took that down to zero, that would put some money back in your paycheck every month, right? Yes. Okay, so that's a start. You can reshop all of your insurance. You can go to ramsysolutions.com slash checkup and do a coverage checkup, reshop it all,

because you might be able to save some big money every single month just by reshopping insurance. And on top of that, can you guys work extra, either of you? Yes, I actually just picked up a Saturday job. Good. Good. Do you feel the compounding effect of what a few of these things stacked

on top of each other would do for you? Yes, just getting rid of my car this past Monday, we are gonna be saving 1,031 a month. Boom. Wow. And what- So there's your 1,000 bucks right there, right? Yeah. Yep, absolutely. So you'll have 1,000. And then what are these car payments that are left,

what do they add up to each month? Let's see, 1,259 a month. So think about that. If you sold the cars and downsized to just something you can get you to A to B, you'd be saving an extra 1,200 a month. So think about that. If you sold the cars and downsized to just something you can get you to A to B, you'd be saving an extra $1,200. You freed up $2,200 just by getting rid of some cars. Like after taxes and take-home,

you just added a $40,000 your income to your house. Yeah. Right? So let me ask you this. You guys have $160,000 left on your mortgage. You got 140 grand in debt. You'll make $130,000 left on your mortgage. You got 140 grand in debt. You'll make $130,000. This, that tells me that y'all,

cause y'all don't have, I know it feels like it, you don't have a ton of debt. And I mean, you got car notes, you got credit card debt. You'll have a lot of debt, but you also make good money. This tells me you guys go out to eat all the time. Your daughter's a princess, like do y'all spend recklessly? Do y'all not have a budget?

We definitely have a budget. There was some time that we got a little bit out of control. We have two teenagers, but we have reeled all that in. Okay. I think one of the greatest gifts you could give your teenagers is to sit down with them and say, here's how mom and dad have lived, and here's how things are gonna be different.

And we're gonna take your precious Corolla, and I know you love it, but we're gonna sell it, because it's the right thing to do. You're the worst, I can't believe you. But I'm telling you right now, the 27-year-old her, the 40-year-old her will remember this moment as my mom and dad did whatever it took to become free. Yeah.

And I think it will be a watershed moment for you and your family. Okay. And it will really, really not be fun. Not be fun at all, right? But when you explain to them, like you guys won't have to take care of us in retirement because we made these sacrifices now.

And a 16 year old doesn't care, she wants her cool Corolla right now. You know what I mean? Like she didn't care. Especially with the crummy car you're gonna have to buy her or that she's gonna have to go to work for. Right. Yes.

So there's a lot of sacrifice to be made here, but this is a very helpful situation because these cars we can kind of undo a little bit. I don't know what they're worth. Do not just go trade them into some dealership that gives you bottom dollar. Sell them private party, clean them up, take some good picks, put it on Facebook Marketplace and Craigslist and get top dollar for these cars so that you're not underwater on them. Okay.

And I'm hoping because they're pretty new, you can still, most of the equity is still inside of them versus being underwater. Especially the Corolla mine wasn't even trade You know just they paid it off and then my daughter's is my husband's is not he would be upside down. That's fine Go to go to a local credit union and take out the difference Because I'd rather you be $5,000 in debt and then he gets a $2,000 car I'd rather y'all owe seven grand than owe the 35 that you owe now. True, okay.

And remember, this isn't forever. This might be a two-year journey as you guys clean up all of this debt, get to some financial foundation, then we can save up and pay cash for a car, no problem. Okay. I'm gonna ask you a very stereotypical, like generalized question that's not fair, okay?

But I'm just a lifelong Texan. Is your husband in enough that he's going to sell his truck and get a $7,000 car? Uh, yeah, he would. He's all on board. That's an, that's an amazing, good man. Good for you. Yeah. Good for you. That's, that's fantastic. So now you just have hard work ahead of you, but it's going to clear up way, way faster on this $50,000 of credit card debt, is it one big credit card or is it 30 just? No, it's two big credit cards.

Okay. Did you do some kind of consolidation loan or balance transfer or did you actually max out each card? We maxed out. We were really frivolous on one and the other one, we had everything go wrong in one year and had to put ACs and cars and taxes all on one. Well, from now on, here's what you're gonna promise me. We're not gonna swipe that credit card one more time. We're gonna be our own bank. Yep.

And we can make do without it. And if something really goes down where you need more than a thousand to cover it, you'd push pause on all the steps and save up really quickly, because you guys have a great income. Yeah. And that's where freeing up those payments

will give you a little bit of breathing room. Right now, you should need to get your head above water. So make all the minimum payments on the debts, focus on the smallest one, get the thousand in place, reshop the insurance, pause the investing, and as you start to get more margin, it's gonna become addictive. You're gonna go, where else can we save?

What else can we do? We can cut that subscription. And so I'm gonna send you my book, Breaking Free from Broke, and there's a chapter called Margin is Breathing Room, where I lay out at least 10 ideas to make more, 10 ideas to spend less. My goal for you, just choose a few on each list,

and you will feel so free just days from now, if you do what John and I tell you to do. And I'm gonna talk to everybody here, but I'm also talking to you too, okay, Cindy. I think when you're having to toggle a lifestyle shift with kids, especially teenagers, I want everybody to keep in mind this one word, ownership. How can I invite my teenager,

my middle schooler especially, and even my elementary school kid, how can I invite them into the lifestyle changes we're making that can be, I'm gonna teach them about how much money we make, right? And they're gonna start doing the budget with us. I'm going to help, they're gonna get to sit in my lap when they're younger and punch the button in.

This is what our electric bill is. So when I tell you to turn the electric, like your lights off, this is why. They're gonna put the marbles in the jar for every thousand we pay off. But when they feel a part of it, then there's less, oh my gosh, and more, okay, we're all doing this together, and then you get a whole family united in the same direction. Beautifully said. Hang on the line, Cindy.

We'll send you a copy of Breaking Free from Broke. Wishing you guys the best. You're gonna make it through. This is The Ramsey Show. Self-defense can be a complicated issue, but there's one solution that makes it a lot easier. A Berna launcher. Bernas look like firearms but they're not. They're non-lethal self-defense tools. They shoot chemical irritant projectiles that stop a threat in its tracks without the fatal consequences of a gun. Berna launchers have been vetted

by government agencies, police forces, and private security agencies worldwide, and no permits or background checks are required to buy or own one. Plus, Berna's are lightweight, easy to carry, and give you the power to protect yourself and your family, even if you're not comfortable with traditional firearms. Not to mention, they have more than 15,000 5-star reviews, and right now Ramsey fans can get 10% off an exclusive bundle which includes a Berna Pistol, CO2 cartridges, and ammo. And other Berna products like safety alarms, defense sprays, and body armor are also 10% off for our

listeners. Just go to Berna.com slash Dave to learn more. That's B-Y-R-N-A dot com slash Dave. Welcome back to The Ramsey Show. I'm George Campbell, joined by Dr. John Delaney. As a listener of The Ramsey Show, let me ask you a question. Are you staying on track with the baby steps to reach your financial goals? If you're not sure or you want some clarity, take a quick quiz that we created to check your progress and you'll get a personalized plan in minutes just for you. Simply head to the show notes, click on the link titled,

are you on track with the baby steps and complete the free quiz. Kyle's up next in Portland, Oregon. What's going on, Kyle? Hey, crew, thanks for taking my call. Sure. My main question is regarding my student loan. So I have a pretty substantial student loan amount.

It's a $250,000. And so I work for a nonprofit. My main question is should I pursue that 10 year public service loan forgiveness or should I just kind of tackle it and go head on and just try and pay it off? Are you a doctor or an attorney? So I'm a doctor of pharmacy, I'm a pharmacists. So my gross annual is about 170.

My take home is about 120,000 after taxes. Oregon has some pretty insane income taxes. Yeah, that's why we live in Tennessee. That was a dig. I love Oregon. I think Oregon's a stunning place. Let me ask you this. What's the market rate for a pharmacist? If you quit there and went over to Walgreens or quit there and went over to a local hospital, what would that do to your salary? So I would make definitely a lot less. So I work for a kind of a healthcare giant. I'm sure if I said the name, you guys would recognize it automatically. So I make probably the best hourly and the benefits are phenomenal in terms of how much I pay a year in health care And how much I pay for like their match is pretty good as well. Oh, so you're working at like a hospital, but technically it's nonprofit

Exactly. It's a not-for-profit hospital system. Okay. All right. So you're saying you wouldn't make more going into the private sector. I Know I would not I'd run primate class. Okay. So, dude, I mean, here's what I just saw firsthand. And I, after the, like Biden's gonna forgive it all, and then it didn't, and then with Supreme Court, after all that, I'm gonna be honest with you, I've stopped watching the news ticker on it every day.

Okay? But what I witnessed was some of the most brilliant, extraordinary law students of mine decide to go into public service because of this 10 year repayment program. And they got hosed. It just got denied. They went all the way through it. And then a thing happened, or they or they went from working as a public defender

to working on a nonprofit and they reset the clock. I mean, just crazy stuff that makes no sense. And it really soured me on it. And so what I would tell you is 10 years from now is two and a half presidential elections. If you think you can predict what's gonna happen in 10 years from now, best of luck to you, right? So what I would tell you is for your soul, you make $175,000 and I know you get

beat up on taxes, but you make $175,000 and you could probably pick up Saturday and Sunday work. I would hit the gas in an insane way over the next 18 months and just pay the sucker down as fast as I possibly could That's what I would do. That's what I just watched some of the brightest minds like you just get burned alive by a governmental promise It didn't come through shocker Awesome. I appreciate it guys. I'll give you some stats to you. So my wife and I we own a home We've been in for about a couple years now. We have a four-year-old son And we actually have a baby girl due in May.

So really excited. Awesome. Congratulations. Yeah. So we've been, we're kind of a debt snowball is step number two. So we actually paid off our first medical bill today, which is for 1300 bucks, which has been nagging. So we're making some huge changes in terms of how we spend. It's actually showing, um, but should we keep snowballing? Because like we are still able to continue snowballing while working to save for our baby.

So, like, should I just How much do you have in savings? So we just have about 1500 bucks in our starter emergency fund right now we have about 150,000 in retirement accounts. Are you guys still investing right now? We're still investing right now, yes. Okay. I would recommend pausing that down to zero

for a short time to knock out these debts faster. And I would also recommend pausing to stack up cash. I know you can snowball while saving, but May is not that far away. Four or five months of stacking cash I hope everything goes perfectly mom and baby are home safe great let's hit play and we have a bunch of money to throw into the snowball and we'll continue on. Okay. That's what we call that stork mode in the baby steps when

you're in that baby step one through three world it's okay to pause and just stack up cash. And by the way everyone you work with is gonna tell you that's the stupidest thing they've ever heard. They're gonna tell you, dude, you're missing out on the 2% or 4% match. Are you an idiot? Those guys are morons. And here's what you're gonna have that they don't.

You're gonna have $25,000 in cash in the bank as your wife heads into labor, or 30,000 bucks in cash, and you're gonna be able to sleep at night yeah and none of your colleagues have that they've got a bunch of like cool things on a ten key and a cool things like like I don't know what they have I'm just being a jerk but like but you're gonna be able to sleep at night and then the day after the birth and the moms moms doing awesome

Baby's doing great not day after but the week or two afterwards you can take that money You're just gonna roll it back where it needs to go Okay, and suddenly that loan is gonna be two hundred twenty five thousand dollars because you're gonna have just dropped 25 grand on it Knock it down So I'm not anti the PSLF program, but again, the stats are- I absolutely love the idea. As a taxpayer? Yeah.

I'm happy to support that. You get some of the brightest minds in the world to go actually solve some of these governmental nonsensical issues. Dude, I love the idea. Taxpayer, I love the idea of taking some of the brightest minds and saying, you work for the government for half or a quarter of your market rate, I'd happily pay back your student loans. But those kids just get screwed. It's a half a percent is what was actually approved

from September, 2020 through June, 2023. 4 million were processed, 19,000 resulted in forgiveness. It was a half a percent. So I think the program itself has a lot of flaws. I'm not mad at it. And I also think devoting 10 years of your life to this and kind of putting yourself in some golden handcuffs here because now there's a sunk cost.

You're three years in, you have a terrible boss, the workplace changes and you go, I gotta get out, but man, it's gonna ruin my chances. Or some AI thing comes out and somebody calls you and they're like, hey, we'd like you to come work with our new pharmaceutical thing. It's gonna be amazing. And you're like, oh, I can't do that

because I have seven years into this 10-year repay. Just get it out of your life, man. That's tough. Get out of your life. Get out of your life. All right. Let's go out to Crystal in Dallas, Texas up next. How can we help Crystal? Hey there. So my question for you is I'm a single mom of three. Um, I do have a mortgage and then I have $25,000 cash in the bank. I have $6,000 of zero percent interest debt, and I have a car loan that I owe $25,000 on.

Um, my annual income is $90,000. And so I'm just trying to figure out, you know, I feel safe for having that cash sitting in the bank, right? Because I'm a single mom of three kids. And if I were to lose my job or, you know, something happened, I, that's kind of my safety net. Um,'m just trying to figure out should I put some or all of those funds towards paying off the debt that I have or leave it sit in the bank. This is a tough one.

You do have a lot on your plate. And I would argue that there's also risk and it's unsafe to owe that lender. They could repo your car if you don't make the payment. And so there's a piece of me that goes, if you knocked out the 6,000 debt, leaves you with 21. If you took 15 or 20 of that and threw it at the car loan, you're done with this car loan within a few months, making 90K, right?

You freed up a payment from your other debt. So this is not a, you're gonna go a year with a thousand bucks in the bank. We're talking about maybe three months and then you're gonna restack it with no payments in the world and get there really fast. Okay. But that's the kind of fire when you feel that thousand bucks in the bank and you feel unsafe, that's when you go, I'm gonna kick it into high gear. I'm gonna do whatever it takes to get rid of this debt fast to get to that financial foundation

And if you flip it around if you were to lose your job and you have this pile of cash All those lenders are still calling you the next day Right, so you still it's six one half does it another you could you could spread it out, right? You could pay some a little bit, but you're still gonna have to pay that money I would rather I You could spread it out, right? You could pay some a little bit, but you're still going to have to pay that money. I would rather, I mean, just sitting here, this is me, I'm not a single mom with three kids and so it's much easier for me to say this when I look at my own risk profile, but I would rather owe nobody and get laid off and figure out what's next than have a whole,

have a small pocket of money, but have a whole bunch of creditors that are going to come knocking on the door when I got no job. That's just me. I'd test the waters, pay off that first debt, see how it feels. I think you're gonna go, all right, we can do this. You're gonna feel the progress. This is the by BetterHelp. Hey folks, we all have stories. The family and cultural stories that we were born into, the stories of the things that have happened to us, both good and bad, and the stories that we constantly tell ourselves. And while we can't go back and change any of our old

stories, the world is waiting to see what you and I are going to write next. As we enter 2025, I want to encourage you to examine your old stories and be intentional about the new ones you're writing. And I'm not talking about goals that are going to be long gone by February. I'm talking about writing new stories that will change your life forever, for the better. And if you're like me, therapy can be a great place to explore the old stories, even heal from them, and begin to write new ones. And if you're thinking about starting therapy,

I want you to consider my friends at BetterHelp. BetterHelp is 100% online therapy, and you can talk with a licensed therapist when it works for your schedule. You just fill out a short online survey to get matched with the licensed therapist, and you can switch therapists at any time for no extra cost. So start writing a new story this month with BetterHelp.

Visit BetterHelp.com slash Deloney to get 10% off your first month. That's BetterHelp, H-E-L-P, dot com slash Deloney. ["BetterHelp"] From the Ramsey Network, this is The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, joined by Dr. John Belloni, and we're taking your call as a triple 8, 825-5225. You jump into the conversation and let us know what's going on in your world, and we'll

try to give you the right next step. Henry's going to kick us off in Raleigh, North Carolina. What's going on, Henry? Hey, how are you? Good. How can we help? So, I'm kind of lost financially. I'm not really too sure what to do.

I'm in a good spot, but I'd like to see if y'all were in my shoes. How would you, what would you do in the future coming up? All right, lay it out. So, me and my wife, Rave, we're going to be in the same spot. So, I'm going to be in the same spot. I'm going to be in the same spot. I'm going to be in the same spot. I'm going to be in the same spot.

I'm going to be in the same spot. I'm going to be in the same spot. I'm going to be in the same spot. I'm going to be in the same spot. I'm going to be in the same spot. I'm going to see if y'all are in my shoes. How would you, what would you do in the future coming up? All right, lay it out. So me and my wife previously had a home. Then we actually just moved back in with my dad. He's not charged us anything. He just wants us to save money. I currently have 14,000 in my bank account. We got a little surprise when we moved in and my wife is now six months pregnant. Woo!

So, yeah. I don't really know if I should just keep saving and then buy a home or, there's some people who are telling me to buy a trailer, some people are telling me to buy a home. I'm not really too sure. All I'm doing is just putting money in my checking account and I don't really know what direction to go.

How much debt do you have? I don't have any. I actually just paid all mine off. Awesome. So you're at BabySep 3, you're saving up a fully funded emergency fund. What does three to six months of expenses look like for you guys?

Obviously it's tough now because you're basing it off of zero rent, living with dad, but what would it be? Well right now the only thing we really have is my wife got a new car about six months ago but... Is there a payment on it? Yeah it's about... Henry! That's debt homie! We got to start off this relationship with honesty. I asked if you were debt free. Well I'm thinking of me. She put it in her name.

She did all of it herself. No, y'all are y'all. Any money she owes, you owe. Was this against your will or were you an accomplice in the crime? Well, see, I work a lot. Like I work on calls. I was one of those on call working

and she said she was gonna go look at cars and then kinda. Snuck away to the dealership and showed up with what? How much was this car? 32,000 and what do you guys make a year? So I make 2150 she makes 19 An hour. Okay, so you guys are making I'm gonna just ballpark it and say you guys are making about 80k year Yeah, about there.

Okay. So, in our world, just... John's at a loss for words. Yeah, it's rare. My wife and I, I just can't wrap my head around any successful marriage I know. The partner would not go make a $30,000. Dave and Sharon Ramsey, they're worth $700 million, would not make a $30,000 purchase without telling the other person. And so... Well, she told me she was looking at them, and then,

I mean, yeah. I know, but here's the deal. In our world, we call that financial infidelity, But here's the deal in our world. We call that financial infidelity and I want you to consider it being that serious of a thing because you have cash in the bank you're worried enough about your Future finances that you moved home with your wife to live with your dad right back to your high school house You have the burden that most men don't fully understand until the their wife tells them hey I'm pregnant right and now suddenly it's like you're under a squat rack and someone just put two more 45s on each side you're like whoa this is heavy. The that's the thing I'm worried about so every week I've been doing a lot of overtime so I've

been slowly building up buying diapers buying things to be prepared. It's just... Yeah, don't do any of that. Don't do any of that. Don't do any of that. And again, that's you anxiously spinning out. Okay. Okay? You and your wife have to get united on how much do we owe. We're gonna share a bank account. There's not your money and my money. It's our money. We're creating a home, a family. We made a human together for God's sake. And so we're gonna a home, a family, we made a human together for God's sake. And so we're gonna share everything from this point forward including our dreams, including our value systems. And that's where the hard conversation like, hey we can't have a marriage where one person just rolls off and buys a... I mean for

God's sake, I texted my wife when she knew I was at Guitar Center buying guitars, I let her know how I'm going to get one. And then she sends me like a rolly-eye face. But it's in the budget. You know what I mean? It's just she's annoyed by it. But I wouldn't even do that with a small purchase like that. And so, but it speaks to a larger unity.

And you've got one of you buying cars, doing whatever, and then you're up there like hoarding diapers, right? Yeah. And so that just gets to this unity. Let's be on the same page and let's work together towards a common thing. And that may be the first time either of y'all have ever seen that in your lives.

And so it's new and we can help you with that, man. But do you get what I'm saying, how peaceful that would be? Yeah. So let this new baby be a reset and say hey I've done a bad job leading our family when it comes to finances don't make it about her and her mistakes and like John would say use I language. I want us to be on the same page moving forward because I want us to create an amazing home that maybe neither of us had growing up because I don't want our kid to ever have to move back in with us.

Gotcha. Yeah, definitely can actually do that. Be amazing. My next question would be, how would I, how would we get out of it? Because I mean, it's 15% APR 740. Holy smokes bro. What's left on the loan? I came, I'm sorry. What's left on the loan?

Well, the principal is 32,936. So did she put nothing down? We put four grand down. Oh, so this car actually cost 36, 37 grand. Yeah. What's it worth? 26? Yeah, when we were looking at it just to sell it, I mean, I'm probably paying about four

or five grand just to get rid of it now. Do it. Pay it right now. Pay it right now, bro. What's your car worth? So I don't even, I have a spare vehicle, but it actually broke down, but I don't have another vehicle. So you guys are one car family.

Yeah, I don't have to drive, I don't have to drive, I have a company vehicle, so I don't have to drive, you know, a personal vehicle to get to work. Got it. So that helps us out a lot. I would look at what the private party value is and try to get top dollar for this

and be as little upside down as possible and then use whatever in your savings to cover the difference, to clear the title, and then they'll get you a $4,000 used car right now to get out of this mess. Because then you can start stacking up, I imagine the payment on this thing is massive. What are you paying monthly? With insurance, it's almost a thousand dollars a month.

Golly, dude. That is a lie, man. I almost had a stroke when I saw it. Yeah. Yeah, no wonder she didn't tell you. Goodness gracious. Has she seen, so let's be, I want to be compassionate. Has she seen, that was dumb.

Yeah, now, oh yeah, now she's trying to figure out what we can do. Because now she's on the same page because before I wanted to just buy a T-beater. Yes, absolutely. She did, so that's all I've ever done. I've never owned a brand new vehicle myself. That's why you have no debt and $ thousand dollars in a bank account, but yeah

See, you know, I mean you haven't made some car dealership wealthy by paying the depreciation on their vehicle for them Yep So your job is not to convince her that she needs to sell her car She made a giant mistake Your job is to give her a vision for what the future is gonna look like and and a byproduct of that is, we gotta sell the car. That's a different conversation. And so we're gonna go take out a loan for the difference, or we're gonna save up five grand real fast, or you got 14 grand, you're gonna go sell that thing private party, and

you're gonna be upside down on it, you're gonna write the other 4,000 bucks, and you're gonna be done. But then this baby's gonna come into the world debt free, with a fully funded emergency fund, building for the future instead of paying for the past. And don't buy a trailer, go get an apartment that y'all can rent and y'all can save up for a down payment on your own small starter house. Yeah, I'm gonna say thanks dad, I gotta go

get my own place and we'll figure it out. This is The Ramsey Show. Hey, George Camel here with a not-so-fun fact. Every American social security number, including our children's, has been hacked and is now on the dark web. And this is not a scare tactic, this isn't fear-mongering, it's a reality that could turn into a nightmare for a lot of people. And believe me, I've been a victim of identity theft, and I would prefer it never happen again.

Because once the bad guys have your social, it's the lifeblood for all of their activity. Think of all the places you use your social. Your banking, your employer, government offices, utilities, cell phone companies, everywhere. And once they've got it, thieves can open new accounts, drain existing ones, steal payroll, and wreak havoc all in your name. Not cool. And to be real, it's not a matter of if, but when. So you've got to protect yourself with Xander's ID theft protection.

Xander has all the cyber tools to help, including home title monitoring, full recovery services if you do become a victim, and stolen funds protection. Not to mention, it's the best value on the market. They've been protecting my family for over a decade and I trust them to protect yours too. So get enrolled today by calling 800-356-4282 or just visit zander.com. That's Z-A-N-D-E-R.com.

Hey, George Camel here. So you're thinking about buying or selling your home. It's exciting, but there's a lot to think about and all those decisions can feel overwhelming. Well, here's the good news. You don't have to tackle the process alone. Ramsey's real estate home base is the place to find all of your free tools and resources for help to get prepared to buy or sell your home with confidence. You'll find calculators, start to finish guides, a podcast and even an in depth video course hosted by yours truly.

What's not to love? So if you're ready to take the next steps toward your home goals, go to ramsysolutions.com slash real estate. That's ramsysolutions.com slash real estate. ["Ramsay Solutions"] Welcome back to the Ramsey Show. I'm George Campbell, joined by Dr. John Deloney. Hey, if you're ready to get your finances in order once and for all in 2025, join us January 23rd for a free live stream, Take Control of Your Money.

It's hosted by Dave Ramsey and Jade Warshaw. That's how you know it's going to be good. You're going to learn how to stop living paycheck to paycheck, learn how to free up more breathing rooms so you can pay off debt fast and finally get ahead with money. Plus Rachel Cruz and I will join at the end for a Q&A where you ask your money questions live.

And here's the real reason to join. When you sign up, you'll be entered to win our cash giveaway. Five people will win $4,000 each. Not a bad way to kick off the year year so go sign up for the free live stream by going to ramsesolutions.com slash live stream or click the link in the description if you're listening on YouTube or watching wherever podcast all that good stuff check out the show notes

alright Lucas is in my home state Worcester what's going on Lucas? Not too bad, not to that. Enjoying some of the cold weather cause I'm a skier, but you know, not too excited that there's not too much snow here yet. Oh wow. Nashville might be beating you for once.

Yeah, we got plenty of snow today. We got like five or six inches today. Probably, probably, but yeah, no, it's a good day. And honestly, it's a good year. I mean, we've got some good resolutions, and hopefully, being on the call today, hopefully you can give me some advice, because I'm trying to find some peace of mind over here.

Yeah, what's the question? Yeah, so the question really is like, I'm getting married this year to a beautiful woman, and we're, God willing, we're in a great position to, you know, to get married, buy a house, build a house part of our goals. Um, you know, but we're, we're faced with some challenges at the moment. And the challenges are really like where we're not able to find land that's kind of like in our price range, you know, homes are just, you know,

very expensive in general if we wanted to go down the route of building a home, you know, and then we're also faced with the challenge of becoming further from our family, our friends, our church family, our communities, you know, to find that nice price that's fit in, that fits into our budget. So really the question is like, should we keep like, continuously saving? Because we're not, we're not in debt, debt we have a budget we've spoken to some of the financial advisors and whatnot we're in a good spot but the thing is should we keep saving and wait for affordable land that's kind of in our budget you

know we're kind of looking for the sense we're looking somewhere in the central mass area or should we you know should we buckle up and consider buying one of these homes that are on the market when it seems like those really expensive ones and the ones that are kind of like fixer uppers are all at the same price? Let me free you from two things. Number one, let's assume there will not be

magic affordable land anytime soon. And number two, let's assume there's no such thing as a dream home. And so instead, if you go, all right, I'm newlywed looking to get my very first home, it doesn't need to be the 30 year dream, but I need to get my foot in the door. And so that can free you to go, all right, we're not going to go buy land and do this dream home right now. We're going to go buy a single family in an established neighborhood with some good schools at a reasonable price.

That's still just too expensive. Okay. It's because I'm angry at how expensive the housing market is. I know, I wish we could all go back in time. Yeah. But we can't. So instead we go, all right, how much do you guys have saved right now for the down payment? How much do you guys have saved?

So we have right now saved a little bit over 200K. Wow. 400 grand. That's amazing. First off, if my parents are listening, I just want to say thank you to them because without them, they really helped me save some of the money and also my fiance.

Well, what really they did is they modeled it for you. They modeled what it looks like to live on less than you make. So that's awesome. Thank God they did. So we're for you. They modeled what it looks like to live on less than you make. So that's awesome. Thank God they did. Yeah, so we're ready to put a down payment and detailed of a down payment. I have no idea to be honest. Okay, what does a reasonable home cost

in the area that you would like to live right now? Not the dream land, but just, hey, this is near family. It's in a good area. Is it half a million? Yeah, I would probably say around there or even 400, 400,000. Okay. So you could put 50% down today

and have a $200,000 mortgage and your household income is what? Household income a month is around $10,000. Great. So you guys are taking home about 120 a year? Correct. Okay. So now your next taking home about $120,000 a year? Correct. Okay. So now your next step is jump on the Ramsey Solutions mortgage calculator and go, all

right, our 15-year with $200,000 down on a $400,000 house, the payment's going to be $2,500. Great. That's a quarter of our take-home pay. Let's go ahead. This is a great home. Let's do it. I wouldn't overthink it to the point where you wait seven years to buy perfect land.

Yeah, I think that's the issue though. That's the thing. I mean, we're very much like, we've got this money, we've got this vision, we want to just build something that we want first off of that, but we're battling that idea of buying something or just waiting.

Are there existent neighborhoods with new builds where you could have it somewhat custom for you? Not necessarily. We're looking, I think, we're very unique. We're looking for something very specific. Like, we're looking for a nice little overlook of an area of land and some kind of like a good acreage of land, probably good like five acres of land. You come from the Deloni lineage. Exactly. John loves nothing, but he just give me all five acres of land. You come from the Deloni lineage. Exactly. John loves nothing but he just give me all the acres you got. Okay so Lucas here's the thing you need to make peace with the guy.

Yeah, yeah, yeah. You have a dream and a dream and you've worked towards that dream so here's what you've done, you've made choices. Yeah. What you're not doing is choosing to have peace with your choices. Yeah. You're the guy that got married and continues to talk to all his old ex-girlfriends. Like it doesn't own the gravity of the reality of I made a choice. I picked her. And so you guys right now as a family, I mean as a

couple, you all have picked a house on five acres. And that means y'all aren't there yet financially. Great, make peace with it. Be frustrated and be annoyed, but what you're doing is you're making yourself crazy. And so what I want you to see is that you're making a choice to be miserable. Now, if y'all wanna go back to the well one morning,

one Saturday morning over pancakes and the sun's out and it's cold and y'all like, hey let's re- let's swipe the table clean with this five acre dream and let's like if we had to go right now is that still our dream? Great, it's awesome. And maybe y'all are like, you know what we don't need five acres we can go play at the public parks dude, we want to get a house. Let's get a house right now. Okay. But right now you're working really hard towards a dream. You're way ahead of the curve.

Most Americans don't have $250,000 in an account somewhere. Yeah. So I want you to focus not on the scarcity on what we don't have. Bro, you are on your way. You're in the point 0.00001% of people. Yeah, be frustrated that it's so expensive to buy land. That's annoying.

And you still can't afford a million dollar piece of property. And I'm not gonna choose misery, not with $200,000 in the bank. Yeah. You know what I mean? And then if you wanna- Yeah, no, yeah, go ahead, go ahead. I was gonna say, if you wanna change your values,

change your values. But right now your value is we want five acres. And I love that. That's me and my family too. And I'll tell you, after three or four years, my wife wanted something crazy, like cell signal. And she wanted- To live in a society.

Yeah, like water to always come out of the faucets when we turned it on, right? And so, who knows what's gonna happen in four or five years? Or land is really a fun idea until you have two or three kids and going to the grocery store takes an hour and a half round trip. Or dropping them off at school is a two hour round trip.

Right, yeah. So all I'll say is, dude, I'll be in pursuit of acres until I don't live anymore. I love that dream and vision. And if that's for y'all, awesome. Just don't choose misery today because y'all are doing great, man. How old are you guys? Yeah, that's what it...

We're in our late 20s. Awesome. You're running out of time, man. Come on. Dude, you're so far out of the game. I know, I know. But think about it. If you guys got a normal house now in a normal neighborhood and you get it paid off

in your early 30s, probably by the time you guys are 30, you'll have this thing paid off, knowing how intense you guys are. Then we start stacking up cash on top of that. We can sell it, we can get the land on top of that. Who knows, your income's only gonna go up from here. Obviously you two are sharp. You're gonna be newlyweds combining income.

You're gonna start off your marriage debt-free with $200,000 in the bank. I'd be grateful and I would take my chips home from the gambling table and go, we did real well. Let's go ahead and get out. Or you can rent a house. Once a year, you and your wife can go stay at a farm somewhere for an obnoxious week

and then keep the dream alive, right? And then when you got the money, you got the money and you go get your place, man. But let's don't choose misery today by just sitting there fretting and googling and checking Zillow every five minutes. Like, don't make yourself bananas. Maybe there's a secret listing I haven't found yet. Yeah, get a dollar amount and work your butt off to get that. I'd rather see you working instead of googling, right? Don't choose misery. Hey y'all, it's Rachel Cruz. Just about everything costs more these days and unfortunately, healthcare is no exception. So if you're looking at your healthcare options during open enrollment and finding that your costs are increasing while your number of choices are decreasing, be sure to check out Christian

Healthcare Ministries. CHM is not health insurance. It's a biblically based health cost sharing ministry that's helped hundreds of thousands of families just like yours cover nearly $10 billion in healthcare costs. With no networks and the freedom to choose your healthcare provider, CHM is an affordable option that aligns with your values and makes it possible for your family to save on healthcare. Plus, you can join at any time, including open enrollment. You guys, CHM has been helping Ramsey fans for 15 years, and they're the

only health cost sharing provider endorsed by Ramsey. So you can trust CHM to take care of you like we would. Programs start as low as $98 a month. So find out more and join today at chministries.org slash budget. That's chministries.org slash budget. What's up guys, it's Jade. So picture this. It's the end of 2025 and you're looking back, totally amazed. You're looking at just how much your money situation has changed. Bills paid, savings on point and money stress not having it. You're breathing easy now. Can you see it? Listen, I don't know about you, but I know that you can have this. All you need is a plan.

And that's where the EveryDollar Budget app comes in. EveryDollar will help you create a customized plan for every single dollar that you've got coming in and going out. The app is super simple to use. And guess what? It's free. Come on somebody. Imagining things being better is one thing, but putting in the work, that's how real transformation

happens. So go download the EveryDollar app today and let's do this. Welcome back to the Ramsey Show. I'm George Campbell joined by Dr. John Deloney. Open phones at 888-825-5225. Our question of the day is brought to you by Wirefy. Wirefy refinances defaulted private student loans and builds a custom loan based on your ability to pay. You'll have a payment you can afford with a low fixed interest rate you couldn't get anywhere else to help you stick to your budget and work that debt snowball. Go to yrefy.com slash Ramsey.

That's yrefy.com slash Ramsey. May not be available in all states. Today's question comes from Wanda in South Dakota. Wanda writes, my 71 year old husband had to retire last year due to a stroke. He's okay now but not able to work. He was self-employed and did not have a 401 or a pension. We have to live off what we were able to save which is about $320,000. I'm 67 and got out of the stock market a few years ago because I couldn't sleep at night worrying about

whether the market was going to tank. Our house was paid off but our property taxes are high and we pay a lot in medical insurance. My husband's social security is around $2,000 a month and mine is $1,600. Can you please tell us where we can invest our cash so we can live on our savings at least another 20 years?" Whew. All right, so they have a... Can I just say this? Like this is, Wanda's scared. Yeah.

And also it's not as bad as, like they're in better shape than many of the calls that we get. Yeah, they have a fixed income of 3,600 and they have- 320,000 dollars. That I think is just sitting in cash right now in the bank. That's what it looks like.

But they have no liabilities. They paid off their house, right? And so all of that at least lets me go, okay. This is where I do a budget with my husband and go, okay, we have 3,600 coming in. Here's all of our bills. Do we have money left over or are we in the red every month? We take property taxes, we're gonna divide by 12.

That's a monthly bill we're gonna put aside. Put it in a sinking fund line item in the budget so that you have that money ready come 12 months from now. Now, as far as the money goes, where to invest it? You said, where can I invest this money? Well, you just told me you got spooked by the stock market tanking. And can I give you some piece here?

If the stock market goes to zero, we have much bigger problems. Every company in America goes bankrupt and is worth $0. That's what would have to happen. So I'm not worried about the stock market tanking. You're gonna have to ride some ups and downs, sure. But if you look at the stock market last year, 2024,

it was up 24% over your money that got 0% sitting in a bank. And so I'm much, I'm actually more scared for that money to sit not being in the stock market than I am about the market tanking. George, this makes me think stock market that she had a bunch of stocks. And maybe I'm just looking at it when I see the word stock.

It could be. Stock markets versus some. A mutual fund. Mutual funds. That has hundreds of stocks. So that's what you want to focus on is an index fund, a broad-based low-cost index fund. If this money's not in a retirement account,

I don't know where it is, I have no clue, but if it's non-retirement, you can just invest in a taxable brokerage account and as you need, pull money out of it. And obviously when the market's down, it's the worst time to pull it out because it's worth the least. But when the market's great,

you can pull a little more out and pocket that away in a savings account to cover you for the future months. But it really depends on what your bills are. If your bills are three grand a month and you're taking in $3,600, breathe easy. You don't need to touch the money. Let it grow. Let it ride. In fact, I would strongly challenge somebody to create a life that is below that $3,600 a month threshold. You get no bills other than your, you got your utilities, you have your insurance, and then you've got your health insurance, right?

Your homeowners insurance and your health insurance. And your property taxes. Property taxes, yeah. So I would try to build a world where we did that. Yeah, if you need downsize in house and get lower property taxes, that might be an option too. Right, or leave South Dakota. I mean, there's all kinds of options there,

but you would suggest just put it in a... Back in the stock market in an index fund or mutual fund. That's it, yeah. Keep it simple, let it ride, don't touch it unless you need it. And let's say the last 100 years historical averages stay, right? Yeah, it's 10 to 12%.

Then... It'll double every seven years at that point. Right, so when he's 78, you'll have 640, depending on what you pull, right? And so in 20 years... At 85, it'll be 1.3 million. Yeah, yeah. I could live with that. Yeah, it'll be 1.3 million. Yeah. I could live with that.

Yeah, could be all right. Thanks for the question. Great question, Wanda. All right, Sue is in Detroit up next. How can we help, Sue? Hey guys, nice to talk to you. You as well. I was hoping I could do this a little bit better,

but got a question for you. I've been with someone and recently married three years and found out last year that my spouse has not filed taxes for over 20 plus years. Oh geez, how bad is it? And I'm very, very firm on this, I don't know. Things have been hidden from me. I gave them an ultimatum last year.

I said, listen, you've got one year to clear this up, to get started, to reach out, get a payment system going. I was like, if you, you talk to them, they're not going to come after you. They'll work with you because I've had it happen before. So a year went by and I found out that the person he was supposedly taking his taxes to and followed an extension with had passed away. I had no idea this person had passed away and come to find out he then admitted he had never taken any information to this person whatsoever.

So if behavior is a language, what's he been telling you for the last year? That he's too scared and he's putting that fear over our relationship. That's one way to think of it. I was thinking more him looking at you saying, I would rather be scared and hide than to make my new wife feel safe. Yeah. Is there kids in this mix? Well, there are five kids. Thankfully, they're from a previous marriage. So I'm not really sure how to proceed with this other than I've been researching and trying to protect myself. Luckily, I've always done married filing singly because it just seemed odd to me that, you know, I'd say, hey, let's get our taxes going. He goes, well, I'm gonna be a little bit late.

You know, you go ahead and do it this way. And I said, okay. And then it finally really just started gnawing at me last year. And when I found out about that. Is he ready to deal with this? Or is this just you wanting him to? He's not.

I want him to, and it's been over a year and now I'm going to have to make good on my word, which is- Yeah. Is he ready for his kids to visit him in prison? What's his game plan here? I have no idea. Just put your head in the sand, I guess, and hope that you've dodged the bullet for 20 plus years.

Maybe you'll get lucky a little bit longer, but I can't take that chance. what else is he not honest with you about this does this kind of stuff doesn't happen in a vacuum probably other debts is spending I'm guessing no shared financial life no I found out that I just got a job couple years back with the company I work with and the salary that he was telling me what it was was actually like 20,000 less annually than what he is actually being paid. So he's actually making more and he's using that money for God knows what. Exactly. I don't know what. So

have you been through an ugly divorce before? Yes. Okay. I have. So it's really common to find yourself in this situation and when you get in it to go through an ugly divorce before especially one that you thought was gonna be forever, it's common to look in the mirror and lose trust in you. Like what did I not see? Why did I do this sooner? Like all that kind of stuff that comes with it. Right, blaming myself for not seeing red flags sooner. That's right. And so I guarantee you that's happening again

tenfold this time. Yeah. And I've been, here I go again. Very, very Dave Ramsey approach. Actually he introduced it to me back after my last failed marriage, and I've been working really hard to be financially sound. Yeah, but he's a scam artist. He's a scam artist and a liar, and doesn't tell the truth. Yes. And so I've done the morning of my marriage. I've moved on with

that. I've been moving finances to a totally separate institution. We've never had a bank account together. Okay. Anything like that. I just, I don't want my children to be affected by this. I want to buy my house. I rent a house from my mother. I want to buy it. I want to have that stability so that I can have my grandbabies come here someday. And... Have you pulled your credit to see if he's pulled anything in your name?

No, he has not. I did check that. Okay, I would freeze that too. Okay. And then you or him, maybe both, need to get in touch with a tax attorney ASAP and figure out what's the next step. Because this is not going to just go away. They don't just go, well, I guess he doesn't exist anymore. He hasn't paid his taxes. He fled town. They're going to find him. And they may hold you responsible for some of the tax, the joint taxes while you all were together. So yeah, I would get a tax attorney and if he won't, then you need to go on your own.

And I'm sorry that this has happened to you yet again. What a mess. This is The Ramsey here. Dr. John Delaney and I are coming to a city near you on the Money and Relationships Tour. You the audience will vote to choose the topics we talk about. Things that impact your life like investing in your future, money, stress and marriage and more. We're coming to Louisville, Durham, Atlanta, Kansas City, Fort Worth, and Phoenix in April and May 2025. Tickets are at their lowest price right now.

Grab yours at ramsys Dr. John Deloney. Hey, the Ramsey Show Annual Listener Survey is now live. I know you guys have been clamoring, just waiting for this with bated breath, and it is here. We wanna know your favorite parts of the show. Thank goodness, George. We wanna know who your favorite host is. Is it Dr. John or is it Ken? Come on, America.

Don't leave us hanging. Come on, America. But really, you can tell us what you like, what you don't like, what you wanna hear more of, less of, whatever it is, we wanna hear from you. And this is the survey that our team uses to craft next year's content and what we do and the things that we do.

So there are two ways to participate if you wanna help us out. Text the word survey, S-U-R-V-E-Y, to the number 33789, 33789, or just go to ramsysolutions.com slash survey. And if you're listening on YouTube or podcasts and you're a fan of the description, just head down to those show notes and we've got a link down there for you. And to spice it up, if you're listening on YouTube or podcasts and you're a fan of the description, just head down to those show notes

and we've got a link down there for you. And to spice it up, if you sign up today, you'll be entered to win a $500 gift card as a thank you from our team. So hope you win. Thanks for the feedback. By the way, John, if you did, I know John knows this, but the listeners may not know

that after this segment's over, we're done here. If you're listening on YouTube or podcast, if you're on radio,'s over, we're done here if you're listening on YouTube or podcast. If you're on radio, hang tight, we'll be here. But the Ramsey Network app is the only place to continue listening to the show to get full episodes of the Ramsey show and it's completely free. Go download the Ramsey Network app

with the link in the show notes or just search Ramsey Network in your app store. It's when things get off the rails on the Ramsey Network app. Who knows what could happen inside of the app? It's our world. You're just living in it. All right, Rick is in Madison up next. What's going on, Rick?

Hey guys, how are you? Doing well. What's up, brother? Good, good. Say, question for you. My wife and I are restarting the Baby Steps and we currently have about five grand in our savings accounts and about a hundred and eleven ish in debt

58 of that is mortgage 18 of that's credit card 8600 is a car and 27 and a half of that would be a home equity loan my question for you is should I? Take that savings down to a thousand, use that four to put towards debt, or how do I go about tacking on this? Yeah, the debt snowball. You're going to attack the smallest debt first. So what is the smallest balance right now out of all those debts? Smallest balance is the car at 8,600 at 1.99%.

Are the credit cards, did you do consolidation on those? at 1.99%. Are the credit cards, did you do consolidation on those? It's just one credit card, long story short, half of that is from some medical bills that insurance didn't want to cover, yada yada yada, you know how that goes. Okay, but you have an $18,000 balance on one card? Correct, just one card. So if you threw that at your smallest debt, that's the car loan, that would leave you with $3,600 to go.

How quickly could you tackle that while making minimum payments on the rest? I think we could probably do that pretty good. My wife and I make $160 combined and probably bring home like $110. Awesome. So you guys have a great income to tackle this, but you're still staring down a mountain. I would separate the mortgage, so take that out when you're looking at this debt snowball, it makes it overwhelming. And that's a baby step six item.

So that's gonna come later. So that really, I mean, it kind of frees you when you just look at that and you go, all right, we've got some debt, but we make 160 and we got to clean up, you know, 45. All right, we can do this. And so now your new mission is to figure out how much margin you can throw every month

at the next Smallest debt and again, it's gonna pick up more snow because of that debt snowball working for you as you free up each payment How much do you pay a month for that car? 325 I believe it is so Let's pretend you get paid on the 15th If you took the $4,000 from your savings and y'all had four grand, because y'all bring home what, 10 or 11 grand a month, you had four grand left, and you ran it and you're done with the car in one month.

Now you've just dumped 325 bucks back in the system. On top of the money you were already throwing. So that's where it happens faster than you think because of that snowball method working in your favor. But again, this is some intentionality. If you've got 50 grand to pay off and you're on the track to do four grand a month, this is going to be a year of sacrifice. Can y'all do four grand a month?

Well, that's part of it. We'd have to get back to a budget. So honestly, I'm not going to say yes. I'm going to say yes because I want to, right? But we haven't been know, we'd have to get back to a budget. So I honestly, I'm not gonna say yes. I'm not gonna, well, I'm gonna say yes because I want to, right? But we haven't been on a budget. I'll admit that to you guys. We just kind of fell off.

Yeah, but you're bringing home- I've been there, it's fine. Are you bringing home like 10K a month thereabouts? Are you doing any investing at all in a 401K or anywhere else? So yeah, through mine, about 8.5% gets taken. That's not voluntary. That's through the Wisconsin Ret and a half percent gets taken. That's not voluntary. That's through the Wisconsin retirement system, the WRF.

And then I have a 401k and I have a 457B that I have and my wife has two ROPs as well through her work. Okay, so you guys are doing a lot at once right now and you're not really seeing a whole lot of progress. So what if just for one year, we said we're gonna pause retirement and we're gonna come back swinging, investing 15% after that?

Okay, I'm gonna write this all down here, so pause retirement. So pause retirement, you can reshop your insurance, that can save you big sometimes, because you've been overpaying with the same carrier. So reshop it, you can go to ramsysolutions.com slash checkup, and do a little coverage checkup there to make sure that you're checking off all the boxes.

And then on top of that, now it's okay, what are the other levers we can pull? Are there any subscriptions we can cut? We're going out to eat, we need to stop that and start meal prepping and being really intentional about our grocery runs. And so once you start doing six or seven things at once, making more, spending less, all of a sudden,

it's easy to find five grand sitting around in that budget that you were just kind of lazy with. Okay. All right, yeah, I appreciate it. Gentlemen, that was my question. I just wasn't, you know, like everybody, we're always paranoid about money and finances, so that's why we weren't sure what to do

with that additional savings we had, so. No, you got it. It's scary, I'm not gonna lie, Rick. When you take that down to a thousand, like your breath is taken away, and you realize just how risky of a position you've put yourself in by being in all of this debt. But the good news is you get out faster. Well, and he was saying it there and I think it's important, you know, like

I'll always tell people you got to choose your heart, right? Being a hundred pounds overweight is a hard way to live. It's hard. And losing a hundred pounds is incredibly hard. So it's not a matter of one's easier or not. It's just choosing your hard. Similar here, it is terrifying to go to $1,000 in your savings account. That's terrifying. It's also terrifying to wake up every single day and know we are 50, 60, 70, 150 thousand dollars from multiple different angles.

These guys would take our house, those guys will take our car, they'll take our insurance. So you're just choosing your fear. Which one do you want to have? Right? You want to have an acute fear of, oh my gosh, we only have a thousand bucks and we got to hustle to get this thing done? Or do you want that grinding low-level hum, that fear that never goes away, that you don't even get a say in your own life. Like, man, I'm out. But you're just using your fear. Yeah, what's interesting, as you were talking,

I was thinking about how people tend to go into debt when they're desperate or when times are really good. And they go, well, we'll just take out a HELOC. We'll take out the home equity loan. Yeah, sure, get the car payment. We can stomach it with our income. And then they don't make that income anymore. There's a job loss.

They would need to move for whatever, for family. And all of a sudden it gets scary because you realize just how exposed you were. That's right. What's the old Warren Buffett quote? When the tide goes out, you can tell who's skinny-dibbitt. Yeah, who doesn't have any clothes on. And so the tide's been, I mean,

you've been submerged in the water with this beautiful income, surviving, making all your payments. And all of a sudden the tide goes out and you go, oh my gosh, like this is a scary way to live. We actually had a house of cards situation. And so this is, I'm really proud of Rick because this is the hardest part to get to

when you're willing to just burn the ships and go, all right, we got to do it. We're willing to do whatever it takes. Show me the way. Those are my favorite calls to take because they're not trying to argue that their plan is working. Yeah, no, love it when someone's like okay what I'm doing is not working help, right? And that's one of my favorite phone calls to

make when I call buddies like about workout programs or nutrition or something. Okay what I'm doing is not working I need some help and I love that man because that's usually when people can say alright I got you. Instead of arguing with John going well my workout plan this is what I'm doing here's why I think it could actually work if I and they're just watching you going alright That's cute whenever you're done whenever you're ready. We'll be here with a better line for you That's right, but that's big if this is uh this is the year you're going hey. I'm going to get out of debt I'm gonna do things differently

We're here for you. We've got a free live stream coming up on January the 23rd called take control of your money It's completely free hosted by Dave Ramsey and Jade Warsaw and maybe you need some new information You didn't grow up with financial literacy. Maybe you need a little pep in your step Well, Dave and Jade they are I think they're 90% pep DNA wise And so if you need that go sign up for our free live stream RamseySolutions.com Slash live stream you'll also be entered to win our cash giveaway. Five people win four grand each.

Go check it out. Link is in the description. And again, this is it. If you're listening on YouTube or podcast, to continue listening to more of the Ramsey Show, go download the Ramsey Network app. It's completely free in the app store or use the link in the show notes.

We'll see you then. you