The Ramsey Show - Make The Most Of Your Financial Choices They Matter

Episode Date: January 11, 2026

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Hey, before we get rolling, listen up, if you want to win with money in 2026, you can't keep living normal. Normal's broke. You need a plan. Get a personalized plan and start living like no one else by downloading our every dollar app today. Normal is broke. Common sense is weird, so we're here to help you transform your life. From the Ramsey Network and the Fair Winds Credit Union Studio, this is, the Ramsey show. Jade Washall, number one bestselling author,

Ramsey Personality, is my co-host today. The number here if you want to talk is AAA 825-5-225. And we're going to talk about you right in front of you. Nancy's with us in Clarksville. Hey, Nancy, how are you? Good, Dave. Thank you for taking my call. Sure. My question is, I have paid off all my debt in step two, but the problem is I got involved in a lease for a name. H-PAC system. The total cost of the system, when paid off at 10 years, will be $62,000, so I'm wondering, do I pay it off using the snowball method and just get out of it, meaning I'm responsible for that, or just leave it until I do the house stuff.

Wow. Okay. I didn't know you could do a lease on a heat and air system. I went to the attorney general, and I'm a judge. went through Better Business Bureau, and the Attorney General Consumer Protection Department said it is legal. It's being done all across the U.S. So, yeah. But it's so bad that they, yeah, it's horrible, yeah. Okay. So a lease typically, I have no idea in this case, but typically would have an early buyout provision because leasing is simply financing.

Yeah, their leasing is termination. Okay, what does it cost to terminate it? The cost of the whole contract. No. What you have remaining, yes, yes, sir. No. Yes, sir. 47, right now, my lease buyout would be about $47,000.

Oh, my gosh. I've paid 15. Now, you had an attorney look at that part also, right? I'm getting there. Right after I did the system, I got diagnosed with cancer. So I got kind of sidelines for a few years. Now I'm like, wait a minute, I don't want to keep doing this. This is fevery.

It's theft. Wow. But, okay, because I mean, I know a lot of equipment leasing, certainly car leasing. And I've looked at the contracts on all kinds of leasing deals, even employee leasing they have out there now, which is really strange. And every one. of those have a buyout provision that is less than the total of payments because you're giving them their capital early. You're giving them their money early.

And so they're not collecting interest, so to speak, even though there's not technically an interest rate. And so almost everyone I've ever seen, but I've never seen a heat and error one. So I don't know. My God, honey. All right. So let's do two things. Number one, I want you to reinvestigate that part of it.

it. Okay. Because as suspect as this whole thing is, that part of it suspect. So if the total of your remaining payments is 47, a normal buyout provision would put you somewhere in the 30s. And the way you would do that, if that's the case, is instead of paying them in advance, like double payments like you would in a debt snowball, you simply save the money up. You pay, you pay yourself into a savings account and then write them one check. If there is a discount for early payout, okay? And there typically is. If there is not, either way, what is your income?

I just retired from federal service, so my income is roughly $2,400. Okay, this goes in Baby Step 6 then because it is the equivalent of a second mortgage. and it's a lien on your house because it's a lien on your heating and air system, and you would pay it off in baby step six when you're paying off the house. Okay. What is your interest rate on your home? 2.25. Yeah.

No, no, no, no, no, no, no, no, no, no, we leave that alone. Okay. Because if you had a higher interest rate, I would suggest refinancing and taking them out. Okay, my mortgage balance is 169. Yeah. So when you get to Baby Step 6, you knock out the lease first either way, whether you get a discount or not, because it's more than half your annual income. When a home equity loan or a second mortgage of any kind is more than half your annual income, we move it to Baby Step 6. Yeah.

I've never heard of such a thing. I have now. There's a lot of things that I get on this show. This is where I learn about it. And then I have to go look it up later and go. Oh, it is a thing. So, you know what else? I didn't ask.

She said federal employee. Clarksville is a base, military base. Oh, that's right. So these may be morons that are preying on our military people. Yeah, that's big. That's, which makes us like double, yeah, a double negative for this company that does that. So if your son is out there, mom, and his new job is selling heat and air leases, tell him don't be a crook and go do something else with his life oh there we go there you go

helped with that yeah just throw a dart out there into the universe to see if we can hit a balloon why not yeah man oh man because i did have that happen one time i was ripping on the payday lenders at 800 percent yeah oh gosh yeah a lady called and said well my hunt my son owns two of those stores and i said well tell him to sell them quit being scum uh-huh he's ripping off poor people he's oppressing the poor, read about what happens in the Bible when you do that. It's not good for you. It's not a place you want to be. Messing with widows, orphans, and oppressing the poor. These are not three things you want to do in the Bible. And really, just as a matter of living your life properly, hello. But yeah, there's scum. They're scum. So yeah, shouldn't be, don't be scummy. And then you're safe

on this show. We'll leave you along. We won't talk about you. We won't talk about your kid. We won't talk about you. We won't do any of that. Yeah. So, so interesting to side note, the on a car, and I suspect it's true on a heating and air system, is the most expensive way to operate a vehicle. Several publications, including Ramsey Research, have done detailed research on this. And when you run the math out, so you can take a financial calculator and say, this is what the MSRP is on the car, which is what it's calculated on. Here's what the buyout is at the end of the lease. A closed-in lease always has a number after three years, four years, seven years, whatever it is. you can buy the car for $12,000, but it was a $64,000 car or whatever it is.

So you've got those two numbers, and then you have the number that is the monthly payment. When you put those into a financial calculator, you can figure out what the effective cost of capital is. That's a fancy way of saying the interest rate. However, interest rates are not disclosed on leases like they are on car lines. The Federal Trade Commission requires they hand you one piece of paper with your APR on it, even if they're screwing you. They have to hand you that piece of paper, and you'll look down. and you'll see 38% or 28% or 12%, you don't know you got subprime, right?

On a lease, you don't have to do that because lease is not technically borrowing money, but you can run out, but it is borrowing money. So that cost to capital, there's no cap. No cap at all, and no knowledge of what it is unless you know how to run a financial calculator. Wow. And I've done it on probably 40 or 50 leases over the years. Every time I do it, it comes out between 14 and 17%. And so those of you that are, I got my BMW on a lease because my accountant said

that was the smartest way to do it. You're an idiot. You got hammered. You're paying 17%. You should fire your accountant and get rid of your beamer. You're getting hammered. But you never did any math. You just thought you were sophisticated.

Jeez. No, you wanted a beamer. That's what it was. And there's a way to get a beamer. Very little down, a lot a month, and very little at the end. Yeah, this is the problem. Dave, we got a lot of calls on this show where life happens. One day someone's healthy, they're working, providing for their family, and then a curveball hits.

You know, we hear it all the time. A car accident, a cancer diagnosis, a heart attack, and suddenly, everything changes. Yeah, and that's why you've always said that having term life insurance from Xander is essential, because it protects your family if the worst happens. Yeah, that's right. You need 10 to 12 times your income in coverage. No gimmicks, no whole life junk, just straightforward term life. protection. But there's another piece that people often overlook, and that's long-term disability insurance. Yeah, it's important to understand the difference between them. Life insurance steps in when you die. Disability insurance steps in while you're alive, but can't work. So it replaces a large part of your income, so the bills still get paid while you get back on your feet. Now, if your employer gives you free disability insurance, great. Take it. If it's discounted there at a better price, take it. But if not,

Zander can help you find the right plan. Whether you're single or married, it's not optional. If you're going to be out of work for a while, then you need to make sure the money still showing up. And that's why Zander is our go-to. They make it super simple to get the right coverage at the best price, no pressure, no upselling. I've trusted Jeff Zander and Zander insurance for over 25 years,

and so is my family. So don't wait. It's fast, it's easy, and it could make all the difference. Go to Zander.com or call 800, 356. 4282. Protect yourself, protect your income, protect your family. Jade Walshaw, Ramsey Personality is my co-host today. Thank you for joining us. Michael is in Toronto. Hey, Michael, welcome to the Ramsey Show. Hey, thank you. What's up?

So I'm currently 18, and by the time I graduate, I'm probably looking at $100 to $120,000 loan that I'm sitting at. And my current car is under my mom's name with her interest rates on it. And her credit got ruined by my dad leaving. And I'm looking to switch the car with a way less percentage of interest. But I have to max out my credit cards for the down payment to put on it. And I don't know what to do if it's even worth it or not. What's your car? What do you owe on the car?

I'm sitting. So I bought the car at $30,000. I'm looking at 41,000 I know. And you're a college student? Um, first year, yes. With a $40,000 freaking car. What are you doing with a $40,000 car? You're a college student.

I had a $70,000 car and another $60,000. I sold it. I made profit. But my mom's credit got ruined and they gave me a 12% interest on it. And I didn't realize until yesterday when I checked and I only had it for five months. I don't think this is your mom's fault. You bought a $30,000 car and you're in a $40,000 car and you're in college. You get a $4,000 car.

Do you make any money? What's your income? So I'm sitting at $1,000 to $1,500 from my work at retail. And I had side businesses before, and I had like about $70,000. I blew it all. And now I make maybe $500 to $1,000 from my side businesses. A month. Okay.

Do you have any money saved? Nothing. I'm in debt by credit cards. Okay. So the car, you owe $41,000 on it. If you sold it private sale, what's it worth? Or your mom's. Right now, if a trade-in, they're giving me $27.

Oh, my gosh. That's a trade-in. $12,000 negative equity on it. Okay, but let's look at, that's your homework, is to look at the Kelly Blue Book value if you did private sale, because you're going to get more for it. No, I did. It's $30,500.

$30,500. Okay. Okay. If I were in your shoes... I can't. There's a lien on the car that I can't pay. Yeah, I mean, you make $1,000 a month. Your car payments more than that, isn't it? My car payments comes exactly to $1,000. So how are you paying it? Credit cards?

Basically everything at all. No, no, I can't put on credit. It's definitely everything. I mean, if you make $1,000 a month and you spend a thousand month on your car, you don't have money to put gas. in it and you're any money to eat. So, as math doesn't work on it. I don't know how. No, I make like $1,500. I can, on a good month, I make $2,000 on small months in retail, I make $1,500. Okay, so you got $500 to spare.

You eat a little bit. You pay your insurance. You get gas. You've got nothing left. Okay. Let me stop a second because I did a drive-bond something a minute ago I want to know more about. You had $70,000 in savings, you said, from a side hustle. that you blew. Did I hear you say that?

Yes. Tell me about that side hustle. Where did all that wonderful money come from? It came from, I used to self-screen protectors and cases during COVID when I was 14. Ah. And Amazon. Yeah. So no COVID, no business. Gotcha. Okay. Yeah. All right. And I gave most of it to my mom after this operation. Mm-hmm.

And she's sitting at least at $300 to $400,000 to $400,000 herself. Yeah. You're 18, your mother is not your responsibility. Your responsibility is to love her and cheer for her, but she's not your financial responsibility. So this has got to stop. And unless you can create a huge income, you need to get rid of this car and get a $2,000 car. I tried doing that, but I have to, so the loan that I would put the $10,000 on a credit card. I'd rather you have $10,000 on a credit card than $41,000.

on a car. Amen. I can't. I can't put it on a credit card. Why? I have maybe 3,500 left on a credit that I can spend. Yeah, okay. Who do you owe the $41,000 to?

To a bank. Go down and talk to the bank about signing a note for the difference. Do that, right? And then what about on the new car? So that's the thing that doesn't make sense to me on the new car that I looked at that I'm going to get. seen monthly payments instead of 96-month loan it's a I didn't say anything about monthly payments I said get a $2,000 car because we tried when we went to the bank I didn't want you to go to the bank

I want you to come up with $2,000 and go buy a car just buy a car yeah are you are you in school full time yeah are you on campus you're at home or at home uh campus so oh like what do I live at home Okay, how close are you to campus? What I'm getting at is you might go through two months where you don't have a vehicle and you make it work. And instead of using that $1,000 a month to pay for a car note, you use it to save up and get yourself a little beater car is what we're saying. I have one of your buddies take you to class. I'm away from campus. Okay.

All right. Okay, here's the thing. We keep throwing suggestions out and the only answer you've got is it doesn't work. So let me tell you what doesn't work. your life the way you have it set up right now your situation sucks beyond belief the decisions you have made are beyond suicidal financially so you've got to throw a stick of dynamite in the middle of this freaking mess you've created and it's going to be really uncomfortable but you know what's going to be more uncomfortable you sit there in this pile of stuff and you're going to smell like this

stuff as long as you sit there in it coming up with excuses to sit there in it so you're you have got to get rid of this mess. You've got to create a big, you may need to quit school. You need to go get some dadgum money and start cleaning up this mess. So I want you working like 80, 90 hours a week, going to school on caffeine and doing what normal people do when they get in this instead of telling me, oh, my mom got screwed over by my dad when he left. I'm sorry, but that doesn't mean you buy a $70,000 car while you're in college

and downgrade it to a $41,000 car and act like, That's smart. Nowhere in this conversation is smart. Smart didn't come up today. No, it didn't. It didn't even show up here. So, dude, you've got to get rid of the car and you've got to figure this out some way or another. Now, we're giving you lots of suggestions, okay?

Get a buddy that's in the neighborhood to take you to college. Quit college for a year and take you a gap here and go clean this mess up while you work like a freaking maniac. but you are man you you you cannot there's nothing in this that the math works six graders could tell you this math doesn't work it this is a mess and so no you can't keep this car and no you can't keep this life the way it has it designed right now that's why you called and you can't get another car and i'm not going to argue with you about it anymore i'm through talking to you about it so you go fix this we gave you some suggestions but part of fixing it is you've got to decide that where I live, the land I live in right now is the land of stupid

and I want to leave. That's the first decision you got to make. And we haven't even been able to get that far with you. So that's where you got to go, man. That's where you got to go. Open phones here at AAA 825-5-225. Now, Jade, let's just review the policies on this show. Review it. We love you. All of you. If you've done something stupid, we love you anyway. We've done something stupid. I have a PhD in D-U-M-B. Jade and Sam cleaned up $465,000 worth of stupid in their life. So no one's sitting here high and mighty talking down to someone. So we love you. We love you so much. We're going to tell you the truth. We're going to start gentle. And we're going to start by trying to help you move along. But if you want to argue with us while we're trying to help you,

it's going to get nasty fast because we love you. I'm going to smack you upside. I'm going to smack you your stupid head until you listen to the stuff that'll make your life better. Now, I will start with a gentle handshake and say, honey, this is the best way to do it. Well, Dave, I listen to you all the time, but I'm not selling the car. Well, you're an idiot. You've got to sell the car. That's how it's going to sound around here, honey. Okay, so we're going to serve you when you call here.

You're not entertainment value for us. You're a calling for us. You're a crusade for us. We want you to win, and we're going to do everything in our power starting at first gently and turning up the heat by degrees during the time we're on the phone together until we have contact. This is The Ramsey Show. Hey, it's Rachel Cruz. The holidays are here, which means family time and giving back and remembering what the season is all about. And let's be real.

It also means shopping. Y'all, if you're anything like me, December gets really busy and really, really, expensive. It's harder to stay intentional with your spending, and that's why I love shopping on Amazon, especially this time of year. Named the lowest priced U.S. online retailer for nine years running by Profitero, a third-party analytics and research firm. Amazon's prices are up to 14% lower across top categories and beat competitors by up to 5% in key gift categories. Between amazing deals, stress-free shopping, and fast shipping, Amazon, Amazon makes gift giving simpler, the holiday season a little brighter, and helps me keep my budget in check.

That allows me to get back to enjoying the season. What more can a busy mom ask for? So for more information about Amazon's low prices and easy, affordable holiday shopping, head to Amazon today. Jade Washaw, Ramsey Personality is my co-host today. Open phones at AAA 8255-225. Jaden is in Casper, Wyoming. Hi, Jaden. Welcome to the Ramsey Show. Thank you for taking a call, folks. Sure. Merry Christmas.

What's up? My wife's been pestering me for quite some time now to take her on a vacation. I'm not sure right now is the time to do it. We're both pretty young. I'm 25. She's 21. We got a little one on the way here before too long, and we're getting ready to purchase a property we intend to build on.

Okay. Do you guys have debt? No debt. No debt. We've been very fortunate in that way. Community college educated. Okay. What's your household income? I bring about 50,000 home after taxes, and she brings about 20,000. And that's part of the issue is that next year, her income will be going away. She's a preschool teacher now, but with the little one, she's going to stay home. Do you have an emergency fund saved?

We do. The thing that concerns me is that after the day, down payment on the property, that's what we'll be left with, is with our emergency fund. And so to take that vacation, we'd be kind of having to dig into that a little bit. Well, a vacation's not an emergency, so I would not dig into the emergency fund to take an emergency, to take a vacation ever. What does she want to spend? She wants to go somewhere warm, you know, Wyoming, this time of year, you want to kind of leave it a little bit.

About 2,000. 2,000? Okay. So have you run out the numbers on what? Here's the thing. I'm not saying no and I'm not saying when, but you can decide when. You can look at this and go, okay, my wife wants to take a vacation. We've never taken a vacation.

We're debt free. We have an emergency fund. We're also trying to move in this house. What can that look like and when is the time to take it? Because if you just tell her no and you kind of just swat it away like a gnat, she's going to get irritated. Well, no, that's not your position. Anyway, it's your position for two. She's not a child.

Okay. The two of you ought to sit down as two adults and go, okay, yeah, vacation is a good thing. A emergency fund's a good thing. Having a baby is a good thing. Buying this piece of ground is a good thing. None of these are bad things. Now, where do they fit in our lives with our goals as grownups? You know, you can't just be a kid on the cereal aisle throwing a fit.

You have to be like an adult. both of you. And so I don't want you being her daddy and have to talk her off the ledge. I want her to grow up and look at it and say, as a grown woman who has a child, what is responsible for me? Yeah, I want to take a vacation.

I'd love to take a vacation. But as a grown woman looking at this, I can't afford to do it right this second because I'm not going to be working next year after the baby comes. Or as a grown woman looking at this, I've got a child on the way. I really want to do this. You know, we do have $86,000 in the emergency fund.

We probably can go ahead and take a vacation because you've overfunded the emergency fund, Bubba. I don't know what's in this emergency fund. Right, right. I mean, she needs to participate in this decision as a grown-up, not as someone who has a parent that they're married to. That's right. And if she's laid out how you guys can do this.

then and it's wise and it's wise then you've also got to be open to going you've got to be a grown up though it can't be i want it i deserve it you know i don't bull crap that's what 14-year-olds do that's not what grown women do grown men do no um so no you have to be emotionally mature and say what is good for our family and if in the midst of that we can do this reasonably and we don't leave our family vulnerable with no emergency fund because we went on vacation that would be stupid. Yeah, that's not good. Or leave our family vulnerable since you're going to be quitting work and staying home with the child. And you can't make your bills because you went on vacation last winter because it's cold in Wyoming, which is not a shock to anyone in Wyoming for sure.

And so, you know, that kind of, so, I mean, what I want to do is just pull her into the conversation as a grown woman, not as someone who's, I can't get my husband. It didn't let me do stupid stuff. I mean, this is just, that's ridiculous. That's not a conversation you want to have in a marriage. It needs to be the two of you are, we have this child, we have this future, what makes sense. And yes, vacations are part of the equation. I got no issue with that at all. But, but where they fit is, well, your point, Jade, absolutely. You know? Where and when? Yeah, they don't strike me as people who are not smart with their money. They've paid off their debt. They've got an emergency fund. It looks like they're trying to do this house the right way. I have a feeling that he's laser focused and sometimes has to remember like, hey, we can, we can do

some things sometimes. That's just my, my spidey sense. Could be, could be. Yeah, could be loosening the nerd up a little bit. Lusening up the nerd. Yeah, but she needs to do that with reason. That's right. Not with emotion. That's right. Yeah. And that, that's a fair, that's a fair request for a grown-up. Stephen is in Little Rock, Arkansas. Hi, Stephen. Welcome to the Ramsey Show. Merry Christmas. Merry Christmas. How are y'all? Better than we deserve, sir. How can we help? Okay, so here's my situation.

I'm 20 years old. I'm engaged and I'm planning on getting married in June. And that being said, we're looking to get an apartment together in June because that's what you do. You move in together once you get married. I'm completely debt-free. She has a little bit of student-loan debt, but that's kind of beside the point. The question for me is my grandma opened up a credit card for me to use strictly as a gas card. And that's my only credit card. And she always pays it on time.

But that being said, I have credit paid. Wait a minute. Oh, you're 20 years old. Why's your grandmother pay your card? That was her way of saying that she wants to support me through college. That was her gift to me. Okay. And so I can totally afford my own gas, but that's just the gift she wanted to give.

give to me. And, but I know that I want to get this apartment, and I really like the sound of which I'll talk about, of letting your credit score roll over to nothing. But I'm afraid that if I say, hey, Grandma, thank you, but let's close this card. I appreciate the gesture. I can pay for this that my credit score will plummet, but it won't flip and disappear before that time in June when I'm trying to get an apartment. Honey, you don't have a credit score to get an apartment. Okay. That's, that's mythology. We've done this about six times in Ramsey in the last six or eight years. One of the personalities will jump on the phone and call 15 apartment complexes and say,

hey, I'm moving to Nashville. Do you guys, I don't have a credit score because I'm just out of school. And I got zero credit score. Do you guys, you guys rent to people without a credit score? Nine out of ten say they do. Some of them, a couple of them want an extra deposit. But most of them are just, no, it's no big deal. Come on over.

that's just complete mythology that people have spread out there among your age group it's just not true exactly nine out of ten or not don't care if you have a credit score awesome I did not know that I was under the impression that my credit score would plummet and that might jeopardize whether or not we'd be able to move back your your credits when you stop borrowing money your credit score will go away um it's not going to plummet it's just going to disappear um but to Dave's point, he's right. There are plenty of places that you don't need a credit score to go. And so you'll just do your due diligence and find one. Yeah. Just, you know, can't rent to those, can't rent from those guys because they require one. I can rent from these people over here, though.

And by the way, that's a great litmus test because when you move into an apartment, you want to have a super or whoever's in charge that uses their brain because things are going to happen. You're going to need to talk to them about things and you want something fixed, right? You want somebody who uses their brain. So that's a great way to start. Yeah. And if the only way they approve you is by a number, that's not using your brain, no definition. No. Very good. Good stuff. Yeah, you can look those calls up. We've had different personalities do this over the years and they're on the YouTube channel and you can see them making phone calls to the apartments and it's recorded and you can hear the conversation. Yeah, George did

went on on the fine print. Remember? Yeah, that's the one I remember. And he did. He went out and he was able to call him and there were plenty that did. You just have to call around a little bit. It's not going to be the first, it may not be the first door step that you go to. That's all. Yeah. And yes, you need to, it'll be good for your marriage to get off the grandmother doll. I know. That's right.

Wow. Good for you. Good for you, Stephen. Well done, sir. This is the Ramsey show. If you've got collectors breathing down your neck and you're drowning in credit card debt, you don't need another debt relief company trying to sell you sunshine. and unicorns. You need real help. And Guardian litigation group is the real deal. They're not a call

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Minnesota and Oregon results vary and no specific outcome is guaranteed that settlement may negatively affect credit and not all creditors will negotiate or settle savings vary and may be taxable please review our website terms for more information thank you for joining us America open phones at triple 8 825 5225 there are a few things in my life that I've run into that other than things from the Bible, that I am 1,000% sure work. Teaching the seven baby steps that we teach here, the first one save $1,000. The second one is get out of debt, everything, but the house using a debt snowball and gazelle intensity, as if you're running from a cheetah.

The gazelle runs for its life. That's the intensity you use to get out of debt. You sell so much stuff the kids think they're next. You don't see the inside of a restaurant unless you're working there and you're not going on vacation because you're a broke person in debt and you are ears laid back running headlong straight into this getting rid of it, baby. And we're going to leave it all on the field. That's baby step number two. And then you go on to building an emergency fund retirement plan kids, college, pay off the house and become very wealthy. Those are the seven baby steps.

And in essence, and you can find those everywhere. total money makeover book is where we outline them. We've sold 12 million copies of that. 10 million people have been through Financial Peace University where we teach those baby steps and how to implement them. So tens of millions literally of people, and there's tens of millions of you listening at this moment to this podcast on YouTube and on talk radio. So we know that easily 100 million people have done some stage or some process of the baby steps. and with varying degrees of success because of varying degrees of commitment and sacrifice like you do with anything.

So it's a it's a proven thing. It's not a theory that comes out of a test tube. The debt snowball is probably what we've become best known for. Now this is where you list all of your debts except your home, smallest to largest. You pay minimum payments on everything but the little one. You attack the little one with a vengeance. You squeeze every dollar, every drop out of your budget, and you throw it at the little one. You work extra, you sell stuff, you clean out a savings account all the way down to $1,000,

you stop putting money in your 401k, you get term insurance and cash in your stupid whole life policy, you sell a car if it's too expensive, you do whatever you've got to do, and you throw every dime at that smallest debt until it's gone. When that one's gone, you take the payment you used to pay there, and every dime you can squeeze out of everything else, and you put it on number two. and when number two's gone, the payment from number one and number two are freed up. The snowball rolls over again. It picks up more snow and it attacks the third one.

And you're doing this with just increasing levels of hope, increasing levels of sacrifice, increasing levels of passion. And every time the snowball rolls over and you get rid of another payment, that's that much more money freed up in your monthly budget to attack the next one down. And it's been unbelievably successful. But Dave, I got to be, I'm the person because I know what they say in the comments. I see what people are asking. And the biggest two questions are this, Dave, I've got my debt listed.

What if I have a debt that the interest rate is just killing me? Why would I put the lower one first? Why would I list them small so large as if it means me, you know, having to pay this high interest loan for much longer? What about the math, Dave? It's brain chemistry. A dopamine is released when you complete a task. There's a dopamine release.

and it's called a feedback loop in psychology. And so when you have success at something, you're more likely to repeat the task. That's right. And the faster you have success and the more often you have success, the more you've got the feedback loop and the more the dopamine releases there. And in a spiritual realm, we would call this hope. You start to believe it's going to work because it's working. And then you lean in that much more and you lean in that much more.

And you lean in that much more. And that's why this works because no one says, set up, sat down at their kitchen table and said, hey, let's go deeply in debt because that's a good idea. A series of behaviors put you into debt. And you don't fix a behavior problem with a math solution. You fix a behavior problem with a behavior solution. And the feedback loop, this positive feedback, I knocked out one. Yeah, I knocked out another one. Yeah. I knocked out another one. Whoa! And then you're down. You're beating on the, you're beating on that student loan. You're beating on that big one. You're beating on that car. And you're, yeah!

And now you're starting to yell at your neighbors think there's problems over there, you know, because you're getting fired up because it's working. And that's the dopamine release. That's hope that you're starting to believe. And when I first started, I paid off the little one, I wasn't so sure. And the next one, well, maybe this will work. And then the next one, yeah, it's going to work. And the third one's like, ah! And then your broke friends start making fun of you and you want to punch them, you know.

And so this is why it works. And that's why the dead avalanche does not work. That's right. Or consolidation. You know, when people... Exactly, because you don't change your habits. That's right. The dead avalanche is where you list your...

It's mathematically correct. Honey, if we were doing math, we wouldn't have credit card debt. It's not a math problem. It's a stupid problem. That's what we had to fix the stupid, not the math. And so the math is, you know, we're going to list it highest interest rate to smallest interest rate because this interest rate's killing me. And here's the problem.

While that sounds like it's mathematically correct, It's not because your math that you're using is very naive and you left variables out of the math formula. Here's a variable you left out of your math formula. Probability of completion. If your probability of completion is 80 or 90 percent with a snowball, but the math is running against you, net of probability of completion, it's going to beat the avalanche because the probability completion is close to zero. Almost no one finishes that because there's no feedback loop, no dose. No, no hope release, no sacrifice increase, no getting the spouse on board.

Because this crap's starting to work for the first time in my life I'm telling money what to do instead of it telling me what to do. I am not relinquishing this control ever again. You start getting a little swagger, man. You're ready to go. That's true. And that's why this thing works and why so many millions of people have gotten out of debt using the Ramsey system, which is just freaking common sense.

but you know you people that think your debt avalanche is mathematically superior no your math is naive and your formula is incomplete because you don't know what the flip you're doing so northwestern university did a study of the debt snowball versus the avalanche and they concluded because of probability of completion that the snowball was far superior because if you quit and you don't get out of debt using the mathematically superior which is not really mathematically superior it does doesn't work. That's right. So you don't get completion. You don't get to the goal. So and then Time Magazine comes out and does a story on the Northwestern Studio, Northwestern Study, and they go, turns out Dave Ramsey was right. Like, we didn't already know that. We've got like millions of proof text here. We've got so much social proof on this that's unbelievable. We beat your research project into submission. So good God, people, this is not that hard. Get your butt out of debt. Your number one wealth building tool is your income. And when you're giving it to stupid Bank of America, Lexus Motor Credit, and MasterCard, who's your master of your life, and you know,

and you wonder why you work so hard to make $100,000 a year and I got nothing, it's because you're giving it all to these stupid banks. And you've got to get back control of your life. You just, you work too hard to be broke people. You need to retain control of your life. This This is so empowering. It is. So Dave, get a little bit more tactical because we know, okay, we're listening to Small Solerges. Okay, Dave, I will do the debt snowball method.

But where do cars fit into that? You're telling people all the time to sell their car. That's not my smallest debt. Do I do it first? Do I wait until I get to that on the debt snowball? When do I sell my car? The rule is if you can pay the car off and all the other debt within two years, not counting your house, and you like the car, keep it in the debt snowball and pay it off.

but if the car is keeping you from making it out in two years, if it's one of the reasons, okay? Yeah. But if you've got a $5,000 car and a $200,000 student loan, the car is not your problem. That's right. That's right. But you got a $70,000 car and a $6,000 student loan. You got issues. And you can't make it out in two years.

Well, it's the car, stupid. Yeah. You know, so get rid of the dumb car. So can you get rid of the thing and do you like it? Well, I hate it. Well, get rid of it anyway then. You get rid of it even if you weren't broke because you don't. like the stupid thing. But I love the car and I can pay it off and all of my other debts with the

money I have in savings and the money I can earn and using the debt snowball during a two-year period of time. Then keep the car. I'm fine with that. Yeah. And the only exception would be the IRS. That's the only thing that jumps to the top of the list. Child support. Child support. Anything like that goes to the front of the list because they're going to come get it anyway. That's right. And child support, you take care of babies before you're doing any of this. Shut up. But the, you know, the IRS is going to get their pound of flesh. So you need to put them at the front and get rid of them as soon as possible. They have collection abilities nobody else has.

This is The Ramsey Show. Hey guys, it's George Camel, and I've got a hot tip to save you some serious cash this holiday season. Shop Aldi first. Aldi has everything you need for holiday get-togethers. I'm talking charcutory boards, holiday sides, desserts without the large price tags. You'll get fresh, high-quality food while keeping your budget off the naughty list because Aldi has the lowest prices of any national grocery store. It's true. Families are saving up to $4,000 a year just by making Aldi their go-to, which means more money for stocking stuffers.

So find a store near you at aldi.us. That's a L-D-I-U-S. Savings based on regional analysis of Aldi versus select competitors. Prices may vary by location, product availability, and the market. Welcome back to the Ramsey Show in the Fair Winds Credit Union Studio. Jade Washaw, Ramsey Personality, number one bestselling author, is my co-host. Sarah is in Virginia Beach. How are you? Hi, I'm doing well. How are you? Better than we deserve. What's up? I guess I have a question about debt and merging everything.

I'm a new wed. Me and my husband recently got married in December, 12, 2024. And I didn't know that he wasn't as financially responsible as I thought. He has, I guess, been more secretive about his debt. I'm a bit more, like, open about it. And he wants the merge accounts, but I'm not comfortable with doing it as a get because he's kind of been very secretive and has lied to me about certain debts. And I'm working on now using, like, your plan to get myself out of debt because I bought a home before we got married back in 2023.

I have a car I'm working on paying off, which is supposed to be paid off. later maybe next year and a couple other few debts but he has many more that I wasn't aware of and some that I think is secretive about still we're going to marriage counseling but I just I don't know how to be more comfortable with merging our accounts together and fear like we'll be deeper in debt versus trying to have more assets give me an example so let's clarify because part of the solution to the problem is you merging accounts because when you merge them, then you can see everything that's going on, right? There's transparency there.

So give me an example of what that deceit looked like. I asked him how much the bill was and he said it was 300, but really it was 3,000. Tell me an example of what that is. Yeah, so when he moved into the home out of his rental, it was that he wasn't making enough at the moment because he needed to still finish paying off like electricity bills, gas bill, things like that. So I told him, okay, how long did you need to do that? And it was about two months. And so when I was waiting for that time frame, I had got a bill in the mail and it was from the gas company. And when I had asked them if he paid it, he told me yes. But when I

end up calling them. They told me that they were still a balance of $1,200 for a gas bill. And when you asked him about that, what did he say? He told me that it was paid. I never informed him that I called them until a little later, and he told me that he would end up taking care of it. When you said, I called them and you lied, you didn't pay it, what did he say? He just said that I did. He was firm about that he did pay it until I showed him, like, the bill. And then was he like, oh my gosh, I didn't realize there was still an outstanding balance. We're just really trying to get an, here's what I'm trying to get an understanding of.

Are you dealing with a liar? Or are you dealing with somebody who's disorganized and chaotic? Right. It's more, he has lied about many, many things. Not just money. It's just surprised, yeah. In three months? Yeah, it's been, I guess, 10 months now, but three months into, yes, the marriage.

I found out that he was lying. So everything before was being deceived into separate homes while we were recording in things and then got married and now everything in the home and I'm seeing it more vividly. Okay. So here's what I'm trying to be clear about because there is part of this to Dave's point where some people are just extremely unorganized with their money and as they learn to get more organized, things get better and better.

And then there's another part of you guys are married and I'm wondering what the communication sounds like because of the communication is, Did you pay the bill? Yeah, and you're keeping it to yourself. No, he didn't. It's this money, right? All of that matters in this situation. Now, what I do think is if he's lying and they weren't past lies, but there are lies that are

continuing on now and you know about them. And if he's lying in other areas, not just money, then you do have a big problem on your hands. Yeah. You don't be a big enough problem. You need to be in the marriage counselor's office early and often right now because your communication style isn't good. Because if at my house, if I said, hey, Sharon, did you pay that?

She says yes. And I went, I'm going to check. And I call and they go, no, it's not paid. I would go, hey, I called them. They didn't pay it. I wouldn't wait three days and stew about it. I'd walk in there right then and go, hey, what's up? You said you paid this.

Right. Like right then. And she would be going, I thought I did. I screwed up or I was ashamed or I was scared or whatever. But at least we get to the bottom of it right then. We don't carry it around for four weeks and then label her a liar. That's a bad thing to be married to. And what I'm trying to understand from the beginning of your call is you're saying,

now he wants to combine money, but you're the one who's afraid to. So I'm trying to understand if he's trying to make it right by saying, okay, let's just put everything together. Then I don't have to try to keep something over here while you have it over here. But you're saying now I don't feel comfortable doing that. Too late. You're married. Right.

Are you worried? What can he do? What do you think he's going to do if you combine finances? Let me ask that question. I think he's going to spend more because I'm like, what does the term people use, like the breadwinner? So I make majority of the funds. He helps pay, like, since we didn't have a merge account, he would just send me like $150. What does he make?

What does he make? That's another thing. He's kind of private about that, too. So he works for a cable company, and it's supposed to be, quote, unquote, $12 an hour, but they have a point system. So week to week, sometimes he says he makes $500. Sometimes it's only $300. So would he be direct deposited into your joint account then if you combine finances? Is it, hey, now we direct deposit all of our paychecks into this account, not you get paid and then put money into a merge account.

All direct deposits go into the same account. That's how it works. And that's the only way we're doing this, right? Then we know what he's making. And what do you make? I'm in the discussion. So I make $62,000 and some change a year. And how long did you all date before you got married three months ago?

It was two years, about two years. And how many times have you sat with your marriage counselor in the last three months? We've been going consistently. It's like once every three weeks, and now he's going one-on-one with the counselor, and I go one-on-one with a woman counselor. Okay. Well, that's good that you're doing that. And at some point we have to combine that process, too.

All right. Sometimes he's a bit of a spender as well, so it kind of makes me, I guess that's where it gets me a little nervous. Listen, here's the thing. Here's the thing, okay. If you put all of your money into one account and you make a list of all the bills that have to be paid on every dollar, and you both agree to them,

and we agree where every dollar of our income is going to go this month before the month begins. He has agreed to his spending level, and you have two, before it occurs. If he does otherwise, you're dealing with someone who can't keep a contract now with his wife, and then we've got a problem there. That's a different kind of problem, okay? But you're not solving a spender by staying separate from them. combining is the only way to get transparency and accountability on where every dollar is going. And you need to talk to your counselor about the language you are using towards your husband.

You have contempt all in your language. Exactly. You're rolling your eyes like you're so much better than him on every subject. And that is one of the four horsemen of the apocalypse, the primary reason people get divorced when contempt rolls in. So you've got to solve for that or this marriage isn't going to make. This episode is sponsored by BetterHelp. The holidays are full of traditions. Some of these traditions we love, some we just survive.

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Jade Walshaw, Ramsey Personality, is my co-host, AAA 8255-2-225. Anna is in Austin, Texas. Hi, Anna. How are you? Hi, Dave. I'm good. How are you? than I deserve. What's up? Well, I received this weekend. I received some devastating news that my husband was scammed out of almost his entire 401 king. And so now it's tax time. And we're going to have to pay taxes on it. So we have no more retirement and our savings is going to be wiped out. and I don't know where he began from here.

What did he, how did he get scammed? What did you put it in? It was a crypto. Crypto. It was a, yes. How much? And he did 270,000. $270,000.

Yes, sir. Ooh. There's a little bit of a back story. I'm not making excuses for him, but we've learned a back story as to why he felt financially strapped that he felt he needed to do this. to secure our financial future. How old are you? I'm 57, he's 58.

We have no debt. We paid off our home in February of 2022. What's your household income? Right now he makes approximately 98,000. annually and I'm currently not working. I had to quit my job in January of 2023 because I was diagnosed with cancer and the medication that I'm on just causes me a lot of side effects that you chose. It's better for me to stay home because we could afford it.

Obviously, we had no debt again and he was, I think he was looking at. into securing our future so that he may be able to retire early. He started doing some research as to having this money. He knows nothing about it. He's not educated in that. Your voice is fairly muffled. Speak directly into your phone, please. Okay.

There you go. Okay. He's not. No, he's obviously, even if he is educated, he's not wise. And he got desperate. It sounded like. He did. and right after I get desperate I usually get stupid

that's what it was and oh so that happened in January 24 in about March or April he came up to me and told me that that he had invested a little bit of money and I was like okay

and he says and he showed me that it was he showed me that the app and he showed me that the money was I mean we had made it made about three or four hundred thousand and I said okay how much did you invest and he told me at that time he said 30,000 I said what did you get the money from because I take care of all the banking and he said that he pulled it out of the 401k and I said okay the mistake you know we'll get we'll get through this I found a temporary job I made enough money to cover the taxes I made I calculated we probably owe about

6,000 taxes. I said, okay, great. Well, I'll take care of it and I'll get a permanent job so it won't affect our savings. And now that it's tax time, I kept looking for the form that comes in, the 1099 R, I believe, and he kept making an excuse as to why he hasn't gotten. He had, we hadn't received it. So I kind of had a feeling that it was worse than what I knew and that it was worse than what he had told me and this weekend he gave me the paper and it was 270,000 so now we will have to and now it's worth a row of course yes well he I looked at it last night and there was about 16,000 in it right now but was it really a scam or did he just lose like did he get scammed by a scammer or he invested the money and he lost the investment no it wasn't an actual scammer I had

demanded that I back when he told me it was 30,000, I demanded to know where he sent it, how he sent it. I wanted to know everything. And apparently it was a company in Hong Kong. And I looked up the address and it's, it's in the slums of Hong Kong. I'm like, why didn't you do the research before? Well, the thing is now, he said that it was the 200. I'm like, how can you, how can it go from 30,000 to 270,000? And he said it was about the same time.

He invested here, you know, in a couple different. Okay, let me ask you this. Let me ask you this. Yes, sir. Does he now own that this is stupid or is he still defending? No. No, he owns it. He's been living with this for the past year.

And it's, I mean, he had his. Well, he was lying about it 20 minutes ago. Yeah, you said he just came clean with it. Yeah, he just came clean with it. But he was running with that lie for the past year. But, I mean, he's now saying out loud, I completely screwed this up. Yes, he has.

That's important because otherwise he's going to do it again. Right. And he's like, I'm prepared to work till I'm 70. Yeah, he might as well. He's not a choice at this point. Belly up, buddy. How's your health? Are you improving?

It's getting there. I'm on a clinical trial. Okay. And so I'm hopeful. I'm hoping that this will be something that will, you know, give me more time. And I feel pretty good, except, you know, just the usual side effects. I mean, not the usual, but the side effects of medication. But thank you.

I'm happy, you know, every day is a good day. And I'm not going to let this bring me down, but it does scare me for our future. The good news is you have no payments. And so what he needs to do is max out his 401K, and you all need to max out your Roth IRAs. And you need to tell him that if he makes any transactions without the two of you being an agreement ever again, that that will be the last time he'll do so as your husband. Absolutely.

He needs to understand that this has extreme consequences. Because he not only did something stupid, he lied about it, at length, deceived, created a web, a full scenario of lies. that concerns me actually more than his stupidity. Correct. And so, you know, that's a big deal. So, yeah, you guys can catch up. I mean, you can make $100, $120, and you max out your 401ks and max out your Roths and work another 10 years, 12 years, and you will have enough of a nesting to retire on if you don't do this again.

But as soon as he gets desperate and tries to pull off a fast one, that's when you get messed over. And so, ouch, I'm so sorry, honey, with everything you're facing. It's just not fair. Wow. All right, guys, let me give you a couple principles on that. There's a guy who scammed a bunch of people and wrote a book from jail in the 70s. The book he wrote about himself was con man or saint. Obviously, he thought he was a saint, but he was in jails.

He was a con man. Okay. But I read that book in the early 80s as a teenager, early 20s. And the only thing I really got out of the book was he said it's very, it's almost impossible to con someone unless they are afraid or greedy. This guy was afraid. His wife had cancer. He's trying to get a bunch of money so that he cannot have to work and take care of her. And he got desperate based on fear. And that set him up in the emotional category to be conned. The other crypto people that get conned are the greedy ones. They're trying to make double your

in 20 minutes because I'm the cool kid and I'm the smart one and I grew up with a cell phone in my hand, a smartphone in my hand, so I know everything about digital. No, you don't. You're a greedy fool and you're going to lose your butt in crypto also. The second thing you can do is who can find a virtuous wife for her worth is far above rubies. The heart of her husband safely trusts her and he will have no lack of gain. If you have to have a virtuous wife, you have a lot of hide the investment or the financial move from your spouse. Warning, warning, warning, you're screwing up. I have no lack of gain because share not talk about it before we do it.

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Check it out. South Dakota's calling. Sarah is with us. Hi, Sarah. Hey, how are you guys today? Better than we deserve. What's up in your world? Well, I'll see. Just have a quick question. So my husband and I got a term life insurance policy through Zander when our son was first born. But that was 15 years ago. And since then, life has stayed a little bit. We are still making progress with our debt snowball. We're actually planning to pay off our last debt by hopefully February. However, we're not there yet. But over the years, our income has increased quite a bit. So when we were first married, we were making about 70 combined. Now we're making about 180. So my question is, why is it taking you 15 years to get out of debt?

Well, you know, maybe weren't so gazelle intense. Like not at all. Okay. Right, right. But we're getting there now. So we're getting really close. So you still have a mortgage and you still have what else? We have $8,000 on my student loan and we've got our mortgage and that is all we have left.

Wow. So what's the question today? So the question today, we are curious, do we need to consider increasing our life insurance through Zander, given that our income has gone up? I know the recommendation is like 10 to 12 percent of your overall income. or because we're so close to being debt-free, do we not need to take that approach because ultimately will be self-funded through insurance?

No, you need to extend because being self-insured would denote that you've got a massive nest egg of wealth that can cover you when those situations arise and you don't have that just yet. If you keep going with intensity, you will, but if you play the next 15 years, like you've played this last 15 years,

You're still going to be in debt. You'll still have a mortgage. Well, we are definitely not looking to do that. We're definitely looking to get to tax that mortgage as soon as the student loans paid off. When you have enough money, when you have enough money in investments, that the income off of the investments will support you if he dies, then you're self-insured. You're not there.

We want you to be okay if something happens. to him and you're not there. Okay. And we want him to be okay if something happens to you and make sure the kiddos are fed and so forth. And that would be that, you know, and so if you had a million dollars and it was producing 10%, that'd be $100,000. Okay. And that's not even, that won't even take care of you now because you're making 180.

And so you'd need about $2 million in investments right now in zero debt in order to be self-insured. equal to, you know, having the right amount of life insurance. So no, yeah, you need to increase your life insurance and buy new policies. Yeah, if your 15-year fixed policy is running out by new ones, yeah. And yeah, and here's the thing. If you do get intense, if that did happen and you get out of debt and you look up and there's a million or two million dollars in investments and zero debt, you can cancel the life insurance.

You don't have to keep paying it. You can just call them and cancel it. But if you're not, if you don't smoke folks and you're not overweight, life insurance doesn't cost anything. It's very inexpensive. So 15 year level, 15 to 20 year level fixed rate. And the idea is that during that 15 years, you pay off your mortgage. Well, yeah. And you get out of debt.

And you build up some investments. And the kids grow up and leave. That's right. During that 15 to 20 years. And so we don't have kiddos to take care of. We've got a pile of money. and you work your way into a net worth that allows you to be self-insured. But you guys have been slow so you get to re-up your life insurance.

And then you can always drop it later, but for right now, you're not ready. That's a good question. Yeah. Felix is in Los Angeles. Hi, Felix. How are you? Hi, Dave. Thank you so much for the opportunity to be on the show.

Sure. I'm calling today to get more, to get your advice on my current living situation. I work for a government utilities agency in Los Angeles as an engineer. I currently live in downtown L.A. I'm paying about $3,000 in rent per month. And I just turned 30 this year. And I watch your show. I hear, you know, your advice about ownership and owning a home someday.

and that's a goal for my life as well. And I wanted to give your thoughts on renewing my lease, which expires this month or going back home to stay with my parents. Well, how much do you bring home every month? So after tax, I bring home about somewhere between $6,000 to $6,500. So what you're telling me is your rents 50% of your take home. Yes. It's, yes, it's around that if you include utilities and, you know, I know it. So I think you know, there's one of two things that can happen here. You can either figure out a way to bus free and suddenly make $20,000, you know, a month or you can look for someplace that's far less expensive for rent. What would you do if you moved, you know, away and moved towards where you. your family is. What would you do for a living? Well, I would still be an engineer. My family stays in Fontana, which is about maybe 50 miles away from Los Angeles. You have an engineering degree?

Yes. I have a bachelor's in civil engineering, and I have a master's in environmental engineering. And you make $70,000 a year? Well, that's, no, I make around $105,000 a year. How long you've been out of school? I graduated with my master's in 2023, and shortly after is when I moved to L.A. And got my job in Los Angeles. Yeah, I mean, you're living in one of the most expensive places in the country. So there is always going to be a limit because of that.

So if I were in your shoes, yeah, I'd be looking for other places. Now, Fontana that you mentioned, I mean, have you priced it out? What's the difference? Where could you get a one bedroom and what would it cost? Would it get you to the 25% range? Well, in LA, it's very difficult to find a place to stay. I'm talking about Fontana, like you said. I'll be staying with my parents.

Okay, so Felix, here's the thing. What you want, staying with your parents is not your play. Because it doesn't take you to the future you want. You've said nothing about where you want to be in 20 years. in 10 years and how staying with your parents is going to get you there. All we're doing solving the immediate problem by going backwards. So, no, I'm not going to do that. If I'm you, I'm looking for a new job that pays $150,000 in a market where the rent is half of what it is in L.A.

And you make a move. For your career, you're a single guy, and you go out there and make some money and get your cost of housing down. Because if you're working for utility, your bumps, your increases in pay are. going to be moderate to poor. Yeah, it's a government. It's a government. It's a government job. Yeah, it's going to be moderate to poor.

The pay is already low, and it's not going to get better. You're going to get cost-living bumps and nothing else. And so as an engineer, you can go out there and make twice what you're making now in an area that costs half what it costs to live in L.A. And that puts you in a position to build a life, a financial life, including homeownership. But the ratio you're giving me right now, going back to your parents doesn't solve it. That's regressing instead of saying how can I move forward. So I'm going to be figuring out a way

to move forward. Either a different kind of engineer application for my master's in engineering in Los Angeles where I make a lot more or a different city or both. The holidays are supposed to be joyful, but they can also be expensive. Between gifts, travel, and about a thousand limited time offers, your budget can start feeling anything but merry. And that's why I love this. Boost Mobile helps you treat yourself and your wallet. Right now, you'll pay just 10 bucks a month for your first two months. Then, only 25 bucks a month for unlimited talk, text, and data. Forever. No price hikes, no contracts, no nonsense. Just reliable service that keeps your phone bill low and your holiday spirits high. So stop stressing over your budget and start saving instead. Go to boostmobile.com

slash Ramsey and unwrap the savings today. That's boostmobile.com slash Ramsey. Restrictions apply. See boostmobile.com slash Ramsey for details. Jade Warshall, Ramsey personality is my co-host today. Thanks for being with us, America. Luke is in Columbus, Ohio. Hi, Luke. Welcome to the show. Hello.

Hi. How are you? Better than I deserve. How can we help? So, I kind of use a unique situation here. 22 years old, household income of 90,000. We inherited and inherited six acres of land and decided to build a house on We don't have any debt.

We have not taken any loans on the house. I've built it so far where you've got to roof, walls, and siding, and almost done with utilities. But our goal is that I pay for all the bills and then my wife, she pays for all the materials for the house.

My question is, should I take what's the step of my income after the bills and throw it towards the house or put it towards retirement? Okay. You're trying to build a house out of your pocket and so far you have, but you and your wife have separate finances.

Well, we've worked together for the finances, but not really. Not really. You've delegated part of it to her and part of it to you. You don't have one pile. So you need one pile of money. Her money, your money is our money. One big pile. Out of that pile, what is our first goal?

I would assume it's to finish the house, isn't it? Yes, sir. So what does it take to finish the house money-wise? How much money? We're at probably about 10 grand left. We got drywall insulation and paint. Okay. How long if you pile all your money, you and your wife, our money in one pile,

how long does it take you to come up with 10 grand? Well, probably a month or two. Yeah. Okay. So let's finish the house. And then you need to make sure you have an emergency fund of three to six months of expenses. and then take 15% of your household income, our income, and start that towards retirement.

That's baby step four. But you're going to be living in a paid-for house. That's nice. That's awesome. You got this acreage and you built a house. You got a lot of sweat in it. And you're going to have a bunch of equity, right? Oh, yeah, for sure.

What's this finished product going to be worth, acreage and house total? We're hoping for $250. Good. Very cool. And you said you're 26? 22. 22. Wow.

Okay, wow. And your household income, if we put both of your money in one pile, is how much a year? $90,000. How much? $90,000. That's the two of you combined. Okay, good. I make $62. She makes $28. Okay, cool. Perfect, yeah. So let's take 15% of $90,000 after we get the emergency fund in place, and you're sitting on $250,000 house. You're going to be millionaires before you're 30.

Whoa. That's exciting. Not fun. Mm-hmm. I hope they take your advice and put their money in one pile. Well, that's the thing. Yeah. So there's, yeah, there's just so much data that says when you do that, that your higher probability of winning at marriage, winning at relationship, winning at everything. And let's circle back and say this, nothing to do with Luke's call, but just this,

because we get so much bull crap on social media about telling people put their money together. You should be independent. No, you shouldn't be independent if you're married. That's a dumb, bud idea. That's how your marriage doesn't work because you're so strung out on you that you're worthless as a spouse. So that's the problem. So no, you don't need to be independent. You need to be one.

The preacher said, and now you are one. One, uno, unity, all in one. And so if we know, and we do know that the data tells us in America today, the number one cause of divorce is, money fights and money problems. The number one solution to that is learning to dream together and put our money together and handle our problems and our challenges and our opportunities and our dreams together. That is the solution where you don't have money problems cause divorce. If we have the solution to the number one cause of divorce, why are you arguing with us? That's just dumb. Because people out there are dumb, and we

We will always have a show for that reason. So there it is. Not all people out there are dumb, but enough of them are dumb, but we will always have this show. Are they dumb, Dave, or do they do dumb things? They're ignorant. Ignorant's different than dumb. That's good. I don't know how.

Ignorance. And there's things I'm ignorant about, by the way. I don't know how. I used to know when I was a young redneck. I used to know how to work on a car. But now a car looks like a spaceship when I opened the hood. And so I can't even, I don't know if I could jump the thing and get a jumper cable on it nowadays without blowing it up. So, you know, so, but so I don't know how to work on

that car. It doesn't mean I'm dumb. It means I'm ignorant. I don't know how to do that. But then don't argue with experts when you're ignorant because it makes you look dumb. I'll take that, dude. I'll take that. Golly. Wow. And Luke was doing none of that. Luke's a sharp young guy, At 22, man, he's got it going on, doesn't he? Yeah, most definitely. I don't even. I was nowhere near that, so. Yeah, I don't even want to talk about it.

Jason was in Raleigh, North Carolina. Hi, Jason. How are you? Hey, guys. How are y'all? Can you hear me okay? Yes. What's up?

Good, good. Hey, I just got a quick question for you. I'll give you a quick rundown on my situation. I'm trying to decide if I should sell my house. I live about an hour outside of the Carolina Metro is right now. I'm planning to make a move. summer. I'm self-employed at sell real estate and so in my new market I'm going to have to kind of start from the ground up. I'm near the end of the baby step two.

If this move wasn't happening, I'd be done probably by June or July, maybe August. The flip side, so the question is basically... Where are you going to live when you move? I'm going to rent. Okay. And so your question is whether to keep your house or not? Yeah, I'll sell it. No, just sell. Yeah, I bought.

You don't need to be a renter and be a landlord. That's bass backwards. That was risky, Dave. That was very risky. That's what I needed to know. Yeah, I mean, really, think about it. That's backwards. You don't want to do that.

So, no, you need to get, you know, you're in the real estate business. You're going to get plenty of opportunities to own a property and live in a house that you pay cash for or buy it and then get it paid off as quick as you can. Hanging on to this boat anchor that represents your former life out in the burbs when you're moving into the metro and having a deal with that while you're trying to learn to sell real estate and trying to get your business moving. Nah. Yeah.

That's where my mind was and I thought that was right. I just wanted to make sure. Yeah, you're right on track, man. You're right on track. So there you go. Here's the thing. It's interesting. Real estate is such an emotional topic because,

It has these two strange elements to it. Strange element number one is it is an excellent way to build wealth when you do it right as a part of your long-term plan. Right. That then gets confused with it's always smart no matter what. That's a good point, Dave. And it's not. Sometimes real estate, doing a real estate deal in the wrong situation in your life could be not, you know, in Jason's it's just a bad idea.

people that's even way over into the stupid zone. Yeah for sure. And so real estate is it's weird. It is because it's a blessing when you do it right, that gives everybody permission to do it even wrong and it becomes a curse. Yeah. And I think also the other thing that I think we're fighting now is so many people had properties that they locked in at a better interest rate. And so then when life moves them, they feel like, yeah, it's a good deal. Maybe I shouldn't get rid of it. Even though I'm moving, I should keep it. It's like this weird attachment to it. It's like because real estate is good, I can't, everything I do with it is going to be smart. Right. It just falls in line. And it's like, no, it's not going to be smart. You know, it's not smart. The only way that, you know, no,

there's a good time to cut real estate loose. There's a good time for it to not be there. And buying, real estate you can't afford. Buying a house, you can't afford. We had that earlier in the hour. That's right. So we've got to sell the house as mom wants to come home and not be a teacher and be a full-time mom. That's cool. But we got to sell the house. But we got to sell the house. house with bought a house we can't afford. It's not a blessing anymore. That's right. It's a curse. It's a problem. Yes. So doing it wrong or keeping it wrong or because real estate's good. It's not always good. And it's not that real estate is, actually real estate is always good. It's the life situation you're in doesn't match up with owning real estate right then.

And so it's not always good to keep your old house and rent it. Matter of fact, it seldom is. Yeah. Very seldom. This is the Ramsey show. Welcome back to the Ramsey Show in the Fair Wins Credit Union Studio. Jade Washaw-Ramsey Personality, number one best-selling author, is my co-host today. Alyssa is with us in Chicago. Hi, Alyssa. How are you? I'm good.

How are you? Better than I deserve. What's up? My question is, how much is too much to spend on a wedding? Okay. That's cool. How much are you thinking about spending? 60,000.

Cool. Nice wedding. Good. Okay. Do you have 60,000? So we're actively saving to get to, we have about half right now. So by next September, when the wedding would be, we would have that. So mom and dad aren't chipping in that you and him paying for it? We are going with the intention that we're paying for it. They've briefly mentioned that they might contribute, but no hard numbers have been given or anything like that. Okay. So you're assuming it's all on you. So what do you make? Yeah. I make 90 before commission. 190.

Cool. Do you guys have any debt? No debt. Wow. It's not too much. It's not too much. Okay. Not if you pay cash. That's exciting. Okay.

You want to know how I did that? Yes. Here's fun, okay. average household income in America right now is about $75,000. The average wedding in America is about $36,000. It's about half of the average income. So if you spend more than half your annual income on your wedding, and if you're paying for all of it, which just sounds like you are, okay,

then you're spending too much on a wedding because you're more than half the average. Now, here's the thing to keep in mind. Average kind of sucks in America. We don't necessarily want to be average, but you're below 50% of your way below, 50% of your $270,000 income. And so you're, on a ratio basis, you are half of the national average, which is half. That's a weird way to say that. But yeah.

So, I mean, the national average would put, if you spent 50% of your all's income, it'd be 135. So you're well below what the average person is doing. And you're about half of that at 60. And so you're very conservative as a ratio. But now for somebody that makes 100 grand, it sounds like that, you know, Alyssa's lost her mind, you know, but that's what people say that don't have any money and you've got some money. So, you know, when you have more money, you can spend more.

Yeah. Without it being a problem. Yeah. So. And if that doesn't include the honeymoon, And we added, I don't know, 10 or 15 on top of that. I was talking about the wedding. Honeymoon's a different story.

I think that'd be fine. And the engagement rings another story, okay? Yeah, that's a good differential, though. When we're talking about the wedding, there are those three components. There's the rings. Then there's the actual party, and then there's your honeymoon. What do you all do for living? I do medical sales, and he does product management.

Cool. Okay. Well, he's going to really like this last suggestion. question. We've done three weddings at the Ramsey's. I've got three kids that are all married and been married many, many years, okay? And Ramsey's, we like a big party. We like to celebrate stuff like that. And so we, we threw major parties on each of these weddings. It was a lot of fun. But we learned, and we did it from the first one. We introduced this idea that for your fiancé will love me. Your wedding is a project. So let's lay out a budget. Yeah. In detail.

If we're going to spend 60, how much of that's the dress, how much of that's the reception, how much of that's the videographer, how much of that's the preacher, how much is the venue, and you lay out a budget. And then guess what? You stick to the budget. And that would be my word of wise for you, Alyssa, because when you hear what Dave said, which is, yeah, which is technically you could be spending more if you were being, quote, average. So for you, the hard part is going to say, even though we could spend more, we're going to stick to what we said in the beginning of 60,000. I would pretend like that you work for someone and your job was to manage a $60,000 budget

and bring the event in on budget, on schedule. Because you're a manager project. It's an event project. I mean, we manage events here. It's what it is. And so you get fired if you went over someone else's budget. Yeah, if you work for somebody, you get fired if you screwed it up, right? So just treat it like it's serious business.

And I know that doesn't sound very romantic, but people use romance as a way to do a lot of stupid but stuff. So no, we're not doing that. So, no, just lay it out exactly. And you say this is, and you can pull up some percentages. There's some good guidelines online for how much to spend on the dress. I will go ahead and tell you, if you're going to have a nice reception to have the big party, it's going to be your biggest line item by far. Like how many people you think, I mean, 60,000, you're thinking about inviting a decent number of people, aren't you? It's not huge. So we've already booked the venue. And we're going. through that process, but I'm more of the favor and he's more of the spender. And so thinking of

kind of the rough estimate that we put together with all the, you know, videographer, photographer and all of that, it just sounds like a lot of money. So I... Yeah, I go back before the team hesitant and not. You know what I say? You know what I mean when I say scope creep? Yes. Yeah, this project, this thing will creep up and the 60 will turn into 80. If you do not, if you do not line item this, and no rough estimates, it's freaking what we're going to do. And then when you're meeting with the caterer and they go, well, we can have a devil lick. No, no, this is all we got. This is what we're doing. And, well, you know, we could spend, you know, freaking $85,000 on flowers. Who's getting married here? Princess die?

I mean, seriously. So, you know, we're going to go in the field, pick some wildflowers so that we stay on budget. Rachel actually did that one. Well, if nothing else. Because she was over budget on other stuff. And the only way she could get it back in budget was to get the flowers down. If nothing else planned for 54, so at least you've got 10% set aside just as contingency. Oh, that's what I do. A little slush fund in the line items. Just in case.

Yeah, a little just in case fun. I'd have something in there for that. I don't know if I get away with that, but wow, wow. Yeah, that's exactly how I would do it. And, Lisa, I think you're approaching it very wisely. You're not counting on the people who have been vague about their possible input. That way you're not under their control. Matter of fact, whatever they come forth with, I'd probably just use that for the honeymoon.

And I just lock this baby down on 60 and just go, we're doing it. And you and the fiancé sit down and agree to that. Go, this is a project like you manage at work. We're going to manage this. We're going to come in on budget. We're going to get the details out because there's always something that you can go higher. You can always go one bigger, one better on everything. You get the extra large shrimp instead of the large shrimp.

What was the thing on the father of the bride? Cheaper chicken. Oh, yeah. You get ice sculptures. Yeah, that's it. And so, yeah, you can do it. And you can do that on a $10,000 budget. You can do it on whatever.

You just manage the budget. That's right. This is what we're doing. doing. And so it's just we're going to get super creative, but we're going to do this for $7,800. We had a lady here on the team that got married and had a really nice little wedding for $7,000. And she just, you know, they were trying to get out of debt. And that's the most they were going to spend. And it was really very nice. Can I tell you the, okay, Sam and I paid for our wedding out of pocket? Oh, it was like $10,000. Okay. It was a little bit more. But I, my biggest

regret to this day, and it was in the name of doing it debt-free. We didn't have an open bar. No open bar. That's your regret that you didn't booze up everybody else for free? I mean, we were on a yacht. It just made sense. You should have had, there should have been some drinks on board. Oh, you didn't have a, oh. There was no open bar. There was no bar. No. No, not, they couldn't even pay. No. Open bar would be like you paid. No. Well, I felt it was tacky to have people pay, so there just was no bar. Just no. Oh, well, okay. I'll go. With that. Okay.

Listen, it was a mistake. That's okay. You know what? They don't remember it? You're the only one that does. I guess so. I don't know about that. Sam doesn't even remember it.

When you're tired of feeling stuck with money, there's just one solution. To get different results, you have to do something different. No one accidentally wins with money. You have to have a game plan, and that begins with our get started assessment. Go to ramsysysolutions.com slash start. Answer some questions, and we'll show you what steps to take next. Don't stay stuck. Take control of your money starting today.

Go with ramsysolutions.com slash start. Jade Walshaw, Ramsey Personality, number one bestselling author is my co-host today. Thank you for joining us America. I am Dave Ramsey, your host. Katrina is with us in Salt Lake City. Hi, Katrina. How are you? Hi, I am fantastic.

Thank you so much for asking. How are you? Better than I deserve. What's up? All right. So I am going through a divorce and it's really hurting me financially. So I'm wondering if I should take money out of my business account that I'm actually trying to sell because of the divorce and use some of that money to buy things for my primary job. What is your primary job? I am a school teacher and tomorrow I go back to school and the kids come back next Tuesday. But I need to buy something. some supplies for the students to come back to school. I'm sorry, they don't furnish your supplies for the classroom like they should.

Well, they give me $5. Which would make you every school teacher in America? Well, yeah, thank you. They give me $5 a student, but I've already spent that. I bought glue sticks and colored pencils and pencil pouches for the students. So what are you talking about spending? I need paper, hand sanitizers, folders, and journals. What are you talking about spending?

I'm thinking I need about $200. What type of business do you have? What's the nature of it? So in the evenings, I run an escape room, but I have to sell it, according to the divorce decree. I have to sell it so I could pay back some of the equity that I owe to my soon-to-be ex-husband. Do you take a payroll from the business? I don't it doesn't make enough money so I just I run it and and then like it pays for okay if $200 changes your life you have other problems well right now I'm I'm barely

finished baby step number one I've been using your every dollar out if you have to choose between you eating and buying your children hand sanitizer you eat okay I get that okay and so if you you know, if you're down to nothing, if you have no money and $200 is a huge amount to you, where you get it from doesn't matter. It's where you spend it that matters. You don't have the option to be this generous to these students. Contact a local church and ask them to help you with, they've got some journals laying around, and maybe they've got some hand sanitizer they can give you from the children's ministry and help you fund this, help you get the things set up without you spending the $200 at Tarjeet.

And, you know, let's go that route because it sounds like this $200 is a lot of money to you. Yeah. And you've got, you need to work on the other side of that and that's the overall income. I think I'm tutoring instead of running a game room. Escape room. Yeah. Today's question of the day is brought to you by Y-R-R-R-R-R-E-F-Y. If private student loan debt is taking away your peace of mind and you don't see any way out,

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Go to yrefi. Refi.com slash Ramsey today. That's the letter Y, r eFY.com slash Ramsey might not be in all. States. All right. Today's question comes from Nora in Pennsylvania. She says, I've been married for almost 30 years and my husband and I have adult children. My husband runs his mother's family business. He will inherit the business when she passes, but he says that the business is not going to be mine if anything happens to him. He says his will is going to state that our children will get the business and that he will not be providing for me. I've explained to him how upsetting

this is and that I shouldn't have to go to my children for help when it is his responsibility to care for me. I live on a fixed income, my adult life as a stay-at-home mom, what can I do to protect myself legally? Wow. You can't. So you have a marriage problem. My goodness. You don't have a legal problem. You're married to a jerk. And that's a problem. Yeah, I thought this question was going in one direction. And then it turned left and went off into the ditch. It sure did. You know, so honey, you need to go see a marriage counselor.

And he's not going to go with you because he's right about everything. He doesn't need any help if you ask him. And of course, everybody else listening to this knows he's the one needs the help. But you need to go to the marriage counselor. And the marriage counselor is going to explain to you that your marriage is over. If you don't get some serious work done on it. That rattling you're hearing under the hood means, the engine's about to blow, kiddo.

And this does not describe a loving home where the husband is gentle, kind, and serves his wife. I didn't hear anything like that in here. No, no. So sad. Nora, I'm sorry. But yeah, you need to go see a marriage counselor today. Tell him he ought to go with you, but he won't. And then the marriage counselor will give you words to speak to him that lead to either him coming to the table or the

end of your marriage. You can't go forward with this. And after 30 years, he still chooses his mommy. Wow. After 30 years, he's still a mama's boy. Old men that are mama's boy are kind of pitiful. That's the worst. Mama's boys are pitiful, period, after four years old. But old men, mama's boys, seriously pitiful. And he's going to be one even after she's gone. That means this guy's in his 50s. he's an old man mama's boy. You can title the thumbnail on YouTube. Old man mama's boy. There you go.

I thought she was going to say something. As I was reading it, I thought, okay, this is a, his mom's family business. It's going to pass to the children. Maybe she didn't want to run the business. You know what I mean? Because there's part of that where it's like, I don't want this responsibility. But that took a hard left turn. Ooh, gracious.

Yeah. Yeah, mamas, don't let your boy. become leave and cleave oh choose carefully my darling choose carefully choose carefully choose a man who loves his mother from a distance I know that's right mom I love you over there listen I say that but when the day comes when my son gets old enough where he has to go over there it's gonna be hard I think it's one of the hardest child developmental things I've ever witnessed as we raised kids girls separate

from their mom, but boys, when boys stay right there until they separate, when they separate, it's brutal. And it usually comes somewhere around 16 or 17 years old for people that become men. Oh, man. But boys who are, Mama's boy at 50, they never did cut the cord. And so they're still tugging on her apron strings. Mommy, Mommy, Mommy, Mommy, I want the business. Mommy, Mommy, Mommy, would you take care of Mommy?

Mommy, I want to make sure you love me, Mommy. Oh, brother, I think I'm going to puke. Oh, gosh. Oh, no, I want my son. We do have a manhood crisis in this country for sure. Wow. I mean, this is not masculinity. It's not toxic masculinity. It's just a child. Yeah, and a controlling child, a very controlling jerk of a child. Yeah. Goodness gracious. After 30 years. Nora's husband, if you happen to end up listening to this, if you're not who she says you are, you need to understand.

how screwed up your marriage is that your wife wrote this letter to a nationally syndicated show that has hundreds of millions of people downloaded every month. So if you're not this and she sent this in, you got stuff going on, dude, so you still deserve bus tracks over your butt. So we threw you right in front of the bus still. That's what happened. Maybe he'll write in a letter next. I hope so. I wish he would just come on the air and let us talk to him. How fun would that be? That would be compelling podcast material. Oh, man. Wow. Ouch. Yeah, that's, this is a, here's what's interesting. The number one thing that will keep you from building wealth is screwed up relationships. Bingo. That's so true. When you can't handle screwed up

relationships and put reasonable, gentle, kind, strong boundaries in place and keep the screwed up people at a distance and the right people up close and you can't function with other humans, you're going to struggle building wealth, period. This is the Ramsey Show. It's one of the best times of the year, but it's also the time of year when people let their money get totally out of control. Everywhere you look, it's just buy. buy, buy, buy. So you start swiping the credit card and suddenly it's January and you got a mess on

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that does a lot of transactions, not your Aunt Sally who got her license three weeks ago. Sorry, Aunt Sally. You don't qualify to be a Ramsey endorsed local provider that's Ramsey trusted. We love you. We hope you do good in the real estate business, but we don't want you to sell a half a million dollar house for somebody we love, and you've never sold a house. You need to be doing 30 to 50 to 100 transactions, 200 transactions a year, and then you can become the possible, possibly become Ramsey trusted. So if you want to know who's Ramsey trusted and is an high-octane, high-protein producer in your area, You can do that for free at ramsysolutions.com slash agent.

Teddy is in Traverse City, Michigan. Hi, Teddy. How are you? I'm doing great, Dave. What a pleasure to speak to you today. You too, man. What's up? Well, I've been in debt most of my whole life between cars and my wife and I bought a house.

I am self-employed. My wife is retired after 32 years. I make about $70,000 a year in salary. I have $1,400 a month in rental income from a home that we had purchased and paid off. My wife makes about $400 a week and a side hustle, and she draws $1,500 a month from her 401K. Last year, we got a HELOC loan for a home addition. So I still owe about $100,000 on that. I owe $20,000 on the mortgage on the house we're living in now that we put the addition on,

as well as $20,000 on a car. We've got about $1.1 million in retirement, and of that, $210,000 is liquid investments. So my question is, we've been working in the debt snowball, but do I sell some of my investments and pay off this debt and just get it over with? Yep. Yep. How old are you? I'm 62, and my wife is 65.

Yes. If you take, you said 1.2, and we turn it into 1. and you're 100% debt-free, I'll take it. I mean, you said you had $210,000 that was liquid. I do. You could do it with... It's not tied up in retirement. That's liquid.

Oh, it's no retirement at all. So you're not even going to have taxes on it. Yeah, no. Well, it may be a little gain on it. It may have been sitting there gaining, but it might have a little capital gain. So it's not even going to be a $200 hit. It's, uh, be $100, 150 hit, whatever. But either way, you're 100% debt-free.

Now, that only works, Teddy. If you stop borrowing money. Oh, yeah, I'm sorry, America. I've been in, you know, borrowed cars, bought to buy cars. I know. I'm real frugal. I'm real frugal. You know, you're not.

You're 66 with a stupid car payment. Isn't that the truth? You're a millionaire with a car payment. Yeah, you're correct. Don't do that. No, sir. All right, brother. Hey, seriously, if you go pay all this,

off and then run up another debt, you're just going to eat your nest egg up. I can't wait to come and stand on the stage. You've inspired me. I love it, brother. I love it. You're a good man. Congratulations on being a millionaire. Good. Very cool. Very cool. Isn't it funny how hard it is to get the culture out of our veins? It's very, I mean, it's yapping out as around every corner, you know, everywhere you look. Every corner. That's why when someone's debt freehouse and everything, we say you're weird. Yeah. Because you are.

Weird just means unusual. It doesn't mean bad. Well, what makes you weird is you've decided to become independent in a culture that teaches you to constantly be dependent. That's what the weird is. Wow. Let it roll around in the brain for a while. That's strong. That's strong.

Well done. All right. Let's do it. Charlotte's in Cincinnati. Hey, Charlotte. How are you? Hey, good afternoon, Dave and crew. Thank you so much for taking my call.

I thoroughly enjoyed listening to your program. My question is, just a tiny bit of my backstores. My husband passed away in 2012, and as a result of insurance money coming in, we were able to get debt-free, my daughter and I, and we have stayed debt-free, thank God. And she just finished her freshman year in college. We have a cafeteria 529 plan, project. You have a what, 529? It's what's called a cafeteria 529 plan. Oh, a cafeteria.

I didn't hear the word. Okay, cafeteria. Okay, I got you. Yeah, okay. That's a good plan. So, yeah, so we've got our college paid for as far as that's concerned. But unfortunately, the way that it's grown, there's a trajectory of being like an $80,000 surplus at the end. And I found out that I could only put $35,000 in a Roth IRA in her name.

That's true. After she's 30. Okay. Yeah. So I'm a little bit concerned about like, can I take any of that overage? I mean. So how much is in the 529 total? There's probably right now $189.

Okay. And how much? did you put in and how much is growth? Well, that's just it. Like, I only, I think at the time I only put in like, I don't know, 85,000. Okay, she got 100 growth. You got 100 growth. Yeah.

And of that, 80's going to be, if he keeps growing, there's even going to be more. And so you'll have an 80 overage. Is that what we're saying? Yes. Is she getting any scholarships? She is. Okay. You know you can pull that much out.

of the equivalent of the scholarship can be pulled out each year no tax the equivalent to the scholarship so she gets a $10,000 scholarship pull $10,000 out that's actually an incentive to get more scholarships yeah okay because I guess my tax preparer he doesn't know about that is there any place that you could direct me as to where I could find good solid information about this kind of stuff a different tax preparer because that's pretty standard information. I'm not even good at taxes and I know it. So, yeah, you know, if that's one of our ELPs, I'm sorry, but if it's not, check one of our endorsed local providers for taxes in your area

and get a second opinion on it. But you're allowed to pull the equivalent of scholarships out, athletic, academic, whatever the basis for the scholarship is, every year, and there's zero tax on it. So she gets a scholarship pull that much out. Do you know how much she got in scholarships? Like last year, I mean, it was, I don't know, it was around $10,000, I think. Yeah, okay.

All right. That's not going to alleviate the problem completely, because if it's times four, it's only $40,000, right? And she's 80 over, so you're going to have another $40. And I really wouldn't screw around with the Roth IRA at age 30. I'd just go ahead and cash it out. You don't get, it's not 100% tax. You're just taxed and penalized on that amount. of growth only. That's why I was asking you what you had in it. And so the calculation is not as

severe as it sounds. So let's say you end up pulling 40,000 bucks out because we just got rid of 40 with the scholarship idea. You know, you might have $5,000 in taxes. It's 10% yeah. Is that the rate? Yeah, on the growth. Yeah. So I could in essence take that money out and use it, say like for home improvements and use it for anything if you pay the taxes on it and they'll be the taxes and the penalty there's a tax and a penalty both but it's maybe a 10 or a 15 000 out of that 40 you're going to lose but it's not 100 percent so they don't take the whole thing and and rather than try to screw around with something for a 22 year old wait until they're 30 and these idiots in Washington change the law six times between now and then no I just cash it out take my hit and go on and

go hey we paid for college and we had a little leftover good life's good it. Yeah, I agree. There you go. Hey, good question. Thanks for calling. So, you know, that's a very unusual problem. Yeah, it's a good, I think it's a good problem to have. Yeah. I mean, the only other thing is if they left it, I mean, it can pass, like, her as a beneficiary, she can pass it to her kids when the time, you know, when the time comes. That's way out there, but. Yeah, now we got 800 grand. That's true. Yeah. At that point, if you take the penalty, it might hurt a little bit more. Yeah, I think I'm going to go ahead and just be done with it and just say, hey, we did a great job. We might have even done too good a job, but just so slightly.

Just so slightly. Yeah, when I hit a golf ball a little bit too long, I just say I hit it too well. That's all it is. This is the Ramsey Show. Do you want to keep more money in your pocket and not Uncle Sam's? Then listen up. There are tax deductions and credits you could maximize before the end of the year by connecting with an experience tax professional like a Ramsey trusted tax pro they know the tax code inside and out so you don't have to

and they can help you file when tax season rolls around get a trusted tax pro by going to ramsysolutions dot com slash tax pro ramsysolutions dot com slash tax pro our scripture of the day luke 638 give and it will be given to you a good measure pressed down shaken together and running over will be poured into your lap Jay Paul Getty says money is like manure. You have to spread it around or it smells. All right. I'll go with a little generosity. There we go.

Left in one pile, it stinks. Yes, I like that. That's good. Dylan is in Houston, Texas. Hi, Dylan. Welcome to the Ramsey show. Hey, Dave and Jade. How are you?

Better than we deserve. What's up in your world? Hey, I've got a question for you. I've kind of got two options. I'm working baby step number two currently with. my wife. We are about 71,000 in debt. 67 of that is student loans and 4,000 on a credit card. Right now we're bringing about 6,200, and I think it'll take us roughly five years to get out of that debt. So that's kind of what I'm going to label is option one. Option two is my wife can have

the opportunity to travel with her job, and we would be able to kind of sell our house, pay all that debt off instantly, and then travel around for a couple more years while we save up for another down payment and find the place that we want to stay for a while. And that option, I wouldn't work. I would raise my five-year-old and my two-year-old, maybe finding a job on the road if I got time. But I wanted to get y'all's opinion. What kind of work is it? Nursing? Yeah, well, kind of. It's an echocardiography, so ultrasound of the heart, but very similar to like a travel nurse. Okay. So give me a better picture of that. So is that you just, you live somewhere for six months, and then you move on? What does that look like? Three-month contracts.

roughly about 2,500 a week. But they range, depending, but average would be about 2,500 a week. And how old are the kids? Three and five. Five-year-old and, yeah, five and two. Five-and-two. Okay. Interesting.

What do you do? I work for the state. Doing what? Fisheries biology. What do you make? I make 69,000. What does she make now? She's part-time.

She's part-time. She's a home with three. kids two times so it ranges but um i think about 30,000 a year. Okay so she could work full time and make 70. She could and um but you're also concerned is that one parent is with the kids it sounds like yeah we like that and and I'm okay staying in dead a little longer I know that's not the Ramsey way but I'm okay with it so she can spend some time with the kids that's really important to her if you were leaning towards one what would you lean towards because

when I look at it, when I look at what you're showing me, it really feels more like a values conversation between you guys. Some couples are, they want the adventure and they would say, oh, this is a great opportunity. Let's go out, go travel. The kids will learn on the road, you know, that kind of thing. Whereas other families like the feeling of stability and being in one place. So do you see what I'm saying? Where do you fall on that line? Yeah, for me, option two. And I think that's both of us. The what our concern is, You all just went through the housing market. I mean, we're in a really good spot we bought in 2019, so we have a low interest rate.

Okay. We're just not a huge fan of our area. We both love our jobs. We just want a different area. So then you've whittled this down to it all being about interest rate. And that shows me. Or house price. Yeah.

House prices are going to escalate during the three or four years he does this. That's true, but they will also have paid off debt, so you'll be saving more. So I think you can pace with that. Yes, and putting into retirement because right now baby step number two, we're not into retirement. So this would essentially jump us into three. Yeah. I feel like what you're leaning towards is option two, and I don't have a problem with that as long as you guys don't have a problem with it. Okay.

And then I'd set clear limits. How long do we think we want to do this? And then play out the whole thing until the end. What is the whole thing look like? We do this for three years. At the end of it, we've had X amount of dollars saved, and then we can go and we think, we can buy this amount of house and cash. Play the whole plan out and then ask yourself what happens if this goes well,

what happens if this goes bad and really try to fill in all those variables as best as possible on paper, not just mentally, not talking about it over dinner, but write it down so you can see do we like this? Yeah, and give yourself permission to pull the plug in the middle of it. Yeah. There's nothing holding you to this. Okay, three years, we're going to do five cities. Okay, that's the plan.

But after three cities, you go, this isn't fun. Yeah. You'd stop. You'd stop, you know. You don't have to. to play all the way out. It's not a long-term play. I would not call it a decade.

No. Yeah, a decade of this feels. You know, I think I would put a limit on, personally I would put a limit on it from an economic standpoint of five years. Yeah, because what's the goal behind it? You can stand, too. So, but, you know, I personally wouldn't do that.

But, I mean, I wouldn't do anything longer than five years. I think you're going to end up in other kinds of issues. At that point, you've got a ten. year old and eight year old too so um but the point of playing that out is to say what is what is it you're trying to accomplish exactly with this money and what's what's in game and is it worth it and is the the process we're going through going to be worth is is the is the juice going to be worth a squeeze you uh Ramon is in San Diego hi Ramon how are you hey hello Dave thank you for having me sure how can we help I mean I don't know where to start so I'm just going to put

this way. I'm like $73,000 in debt and I don't really know where to start. Okay. I mean, I got myself in this position. I'm down bidding myself down to it and I mean, here we are now. What kind of debt is it? I mean, it's a combination of a lot of things. It's credit card, say personal loans. Give us a break in. How much on credit cards? Okay, credit cards is about 33,000. Okay. How much on the car? And the car is 16,000.

Okay. What else? Personal loan? Okay. Personal loan is 6,000. And student debt is about 12,000. Okay. The car, what's it worth if you sold it?

Just curious? Last time I checked, it was like $24,000. What do you make? I'm currently making $3,000 a month. Okay. So I just want to clarify the car. You said you owe $16,000, and I said if you sold it, you said you'd get $24,000. Is that right?

Yeah. Yeah, last time I checked like a couple months ago. Okay, well, that's good for you. Yeah. Okay, so what if step one was we sold this car to get out of the note or you want to get out of the note and then you bought something in cash to free up some money? What about that? Yeah, yeah. That's something I discussed with my wife too and we're kind of on board.

What's your wife make? I take a look at my website home. And you make $3,000 a month in San Diego. Ooh, that don't work. What's keeping you in San Diego? What do you do? Okay, so just a little background in the wider situation ended up like this. So I lost my full-time job like six months ago.

I ended up being unemployed for like four or five months, and I finally landed this part-time job from Costco pushing cards in the meantime. And now I have a job, professional job again, thank God, lined up in Houston, Texas. It's going to start next month. Oh, that's a big part of this. Oh, that kind of matters in the discussion. So how much are you going to make there? Yeah.

So the first few months it's going to be like $57,000 a year, plus a 500, $500 a rent a month. And after that, I think it's going to get, they're going to bump me at to look, $62,000 thousand dollars. Good. Salary plus commissions is a sales position. Awesome. Excellent. So the biggest thing to worry about now

is saving up for this move because this move is coming. It's going to be expensive. I still think you need to get rid of this car because it's going to free up extra money. Are they giving you a moving stipend? Yeah. Yeah. What are they going to send like 1500 before taxes?

1,500? Okay, that's not a whole lot. So I want your homework here is to not make this worse by going into debt on a move. So you need to save up for the move and you need to do detailed research on what this is going to cost you because a cross-country move is expensive.

When do you move? They want me to be there by January 2nd. Oohie. Yeah. So, yeah, you need to be delivering pizzas and Uber's and whatever else you can going crazy between now and Christmas, throwing boxes for FedEx or UPS,

whatever you've got to do. I want you working 60, 80 hours a week to pay for the move between now and Christmas, okay? Yeah. No, yeah, I'm actually looking for a second and a third job at the moment. Yeah, I wouldn't look for one. I'd go get one today. They're everywhere.

It's Christmas, dude. I mean, Target's paying $20 an hour. Get your butt over there. So load up on that, and then list your debts smallest to largest, and we're going to pay for you to go through Financial Peace University, our class to show you how to do all this stuff because we're running out of time, and we didn't get to give you a great answer. So you hang on, Christian will pick up and take care of you, brother.

You're going to be great. You're going to do good. I can tell. This is The Ramsey Show. 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.