The Ramsey Show - My Husband Won't Stop Lending His Mom Money

Starting point is 00:00:02 Brought to you by the Every Dollar app. Start budgeting for free today. Normal is broken. Common Sense is weird, so we're here to help you transform your life. From the Ramsey Network and the Fairwinds Credit Union Studio. This is the Ramsey show, alongside the fabulous, incomparable Jade Warshaw. I'm just Ken. That's a lyric, you know?

Starting point is 00:00:33 I'm sorry, Ken. From the Barbie movie. That's all. I'm just trying to do a little shout-out, see if the audience is a way. and pay attention. Fabulous studio audience today. Handsome looking group of people that we'll meet here in a little bit out there watching in the lobby.

Starting point is 00:00:45 So let's get right to it. AAA 825-5-2-25. That's the number to jump in today. Sarah joins us in Philadelphia, Pennsylvania. Sarah, how can we help? Hey, guys. So my husband and I keep on loaning his mom money. She always pays it back to be fair.

Starting point is 00:01:04 But then she asks again, and I'm starting to really resent it. and we disagree on whether to keep helping. And I just don't know how to go forward with my husband here. Oh, boy. Obviously, you don't want to. He feels he has to. Is that a fair classification? Okay.

Starting point is 00:01:21 And tell me about the last conversation that you guys had about this. How did it go? Well, it started because she asked for $7,000 to fix her car. Oh, Lardi. Whoa, I thought this was in the $70 range to be completely. Absolutely. I'm not the same. No, no, no. This is not your change.

Starting point is 00:01:41 Wow. No. It's always thousands of dollars. And I basically told him, like, listen, we're her piggy bank, and I'm tired of being her piggy bank. And she... What did he say? Go ahead. Well, he says that she never asks for frivolous things.

Starting point is 00:02:00 It's always, quote, unquote, an emergency or important. Okay, tell me what the $7,000 ask was for. Just, I think it was the transmission on her car. And how often does this occur? Is this once a year? Is it every couple months? And is it always, like, to the tune of, like, thousands of dollars? Or is it sometimes just, like, spot me into a couple of hundies?

Starting point is 00:02:24 No, it's always, it's always thousands of dollars. It's at least once a year. And it's sometimes twice a year. And she always pays it back? She does. Yeah. How long does that take? I don't know because this is all just my husband's word, but I think six months.

Starting point is 00:02:46 Yeah, this is tough. The reason I asked, because I really wanted Jade to lean in on this one, because you are the wife. And this is tough for me. I don't have any clear response because the reason I asked about the relationship conversation was what had happened the last time we talked about it. And you didn't give me a lot of detail, but from what I inferring, he basically was like, well, it's not. frivolous, she needed a new transmission. And so in his mind, he's justifying mom's crazy ass. He's on mom's side. Right. And that's a problem. And so she's in, so I'm going to actually defer to you here because this, not to say that a man can't inform this question, but I do think it's

Starting point is 00:03:27 unique. I want you to lead off here. Could to be honest with you, I'm not sure what she does here. I think that this is a classic, this is kind of a classic leave and cleave. type deal where the son has to go, I love my mom, my mom made me, she raised me, I have nothing but love for her. But if I'm forced to choose and my wife is not wrong, it's just a, well, I think, I think the husband's wrong. But I'm just saying in his mind, in his mind, if he's, if he's seeing it as a, as a question of preference, my mom prefers this, my wife prefers this, you got to go with the wife every time. Yeah. And that's the question I have. Quick, I don't want to totally interrupt your momentum, but I do want it, Sarah.

Starting point is 00:04:10 I mean, is he completely clear, if he were sitting right here with Jaden, would he be completely clear that you've had it with this, or does he think you're just mildly frustrated? What does he think? I think he knows that I've kind of had it with this. Okay. Now, I've been pretty blunt with him. You said something earlier that begs a couple of questions from me. When I asked, does she pay the money back?

Starting point is 00:04:32 By the way, that's neither here nor there to the question of whether you should lend it. I was trying to understand his point of view a little bit more so I can argue it. But what you responded was, was interesting. You said that basically as far as you know, based on your husband's word, which made me think, like, do you not have access into seeing each other's finances? Are you sharing finances, basically? I mean, technically we do, but we do not have a joint think account. Okay.

Starting point is 00:05:03 So that right there, and I'm going to tell you right, right now, Sarah, we've been getting more and more of these calls where what happens is you guys have not fully aligned on finances, the philosophy of it, nor how we share our money, right? There's still this kind of side business going on where we have one account that we put checks in, but we also have our side accounts. What happens when you set up life like that is you, you actively pull yourself out of being the decision maker with your spouse on every major financial issue because you've already said we're not fully together. And so that I think is why your husband is operating over here saying, ah, it's not that big of a deal. She always pays me back.

Starting point is 00:05:47 I'm not saying it's right. I'm just understanding it. It's actually great insight. It's a really good point, Sarah. I hope you're hearing what she's saying. Because here's where this goes. You guys are going to have to have a mediator. And I think it's a marriage therapist. Because to Jay's point, things have been so separate. It's a total real. to this point that, and again, he just needs a completely new perspective and you don't want to put yourself in a place where you're threatening him, right? And then making him make a false choice. Now, if he was sitting here with me, I'd look at him straight in the eye and go, hey, bro, listen to me. You got to twist him. Like, you got to choose your wife here. You got to grow up. Take the diaper off,

Starting point is 00:06:27 the emotional diaper. This is embarrassing. I mean, I would just go straight at it. He's not here today. So we want to equip you. But I, I think Jay's Insight is absolutely phenomenally on target. So because of that, I think you're going to have to have a marriage therapist to bring you together, hopefully a skilled one, who is the middle ground and can go, we do have to reset. Because I think he's operating like, what's the big deal? Yeah, because you're the one who, and I'm not saying this in a wrong way, I think you're absolutely right, Sarah. But if you look at what the agreement was, right?

Starting point is 00:07:01 If you and I say, here's the stakes, we'll do this together. And then you're the one who changes. He has the right to be confused or wonder, well, what's the big deal? And again, I can't stress this enough. I believe you're right in wanting to not continue to lend her money. But in that, that's not the bigger problem. The bigger problem is we actually need to have full transparency on our money. We need to be fully combined on our money.

Starting point is 00:07:23 And I agree with Ken. Counseling is the way to start that new process. And here's the ask. Here's what you've got to tell him. You have to say, we have to do this. We have to go to counseling. It's not a threat. we have to go, this is causing me to resent you and your mom.

Starting point is 00:07:38 I don't like it and I don't have the tools to convince you. So will you please do this for me? I think that's your posture. And, you know, the context has to be reset because you guys are not on the same page. Therefore, he's like, what's the issue? So it's going to be tough. It's not going to be easy. Right, right, right, right.

Starting point is 00:07:57 But, Jade, in this situation, there is no easy. This has to be confrontation. and to your point, a full-blown operational reset. Absolutely. And then on the money front, what I see, honestly, just on the money front, it's only a matter of time because she's not been a good, the mother-in-law has not been a good manager of finances, it's only a matter of time before she stops paying you guys back, is what I see, because she's just not a responsible person with her money.

Starting point is 00:08:25 Oh, and be prepared, and I don't want to judge her, but be prepared for a pretty nice blowback from mom. Because I believe she's either knowingly or unknowingly manipulating your husband, her son. Wow. And that's going to be sticky and stinky. The words of scar. Be prepared.

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Starting point is 00:10:25 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. We're going to go to Reagan next in Houston, Texas. Reagan, how can we help? Hi. So my husband and I, we're both 25. We have two kids. And when we are kind of living paycheck to paycheck, when I feel like we shouldn't be, we're trying to figure out what's the best way to kind of pay down our debt as well as still put money into the savings account to help, you know, have an extra layer of cushion. Okay. Tell me a little bit more about how much debt you have and what type of debt it is. Um, so without our mortgage payment, um, it's about $60,000, um, mainly credit cards, vehicle loans, and some medical bills.

Starting point is 00:11:39 Okay. How much of it is the car? Uh, our vehicle, so our, his truck payment is about 40,000 and mine's about 4,600. Okay, so 40,000 is the total amount that you owe on his car. What's the total amount that you owe on your car? about 4,600? Oh, 4600 toll. Okay, I hear you. All right. When I look at this and you tell me, hey, we're living paycheck to paycheck, the number one glaring, obvious reason I see are the cars. What's his monthly payment and what's your monthly payment? So the car payment is 378 a month and the truck payment is about 600 a month. There you go. Yeah. What difference would it make if you cleared that out and had an extra almost thousand bucks a month in your life. Yes, a lot. And it's also, I think it's also daycare because we spend a little over a thousand a month

Starting point is 00:12:37 on daycare. Yeah, daycare will get you. But that's not something that we can really change right now. The thing that we can really change in effect is this car payment. Tell me about you guys' income. What do you bring in every month and what does he bring in? So together, roughly $7,600. I just got a promotion a couple months ago, so our income went up.

Starting point is 00:12:58 And we had to buy a vehicle. It didn't necessarily have to be the truck. But, you know, right now we're trying to figure out what's the best way to pay this down because I will probably need a car here in a couple years, maybe a year or two, because my car keeps breaking down. Yeah. So let's solve for that then. I mean, what I would do, I mean, yes, you're right.

Starting point is 00:13:21 You have to have vehicles to operate life. So I agree with that. However, when you're, you know, $60,000 in debt, clearing out $40,000 of it, which is a vehicle, makes a humongous difference. So if he sold that vehicle today, what could he get for it? Probably $35, $40, maybe. We just bought it in October. Even better. Even better.

Starting point is 00:13:49 You won't be as far upside down on it. Do you have any money saved? We have about $6,000 in our savings and about $4,300 coming within the next month or so from our college scholarships we get. So we're going to have access to $10,300 that is above and beyond your income. And that's coming quickly. We already got six. Well, are you familiar with our baby steps and how they work? Yes.

Starting point is 00:14:19 So I purchased the book last year. So we saved up the money and we've been trying to pay down the lowest amount of debt we've had. Right. But if you're familiar with the baby steps, baby step one is how much in the bank? A thousand. All right. You got 6,000. Yeah.

Starting point is 00:14:38 So, Jade, what does she do with the five? We got good news for you on this truck. Let's roll through this. Yeah, let's pretend, yeah, that you only get 35 for it. Okay, you've got the five to put with it so that that's a clean break right. there. And then to your point, if you've saved up 600, you know, if you've cleared 600 extra dollars a month, theoretically, how quickly could you save for a cash car? Right? If you said for a split second, I'm going to pause the debt snowball and I'm going to stack up some money as

Starting point is 00:15:08 quickly as possible. How quickly could you stack up five or six thousand dollars? I think making $7,600 a month, I think you could do it pretty quickly. So that's really the play here. anytime you have debt, I'm going to find out ways to clear it very, very quickly because the faster we do this, the more motivated you're going to be to continue. So in a world where you sell that car, now suddenly, instead of $40,000, instead of $60,000, we've got $20,000, and you've got more money per month to knock that out. I think this is kind of like a win-win. And then you have this $4,300 coming. That goes towards your car fund. Does that make a $1,000? Does that make a win-one? sense. Okay.

Starting point is 00:15:49 How, on a scale of 1 to 10, be honest with me, how excited are you about that solution? I'm kind of in the middle. I'm a little nervous because right now my biggest, well, not the biggest concern, obviously, but my car is one because I don't want to have to buy two new vehicles and go into two car payments again. Well, that's what I'm solving for. So let's roll through that. Hold on a second. Before you roll through this, where did you hear that we want you to have two car payments when Jay just spent a couple minutes telling you how to get rid of the only one you have. No, I heard that.

Starting point is 00:16:26 It goes through my mind because we have really bad luck with vehicles. And so, you know, okay, I'm glad you're saying this. Here's what I want to talk about. So we gave you the advice. It's normal to very quickly get very emotional about it, right? Because we've had bad luck with advice. Or I'm sorry, we've had bad luck with cars. Oh, you know, I have to think about how to tell my husband this.

Starting point is 00:16:48 oh my gosh you know what about security right your brain starts going through all those emotional plays so i want you right now to tell me the top three things that and i are going to dismantle that in a completely logical unemotional way how about that okay okay so first thing you said is we've had bad luck with cars in the past kin what you got so have i uh that's just life right so this idea that you're stuck in this bad luck thing no you're not You're just a part of the human race. It's a little bit of the human lottery, right? I mean, you know, you go look at a mechanic, any mechanic place in your local area,

Starting point is 00:17:26 and you're going to see a steady stream of cars. Probably not a bad idea to go, oh, I don't have bad luck. I'm driving an imperfect machine, and there's thousands of other people in my zip code. So I think it's mindset is how I would dismantle that and go, all right. Now, how do I prepare for, not bad luck? Have better odds. How do I make the odds better? Well, I'm going to put enough money away that I can.

Starting point is 00:17:48 can take care of a basic mechanical issue and keep moving forward. Is it a little bit of a step back every time? Absolutely. Or you can do a lot of great research on the front end to make sure you're making better choices than you've made in the past. That's right. Take longer to buy the next car, right? Get it checked out by a mechanic. Buy a car that has better odds, right? We can name the brands and you can look them up that can do much better. I mean, I'm a guy right now that's got three teens. Okay. I got more cars than I had ever thought that I would have owned. All of them. Very used. And I'm driving a used car. And I do the research and I get these things checked out by a mechanic that I trust because I got two teens right now driving every day. Yeah. And I'll tell you what I do.

Starting point is 00:18:35 I have a Christian brothers in my neighborhood. It's a local mechanic. I'll bring, when we're looking at used vehicles, you can bring them over there and they'll give it a once over for you and check it out so you can feel good about the purchase. So, okay, that was the first thing. Next idea that could be a potential issue could be what? Just the idea of downgrading vehicle because other people see it. You're driving a car that stinks. Yeah. Everybody saw you get a new vehicle and now suddenly you've gotten rid of it. So I got to solve for that. You know, you did drive around the corner. If you're ashamed of the car and I've been there, okay? When I first got married, I had a Ford Taurus, okay? And it had no AC.

Starting point is 00:19:15 And one day on the way to work, the felt on the top of the ceiling of the car just fell down on top of my head at a stoplight. I was very embarrassed. The dignity. Loss of dignity. It was very embarrassing. I got home that night and I couldn't afford to fix it. So you know what I did? I got a staple gun out.

Starting point is 00:19:33 Come on, Ken. Three shots took care of that business. And then, but I was embarrassed. So guess what? I always had a good excuse or a creative way of getting out of driving anybody to lunch. That was pretty creative. Number two, if I had to go to a meeting, I pulled around the corner and walked and just acted like there was no place to park. Perfect.

Starting point is 00:19:53 There are some creative psychological things you can do to not be ashamed of the hoopty. Yes. For a season. So I think that's kind of, I'm addressing that because I think that's part of it is our pride. The point is what we're suggesting, you are going to feel an emotional backlash immediately. But I want to challenge you to work yourself through it because chances are it's just that first. feeling of, because you don't know what's, it's fear. It's fear is what it is. You've never done something like this before. You've never done something this drastic. You don't know how it's going

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Starting point is 00:22:30 Eric is up next in Phoenix, Arizona. Eric, how can we help? Hey, how are you? Thanks for having me. Yeah, you bet. Pretty good. So I'm going to bet a bit of a pickle. My mom co-signed a lease with my brother about four years ago.

Starting point is 00:22:45 And he's in and out of jobs. He doesn't like working in corporate, even though he had the opportunity to do so. And now he can't afford it. And he wanted to get it repoed, which she said no. So we, she's been asking for help to pay bills. And so now the cars is kind of sitting is being used. But we had asked her to sell it by we, I mean, my son, my husband's in my,

Starting point is 00:23:11 but she doesn't want to sell it. Why? She's kind of underwater. So even if she does. that she won't get much for it. Okay. How much do you guys, well, let me say, how much does the mom and the brother owe on it? About 20 grand left on it.

Starting point is 00:23:26 Okay, what's it worth if they sold it? It's been such bad shape. You kind of ruined it. Sorry? You said somebody ruined it. She ruined it or he ruined it? He ruined it when he was using it. Just wrecking it? He just didn't take care of it.

Starting point is 00:23:38 Maintenance, yeah, it's been wrecked a couple times as well. Why are you calling? Interior is terrible. Because mom has asked him, to help out. And brother, because brother won't. She was in an accident last year as well. She was?

Starting point is 00:23:51 Taking care of a while she's been going to rehab and infidio and stuff like that. Understood. What could she sell the car for today? Maybe five grand, honestly. Oh, gosh. If she's lucky. Okay. Well, this is, first of all, this, your brother is in a season of life where he is

Starting point is 00:24:13 impersonating a deadbeat. And so deadbeats only wake up when they're forced to wake up. But the problem is mom's name is on this, and she refuses to help herself, correct? Kind of. The main reason she doesn't want to necessarily take it back to the bank or maybe just get a repo. Well, repo is not an option. Repo is not an option, and we can talk to you about why that is, but continue on. Yeah, so eventually she says she wants to get a.

Starting point is 00:24:47 the house soon enough, which I personally think she can't afford. So the biggest thing for me really is just continuing to help feels like enabling. I don't know how to approach her in a sense, like, okay, in as much as we've been helping this entire time, there's a couple things she could do. What else have you been doing? What else have you been doing to help? Because it sounds like you've already been down that road? It's mostly just bills and, you know, rent and stuff like that. I still live at home, but I just got married, so I'm moving out. Is that because of the accident or that's just always been ongoing? It's been ongoing, but more so after the accident. And who's we? I thought I heard you say

Starting point is 00:25:32 we've been helping. My siblings and I. I have a younger brother and then I'm older. Are your siblings that have been helping with the bills? Are they all in the same opinion of view that you just said, which is, I feel like I'm helping and it's enabling. Do they have the same feeling? Somewhat, my oldest sister, yes, my own brother. I'm not too sure. Okay. He doesn't say much. Listen, I, you asked a question and I'm going to answer the question that I heard, and that is, how do I approach her on this? How do I handle this? And this is you going, mom, I can't do this anymore. Here's what you should do. If I were you, this is what I would do. And you lay it out and say, I'd sell the car because every day that she doesn't sell the car, there's like another calamity

Starting point is 00:26:16 that's probably going to happen to this. And I feel like this entire car represents a lot of the calamity that your brother creates and no one is willing to do anything about it. And so I, if I'm you, I go to mom and I go, Mom, sell the car today because we got at least get five grand for it and at least lessens the debt by $5,000. And then we have a $15,000 problem. You've got all these other financial problems that are more important than this stupid car. So mom, here's how I'm going to help going forward. I can't help you financially anymore. I've got to move on. I suspect that you don't have the finances and the margin to be able to keep helping her anyway without hurting you. True or false? True. So that's the conversation. Mom, I can't. Even if I wanted to, I can't.

Starting point is 00:27:00 So here's how I can help. I'll be willing to list the car, sell the car. I'll be willing to have a conversation with younger brother and grab him by the nap of the neck and just absolutely as only a brother can lay into his butt. With both hands. With both hands. With both hands. Very well done, Jade. And like, use both hands, clap him on both ears. Okay?

Starting point is 00:27:22 Now here's the deal. And that's a lay it out and move on and say, you've got to help mom. Yeah. And I think all the siblings should unite on an intervention. Outside of that, Jade, that's what I'm thinking of. What else did I leave off the table? What would you do here? There's a part that can help relationally, I think, early on if it's possible.

Starting point is 00:27:42 possible. You said mom co-signed for brother, which makes me think mom has better credit. I wonder if she can refinance this and get him off of it so that at least you're separating that relational tie. And then from there on, she can make whatever choices she's going to make with the car separate from the brother. That might unmutty the waters just a hair as she decides what she's going to do next. But other than that, Ken, I think Ken is exactly spot on. I have nothing to add. Yeah. This is tough.

Starting point is 00:28:16 So selling the car would be private sale. Yeah. You're going to get more. They get the most money. Yeah. Okay. And what she can do, and you can advise her of this, if her credit's all right, in the process of getting him off the loan, when you're in there, you can say, here's what we want to do. We need a loan for the difference because ultimately we're going to sell this thing.

Starting point is 00:28:35 So we need to get him off of the loan in the process. That's right. And then we're transferring it to a personal loan. And when she does that, If she wants to add a little something to it to get something in cash, that's fine. But I think because of the nature of how much she owes on it, she's probably, you know, she would end up basically back in $20,000 of debt. So I think the bigger part here is to get the brother off of it.

Starting point is 00:29:00 And then maybe, maybe, and I don't know what your lifestyle is, but maybe that's a way you could help her out, which is, hey, while you're saving up for your next vehicle, I can help if you need a ride, you know, in between the ubers that in the bus rides that you'll be taking, I can help with that. Maybe that's something you can offer. Yeah. And then we need a caution, mom. You're nowhere near buying a house. Not even close.

Starting point is 00:29:22 Are you renting? Is she renting now where you've been living with her? Yes. Yeah. No. She is not thinking about buying anything. We've got to get her healthy. Do you feel like her long-term physical prognosis is good or she can get back to work?

Starting point is 00:29:39 It's been better. She's going to extend a little bit because. she's still in some pain. So maybe by July, maybe she'll be... What is she living off of? Is there some type of a disability or insurance that she's getting? What's what's going on there? Yes, she had gotten a disability for a little bit,

Starting point is 00:29:57 and then she was pulling some out of her insurance, I think life insurance. From... I think you borrowed against that. Oh, my gosh, Mom. Wow. Okay. Yeah, this is tough. Tell me, and you can be vague, but the nature of her injuries, how serious is this?

Starting point is 00:30:18 And how old is she? Because I want to know really honestly what she's going to be able to get back to doing work-wise. It was pretty bad. She got rear-ended while she was stopped at a light. And then she's around mid-50s. So it's pretty slow progress for recovery. What was she doing beforehand? What was her job and what was she earning?

Starting point is 00:30:39 she was doing a bunch of different things but she at that time she was doing Uber as a side gig and then okay I think the ways that you can help her are as following help her get brother off the loan that's thing one thing two is I want you to help her with the career side of things we're going to give you Kins find the work you're wired to do assessment it's a book that'll help you and there's an assessment inside Help her go through that because it sounds like she needs to create stability in her career or create a career so that she can create stability in her finances going forward. I hope she's well and I hope she recovers very, very quickly.

Starting point is 00:31:21 And I would just add, you siblings need to get together and essentially fire this brother from her life for a while. This show is sponsored by BetterHelp. I am here on this show because some amazing women in my life, like my mentors, my friends, my wife and my mom, because they invested in me. all extraordinary. And one of the common themes I've heard from all of the important women in my life is that between the responsibilities and expectations that the world places on them and the expectations they place on themselves, they are under incredible pressure every day. Women are often encouraged to overlook their own emotional well-being to care for everybody else. Therapy offers a space for

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Starting point is 00:32:55 Help, H-E-L-P.com slash Ramsey. The Ramsey Show Question of the Day. It's brought to you by Y-R-R-R-E-F-I-F-E-F-E-F-Lones are in default. Your progress stalls out. Y-R-R-E-F-Y-F-E-E-F-Y-Lones into a low fixed-rate payment that fits your budget so you can stop spinning your wheels.

Starting point is 00:33:28 Visit Y-R-R-E-F-Y. That's the letter Y-R-E-F-Y.com. It may not be available in all states. All righty, then. Today's question comes from Nicholas in Illinois. He says, since I discovered your show last year, I've sold my truck and almost all my furniture. I've worked three jobs, escaped $35,000 of debt and now have $15,000 sitting in the bank. Well done, my man.

Starting point is 00:33:52 My mom wants me to open a credit card so I can go to Italy with her to visit my sister without losing any of my recent progress. Wow. I have the money to pay my way, but she's insistent on me getting a credit card. How do I explain to her that although that seems like a smart move, it's really not? Nicholas, my guy, you haven't told us how old you are. So I don't know if you're 18. I don't know if you're 35.

Starting point is 00:34:23 I don't know how old you are. But the answer remains the same. I don't think you have to explain anything to your mom nor listen to her advice. I think you can very politely say, thank you for your insight. and move on. Yeah. This is a very perspicacious young man. I don't know if I said that right.

Starting point is 00:34:43 There's a word I recently. What are you trying to say? He's very, he's got good insight. He picked up on this, this temptation issue. Perspicacious? Yeah. Have you ever heard that before? I like a good word.

Starting point is 00:34:53 It's like one with keen insight. Yes, it is. So this guy gets it, right? So mom is playing the emotional game. Okay? And she's going, okay, I'm so proud of you, son. You did a good job. but I don't want you to have to use any of that cash.

Starting point is 00:35:09 So let's just go to Italy and she thinks he's getting ahead. And she doesn't understand that it's a millstone around his neck. And he gets it. She's like, what do I do? She's projecting her fears on him. Here's what you say. Mom, I'm sorry. This is my money, my life.

Starting point is 00:35:27 I don't agree with you. Like, I disagree. This is hard for young people, by the way. You know, certainly late teens, early 20. monies. Mom and dad have so much influence. By the way, this is a kid who respects his mom. Facts. Yeah. So a question about it. And so it's very, very hard where when you're beginning to strike out on your own, he clearly has on some level, certainly has with his money. And then a parent comes in and says, do something. And again, whether it's money or something else, and a parent makes

Starting point is 00:35:56 a strong suggestion. Yes. It's really hard to go against your incident. Your whole life, you've tried to say yes, so you don't get in trouble. And now you're in a place. where you go, that doesn't make any sense and I'm not really going to get in trouble, except for if I do what mom says, I'm actually in financial trouble. It's really confusing. And so I'm kind of expanding this to our very large audience on this to say, hey, young people, look, when you finally figure this stuff out and you agree with what we teach, at some point, you're going to have to go, thanks, I really appreciate your insight. I disagree. I'm not going to do it. Here's why. And they confidently walk away. But here's that. Here's my argument.

Starting point is 00:36:35 Do you even have to explain why? That's my thing because my... You don't have to... That's a credit. Very good point. So my answer to that is he doesn't have to, but I think it's expedient to do so. In other words, you can honor your parents and still say no. That's right.

Starting point is 00:36:53 And I think in this case, I'm always going to say, honor them once. If they keep coming back, go, I'm not actually going to have this conversation. Okay, let me crack the door open on another piece of this. puzzle. And you've got two older boys. So I think that you're the, what was the word you use? Perspicacious. Yes, very good. You have a perspicacious. You're really leaning in on my work. You said it. I'm just trying to reuse it for you. Okay. So you've got two older boys. How much, and we don't know how old Nicholas is. How much of this is due to oversharing? Because I know I got to the point pretty early on where it's for my parents to know how much money I have.

Starting point is 00:37:35 have that I sold my truck, that I got 15,000 over here, that I don't have credit. Like, that's a lot for a parent to know for a grown adult. That's a really good question. I don't know the answer. Could be. And I think it's a very good point to say, you know, if let's say he's in his early 20s, yeah, he doesn't need to be sharing all that information. If mom says, hey, we want you to go to Italy. He goes, all right, let me check.

Starting point is 00:37:57 Let me see if I can do that. And he says, yes, that's a very good point. In other words, at some point, you've got to create your own financial independence by not sharing all that. It's just your business. So here you go, point. I, you know, it's been a long time, but I don't think when I went to college and I started working. Did you share? That I was sharing with my parents how much I had in the bank account.

Starting point is 00:38:20 I definitely did not. I might say something like, hey, I'm thinking of getting a new car. I have 10,000 to spend. What do you think I should get? Like, I might say something like that. Yeah. But to just, for them to just know all my business out in the streets, Like this guy here, definitely not.

Starting point is 00:38:37 It's a very good point. Create a boundary there. Let's go to Grace in Atlanta, Georgia. Grace, how can we help? Hi, I'm 29 years old. My husband is dirty, and we've been going back and forth on whether we are ready to buy a house or not. He believes we should save more money before we can put down 20% and have plenty of emergency funds after that. But I think we're ready.

Starting point is 00:39:02 And what is your financial position? If you're ready, what do you have to put down? down? I think we have the 20% down. I think his biggest concern is that I bought a house during COVID, but that house is currently being rented and so the mortgage is being covered plus a little bit more. Oh, he's worried about taking on two mortgages. Absolutely. And I agree with him. Why wouldn't you get rid of your existing mortgage and put that money towards the down payment and security on your family home with him? Well, because at the moment is being rented and it has been for two or three years.

Starting point is 00:39:44 When's the lease of? I believe at the end of this year. Okay. That's what I would do. I would move into that house. You've already bought a home and you got renters and you have basically dodged a major bullet thus far, sounds like. In other words, you're barely making enough to cover the mortgage, yes? Oh, well, yes, I think I make like $300.

Starting point is 00:40:10 Okay. That's a whopping $3,600 a year. Woo! Grace, you're getting rich on that one. And that doesn't include your actual expenses on said house. Correct. Which if you hold it long enough, you hold it long enough, you will end up going in the negative in one year, maybe two consecutive years in a row.

Starting point is 00:40:33 I am not negative. I am positive. That will happen. And so if it's me, I'm going to move into this house at the end of the year. And now we're building equity. You're already building equity, which is great, but now you live in it. I would not buy another house. Anyway. I want to know about that current house. What is the mortgage on it? What do you owe every month on it? You were the renter. So we haven't, so we currently, we do not buy a second home. We are wanting to buy a second home. I understand. I'm talking about. the current rental, what's the mortgage on it? Oh, I have 200,000 left. Great. What do you pay every month? Every month, 1,200. Okay. And what's you guys' income? You and your husband? I get 100,000 every year before taxes, and my husband makes 130 before tax. Excellent. Okay. So even if you, to Ken's point, if you, you know, after the leases up, renters are out, you guys moved in, or if you wanted to sell it, and get something that suits you guys as needs, I would 100% do that deal in two seconds.

Starting point is 00:41:37 How much is that house worth? About 300, maybe 310. Okay. So you walk away with 110. How much do you guys have saved right now for a down payment? I have 147,000, but that includes... No, no, no. Don't give me that.

Starting point is 00:41:55 How much do you have that set aside just for a down payment? Just for a down payment? I would say 47,000. Great. And my husband, about 15,000. Okay. So we're separate finances. We don't have time to cover that one.

Starting point is 00:42:11 We'll talk about that later. I think you guys either move into that house or you sell it. And now you guys have about $200,000 if I'm doing quick math, or just under $200,000 to put towards another home. That's the play. Yeah. Not keep both houses, not create another mortgage and then, you know, play this roulette game of landlording. And just to set the record straight, what you're aiming for more so than the 20% down, what you're looking for is for that payment to be no more than 25% of your take-home fee,

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Starting point is 00:43:29 Restrictions apply. See website for details. Welcome back to the Ramsey show in the Fairwinds Credit Union Studio. I'm Ken Coleman, Jade, Warshaw is alongside. And Peter is on the line in Ottawa. Peter, how can we help today? Hi, how are you? I'm doing fine.

Starting point is 00:44:02 I'm doing fine. I'm 23 years old And I'm trying my best to manage a business And I'm having, you know, trouble with it Well, actually, I'm having trouble with the decision That I want to keep doing this Is it your business, or are you managing it for someone else? It's my dad's business,

Starting point is 00:44:28 But I've been managing it for like two years now because he's not well. Okay, and so what is your dilemma? I'm just stuck in a lot of debt that I don't know how to get out of, and I don't know if I want to keep doing this. The job? On the other hand, I don't know what else I would do with myself. Okay.

Starting point is 00:44:53 So I'm glad you share it that way. So I'm going to do a quick analysis. Tell me if I'm right. Feels like our biggest problem is the $200,000 in debt, The secondary problem is I don't want to run my dad's company the rest of my life. That's the secondary problem. Is that a good way of laying it out? I do want to run it.

Starting point is 00:45:10 It's not that I don't want to run it. It's just I don't know how to. You don't know how to run it? Yeah, because clearly I'm not doing that good of a job. That's good self-awareness. Okay, and the company's not doing well? It was up until my dad got really, really, really sick. And I had to take care of him for about two, three months.

Starting point is 00:45:34 And the company didn't run without me. Okay. And now where are we at? We're at. I just had my warehouse closed out for three months for non-payment of the rent. And I just got it open with some negotiation. And how's your dad? I used to it.

Starting point is 00:45:54 That's why I got back to it. Okay. I mean, you feel sick. That's part of my, you know, I understand, but I'm leaning in here to say it sounds like you were doing okay running it until you were the only caretaker or felt you were the only caretaker for your dad, and at which point you weren't doing hardly anything at all. It doesn't sound like you were clueless is that you were not present.

Starting point is 00:46:18 Is that true? That is. Okay, so let me ask another question. If you're back involved and dad is not as sick and he might be well enough to guide you, do you feel confident you can get this thing back on the tracks? I am confident. I don't know how to put it on paper. I know how to plan this. You don't know how to plan. And the reason I'm leaning into this is because this is your sole source of income right now and you have a lot of debt. So we got to figure out where you

Starting point is 00:46:54 need to be spending your time so you can make money because it's money and cutting. And Jay's going to come in and walk you through where you're cutting, but I'm trying to get an idea of what is before you to where you can make money. So one more follow-up. When you say you don't know how to put it on paper, can you be specific? What do you mean? It's just how to manage the debt that I'm in. So I'm 200,000 total in debt, but 100,000 of it is like a vendor debt, which I'm not worried about. Okay. Okay. Is any of this personal debt? Is any of this personal debt? debt? The other 100,000 is, it's not personal, but it's like taken from family and friends. Okay. It's your debt, though. It's not the company's debt. It's not the company's debt. Okay. And then the other

Starting point is 00:47:45 hundred thousand is the company debt. It is the hundred companies. Yeah. Okay. Well, okay, these are two different situations. So that's good for us to know. What are you paying yourself or what are you getting paid? Up until three months ago, I was paying myself enough to, you know, around $4,000 a month, enough for my rent and expenses. Okay. All right, I want to bring Jade in here because we got two lines of debt here. One is the company's debt and one is your personal debt. And that's where we're... I don't know if it's, I'm sorry, but I don't know if it's going to be different, but the $100,000 that's personal. I took it to help the company. I don't know. It's any different.

Starting point is 00:48:28 So you borrowed money from family. You personally borrowed the money from families and friends to use that money for the business. Yes. Okay. So then it's all business debt. I mean. Okay. Now we got that.

Starting point is 00:48:40 We get it. It was all for the business. Let me put it like that. Okay. So the only way to clear this is to bring in more revenue that can be converted to using the pay off the debt. Correct. Correct.

Starting point is 00:48:52 So what do you see? Do you see possibilities to do that? Are you, I don't know what. the nature of the businesses. What do you guys do? It's a used clothing business. I saw them into categories and ship them out to Africa. Oh my gosh. Okay, very interesting. I know nothing about that world. I'm going to tell you that straight up, but I can tell you right here what I'm, the way to pay off debt, right, is you have to have more money coming in that can be used for that purpose. So it goes back to Ken's question, which is how suited do you feel to do that? And more

Starting point is 00:49:27 The bigger question is, you're 23. Is this what you want to be doing with your life? If not, we need to talk about that and how to offload this to the right person. The dilemma I'm in is I like the work. I just don't like the stress. Okay, what's causing you the stress? The debt or the work? The work, I'm good at the way.

Starting point is 00:49:53 I was working with my dad in high school, so I'm, fine with the work. I am involved. I was involved with it. I'm inside and out. Okay, but let's go back a step. Let's go back. I appreciate that, but let's go back a step. You at some point needed to borrow, or you thought you did, rather, let me stipulate, you thought you needed to borrow $100,000 from family just to keep this thing afloat. We're not even talking about the initial $100,000. This company is not healthy, true or false. Regardless of you being there and dad being there, somewhere along the line, company started taking on water in the form of debt because you didn't have enough revenue. Am I right?

Starting point is 00:50:35 Yes, you are. That was partly due to my bad decisions, but it is true. Well, there's part of this. I have just a logical, technical question, really. If you exit this business, if you say, you know what, I'm not suited for this, I'm going on. Will your dad and family view the $200,000 as money you personally need to pay back, or will they view it as that lives in the business? and it's up to whoever or whatever goes on with the business to cover that.

Starting point is 00:51:01 How will they view it? And how do you view it? That's what I was thinking is the $100,000 that's personal, that's going to stay with me regardless. Even though it went to the business, just because you raised it? Yeah, yeah. The other $100,000, if I were to sell the business or other options, the vendor that's going to stay with the company.

Starting point is 00:51:25 See, I disagree with that. if you show the receipt, if you are able to show the receipts, literally, of how that money was raised for the business, I don't think that that's the case. I don't think that that debt does follow you. You're running this business and that's how you raise money. Either way, either way, my friend, the only way out of this stress is a lot of hustle. And I, you're going to have to get somebody else that helps dad. You have got to take this company on your back, learn from your mistakes, go get some advice from people in your world, and you're going to have to take a real shot at this to get this better. But if in about three to six months, something doesn't turn

Starting point is 00:52:02 around with your overactivity, then we're going to have to shut it down. You got to know when to hold them and know when to fold them. Great song. You should check it out. I think it's a great lyric, because I think this is your situation. You've got to make the decision sooner. You're going to keep digging deeper. If you're looking for a more budget-friendly way to save on medical costs, and stay true to your values, Christian healthcare ministries is a great option to think about. CHM is not health insurance. It's a health cost-sharing ministry,

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Starting point is 00:53:06 faithfully serving the Christian community. And many members save hundreds of dollars a month compared to traditional health insurance. And that margin gives you breathing room when you're working the baby steps and trying to steward your money well. And right now, CHM's offering new members a 50% credit towards their first month of membership. Get started at CHministries.org slash budgets and use promo code Ramsey. That's phministries.org slash budget and promo code Ramsey. All right, let's go to Diana in Las Vegas. Diana, how can we help today? Hi, yes.

Starting point is 00:53:58 I was wondering if my husband and I can afford to buy a new model wine, Tesla. Okay. I like these questions. Walk us through the potential doubt. What would be causing a lack of certainty? My husband thinks I'm being careless and not thinking about our retirement, but I think we have more than enough for retirement, and I think we're over-saving.

Starting point is 00:54:24 It's time for us to actually loosen up the belt a little bit and enjoy life. I like the sound of that. Tell us how much is your nest egg? Okay. So right now we have over $1 million spread up between our 401, our Roth, our brokerage account. We also have $11,000 emergency fund, $20,000 right now that we already saved up, we're planning to go to Europe to experience Christmas market this November.

Starting point is 00:54:55 We don't have any debt except for our mortgage. We still owe $380,000. The value of the home is $1.5. We have lots of equity. Okay. And then right now, and we still owe car for, we still owe about $15,000. We have another model Y. But my son, he's driving soon, and I want to give him the old model Y and buy us a new model Y.

Starting point is 00:55:28 Got you. And when you said over $1 million, is it like $1.1 or is it like $1.8? Like how much over $1 million? So $700,000 for pre-tax 401K. We have $1.29 on our Roth. We have $200,000 on our brokerage. and then 11,000 rainy day funds and the 20,000 for the travel. Okay, so here's where I'm at.

Starting point is 00:55:53 I think you've done extremely well, and I want you to hear that first and foremost. You guys have really set yourselves up. How old are you? We're 47. 47. Excellent. Good job. Excellent.

Starting point is 00:56:05 Thank you. I think that you could be in a better position before purchasing this vehicle. How much does a model Y cost? Right now, it's only for, it's 41. 41,000. And what's you guys' income? 280. Okay. So my biggest, I mean, the glaring thing here is why haven't you paid off the first model? Why it's $15,000 for crying out loud. Because he says, because of the interest is low.

Starting point is 00:56:35 Oh, come on. What he wants to do is the money. Just put it in our, you know, just, just vaccing out our retirement and our Roth. Because right now the market is we get about. 14 to like 18% returned. Diana, do you consider yourself Ramsey folk? Like are you?

Starting point is 00:56:53 Are you? No. I've been paying extra on my mortgage. No. Okay. Take us back to the show or the part in a Ramsey book where we would be okay with you not paying off the car. I'm just curious.

Starting point is 00:57:11 Do you have a page number or an episode number? I should reread the book again. Yeah, you should. That's how we live by. No death except for mortgage. But then... Spoiler alert. It's not in there.

Starting point is 00:57:25 We're playing... We're being hard on you, Diane. No, I'm not. I'm having a blast. Well, my husband tells me what he wants to do is the $20,000 that we saved up for traveling is pay off the Tesla and we're not going to go traveling this year. Okay, great. I've been saving for so long, working overtime to really go. go on that trip. Well, here's the thing. I think you can do both. Let me tell you how. I think you can do both. I think you have more money here than you think. It's just how are we going to allocate it. So let's go back to

Starting point is 00:57:57 la la la, la, okay, 20,000 saved cash over and above your emergency fund. So yeah, let's say we take 15 of that. We pay off the first model Y. Now we have 5,000 left. And we keep that in our vacation fund, 5,000. By the way, how much is the vacation going to cost total? 15. Okay, so we got 10 more to save. Now tell me, what do you guys bring in every single month again? Take home 15,000. 15,000 a month. And when is the vacate? Yes. I'm planning November, Thanksgiving. Okay. Got plenty of time to do that, just out of your take home. How much is your mortgage payment? Including taxes and insurance, it's 2,900, but at minimum, I'm saying 35 months. There's no problem. Here's what it is. Here's, I'm going to tell you what it is.

Starting point is 00:58:43 You guys have a very loose budget. And so the 15,000, it's going here, it's going there. It's, you know, you go out to eat. You do a little of this, a little of that. If you just got very intentional and said, okay, and before November, we need to save up $10,000, making $15,000 a month and the only debt is your mortgage, which is $2,000 should not be a problem at whole. The model, the model, right? Yes. And now when we start talking about the second model Y, I don't know.

Starting point is 00:59:12 is that used or is that brand new the 41,000 that you quoted? We're looking at brand new. Okay. What if you just said, hey, instead of us taking the hit on an EV, by the way, why not let somebody else take the hit and buy one that's slightly used? But I'm looking at the tax, what I call that, the tax reduction, if you bought no taxes on tax, if you bought no cars, made in the USA. I don't even know.

Starting point is 00:59:41 I'm going to be honest, I don't know what you just said, but all I'm thinking about is how you're going to be able to have your vacation and your model Y and not take a major hit on your used vehicle. That's what I'm thinking. Now, you can go back and do the math on whatever rebate it is that you're talking about. But in this position, I would not advise you to buy this car outright brand new in this position. Oh, and I think the vacation is more important to you, isn't it? Yes.

Starting point is 01:00:09 I would like to build good memories with my children while we're healthy. Okay, now that's the mindset, because I don't think you're going to listen to a word we said about financial advice, to be completely honest with you. But if I can get through to you on this, then I feel like I got a win for you. So I think you got to go, wait a second, what's more important to me? Because I can't do all three because I think you and your husband are on different pages. Is that true or false? Correct. Okay, so.

Starting point is 01:00:33 He thinks since we hit our goal, which was one. I think your husband's right. I think your husband's right about everything except for the fact that he doesn't think you guys can save up enough. cash between now and November to cash flow the vacation. That's where he's wrong, but he's right on everything else. So if I'm you and life is short, that vacation is going to be something that you will look back on the rest of your life. You will not look back on this new Model Y. Now you won't. You just won't. Because listen, and I mean this, this is not a disrespect. Folks like you who love fancy technical cars that drive themselves, you get over cars like

Starting point is 01:01:13 that because the newest models out. Okay? Guys like me, all I want are classic cars that no one can track and they smell a little bit more than every other car and you feel every second of the road. I don't give two craps about an electric car. Never going to, it doesn't feel like a car. So here's the deal. You buy that car and don't go on vacation, you will regret that. But if you cash flow your vacation, pay off the model Y, you won't have any regrets at all. Now, you may not believe me, but I'm right. And that's the mindset. Then what about what about for a car that my son will should be, will be driving. I think you can cash flow. After you paid off, I think you can cash flow another vehicle, whether it's a model why or whatever, another used vehicle. But only secondary

Starting point is 01:02:00 to funding that vacation because the vacation is where your heart is at. I think in the next 12 months you can do both. Let me put it like that. I think so too. But vacation is the highest priority, true or false. Yes. I really would like to go on Thanksgiving. So then you got to give up, so you got to get on Hubbs's page then, and this is where we compromise. And to Jade's point, you'll get your fancy electric car down the road. And let me also clarify, because how old is the boy? The son? She's turning 16. Okay. Can I just tell you are the priority here, my friend. So if you pay off the model Y and it's not time for you to buy another one yet. Guess who's driving it? You. That's a great. You are

Starting point is 01:02:46 driving. It's your car. He will be strong. I drove a Fred Flintstone car when I was 16. Like I had to stop the car with my own feet. I had to accelerate by digging my heels in. This kid doesn't need a model. Why? I do have my old 2005 G30 opportunity that my husband would like to get to myself. It has over 100

Starting point is 01:03:10 Who cares? I drove a car that had 275,000 miles on it. It was such a piece of crap. Same car I'm talking about. I could drive down the interstate and play tricks on my friends by pulling the key out of the ignition while driving it. Please, he can handle it. You already know the power of generosity and the best gifts make an impact now and eternally. That's what pre-born does. And you can trust them to do it well. They don't just. offer free ultrasounds. They support pregnancy clinics across the country with ultrasound machines, training, grants, and evangelism tools. They're faithful with each dollar so moms in crisis can see the life in their wounds. And here's the truth that brings eternal life. Because here's the thing. When a mom sees her baby on that ultrasound screen, she chooses life 80% of the time. And your gift of just $28 covers the cost of one ultrasound. Or if you're able, you can purchase an ultrasound machine through pre-born and have it

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Starting point is 01:05:16 All right, folks, if you're debt-free, the live like no one else cruises your chance to celebrate. Hang out with us and day for new sessions on building wealth, live episodes of our shows, and the world's largest debt-free scream. I remember when they did it last year was pretty wild. And next thing, I'm walking through the ship. And I was trying to get to at least one of the areas. And then there it is on the screen. Dave is up there with the captain, got the microphone.

Starting point is 01:05:43 You know, he looked like he was in charge of the ship. Yeah. And everybody screamed at once. Really, really fun. And you can secure your cabin with a $600 deposit and join us in the Western Caribbean, March, 27. Click the link in the show notes or go to Ramsey Solutions.com slash events to book your cabin today. All right. Jeff and Leonora are up.

Starting point is 01:06:06 in Pensacola, Florida, and ice cream tells me that you amazing people are baby steps millionaires. Is this true? That's very true. Wow. Well, first of all, congratulations, and welcome to the show. Thanks for being with us. Well, thank you. We were actually on the show 10 years ago.

Starting point is 01:06:25 No way. What for a debt-free scream? No. We called it for the millionaire. Okay. deal and I called Dave I was retiring that year and he said well call us back in 10 years and let us know how you've been doing so here we are 10 years there oh wow well that's fantastic all right well let's get some details here what is your net worth well we'd like to say it's in excess of two million dollars you like to say what does that mean well there may be a little bit more in there that's promised to our endowments and things like that that we don't really consider our money anymore okay I understand the place to do that way So we set it on $2 million in our minds is our money.

Starting point is 01:07:08 Got it. And what is the mix that creates the $2 million? We have about $1,6 in mutual funds and 401Ks, and then the remainder in real estate. Jeff, I don't know what's going on with a phone here. We're having a hard time understanding you. Your phone's kind of coming in and out. All right.

Starting point is 01:07:32 well. You need to speak closer, that's why. There it is. Leonora is on top of it. That's great. So 1.6 in mutual funds and what is the other $400,000 the mortgage? No, no, no. We don't carry mortgages.

Starting point is 01:07:48 We don't carry any debt whatsoever. Right. I mean the equity. Oh, God. I'm going to say half a million dollars in equity. Perfect. Fantastic. And, you know, I'm going to say, you know,

Starting point is 01:08:02 What is your income or what was your income? Give us kind of your lowest income ever and then what you guys may have finished out at, your highest income. Our lowest income ever was probably 30, 40,000 to 50. Okay. And it grew to an average between the both of us of, I'd say, 150 towards the end of our saving years. Okay. Great. And what did you guys do? We're both medical professionals.

Starting point is 01:08:36 I'm a trauma nurse and a paramedic and my wife, Leodora. She's a registered nurse. Yeah. Wow. We were an law director for years as well. Oh, fantastic. Okay. And your age is right now?

Starting point is 01:08:50 I'm 68. I'm 71. Okay, great. And any of this money inherited at all? No. The chuckle. The knowing chuckle that we asked, just so people realize. you can actually do this without inheriting money.

Starting point is 01:09:05 Wow. Really fun. What would you say to young people who are just getting started? Maybe they're a young couple. Maybe they're in the medical profession, you know, and they wonder, is this possible? What would you tell them they need to do to actually get where you guys are? Well, I would say no amount is too small to start saving and to, clear all your debt. My husband, that was his clarion call, no debt. And a lot of that, he, he learned from

Starting point is 01:09:43 Dave Ramsey and listening to him and reading his books. And we lived by that rule. And because we were, we had lots of debt when we were young when we were first married. And very little, very little. We pant the mouth, as they say. But we just struggles. You make sacrifices, but you have to have your eyes on the prize. And it wasn't always easy, but it's without fail, hard work, determination, and commitment. You can do anything. I love it. And we just saw an awesome picture of you two on a cruise ship. So

Starting point is 01:10:24 what does describe what life is like now? On the other side of all that hardship and discipline that you, you know, you know. you talked about. Well, basically right now, we still survive just on our social security checks, believe it or not. Okay. But every once in a while, we splurge and we've spurred to the tune of about five cruises this year. That's awesome. I'm sorry? I said that's incredible. Yeah. Yeah, we've been to the South Pacific and Fiji and all those islands and places out there and Alaska and a number of different destinations. And, you know, so we just, we understand our mortality to be in our ages that we are.

Starting point is 01:11:05 So we're going to spend a little bit of it. Well, we're so proud. You guys are heroes. We're so proud of what you've accomplished. That's awesome. Jeff and Leonora, thank you so much. Our babysatts millionaires today. Thanks for sharing your story.

Starting point is 01:11:18 I love it. And there's so many young couples that could aspire to that. And here's what I love about that, Jade. You know, Leonora laid it out. It wasn't any fancy strategy, right? No. It was just gods and grandma's ways of handling money, the same theme that we've had on this show for decades. So thank you all again for sharing your story.

Starting point is 01:11:36 Really, really fun. Let's go to Nick in San Francisco. Nick, how can we help? I'm doing great. Thank you for taking my call. Sure. What's going on? I live in California.

Starting point is 01:11:47 And as you can imagine, housing is extremely expensive here. and I was wondering if it makes sense to buy a rental property before buying a primary property. What would be the purpose of doing that first? Is it a size issue? Like, is it a rental is way smaller than what you need, but at least it gets you in the door? What's the play here? I mean, my thought process is, I mean, in my area, I'm looking at maybe 700,000 even more to just buy a starter home. when I was looking in other states to buy a rental home for, you know, much cheaper, much, much cheaper. And I would be able to buy it outright. And I'm looking to make money off that. What are you doing for a living right now, just renting somewhere?

Starting point is 01:12:41 I live in a rental apartment that's owned by my family. And I pay about 600 a month, S-plus utilities. Do you have to live in your area or are you able to work from anywhere? I have to live in my area. Okay. Why would you think about buying a house out of state and dealing with all that headache? Yeah, what do you think is going to happen? You're going to turn a quick profit?

Starting point is 01:13:07 I'm still trying to understand. No, I'm just looking, I mean, I'm just looking like in the long term to see if it makes sense. I mean, I have money to buy a property. How much? And I have 300 to 350,000. What do you make per year? I make 130,000. So help me understand, you've got 350,000 to spend.

Starting point is 01:13:32 Something in your area would cost 700, so you could essentially put half down. I'm still trying to make sense of what the out-of-state rental property would do for you. I'm just sort of looking at the fact that, I mean, I'm looking at. the fact that property taxes and insurance are much cheaper there. And I'm just looking to see. Are you moving there? But is it for an investment? No, you're not going to move.

Starting point is 01:14:00 Yeah, for an investment because I would invest that money. I wouldn't buy a house. I wouldn't buy real estate in another state. If you're looking to earn quick compounding interest, I would not invest in another property in another state. I would simply drop it in an S&P 500 index fund and let it sit for the next five years and keep adding to it, you know, and just kind of have a five-year horizon on this. And before you know, you'll have a $700,000 property.

Starting point is 01:14:28 Hey, folks, have you heard about Ask Ramsey? If you haven't, it's our free AI tool that's built and trained on proven Ramsey principles. And today we're going to break down some of the most asked questions from this week. There are some questions around life insurance. But the most asked question was around retirement accounts, rules and options for contributing to multiple types of accounts, IRAs, 401Ks, 4 or 3Bs, TSPs, so many of the acronyms. And the main question is, what are the best options for me end in what order? Okay. So again, this is two as grams. People are diving in there. And so here we go. Match beats Roth, beats traditional.

Starting point is 01:16:00 So the workplace match is first, right? So whether that's traditional or Roth option, 15% up to the match. That includes 4 or 3Bs and TSPs. Then you go next to Roth. whether that's an IRA or a 401k, max that out, and then back to the workplace option to finish out the 15%. Taxable investment accounts should happen after the 15% if you want to invest more. So Ask Ramsey can actually help walk you through what options work best for you in your specific situation. And go today. Ask your question at Ramsey Solutions.com or click the link in the description if you're listening on podcast or YouTube. So there it is.

Starting point is 01:16:38 Ask Ramsey. Just type it in, and there it goes. Tony is up next in Houston, Texas. Tony, how can we help? Hey. Hi. I can hear you loud and clear. What's going on?

Starting point is 01:16:53 Hey, happy Friday. So I'm in a situation where I recently got a good, well-paying job right out of college. But my family has some debts, and they are asking me to pay the debts for. What? No. Goodness gracious. Hard pass. When you say you got a good job with good money, tell us what that, exactly what that means.

Starting point is 01:17:21 What are you doing and what do you earn? Okay, so I'm a machine learning consultant or a telecommunication company. I'm earning 285K per year. Okay. Do they know that? And they know that. You told them that information? Oh, boy.

Starting point is 01:17:41 That was a... To Jate's point. Jake to make a great point here. You made this point earlier, so I got to follow up. How soon did the ask, or did the ask, for you to help them with their debts come after you told them about this new gig, or were they already pressuring you? No, they were not. They were very supportive, and I thought they would just be, you know, like, yeah. So once they found out about the new raise, they said, help us.

Starting point is 01:18:06 Yeah. And Ed has three cars, and he's asking me to pay off. of them. And I hear it fund your sister's college too. I see that on the screen. What? Yeah. Yeah. Let me tell you what I would tell them. You aren't making $285 million. I know. What's happening? 285 after taxes doesn't take care of those problems. Is this, can I ask straight up, is this anything culturally related that we need to know about? Or is this just people who are off their rocker? Well, I am Asian, so.

Starting point is 01:18:40 Is there an expectation for the sons to pay for the parents? There's no expectation usually. I mean, I thought, you know, we would be just dealing with our debts and things. Obviously, like, I'm open to helping them, but there's no tradition there that you feel like they are relying on that you no longer believe it. Do you see what I'm saying? Well, there's no tradition, no culture thing. So let me ask you a question, Tony. Why did you call us?

Starting point is 01:19:15 Because when I immediately said no, you went, so we want to help. But why did you call? How can we help you? The thing is, I love my family, and I currently live with them. But the thing is, this situation is, it really is taking a toll on my mental health. Yeah. How can we help you? I think you got to move out, Tony.

Starting point is 01:19:43 What's your question? I kind of want to know your opinion. Do you, would you, if you're wearing my shoes, would you just... I would move up today. Tony, I would move out. You are grown first off. Money aside, what you make, career aside. You're grown, so it's time to move out.

Starting point is 01:19:59 That's thing one. And not pay them a nickel. And not pay them a nickel. And thing two, by you moving out and separating yourself from their expectations, you get to go home and eat a sandwich and not everything. think about this again. Versus being in their house, like you said, every night at dinner, they're going to bring it up. In the morning, you know, when your mom sees you before you go to work, she's going to

Starting point is 01:20:21 do you see what I'm saying? So you're keeping yourself in that guilt-ridden environment. Take yourself out. Remove yourself from the conversation. Yeah. There is nothing else for us to say. You will resent your family. The very family you love, you will resent if you capitulate to their manipulation.

Starting point is 01:20:40 Don't do it It's going to burn the bridge I'm afraid No it's not You will not Here's the thing I know I just got very hot handed very quickly

Starting point is 01:20:52 You are not burning the bridge Tony There is absolutely nothing wrong With saying I went to school I earned this income This is my life There is nothing stopping sister From doing the same

Starting point is 01:21:05 And mom and dad It's never been my responsibility To pay off your mortgage Three cars. And that's where I stand. That is the barrier and the boundary that I'm putting in place. I really hope you guys can understand that because that is perfectly logical and it makes perfect sense.

Starting point is 01:21:25 Period. Done. And if it burns the bridge, that's on them. You can't do anything about this. I feel for you, but only to a degree. Because I'm telling you, we, see, Jade and I are sitting in the enviable position of having any emotion attached to this. That's right. And our audience, we got people in the lobby. They're shaking their head. No, Tony, no. Because we aren't attached to this. And so none of us have

Starting point is 01:21:50 the fear. And I honestly think that the best thing you can do in a situation like this is call family members bluffs. Yes. Call their bluff. And so move out today. Don't pay them a nickel. Tell them why. Tell them you're happy to guide them on what they should be doing if they're willing to listen. But absolutely not. And I'm sorry. We've got to cut it there. I love that you said go home and what kind of sandwich? For, you know, a bond me. I don't even know. See, you're so fancy.

Starting point is 01:22:18 What is that? It's like a nice. Nobody in America knows what you're talking about. Like a nice bun and there's like pork and like greens. Bon me? Bond me. You guys know what that is? Bon me.

Starting point is 01:22:30 Kelly does. Yeah. And there's like nice mayonnaise in there. A barbecue sandwich? I don't know. It's Vietnamese. It's delicious. Boy, I got to tell you, this is exciting.

Starting point is 01:22:39 Now I'm glad I asked. now I have a new sandwich I need to try. Or you could do maybe he's eating a BLT, like just a bacon lettuce, tomato? Well, you know why I ask? Because this is tough emotionally. I'm having a little fun, but I love how you kind of say good. I actually think when you take a decision like this and take a stand, you need to emotionally eat. Oh, 100%. You know what my emotional go-to sandwich is? Tell me right now. P.B. and J. Oh, really? And I'm going to chase it with a glass of milk. Oh. Like I'm 10 years old. I know you hate milk, but I'm just saying. PB and J.

Starting point is 01:23:11 Listen, Stacey ain't coming anywhere near that mouth after peanut butter and milk. Get out of here. What are you talking about? So judgmental. I'm just looking out for Stacey in all of this. That's all. All right, America. You guys can comment.

Starting point is 01:23:27 What's your favorite emotional sandwich if you're having a rough day? I'm going to go with a BLT. BLT. BLT. Kelly, the producer. Let's get Kelly the producer in here. What's your go-to emotional sandwich? You've had a rough day and you're going to eat a sandwich to feel better.

Starting point is 01:23:40 what is it? Turkey with bacon, for sure. Extra crispy. Oh, I like that. Any condiments? Homemade ranch. Ooh, always with the homemade ranch. Honorable mention,

Starting point is 01:23:53 meatball sub. Okay. Okay, I feel like that's pizza. I'm not sure if that's a sandwich. I think that's pizza. I think it's pizza. Do you know what I mean? I'm just...

Starting point is 01:24:04 You don't think so? You think that meatballs is a sandwich? I'm flabbergasted that you would not call a meatball sub a sandwich. Flabbergasted. It's got the sauce. It's got the cheese. You're putting cheese on it?

Starting point is 01:24:13 Absolutely. Mozilla or provolone. It's a meat pizza. It's all that is. Oh, wow. You know what I mean? It's got all the same ingredients. It's on a bun.

Starting point is 01:24:21 Versus like a sandwich. I'll tell you what I'm going to a Philly cheese steak. Hey, okay. Now listen. Now you're about some business. After the PB and J, I need the Philly. You know what I mean? Yeah.

Starting point is 01:24:33 Yeah. That's what I need. That's good. Need that protein, the extra cheese, some pepper. Mm-hmm. The peppers. To deal with all my emotions. I like that.

Starting point is 01:24:41 All right. There you go, folks. Emotional eating is what we're suggesting. This is what people come for. Great life advice. And then a good conversation about a sandwich. With a side of homemade ranch. Way to go, Kelly.

Starting point is 01:25:19 Welcome back to the Ramsey show in the Fair Winds Credit Union Studio. Alongside Jade Warshaw, I'm Ken Coleman. Thank you for being with us. The phone number to jump in is AAA 825-2-25-3-8-25-2-2-25. Huntsville, Alabama is where Denise is waiting. Denise, how can we help? Hey, thank you guys for taking my call. I appreciate it.

Starting point is 01:25:43 You bet. Here's the short of it. I'm 54 years old. I've been a widow twice. Oh, my gosh. And I have no retirement saved. And my income does not, it doesn't cover my expenses. I had credit card debt, and I ended up having to call National Debt Recovery to turn those over to them,

Starting point is 01:26:12 and it wasn't even a lot of debt. It was just $10,000 that me and my past husband had incurred paying his medical bills. So after he died, it left me with that debt, and I had one income instead of two. So I went ahead and turned those over. and I just recently paid one of the smaller credit cards that I just refused to turn over. I paid it off. I don't have a lot of debt, but it doesn't, I'm just not able to pay my bills. And I've sowed everything that I could sell that I can live without.

Starting point is 01:26:49 I downsized, I got rid of the truck and downsized two and economical little Mazda 3 that I drive to work. I work 45 minutes away. Okay. What do you make? I make $16 an hour, so I end up bringing home, depending on the week. It's anywhere from $1,500 to $1,000 every two weeks. And the little Mazda 3, is that paid for? It is actually not paid for yet.

Starting point is 01:27:19 I still owe like $2,500 on it, and I only bought it for $4,000. It's got 200,000 miles on it, but it's a decent, good car. What do you do for a living? I am a front desk. I take co-pays collection. I work for a doctor's office, basically. Okay, gotcha. Okay, can you walk us through your debt, the remaining debt you have, go smallest to largest? Smallest to largest. Smallest would be, can I just go down the list the way I haven't wrote down? Sure, yeah, yeah, go ahead. I'm sorry. The house is 800 a month, and I still owe $12,000 on it. Okay. I don't think I could rent cheap. The payments are $800. No, no, no, no. I don't even think I could rent you for doing that.

Starting point is 01:28:02 You're doing good there. The health insurance, I have to go through the market, and it's for me, and my child, it's $50 a month. Well, I don't need your monthly bills. I just want to know your debt. Oh, my debt. I'm sorry. Okay, that's all fine. What I have left in debt is the car, which is right at $2,500. Okay. And I already got rid of the credit card, the other credit card.

Starting point is 01:28:26 But then I have that $10,000 that I've turned over to the national debt recovery. Okay, that's actively being, they're actively covering that. Yeah, they take 100. They just started after Thanksgiving last year. They take 150 out of every paycheck for 29 months. Oh, boy. Can you get out of that? What's the penalty for counseling that?

Starting point is 01:28:47 I'm not sure. I want you to check into that. Okay. You might be on the hook for some fees, but all they're going to do is stack those $150 payments off to the side, and they're going to let this default, and then they're going to try to make a deal. That's what they're going to do.

Starting point is 01:29:01 And that's honestly something that you could do yourself if you chose to do. But I don't know that you need to do that just yet. That's going to tank your credit. It's not good. And like I said, there's usually a good amount of fees attached to that. So I would, if you can get out of that, and it's reasonable. I don't know how much you've already paid in, but I would get out of that.

Starting point is 01:29:22 pretty much immediately. So after the car, the $2,500 and after this $10,000, is there anything left? Is there any other debt? No. No student loans, no nothing like that? Okay. So the good news is, the good news is your mortgage is awesome. The $800 a month you're right. You can't rent cheaper than that. And the good news is you've got $12,500 of debt, which under the circumstances, I don't know why I was expecting, but I thought it was going to be a lot more. Now, the problem is if you have a month to month income issue and there's no margin, that $12,500 of debt feels like a mountain just because you're struggling to eat, right? Yeah, I want you to, so let's dive in with Jade.

Starting point is 01:30:03 Jade's the Budget Queen. Give us, what do you think you're spending too much money? That's just it. I don't know. I've went through. Let's look at it. You make $3,000 a month, give or take, right? Yes, right, less than that, actually.

Starting point is 01:30:19 It's more like, and I, and I, and I, and I, work two jobs, so it's more a lot. So this is a second job, it's about $2,500 a month. Then it's an income crisis is what you have, because no matter what you do, that $2,500 is not going to feel like enough. It's very hard to live on that. You're working two jobs. I only heard the one job.

Starting point is 01:30:39 That's 16 an hour. I do the 16 an hour, and then the same company, they asked me if I would clean the office for $120 every Friday. Okay, so that's after hours. That's the second job. Yes. But none of them are 40 hours a week. The $16 an hour job is 40 hours a week, and they let me work over all the time to try to help me. Well, that's good news.

Starting point is 01:31:05 I mean, I feel like all I do is work. I go in at 8, and I don't get home until 6. I know, but I think we need to get you a hire hourly. That's the problem. I do. I think that's the transition. But I also, I believe, if you'll let Jade walk you through this here for a couple of minutes, a lot of detail. I got to believe there's some budgeting. issues going on. Let's try to find it. So after, let's say you're making $2,500, after the $800, that leaves you with $1,700. Then you said for each, you and your daughter, did you say, it's $50 a month for health insurance? Yep. So $100 total? It's, yeah, $50 a month. Okay. Both of us. Both of us are in there for $25,000.

Starting point is 01:31:41 Okay. Okay. So that takes us down to $1,600 or $1,650. What next? What else? Water is $35. Uh-huh. What else? It's 180. Okay. Progressive car insurance is 100. Okay. I have one of them Gerber life insurances that my mother got on me that if I pass away,

Starting point is 01:32:03 it gives my child $10,000 to bury me. It's $7 a month. Okay, we're going to cancel that immediately, but it's $7. Okay. What else? And then, of course, now I have the new National Network Relief of 150 coming out of every paycheck. Okay, fine. What else?

Starting point is 01:32:19 Cell phones are 90. Okay. Do you do like that? Like a consumer cellular or who are you with? We're with cricket. Okay, good. Next? That's just for two phones.

Starting point is 01:32:30 Internet's 90. And then I have a life insurance that since both husbands passed away and left me with nothing, I couldn't even hardly bury them. I didn't want to leave my child like that. So I took out a life insurance plan of $250,000. And I pay six for me. Is it term life? Did you do it through Zander?

Starting point is 01:32:50 Yes. I did it through Shield. Okay, I want you to call up Zander and check it through with them and make sure it's the best possible option. If not, you might be able to pay a little less because you said you're paying $248 a month or a quarter. I pay $69 every three months. Okay, okay. $2.50 for a year. Okay.

Starting point is 01:33:10 We got about 40 seconds. Right now, I'm seeing you with $900 extra dollars. So what do you spend it on food? We don't. I'm honest. We spend something. If I have a little bit left over, we, we'd, We spend about 110 if we have anything left over.

Starting point is 01:33:25 Okay, so that leaves me on my checklist here. That means you got $830 some odd dollars to spare. We're going to give you every dollar and you're going to plug this in and you're going to do just what I walked through with you, every single item. That money is draining somewhere and you don't have the margin for any drains right now. And I believe that you do need to find something that's going to pay you a higher hourly rate than $16 an hour. That is where your primary struggle is. you're not going to be able to side hustle your way out of that low core income.

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Starting point is 01:35:18 downloading it in the app store or Google Play. Riley is up in Chicago. Riley, how can we help? Hi, thank you for having me on the show. I'm 28. My wife is 32. We've been married for five months now. We're moving.

Starting point is 01:35:34 We currently have about $100,000 equity in our current home and kind of wondering what we should do with that equity, whether we should just roll it into the next house, pay off debt, and then use the remainder as a down payment or pay off debt and then do some remodeling on our new home. Oh, I love this idea. So 100,000 in equity. How much debt do you guys have? So I currently have no debt. I'm 100% debt free. My wife has about 70,000. She has a car loan for $10,000, a personal loan that she got to remodel the house that we're currently in,

Starting point is 01:36:09 and that's for $10,000 and then about $50,000 in student loans. Okay. Okay. So, yeah, I like the idea of since you guys happen to be moving, you have this equity and you are newlywoods, so it's really a fresh start. I like the idea of taking that $100,000, taking $70,000 to pay off the existing debt between the two of you. And then what I would do with the $30,000 is I'd say how much of this $30 constitutes three to six months of expenses for us? What would you say? Well, with the new house and everything, it would probably be close to 10 to 12,000 probably. Okay, so we'll say maybe half, to be fair. Yeah, I have.

Starting point is 01:36:52 And so that leaves you with 15,000. Now, the question is, does that leave you with enough of a down payment for a new house? Or what would you do? Yeah, so I have, we have 80,000 cash in the bank that we're going to use for a down payment already. Okay. So you could add the other 15 with that cash and have $9,000. Yep. Okay. Now, if you put the 95 down, does that get you where you want to be mortgage payment wise? Yeah, so we're going to do a 15-year mortgage. That gets us, it's like, I think went to the math, like 27% of our monthly income would be our mortgage. And that would be everything in escrow, property taxes, all that. I love that. I'm okay. I'm not going to split hairs on that. I love that for you guys. And then how quickly could you then, I mean, it sounds like there might be work to do on this house because you mentioned renovations?

Starting point is 01:37:41 Yeah, we kind of just want to do a kitchen remodel on the house and then everything else is we can kind of just do as we go. But the house is moving ready right now. How quickly could you save up to do that Reno in cash? Probably a year. I have overtime opportunities at work, so it's easy for me to come up with extra cash if I need it. Listen, you are very analytical, very logical. This is easy. This is the easiest call I've had all day.

Starting point is 01:38:07 Thank you. There's no argument. Love it. have a question, though, the way you worded things, do you two have separate finances? It doesn't sound like it, but the way you said it earlier, it did sound like that. Yes, and no, like we're slowly combining our finances. I guess the way we have it set up now is out of our paycheck, we put, you know, a certain amount into a shared account, and then all of our household income, vacations, food, all of our living expenses comes out of that. And then we have our separate

Starting point is 01:38:35 money for, you know, if I want to buy a toy or whatever, you know, like a four-wheel or something like that or if she wants to go to her hair or whatever it is, then she can I select. Can I suggest a tweak to that? Yep. Where you guys still have that personal autonomy. What if you put, what if you put all the money in one account, all of it, and then on the budget, you designated amounts of money, like equal amounts of money for you to spend how you want and equal amounts of money for her to spend how she wants?

Starting point is 01:39:04 Okay. Yeah. I mean, yeah, basically the same, just a little bit. Yeah, it's just creating, it's creating, I don't know if you've, how long you've listened to the show, but I can tell you just today we've had two calls where because the spouses, they had separate accounts, it kind of created this feeling, it created this feeling that I can kind of do what I want over here and I don't have to tell my spouse. And over time, things were done that felt like it was crossing the line for the other spouse. So what happened? So, do you know what I mean? So putting it in one account says, hey, this really is our money. And I know, and I'm just making up numbers here, and I know that I have $500 out of that that I spend on what I want. And she has $500 out of that that she spends on what she wants. And then from there on, now you've created transparency. And so for instance, for my husband and I, I'll be honest, I rarely am like, what did you spend your money on? I don't care. Every once in a while

Starting point is 01:40:02 it just comes up and he's like, oh, I bought this new thing. And I'm like, oh, great. And I, the assumption is, and I know, oh, that's what he spent his money on. But do you see what I'm saying there? Yeah, it makes it more of, yeah, instead of, it makes it more of our money, the whole pot. There you go. Yes, yes. There you go. This is the easiest call.

Starting point is 01:40:19 Your wife, wonderful. She, no arguments. Yeah. And Riley, you guys got it together. But just to really put a pin in all this, the hour, there's a real powerful emotion of unity when we talk about our and by the way the data bears it out yeah absolutely so don't i don't need to get on a pulpit on that one today evan i know where that is evan i know where that is evan how can we help hey thanks for taking my call you guys are my favorite two when you guys

Starting point is 01:40:53 are together it's one of my favorite combinations that's very nice we just high-fived evan in honor of you thank you very much so i um we're in fPU uh week number five uh wow How? Did you cut out, Evan? Uh-oh. I think our high-five slapped him so old. Okay. We'll see if we can get Evan back. In the meantime, let's go to Robert in Daytona, Florida. Robert, how can we help? Hey, how you doing? I'm a wife. You know what? We're having a blast. What's going on with you today?

Starting point is 01:41:31 So I have a little bit of a strange little question here, and a career change. I'm kind of curious as to how to transfer careers. I'm kind of on the top of my career right now, so I'm making the most amount of money that I can't right now. But if I'll be switching to the second career, I'll be staying all the way down on the bottom. I'm making about 125 right now. My wife is making about 35. If I switch careers, I'm going to be dropped to about $25,000 a year. Two and what? Well, I'm a mechanic right now, and I'm not. looking at flight instruction, going into aviation.

Starting point is 01:42:13 Okay. Well, could you even do that? Is it even possible? Have you set your life up to where you can take that big of a hit? I've spent $65,000 worth on training so far. I didn't ask you that. I asked you because I understand I've taken this call many, many times because pilot, the schooling is outrageous.

Starting point is 01:42:34 And they can just charge through the absolute teeth on this. So is there not a way to be? more patient and save, save, save so that we're not taking a big hit here because dropping from 135 to 25, the question I have, we have limited time, is your life set up to where you can take that big of a hit, a $100,000 hit and not be starving? Yes or no? Well, that's kind of what I'm calling. I have about, we have about 20,000 in savings.

Starting point is 01:43:04 That's not enough. And we have about 15,000 and like investment. months and stuff. That's not enough. What matters is your month to month, if you can eat every month on what you bring home? Between me and my wife is going to be really, really close. I mean, you're going to be down to 55,000. So what you need to do tonight is a mock budget. So what is that going to look like? 3,700 a month? About 32. How long is the program? I'm already all taught and everything. I have enough hours to start my career. Okay, well, how long then will you be making 25,000?

Starting point is 01:43:41 It's a very good question. A year, two. You better get the answer to that, and then you do what Jade's talking about. Yeah, do it tonight. This is all about numbers meeting up with calendars. So if I'm going to make that for one to two years, I need to know, is that the gospel truth? What is the range? One year, two year. It could be anyone there. Okay, great. Now, that's 25,000. So how much money do we have to save up before I take that role? And you may have to press pause, Robert. It sucks. You have to press pause. going into that until we have the money saved up to make up the difference. That will determine

Starting point is 01:44:14 whether or not you can do it. Do I have the cash to make her for the shortfall? Really simple. It starts with a budget first. If you've been working the plan, paying off debt saving and changing your family tree, I'm proud of you. And if you're in Baby Step 4 or beyond, it's time to celebrate. The Live Like No One Else Cruise is back March 14 through 21, 2027. Join the Ramsey personalities and me as we sail to half-moon key, Cozumel, Jamaica, and Grand Cayman on the ultimate debt-free vacation. Cabins will sell out just like last time. Lock in yours with a $600 deposit at Ramsey Solutions.com slash events. We've got on the debt-free stage in the lobby here at Ramsey Solutions. Alvaro, did I say that right? Absolutely. Fantastic. Welcome, and you're here

Starting point is 01:45:44 to do your debt-free scream, I guess. I am. All right. All right, let's go. Let's get the details. All right, how much debt? It was $90,493. Okay, and how long? It took 20 months. 20 months, okay? And what was the range of income? I started at 73,000, and currently I'm at 92,000. Way to go. What led to that? I'm an occupational therapist, and I did a lot of side hustles in the meantime. I tutored, repaired glass for phones, dog walked, you name it. I did it. Love that. What kind of debt was it? All student loans. Hey, okay. Okay. Very fun. Okay. So what happened 20 months ago? I graduated from grad school and I saw the bill and I started seeing how much interest was going to accrue. And I did the calculations and an interest if I did the 20 year plan, it was going to be $75,000 extra on top of the student loans. Essentially they would have doubled. So I was like, I can't do that. And during this time, I was having no interest accrued.

Starting point is 01:46:49 So I was like, I got to go at it. I got to go ham. So I made a deal with my parents. And I asked them, hey, can I live at home for a year? You guys don't charge me rent. But after that, you can charge me double rent of whatever you wanted so I can aggressively go at this. So they helped me through this journey.

Starting point is 01:47:06 And then after that, they saw how aggressively I was going at it, that I wasn't going out, I was doing what I needed to. And they're like, we're going to let you finish off your student loans. They dropped the double rent? They did. Nice. Just the 20 months. That's great.

Starting point is 01:47:18 Good parents. So, okay, give us an average, or if you know the exact amount of what you were paying monthly to get there 90K and 20 months. I could do an average, but I wonder, was it that clean? Were there certain months over the 20 months where you were able to put more? What did it end up looking like each month, paying off debt? It was about $5,000 a month. $5,000 plus.

Starting point is 01:47:39 And what was your take home? It wasn't much. It was like $55, $5,600. Wow. And those were basic things of like, I'm going to help with the groceries. I'm going to get gas. The biggest goal was my sidehouse was to pay like the principal. But then after that, my main job was really just get after it because I knew that was the biggest way.

Starting point is 01:47:59 I love this. This right here is a gleaming example of when it makes sense and how to do the I'm going to live at home for a little while to get this debt paid off. Excellent. Well done. Wow. So what was the hardest part? I mean, obviously you're seeing your money go out of the door. and you're living at mom's house.

Starting point is 01:48:15 What else was hard? Being able to finding the courage to delay gratification and saying no. Saying no to a lot of things I wanted to do that in the moment I was like, I'm looking at the future. I'm looking to see what I can accomplish later because right now it does stink. Yeah. But in the future, I know it's going to be so worth it. And it has been.

Starting point is 01:48:32 So the keeping, understanding the logical part, yeah, you know what I have to do. I got to stick. But keeping the promise to yourself is the hardest part. Absolutely. Wow. So here's my thing. I have, you know, I'm on social media. I hear people talking all the time. And when you mentioned paying off student loans, the automatic mindset is that's impossible. I want you to talk to, because how old are you? 30. 30. I want you to talk to the 27 year old, the 30 year old who just finished grad school, just finished undergrad and is like, yeah, I'm just going to kick the can down the road forever. I haven't even calculated the interest. They just need to do it. It's a mindset. It's a mentality. And it really does. spread into every aspect of life, your work, the way you decide to go about having friends.

Starting point is 01:49:19 Like those intentional relationships and those intentional things that you choose to do in life, they carry on. So that's why this was so important to me because I knew that if I can be dedicated as I have been in the gym or in my nutrition or whatever aspect that might be, it carries out into being just a better person and you being able to portray that in your personality and whatever encounters you have. Oh, you have figured out, you have unlocked some. something so important. You have figured out that discipline begets discipline. Absolutely. Have you always been that way or did you develop it as a result of the urgency with this process? Different seasons of life definitely led me that way. I was growing up being an athlete and then I

Starting point is 01:49:58 got to school, stopped doing that for a little bit. But then I found that purpose. And once you find that purpose and you know what you're looking for and what you want to be, there's no stopping you. That's right. At what point after you're paying $5,000 a month, does this go from being, I can't believe I'm doing this too. Look at what I'm doing. Was there an emotional shift if you understand what I'm asking? Oh yeah. It's really like a countdown because I started with 90,000. So it was like I start at nine and then we get to eight, seven, six all the way down. And once we get to that final zero and you're just on the bare minimum thousands, it's like it's coming. It's going. I love I love everything about this. Yeah. I do. So 30 years of age. Okay. And now you're on the other side of this.

Starting point is 01:50:40 Yeah. How has it changed your perspective? looking forward because you're a young man. Yeah. It's a great feeling because I bought my Beyonce's ring, paid if we're in cash. Oh, we see it over there. Okay, hold it up there so we can get, there we go.

Starting point is 01:50:56 I love it. I need some sunglasses. And then on top of that, it's just like, I have no fear. Ken, thank you so much for just what you do because because of you, I was able to leave a toxic work environment and just feel proud of being able to work

Starting point is 01:51:11 and do what I do. and have passion behind it. Oh, thank you for sure. There was a quote that Jade once said with Dave. Receipts. He's coming with receipts. I love it. She said with Dave, weird is being independent in a culture that teaches you to be dependent.

Starting point is 01:51:25 And that hit me because it really does. And when you're debt-free independent, knowing that, hey, I need a day off tomorrow. And I can take that. There's no greater feeling and no greater power knowing that you did that to yourself and you can't do that. Yeah. Autonomy. I am, I'm overwhelmed. you've done such a fantastic job.

Starting point is 01:51:44 And you dropped a major key. I don't know if people were listening. Because, you know, people are going to listen to this and be inspired by what you're saying. There is a great motivation tactic that you shared, which is when you have an even, like a nice countable number like 5,000 or 10,000, right? It makes it easier to see that number go down in a pattern that is motivating to us. So a little major key there. I'm proud of you.

Starting point is 01:52:07 What happens next? Life. I started my own business for occupational therapy. I'm a mobile practice. So just growing now, being able to give people the treatments that they desperately need and not having to rely on insurance or anything along those lines because I want to give people the opportunity to live their life and be able to regain all functions.

Starting point is 01:52:28 All right. Hold on. Let's not, if I heard you right. So are you doing a old school cash for your business? No insurance filing at all? That's the goal. But, you know, there's stipulations and everything, but that's my goal. Yeah. And is that, you're basically like, okay, this gets you this and you kind of lay it out like a menu so people know. All the cart.

Starting point is 01:52:48 I got to say, I just, I don't want to go on a rabbit trail, but this to me is the future of personal medicine. 100%. I think it should be. But I digress. But I'm proud of you starting your business. Okay. So obviously your love of fiancé is here. Who else alongside her walked through this with you and were your biggest fans?

Starting point is 01:53:07 Honestly, it was a lot of self-decent. It was a journey by myself for the most part. There's not a lot of people that really helped me, but there's a lot of wisdom that was passed on from, because when I first got out, it was, I always asked like, what did you guys follow? How do I do this?

Starting point is 01:53:21 And it was always the older generation that helped me and said, hey, listen to this, listen to this guy. And it just helped. It helped tremendously. Moral of the story, hang around older people. I was just thinking the same thing. It's good to be old. It's awesome.

Starting point is 01:53:33 All right. This is fun. Are you ready? Yeah. Okay, here we go. We got Alvaro from Dallas, Texas. he paid off 90,000 plus in 20 months, making from 73,000, all the way up to 92,000, and all those other jobs.

Starting point is 01:53:47 Alvaro, it's your moment. Let's hear your death-free scream. Thank you, Lord. I'm debt-free. No countdown. Just a thank you, Lord, which I have to turn. Kind of like that. Put his own stamp on it.

Starting point is 01:54:01 I'm going to go out on a limb. I'm going to go out on a limb and say that's one of the goats of debt-free screams. Now that. That's a goat right there. Now, that's a fun game for our hardcore Ramsey fans, like, do they have their top five debt-free screams? That's a goat. You're saying it's in the top five.

Starting point is 01:54:19 Yes, because, A, he's young. Okay. Two, he figured out the whole live-at-home thing and did it flawlessly. Okay. Number two, he started a business of his own. Number three, he understood a major principle, which is it's not just about paying off the debt. It's about when you have discipline.

Starting point is 01:54:39 when you have freedom in one area of your life and you've mastered it, you have to let it go into the other areas. You don't just get thin and get your body right. Now you do that in your spiritual life and now you do it in your marriage and now you do it with your money. He understands that. You can't stop Alvaro. I'm telling you that right now. I got to tell you, pal, you got my co-host fired up. She could run through a wall right now. I better go open the door. We're going to go out and and see him and celebrate with it. How many times have you started January saying this is the year I'm finally going to get my money under control. But then months go by and you still feel broke. You work too hard to keep living like that. Look, there's only one way to move the needle on your

Starting point is 01:55:37 finances this year. You've got to have a plan. So start by downloading every dollar. Every dollar is way more than our world-class budgeting app. In 15 minutes, we'll build you a personalized plan to free up extra margin in your budget and use it to beat debt and build wealth. You'll find thousands of dollars on average just the first day. And you'll get new steps and new lessons every day that help you stay on track and create unstoppable momentum. Don't waste one more day feeling broken stressed. Get your plan in just 15 minutes by downloading every dollar for free today. Our scripture of the day comes from Psalm 20 verse 4. Let God grant what is in your heart and fulfill all your plans. Our quote today from John Maxwell, the reality is,

Starting point is 01:56:39 that you will never get much done unless you go ahead and do it before you are ready. All right, then. There's a word. It is. All right. Evan, we got him back, hopefully, in Roanoke. Evan, do we have you? I'm here.

Starting point is 01:56:54 Fantastic. Thank you guys for taking me at my call again. Hey, it's okay. We were worried about you, man. We didn't know what happened. So we're glad to have you back. My wife pulled in the driveway and the Bluetooth picked up in her car. Oh, no.

Starting point is 01:57:07 Classic. That happens to me all the time. Yeah, it's really irritating. All right. What's going on? So we are in FPU week number five. So we're just starting, you know, going through the, you know, but we are on Baby Step 2. And I have a question about possibly do we need to go back to Baby Step 1 and reevaluate it?

Starting point is 01:57:29 Because as a backstory, we have two small businesses that we run. I do a cabinet business and she does horseback riding lessons. We have 15 acres and 11 horses, and our income last year after all expenses was 130. And we have $1,000 set aside, but my question is, given that something could come up with a horse that would be, you know, possibly $10,000 for a vet bill, what should we hold in reserve for that? for emergencies like that in this situation? Well, first you need to separate it from your personal monies. So if these are two separate businesses, there's got to be a line item in her business budget

Starting point is 01:58:21 that when she brings her revenues in, some of her expenses, some of her money goes toward creating retained earnings or like a stockpile of cash, basically an emergency fund for her business. So that's going to be something she needs to build in. that's reasonable to the work that she does and that's something that you need to build into yours as well.

Starting point is 01:58:41 And that happens before you guys take your payrolls. Does that make sense? So it's not going to be part of your normal every dollar budget. That's going to be part of her business building over here to the side. Okay. So personally, we should just keep it at a thousand personally. Yes. And then on the business side, like realistically, you know, how much should, following these principles, because obviously, you know, were my business is about 18 months old and hers is like three or four years old.

Starting point is 01:59:16 So she's in the, she, uh, my, my portion of it was 85 last year and she was at 49. Um, and so as far as like operating under the under Ramsey principles, how much. should we hold in reserve for our businesses? And because, you know, we're paying ourselves the profits. And so how much do you hold in reserve on this business? I would probably say somewhere around three to six months of operating expenses for you both is what I'd be looking to do. Now, for her, she's going to have to figure out what that is.

Starting point is 01:59:52 I'm not sure that she has an accurate picture based on the fact that there's no, like there's nothing held aside. I don't think you guys have an accurate picture of what, salary you can actually pull because that's a significant amount of money that needs to be budgeted for every single month out of her budget. Does that make sense? It does. And we do have separate, like the, every, every, you know, we have a personal and the two business accounts. And her, her gross last year, you know, just because the overhead on horses is a lot. So her gross was 226 and her net was, was 49. My gross was, yeah, my gross was

Starting point is 02:00:30 was 210 and my net was 84. Yeah. I mean, I think just the nature of the business that she does because it's live animals and it's horses specifically. I mean, I think that's always going to be the case

Starting point is 02:00:43 that her spend is going to be higher. But my point is, I think this can continue to go, but the biggest takeaway for you is to go, okay, the money for her business overhead is not coming out of our personal budget. It's coming out of her,

Starting point is 02:00:58 the P&L for her business. Does that make sense? It does. And so I guess do we put step, you know, because we have a plan that right now our plan to pay off the debt is going to take 27 months. Okay. And so $70,000 in debt in 27 months. What this means is, yeah, that's going to take longer.

Starting point is 02:01:18 If you want to get these businesses in a stable position, it means your personal debt's going to take longer, which means you're probably going to have to do some things on the side to bring an extra money to account for that. Right. I mean, Ken, am I missing anything here? I agree. Your advice has been great. I only add this mental thing. You were touching on it just here. Jay, give you great advice. It's super important that you don't let the intensity, and I love that you're in week five of FPU, right? So you're in it. It's like training camp, you know, and you're just walking through it and you're fired up. Don't let that intensity put you in a situation where you don't shore up your businesses. That is your income. And Jade really was all over that. And I would just say, make sure you go, I got to make sure that I've got those retained earnings set up in my businesses, plural.

Starting point is 02:02:09 And if that makes my debt payoff a little longer, it's okay. It's okay. But then I'm going to make up for it as Jade is saying. So the mindset is let's not hurry at the expense of, like, gazelle intensity doesn't mean gazelle foolishness. Good. Right? And I think that thank you. I'm getting, this is very exciting.

Starting point is 02:02:30 It's rare that I get this. So that would be my word for you is I love the intensity, but let's shore up everything else. And then we deal with it as it comes, as far as the payoff date. Okay? So the fact you guys got these businesses, you want to just keep those things stable. Because if you don't and something happens. Now you're up a creek. Now you're in big trouble.

Starting point is 02:02:54 Yeah. And we're also blowing up our timeline. So it's not about the timeline. it's about how we finish across the line. So appreciate the call. You're a sharp young man. You guys seem like you're doing great. We'll get Kelsey in real quick.

Starting point is 02:03:09 Kelsey, how can we help? Oh, I like that. Giselle quote. I wish I could write it down, but I'm going to remember that. I'll tell you it again. Oh, you already got it. Okay, got you. Very good.

Starting point is 02:03:19 All right, go ahead. We got about two and a half minutes. We'd love to help you. What's the question? Okay. In regards to prenuptial agreements, I've been listening to you all for less than a year, and I know that you all don't recommend one unless you have big financial disparity,

Starting point is 02:03:35 which can protect me or us from Cousin Eddie's. My boyfriend and I plan to get married. It'll be our second marriage. But I wanted to see what your thoughts are on pre-mits. If there is no big financial disparity between us, but we have Cousin Eddies. What do you mean? Be more specific. What are these cousins or who are, I mean, what are we talking about?

Starting point is 02:03:59 So I guess I imagine Cousin Eddie's of being the ones who are looking for money from family members. And this is not a metaphor. You're telling me you've identified some family members on his side that you think will come asking for money. Yes. And they have before. Will he agree with them? Will your spouse agree with the Cousin Eddie? No.

Starting point is 02:04:26 Okay. You don't need a pre-up for that. Yeah. You need boundaries. That's just you and your husband having the, yes, Ken, you and your husband saying, we're not going to loan money to these people. Okay. Yeah. Yeah.

Starting point is 02:04:39 Yeah. Yeah. Oh, yeah. No, he would be on top. He'd be all for that. Oh, okay. Yeah. Perfect.

Starting point is 02:04:45 Yeah. Boy, that is interesting. And good on you, by the way, I've identifying that and bringing it up to him. And so, yeah, complete same page. If we're on the same page, no matter who it is, because we took a call earlier today. a young man gets a massive job. Yes. $285,000 salary.

Starting point is 02:05:05 Tony tells his mom and dad as one would do. And they immediately asked him to help pay off debt, pay for his sister's college. So, you know, Jade and Jade, before we took it, called Jade touched on this. She was like, I wouldn't be telling family about all these income things. So it's very interesting. We've seen this today. I love that you guys have figured this out. But yeah, make sure the husband is absolutely.

Starting point is 02:05:29 in lockstep and we don't share any financial information with any of these folks. So I feel like there's a southern phrase for that, that opportunistic. You always have a southern phrase like a, like a vulture on a jackrabbit. We're like, I don't know, something silly. I love that you gave that a shot. No one in the history of radio or podcasting or YouTube has ever said that. coined that phrase. So I think you've done something great.

Starting point is 02:05:52 Kelsey, thank you so much. I think you've got a lot of wisdom. No pre-nup here. just great communication and a fabulous word to learn. No, and that will work. Hey, remember everybody, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.

The Ramsey Show - My Husband Won't Stop Lending His Mom Money

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