The Ramsey Show - Spending Money You Don't Have Won't Help You Win

Episode Date: July 4, 2024

📱Download your Ramsey Network App for free today! While we're out for the 4th of July, we've compiled some of our favorite Dave and Jade calls from the past year. Enjoy the long weekend and we'll be back with a live show soon! Dave Ramsey & Jade Warshaw answer your questions and discuss: ‘Husband is spent $14K on phone games’ ‘Take out a loan to get by for the next two years?’ ‘I'm in a lawsuit with cofounders of my company’ ‘How can the FDIC insure everyone?’ ‘I want a divorce but cannot afford it.’ ‘Take out small loans to boost my credit score?’ Support Our Sponsors: NetSuite: Free KPI checklist, visit netsuite.com/Ramsey  Churchill: Get started at ChurchillMortgage.com Zander Insurance: Go to zander.com or call 800-356-4282 for a fast and easy quote today. BetterHelp: betterhelp.com/Delony to get 10% off your first month Next Steps 📞 Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET or click here! ☎️ Share your thoughts on The Ramsey Show & more! 💵 Start your free budget today. Download the EveryDollar app! 📚 Your summer reading list is here. Don’t miss these (cool) summer reads! Beat the heat with bestselling books that will make 2024 your best summer yet.  🏠 How to Buy a Home Course Listen to more from Ramsey Network 🎙️ The Ramsey Show   🧠 The Dr. John Delony Show 🍸 Smart Money Happy Hour 💡 The Rachel Cruze Show 💸 The Ramsey Show Highlights 💰 George Kamel 💼 The Ken Coleman Show 📈 EntreLeadership Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. Jade Walshaw, Ramsey personality Personality is my co-host today as we answer your questions about your life and your money. Open phones at 888-825-5225. Ariana is with us in Portland, Oregon to start off this hour. Hey, Ariana, how are you? Good, how are you? Better than I deserve. What's up? I am trying to figure out how I can get my husband on the same page with his out-of-control spending so that we can have an emergency fund to fall on and pay off some of our debts that we have.

Well, what is his out-of-control spending? What do you mean? My husband spends over $1,000 a month just on phone games. Oh. Phone games? Like Candy Crush? Yeah, on his iPhone. Oh, wow. Yes, and I found out by looking at her statements.

When you say that out loud, does it sound as crazy to you as it does to me? Yes. Like this is like illness level. Last year. I'm sorry, you cut out, honey. What did you say uh-oh thousand you're cutting in and out you he spent what 14 000 last year yeah and what's your household income

apparently your phone has not been paid. I can't. Oh, you're back again. We're losing most of your phone here. Okay, so what is your household income? $83,000. $83,000. Okay. Are you somewhere where you can walk and get a better signal maybe?

Because we're losing you about every third word. All right, $85,000. How old is your husband? 29. Okay. I have a question. We have a four-year-old daughter i i have a question it's just what i'm wondering something tells me this is not the only thing he's overspending on what else is he spending crazy money on um his car his what his? His car. His car? Car.

What's that? Yeah. He has a 91 Volkswagen. Yeah. Okay. Which, yeah, that just screams money right there. I'm a stay-at-home mom. Yeah.

And I am the one that pays the bills. Yeah. And I pinch money wherever i can okay so that we can get those paid you're you you guys need to see you need to get some professional help that's what i'm thinking too yeah because this is not a hundred dollars uh and he makes two hundred thousand and it's over a thousand i know i know it's fourteen thousand a year and the money we're spending on the car too so there's something i'm sure you're aware of this or maybe you haven't heard but in dealing with our phones what we are now discovering is that a lot of the things, the games actually have them, they've carefully designed the games to create a dopamine hit to cause you to come back again and again and again.

They designed these games to be addictive. If you're not aware of that, that's very true. It's also true of, for instance, the way the videos now work on slot machines. They have carefully designed those to be addictive. And so your husband is involved in an addictive behavior loop because if you just say what he's doing out loud, everyone that hears it except him thinks cray-cray. Yes. They think he's nuts.

I know. Okay. And so this is not a money problem this is you have a husband that is addicted problem now what do you do with that if your husband was doing cocaine if your husband was doing pornography if your husband was doing some other form of addiction what would you do well you would demand that he gets some help and you would begin to see someone to build language and a narrative to talk to him in such a way that he starts to understand that he's destroying himself and his family with this behavior yes because i feel like at this point i'm talking at him this point what it feels like i'm talking at him. This point what? It feels like I'm talking at him.

Oh, yeah, you are. You're talking to an addict. I just feel like I'm nagging. He's glazed over. You're talking to him when he's drunk. Yeah. You can't talk to a drunk. Right.

It doesn't make any sense. But what you do need to do is sit down with someone that can give you some language that says, okay, this is terrifying me i have a baby and i feel like i am in the house with a cocaine addict right because you are exhibiting the exact same behaviors as a cocaine addict yes and he just spent 700 in the last three days yeah so it's getting worse my goodness well i mean we've established he's out of control we don't need any more we don't need any more evidence that's established does he think that there's a problem at all or when you bring it up is he like no this is fine this is there's no problem here he's told me twice that he was going to disconnect the car from his phone,

but then that did not happen. Well, I mean, I promise you I'm not going to get drunk anymore, but I am hanging out in the bar. Right, right. And we do have a car payment every month, and with what he spent last year, we could have paid off the full balance of what we owe left. But the car payment is not your problem. Last year we could have paid off the full balance of what we owe left.

But the car payment is not your problem. The problem is your husband is an addict. Yes. And you need to start treating this situation like your hair is on fire. Okay. With lots of urgency. And so are you guys by chance in a good church? No, we're not.

Who is in his life that can talk to him, that will listen to him? It's not you. It's definitely not me. I think that we'd have to hire somebody that doesn't know us because he doesn't have a father figure or a mother that he'll listen to. So you need to say, honey, I'm going to marriage counseling because I'm afraid our marriage is going to end because I'm terrified that I'm married to an addict. You are completely out of control.

I'm going to go see a marriage counselor to try to save our marriage. I hope you'll come and set an appointment and go. Okay. Regardless of whether he goes or not, you go without him. Okay. And have that person start to teach you how to speak to an addict to give you any possibility of getting through the fog of this into his brain, and he remembers that he's a husband and a father

more than he is a game player on a freaking iphone right i'm sorry because he works so much i don't care how much he works it doesn't mean you don't just because you work a lot doesn't mean you get to do cocaine sorry that's not how this this works. There's not a trade-off here. I think if I were in her shoes, his phone would suddenly go missing tonight. You think it would? Just look at you. It's almost like it ended up in the river and no one knows how it got there. I have

no idea where it is. You know, after I dropped it out of the car doing 95, I have no idea what happened to that phone. Exactly. It's somewhere between one of those mile markers back there. I know that's right. I have no idea, but to that phone. Exactly. It's somewhere between one of those mile markers back there. I know that's right. I have no idea. But he'll have another one by morning if he's not well.

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guide to AI and machine learning at netsuite.com slash Ramsey. It's free at netsuite.com slash Ramsey. Jade Warshaw, Ramsey personality is my co-host today. Open phones at 888-825-5225. Andrea is with us in Houston. Hey, Andrea, how are you? Good, how are you? Better than we deserve. How can we help? So I just started here at university,

and I've got all the materials. I'm kind of thinking a little bit ahead, and I was contemplating what to do with the two cars I have. Okay. Basically, they're both upside down big time, but I mean, in the perfect world, I would love to sell them both

and get a really cheap minivan that I can fit my five kids. What do you owe on the first one? It's $37,000. And what's it worth? Well, one place, one dealership called me and said that they could pay 40 grand for it but then the car fax or max whatever was saying like 30 like really low 30s okay well what's the other one yeah it's the truck um it's uh 47 on that one and um

definitely i could i know i can only get like 30, probably 30, mid-30 for it. The Traverse is upgraded, but the truck isn't. It's just the average Dodge Ram. Okay. So let's do a little bit more research on this first car and find out if you can really get 40 for it. Because if you can, are you looking at just you're going down to a one car family or you because you could take the 3 000 if you if it really is worth 40 put it towards a 47 and keep rolling or if you're if you were wanting to sell both at least that 3 000 could go towards

the amount that you're upside down in car number two you have you have any money you have any money it'd be like 20 grand upside down at least yeah well that's that's dave's next question is do you have any money set aside whatsoever no that's literally the plan so um i have to still save a thousand emergency um i've been i'm credit cards are starting to get paid down and I plan to cut the first one this next week. And so I'm kind of still thinking ahead, though, because I want to attack this pretty intensive. So your plan was to sell both cars. What was your plan after that? I guess I'm trying to get on your train of thought, because I can tell you what I would do.

But you're going to sell both and get cash for a car, like a minivan that I can fit all five kids. Okay, and then what does your husband drive? I'm divorced. You're divorced. Oh, so you own two cars with one driver. Right. Oh, okay.

And what's your household income? Okay, right now I'm the self-employed business owner, and so after business expense and my cut basically after employees it's um 120 a year good okay good so you're you're on that i love your intensity thank you thank you thank you you're going to go places you're going to go places. You're going to be okay. So, well, how bad is your credit? It was close to a 740, now it's down to a 650, because I've chosen to pay other stuff rather than credit cards. Who's the truck loan with? Who do you owe the money on the truck to?

Wells Fargo. So it's a good bank, and it's a good interest to wells fargo so it's a good bank and it's a good interest rate no it's not a good bank but it is a bank yeah it's not a bank that's going broke but um okay so what i would do is trot over to is wells fargo got a branch there that you work with i kind of ordered the car online so i mean i I can look for a brand new car. What I want to do is talk Wells Fargo, and I would prefer to do it in person. Talk Wells Fargo into letting you sign a note for whatever the truck doesn't bring so that approximately $20,000 or so, hopefully you can get more than $30,000 for it. Hopefully your data is wrong and you get into KBB and you do a private sale and you get

35 or 37, then you're only 10 in the hole. But you would borrow that 10 from Wells Fargo and then they would release the title to the buyer because you've got to sign a note for the difference. In other words, they're making you the equivalent of a personal loan, which they already have. They're just admitting it okay because the truck's not worth enough to cover in the event of a repo so they're already not they already don't have sufficient collateral and they're just allowing you to get rid of the debt which ensures that you're actually going to pay the 10 or the 12 or the 15 or whatever the difference is so that's what i want to start with is try to get them to

cover let you sign a note for the difference is. So that's what I want to start with is try to get them to cover, let you sign a note for the difference. How much other debt other than cars do you have? Credit cards, personal loans, and student loan. How much credit card? So the credit cards are probably totaling about $10,000 less to pay. Good. Personal loan is about $10,000 as well because I have two. They're small.

And then student loan used to be $20, it's 9 000 okay i paid that down okay so what i want to do temporarily stop paying on the student loan completely who's the personal loans with personal loan is some silly companies called opportunity prize they were basically when um because i have four months with my work and so i didn't have emergency savings or any kind of bill savings until i got personal loans out okay i'm just wondering if they would loan you the money to get out of that car if wells fargo won't i don't pay it off they would no i'm not talking about if you pay it off. I'm talking about the $10,000 hole. The difference.

$15,000 hole you're in on the truck. Oh. I'm trying to get rid of that truck today, and you've got to give Wells Fargo $47,000 to get the title to that truck to sell it. In order to do that, you've got to cover the difference, the amount you're in the hole. If Wells Fargo won't let you sign a note for the difference, you've got to find another bank or credit union to loan you that. That's why I was fishing around for. So now, yeah, I'm selling both of them. If I can find a way to cover the truck deficit by borrowing that amount, and then you're going to, that's

going to get rid of way more than half of your debt uh and yeah scrape together the cash with the difference on the van and whatever other cash you if you have to stop uh debt snowballing for a minute and uh get you a five thousand dollar van yeah right i hope you can get five more for the van than it's worth and then you can just go get a five thousand dollar van then we can get the truck sold that's going to leave you 10 or 15 in the hole then you got 10 on credit cards 10 on personal loans and 20 on our nine nine on student loans left so you know you're going to be out of debt really really fast with your intensity and your intentionality you are really doing good really good that's exciting i'm excited it's not even my situation yeah she's really taking action so let me tell you what when you start saying

i'll do whatever it takes and you mean it yep towards any goal you're going to get the goal yeah well she's you can tell she didn't say what it was but she's got a reason and it's it's very clear what her reason is and why she's got to do this and why she's got to act so intensely and that's really the difference between her and somebody who calls in you know lollygagging through this thing yeah it's probably pretty easy to surmise a stinking truck was her exes heck yeah oh yeah so that thing is there's a lot of reasons to be pissed at that truck but the uh yeah getting rid of that and wow and then cleaning up this mess with your 120 000 income in one, you're going to be in such a different place because you're willing to amputate these vehicles

where you're willing to get rid of them. And so you've got to set up the deficit. You've got to cover that deficit, and then you're going to be fine. Very good. All right, Jeannie's in New Jersey. Hi, Jeannie, how are you? Better than I deserve. Anyway, I had a question.

I hope it doesn't sound stupid. I'm kind of doing this by myself. And I did go through SPU. I didn't have the best experience, but I'm smart enough to know how to eat the meat and throw away the bones, if you know what I'm saying. So I went through the course. I feel like I went through steps one through three relatively easy. And I'm wondering, is there ever a time when it's okay to be intense to, I need to buy a house very soon. And is it okay to be intense in step six? I'm kind of, since I never really felt that.

I'm kind of interested in what these bones you're talking about, but I'll save that till the end. You know, I think some people, they go through one through three quickly, or maybe they had something they were able to sell, or it's not as much of a process. So if you want to go quicker through baby steps four, five, and six, that's up to you. We tell folks they don't have to be intense, but if you want to be, you know, that's up to you.

If you want to get there quicker, you know, do your thing. I'm not mad at that. This is The Ramsey Show. Buying your first home is a big deal and sets the stage for your financial success. So work with a mortgage advisor you trust, not just some random website. Churchill Mortgage is Ramsey trusted because they help you avoid hidden traps and expertly guide you through every step. Learn more at churchillmortgage.com. This is a paid advertisement. NMLS ID 1591. NMLSConsumeraccess.org. Equal housing lender. 1749 Mallory Lane,

Suite 100. Brentwood, Tennessee 37027. Jade Walsh, all Ramsey personality is my co-host today. Thank you for joining us, America. Jake is with us in Dayton, Ohio. Hi, Jake. How are you? Hey, thanks for taking my call. Good. How can we help?

So, world got a little flipped upside down. I got a injury. I'm 26. And they said that I'm going to need a total knee replacement. And it's not going to affect my career now. However, in the next 10 to 15 years, I'll need a second knee replacement. And based off that, they said a decent chance that I would not be able to go back to work. At that job?

Yeah, in this career field. So I'm in law enforcement. So my thought process I'm trying to figure out is do I go ahead and switch careers now? Because I don't want to keep dumping money into a pension and then be 40 with kids and then have to switch careers and take a pay cut, because everything I'm looking at right now is a significant pay cut to where I'm at. Okay. Well, let's just change the set of assumptions.

What do you make? Last year, with overtime, I made 102. Okay. All right. um last year with over time i made 102 okay all right so the assumption that you can't make 102 ever again in your life is not a correct assumption no sir yeah i get that it's just everything i'm looking at right now i know but right now your heart's kind of broken because you've had your height your your sights set on being in law enforcement your whole life or a large portion of your life, and you're heavily invested. And then you got injured, and you've gone through the trauma, the emotional trauma of the injury and the physical trauma. And now they're telling you that, you know, your dream's going to die early. Right.

And so in that mindset, you usually don't see this the sunlight you usually see the storm clouds that would be in human nature not not that you're a bad guy okay but i'm not sitting in all that mess that you've been through and so for me i've got 26 year old guy who's bright enough to become a police officer he's bright enough to become a lot of things between now and 10 years from now i mean you could open a business and make two million a year i don't know how old are you 26 i'm i'm 26 and i since i found this out uh i signed up for classes again and me and my wife are cash flowing that good but i'm just trying to, yeah, I just don't know, like how long is too long to stay in this career based off of, you know, like when, when's the best time to switch

careers? Well, number one, you don't want to get injured again, um, or, or, you know, leave your partner in trouble because of an injury or something like that. Um, and number two, you don't want to, uh, you know, wear it all the way down. But do we have to decide this week? No, we don't decide this week. I mean, we have to go work at Chick-fil-A. No, crap no. That's not what you're doing. Okay.

But, you know, what I would do is say, okay, over the next two to three years, I'm going to develop my next, my encore career, my next career after the curtain goes down and comes back up. And I'm going to get, you know, what classes I have to take or certifications I have to take to be that. And I'm going to become a student of Ken Coleman and go live my next dream, which, oddly enough, might end up better. Now, I like that. That's interesting. Yeah. Yeah, that's making God's making me change a career here. I'm just trying to figure out what kind of timeline is here, you know?

Yeah, maybe. My whole life was set up for me to be a real estate investor. And then my real estate portfolio was deeply in debt, and I lost everything, and I was 28 years old, just a tiny bit older than you with a brand-new baby and a toddler, and went bankrupt and lost everything. And so I get to have a new career after that because guess what? They don't loan you a bunch of money at the bank to go do flips if you just file bankruptcy.

So that was kind of out. And so those days were over. Plus, I was done with them because it didn't bring me a lot of fun. And so and by the time your knee got busted you know you're you're part you're partially over being a policeman at that point because you're like this this is less fun than I thought it was going to be yeah you know and so you're having a little bit of that same kind of an experience and you get this next chapter of your life this uh second half so to speak and I yeah you know I think about things like that even what you just said Dave you did this I was just about to say I came from entertainment I was an entertainer my entire life and then COVID happened and there was no entertainment and I had to contemplate my life and I realized

Fauci being entertaining that's how low we got but I realized hey there's other things I can do there's other things I'm good at and I think that you'll find the same thing. And I'm the type of person where I think we just go from good to better to best. Like if you're living your life, right, it's just getting better and better. And I think that this has the opportunity to take you on yet another adventure that's going to have another great outcome. You know, being a law enforcement officer is going to be the first part. And then you're going to move on to something else. And then who knows, you might move on to something else. But that's just the evolution of life. And it's not a failure.

It's not an it doesn't have to be a negative. This can be a this can be one of the greatest things that's ever happened to you because it'll open that that next door. You don't know what's going to be behind it, but you got to keep turning those knobs and something's going to be behind there. And you're going to look back on this and go, man, here's what my prayer always is. I want to look back and go, man,

I'm so grateful. X, Y, Z happened. Cause when that happened, it allowed me to do this, this, and that.

And this has the potential to do that for you. You'll look at this right now. It's painful. It sucks. But in a couple of years, in eight years, in 12 years, I would have never dot,

dot, dot. If it hadn't been. If that hadn't happened. Yes. You know. I never would have been at Ramsey if it wasn't for 2020. Yeah.

Yeah. And everybody hated 2020. Thank you, Fauci. Thank you, Fauci. That's the only time we'll say it. That's the only time. That's the only time you'll ever hear that. Nobody.

Nobody except the plexiglass people say thank you, Fauci. I'm just saying. Now, if that's what it means to get Fauci'd, then. So, yeah, that's the thing. Anyway, but I mean, yeah, the point is, I mean, I didn't sign up for bankruptcy. It wasn't what I wanted. No. And I won't say it's the worst.

It's the worst thing that ever happened to me. And it's the best thing that ever happened to me. I agree. Both. Yeah. Very dramatic, traumatic. And I, you know, I still, you know know we've got the actual bankruptcy filing on the wall wow bankruptcy out here in the in the ramsey lobby when you come out here just so you can

see how this started and i walk by that i still kind of go you know it's like oh crud you know but and it's been 30 years and i still get the heebie-jeebies but yeah but so it's not like i'm still joyful about the whole thing. But, you know, I never would have sold 10 million books selling houses. Yeah, I feel that. I thank God that we went through that $460,000 of debt. It sucked at the time. I'm going to sign you up for Ken Coleman's career assessment.

And it takes about 15 minutes to take. I'm going to give it to you free. And I want you to take that. And it's going to kind of point you in some directions that you probably were already thinking about, but it'll start to give you some clarity on that. And I'm also going to send you his book, From Paycheck to Purpose, because I think what you've got here is not the end of the play. I think you've got the second act.

We're between the first act and the second act. And there's no rush you said you've got 10 years before this is going to go sideways on you so to speak and um but so i mean we can take two or we can take six months and figure this out we do want to actively figure it out though we don't want to sit and let this situation happen to you that's right you want to happen to it be proactive but let's determine you know okay here's the direction and then and let me tell you what the direction is jake the direction is not go back to school that's a good point that is people get this i

just go back to school for what because if you don't know because that's just i just go back to school no that's dumber than a rock. You might be studying exactly the wrong thing. And you may not even need to go to school for what you're thinking about doing. So when we talked to a guy the other day, he's making $300,000 a year and he has a landscaping business. He cuts grass. Yeah. You know. Yeah.

Shut up. Yeah. Do not go back to school unless you know you've done your research and you are locked in. You have to have it. Yeah. You definitely don't go into debt for it no but you have to have you have to have the degree or the knowledge base to open up the fee you know it's permission to play in the field you're going into right okay and so you know what have we got to do there uh and you know it could be as simple as i may not be

appealing to you could be as simple as you work on your master's level stuff and uh and law enforcement administration and you move up into leadership and you know where the knee is not the problem and that changes the whole discussion i don't know maybe maybe you're but maybe your law of law enforcement parlays you up into that it's okay to be either any of those but do it intentionally take two to three years to get tooled up. Begin to make your move gradually so you sneak up on this. It doesn't sneak up on you. And we'll send you the tools from Ken Coleman to help you do that.

This is The Ramsey Show. I've been doing this show for over 30 years, and some of the saddest calls I have taken are from situations that are completely preventable. Yeah. And what's so hard is I feel like one of those, especially the ones that I'm like, oh, it's terrible. People that call in and their spouse has passed away suddenly and they don't have life insurance. When you have to think through how am I going to pay my bills in the middle of next week, in the middle of all that grief, like it's just it is it's terrible. So life insurance is the one thing, especially as a mom with three little kids that I'm like so big on just, it is, it's terrible. So life insurance is the one thing, especially as a mom with three little kids that I'm like so big on for people to get because it's inexpensive.

Zander is the place that Winston and I actually get all of our life insurance. And it doesn't cost much because Zander shops among a gazillion different companies. It doesn't cost much. You just have to admit that someday you're not going to be here. You got to say it out loud and you got to say, I'm going to say I love you to my family by taking care of them and taking the time to put this stuff in place. The cost of stinking pizza. To get a free quote, call 800-356-4282.

That's 800-356-4282. Or go to zander.com. Jade Walsh, all Ramsey personality, is my co-host today. Thanks for being with us, America. Open phones at 888-825-5225. Bill's in Hartford, Connecticut. Hey, Bill, how are you? Hi, Dave and Kate. Thank you very much for taking my call.

Sure. What's up? So I have a question. So I own a condo with my wife, and I was wondering, is it possible to rent instead of owning a condo to save up to buy a house? Why?

What is your opinion? Why? Oh, I owned, so I lived in an apartment, condo and house. And me personally, I like a house better. Like the house is the best. Okay, but I mean, you want to buy a house. I got that. But why don't you just, does the condo have equity?

I don't, I mean, well, here's the thing. I bought it for $160,000, and it could probably sell now for $185,000, because that's what my neighbor sold his for. Okay, so you're not got much equity. By the time you pay expenses, you're just going to get out you think so yeah yeah yeah yeah twenty thousand dollars you're going to spend you're probably going to spend most of that on commissions and expenses to sell the property i mean not maybe not quite that much but yeah very well could so um yeah you're not going to come out with a big pile of money or anything when you sell it,

and then you're going to go rent something and save up a down payment. Well, what are you paying? Is that what you said? That's what he said. Is that what you said? Yep. What are you paying now every month? So the mortgage, this is including the Kino fees, is $1,232 a month.

Do you think that you would be able to rent for cheaper than that? Well, I looked online and rent ranges from $1,200 to $1,500 to $1,300 in Connecticut. Yeah. For a one or two bedroom. So you're not going to do any better? Well, okay. So here's the situation. So stuff like, say, for example, the furnace went out. I had to pay $4,000 to replace it.

Yeah, because you own it. Yep. I mean, would it benefit me to live in a place where I don't have to pay for the fixings? I wouldn't do it. I would stay where you're at. If it was some drastic, you know, if you had a bunch of equity in there that you could get your hands on, that would be one thing. If you found that it was going to be a drastic change, you know, between renting and what you're paying now and ownership, you know, you could consider

it. But for you, there's no real difference. I mean, you got to put your emergency fund aside, you know, for things that pop up. And yes, home ownership or condo ownership in your case does come with things that, you know, you're on the hook to repair. But in your case, I think there's no reason that you can't start saving for a home now. How much do you earn every month? $5,300 after taxes. Yeah. Okay. So here's the thing. Three years from today, between now and three years, if that's what it took, or four years or five years, if that's what it took to buy the next house, to save up to buy the next house,

during that three-, four-, or five-year period of time, rent is going to go up every year. Okay. And the value of your condo is going to go up every year, but your payment is not. and the value of your condo is going to go up every year, but your payment is not. So I would stay in the condo and keep my expenses low, even though you just had this horrible thing of having to buy a furnace and that's kind of made you go kilter on it sideways.

But Jade's exactly right. I would sit right there until I can save up my down payment and or the condo grows more in value and will help provide you with the down payment for the next move. I don't disagree with you that a home is a better standard of living for most folks, especially in early stages of your life, moving towards marriage, kids, that kind of stuff. So I think your direction is a good direction. But what I would do is sit tight and let's have this fixed low payment and deal with whatever repairs but also get the benefit of increased value and uh while you're trying to save up and buy something that's exactly it and i want to make sure that if he has debt he

pays that off first absolutely clear your debts and and be working on your income during that time too which will affect what you can buy. Dave is in Philadelphia. Hi, Dave. Welcome to the Ramsey Show. Hi, thanks for taking my call. Sure. How can we help?

So I'm expecting my income to increase pretty dramatically in two years, but in the meantime I'm having trouble paying costs, including two kids in daycare. So my question is, is it okay to go into debt, take out a loan, or is it better to become extremely frugal and cut costs as much as possible? C, work more. None of the above. So what is this guaranteed income increase that's dramatic in two years?

Explain to me what's going on. My wife is doing a medical residency. So in two years she'll be done with that and get a job as a doctor. Yeah, that will increase things pretty dramatically. That's great. And how much debt will you guys have? Right now we own a house, and aside from the house, we have about $25,000 in student loan debt.

And is she borrowing to finish medical school? No, she has no med school debt. Wow. The student debt is mine. Okay. So she'll graduate debt free in two years? She's done with medical school. She's doing her residency right now.

But I mean she'll finish and pass her boards after residency and become an md that's correct okay excellent and no more so what's she making in residency about 70,000 and what are you making about 110,000 you explain to me why you can't get by on 180 and you have to borrow money because you can't get by on 180 000 something's not right we are child care costs about come on 180 000 and you're going to explain that with child care hold on how much are you paying a month in child care uh it's about 80 000 a000 a year. Why? You bought them in college? The base tuition for the child daycare we use is $25,000 per kid.

Then we pay extra for early care and aftercare, and it doesn't go during the summer. So during the summer, we need a nanny. There's cheaper routes. I'm going to be as nice as I can, Dave. You guys have lost your minds. There's cheaper route let i know that they're gonna be as nice as i can dave you guys have lost your minds there's cheaper routes oh yeah i think there's cheaper routes that's all i can say because you got them in some kind of dad gum i mean are they going to harvard what the crap it is it is a pretty fancy downgrade yeah then you can downgrade. You think? They're not even in school and you're already paying $25,000 a head?

Yeah. Come on, dude. That's just dumber than crap. Seriously. Downgrade. It's time to take the kids off filet mignon. I don't care how much money you make. There's not enough money in the world that doesn't make that stupid gosh find you a free summer camp anything during the summertime we're gonna borrow money now we're gonna take out student loans for the four-year-old because

that's what we're coming down to don't do it no you make 180 000 yeah i think you need to become frugal if that's what the definition of living on 180 grand is yeah you're killing me daycare is expensive daycare can be expensive but it doesn't have to be that expensive let's just 25 000 a kid yeah i think not unbelievable i think not i think not no uh yeah i think i think you can just i'm having trouble here i think he can get i think he can get it for half that half that yeah yeah in pennsylvania i gotta believe that yeah yeah yeah yeah if not if not we're opening a daycare tomorrow i know right dave's daycare philly dave's kids heading off to philly load up the truck and head to beverly oh my gosh there's gold in those daycare hills.

This is like George's doggy daycare. People, man. The things we now call necessities in this culture. So, sweet guy, you're a nice man. I'm sorry to make fun of you, but that's crazy. And y'all need to cut that out. That's not a good investment. Your children are precious.

And, yes, they're worth whatever, but you don't need to be nuts about it. And, and this is crazy, especially when you tell me you're talking about borrowing money to cover this expense among others, because you got what two kids or three kids at 25 K a piece. Two is 50 K for daycare for two kids that's too much i think we can universally agree among all the listener base yeah nope it's too much and uh then then guess what you've solved your problem you don't have to borrow money david seriously if you say out loud in america today i can't make it on 180 000 so i need to borrow money Just the fact that you enunciated that is a problem. This is The Ramsey Show.

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Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. Jade Walsh, our Ramsey personality, is my co-host today. Thank you for joining us, America. We're going to talk about your life right in front of you. Talk about you right in front of you. The phone number is 888-825-5225. You jump in and we'll talk.

Michael is going to start this hour. He's in Dallas. Hey, Michael, how are you? I'm good, Dave. How are you guys doing? Better than we deserve. He's in Dallas. Hey, Michael, how are you? I'm good, Dave. How are you guys doing? Better than we deserve. What's up? Nothing.

So I'm in an interesting predicament. I've incurred about $60K worth of debt trying to survive a lawsuit. I started a company with four gentlemen down in Austin. Things were going well. This started right at the beginning of COVID, and we progressed for about three years. Towards the end, there were some, let's say, vision differences, and me and my partner ended up selling the company out of Houston,

and two of the other gentlemen, our CTO and our CRO basically stole all of our intellectual property. And the problem lies, I have about, um, roughly about a $250,000 stake, um, that I'm, I'm kind of chasing, trying to figure out what I should do and whether or not I should, I should give up and call it quits. Um, but things have come basically sucked me dry and, um, I'm getting kind of desperate. So yeah, I was hoping, hoping to get some guidance. Well, I don't borrow money and, um, I hate your position because this kind of stuff, I'm a redneck it makes me mad i want

to fight to the death yeah um and yet you don't let you simply don't have a war chest yeah and you could go you could go another sixty thousand dollars in four years in debt and still never see any of this yeah because about the only thing we're all sure about the court system is that it sucks yeah i mean even if you're right it sucks it takes forever and a lot of money to prove you're right and so no one ends up winning as you figured out but the lawyers yeah even when you win you lose and and the other opposing party, one of the gentlemen, his wife is a lawyer. She's actually a partner at a firm. So they've been very successful at just burying us in every which way they can.

Yeah, they're just kicking the can down the road, dragging it out and trying to starve you out. It's not a bad strategy on their part, actually. Yeah. That's why we hired him. I mean, you said your stake in this is $250,000. Maybe. Maybe. So that's essentially what my payout would be.

But because they have stolen the intellectual property and done a split-off company, the company who bought us pretty much put a pause on it until, you know, everything is resolved because that's what they paid for. And through just a number of loopholes I won't bore you with, they've basically been able to pull all of the, I guess, most relevant information and the most critical things that we would need. And, you know, they're really just kind of holding it at this point just to hurt us or harm us.

So they're not competing with you with the IP yet, but they've undone your sale by holding the IP. Yeah. Correct. Yeah. They have the inclination, like they're starting a company that's supposed to do something similar. The company that you sold to, do they have deep pockets? They do, yes.

I'd cut a deal with them. Go to them and let them fight it and tell them you'll deduct the legal fees from the stake that they owe you. Yeah. They owe you $250 if you win, right? If you don't win, the company that bought this has got nothing. Yeah. Because they've got a competitor in the marketplace, and they don't even have access to the IP right now, you're telling me.

Correct. Yeah. So they've got to win or their sale is bad. And what they're doing is they're saying, we're not going to pay you the $250 until you give us what we bought, which included the IP, right? Correct. Yeah. If I'm that company and you came to me, I'll go knock them in the nose because I got the money. And I did this deal to start with.

So, in other words, they owe you $250,000. If they spend $150,000 on this to get it, you're going to get $100,000. Yeah. The more you're going to get otherwise. We have a number of investors. I'm probably the smallest split of that. The total sale of the company was $10 million. Yeah, well, I would go to some of them then and do the same thing.

Yeah. And just go, guys, I'm out. I can't do it anymore. I'm not financing this on a credit card. This is stupid. I don't have big enough war chest to stay in the fight you know i reached my end so i i'll give you if you'll give me credit towards it or or i'll even discount my share um and then you you know take my share of the legal fees out of it and pay

me out if you win good luck i'll be happy to sign it over to you on that basis yeah yeah well the the issue too is i'm i'm probably the smallest fish in this entire equation i'm only 28 most of these people are 40 just you know longer careers a little bit more of a war chest like you said yeah my only concern is one if that were to be the case i were to get some sort of payout and then they end up losing right then you won't get a payout yeah yeah they're taking the chance then not you that's why you would discount your share okay so if one of the other investors said okay we're going to continue the fight. You can't, and we'll continue it on your behalf. We're going to take your pro rata portion of the future legal fees out of your share,

and we're also going to discount your share since you're not in the fight anymore. That'd be a deal for you. And it's not a bad deal for them because you're tapping out either way. Because if you tap out and do nothing and they go win you're gonna get the full thing so it's a better deal for them if you offer to let them continue the fight on your behalf and you give them credit for that that's a better deal for them how many because there's like 10 or 15 people playing in this you're saying yeah yeah this is not this is a complicated mess yeah wow golly some people's children yeah man yeah that sounds very very very stressful there's a lot of money at stake yeah

you just can't stay in it michael you you've got to find a sugar daddy to keep you in the deal yeah well yeah because if he tries to do this he'll mess around and spend all his stake on lawyer's fees well he won't even even then he got at least he wins but he gets nothing that's what i'm saying he won't even get anything if he goes $250,000 in debt and then loses oh then he's yeah double completely screwed yeah you know so you just got to stop michael you got to stop but i would sell out my part to, the buyer or the other investors or somebody at a discount. Yeah. And today, or if they want to give you cash, that'd be awesome.

Or better yet, I would discount it and offer to have them reduce the amount by my share of the attorney's fees going forward, my 115th or whatever that ends up being. Like you said, you're in a untenable situation. This is why we don't believe in partnerships around here. Boys and girls. The only ship that won't sail is a partnership. This is the Ramsey show. This show is sponsored by better help. This is the season for Halloween.

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Gonzala is with us. Gonzala, how are you? I'm doing good. How are you? Better than I deserve. How can I help? Thank you for what you do um i am six months into a cash value insurance policy i'm sorry policy yeah uh this was before i started hearing uh your podcast and the way you feel about that, those type of insurance. Um, uh, I did stop contributing

to my 401, um, to make the payments for this. Cause it's, you know, the payment's about a thousand bucks. I do have some, um, some of my 401 still, um, you know, I'm still contributing to it, which is the amount that my employer matches. So I'm taking advantage of that. So I am six months into it, and I wanted to know if I stick with it or you think I'm better off cutting my losses. If you had a suitcase of money laying in the back seat and the back door flew open and it was flying out, what would you do? I'd probably stop it, yeah. Yeah, you'd probably close the door.

End it. Yes. That's what's going on. You're getting screwed, man. Yeah. Big time. It's the world's worst. I mean, the whole life is the payday lender of the middle class.

It's an absolute horrible set of mathematics. It's the worst investment product on the market by far. The only people that sell this stuff are the people that sell this stuff. They're the only people that believe in it. I mean, all the rest of the financial world looks at this and goes, oh, my God. And it's just it's trash. So, yeah, you need to do your investing in real investments, not in something that has a poor rate of return.

And when you die, they keep your money. And that's what whole life is. Now, this policy, this whole life policy, before you do get out of it, we want to make sure that you get into a term life policy at the very least. Have you got good term insurance in place already? I have about the same amount of benefit, a couple of separate policies. So I don't necessarily have the need for it. The reason why I went with this was that amount being tax-free, correct,

and no taxes at the end. That was the selling point, and that's what got me. You know why there's no taxes at the end. That was the selling point, and that's what got me. You know why there's no taxes at the end? Because you didn't make any money. And they never tax you when you don't make money. Okay. If you put money in a mutual fund and it does not go up in value, there's no taxes at the end.

Correct. If it goes down in value, there's no taxes at the end. If they take so many fees out of it that the net, net, net to you is no gain, there's no taxes at the end. Oh, and by the way, when you borrow money, even if it's your own money you're borrowing, which is what a whole life is, borrowed money never has taxes. You go get a loan at the bank, they don't give you a tax on that loan. There's no income tax on borrowed money, even if you're borrowing your own money.

And so if you put a CD in the bank and then you go borrow against the CD and take out a loan, there's no taxes on that. Of course, there's no taxes on borrowed money. So that's the biggest scam in the freaking universe. There's no taxes. Of course, there's no taxes because it sucks. Yeah. They don't usually charge you on something that sucks this bad yeah please please sir please please cancel this stuff

please cancel i hope i haven't been unclear all right matt is in baton rouge hey matt how are you i'm doing well sir thank you for taking my call sure what's up i just have a quick question so i'm a relatively new listener, and I started listening just in time to hear you talk about the bank craziness going on. And I'm just curious, this might be a really stupid question, but how can the FDIC ensure every deposit under $250,000? Where do they get the money in? I'm not even exactly sure what the FDIC is. Could you give like a brief crash course rundown? Sure. It stands for Federal Deposit Insurance Corporation. It's the federal government writing insurance against your bank's failure. Now, do they have a pile of money equal to everyone's covered amount?

Absolutely not. But your insurance company does not have a pile of money equal to everyone at State Farm totaling their car this week either. If everybody totaled their car at once, State Farm's gone. They don't have that much money. Gotcha. Okay. What they're running is they're running

probabilities statistical probability of this occurring uh and so if enough banks went down at one time to destroy the amount of money that the federal deposit insurance corporation the federal government could get their hands on uh that means the entire American economy has collapsed and you should buy a gun. Gotcha. Gotcha. So it's publicly funded. No. Well, Matt, think of it like how your insurance works. If you have State Farm, everybody's paying their premium and they're paying into this big pile of money so that when somebody needs to actually use their insurance, there's money there.

And it's the same thing with FDIC. These insured banks are paying premiums to FDIC, so there's a big stack of money. The banks fund the FDIC with their premiums, but they don't give it enough money to cover all bank failures that are simultaneously occurring. No. Gotcha. But it is a lot of money. It's plenty to cover anything that's actually going to occur yeah but if uh but but the mathematics are to your point matt uh the mathematics are just like if all

of state farm autos had a got totaled in one month they would there's not enough they don't have the money to cover all that because they're running it on probabilities and so this is an insurance policy based on a you know a a projected number of bank failures in a given decade plus a lot and so it's a very conservative set of mathematics meaning you could have a whole bunch of banks fail we had a lot of them cashed out fdic and and went belly up fdic took them over resold the banks the sale of the bank the money goes back into the insurance policy as well to cover but um that happened in 2008 a lot more than that's right in the last three or four months or so so but if you had um 25 000 banks crash at one time there's not enough money and by the way if 25 000 banks

crash at one time we got issues life as we know it in america no longer exists that's right there's a whole lot of other crap that goes with that that can't be just an independent thing yeah you got to understand that if that occurs everywhere you shop is out of business oh yeah we're looking for clean water and in in supplies exactly yeah yeah we're, we're not looking for gold. Yeah, that's exactly what we're doing. But it's a good question, and it's good something to think about. And it's good that we do a little bit of education on it occasionally here. Jason's in Dallas, Texas.

Hi, Jason, how are you? Hey, how are you today? Better than we deserve. How can we help? Appreciate you taking the call, and condolences to your caller, Susie, as well. That was really sweet what you did for Better than we deserve. How can we help? Appreciate you taking the call and condolences to your caller Susie as well. That was really sweet what you did for her. Thank you. With her losing her husband.

So, you know, I have some issues and I have some kind of questions. I'm sure that you get to the questions through the issues. But a few years ago, probably four years ago, my wife and I picked up and moved from our home in Los Angeles. We moved out to Texas. It was about a year before the pandemic. I felt like something was going to happen just seeing where L.A. was going. Jason, I don't want to be rude, but I am up against the clock. Go ahead and just ask me your question.

So we have a new business and a new baby, a lot of debt. Um, when I had the baby last year, I was trying to pay us, you know, a top salary, but I feel like I'm now believing my first baby, which is this new business. Um, I'm trying to get my real estate license to supplement some income, but what do I sell? What do I get rid of to prioritize the debt while also keeping up with this big new thing in my life, which is just trying to raise a new kid. Amen. Well, very cool. Hey, we're going to put you guys through Financial Peace University too, because I am up against the clock. I'll make sure you get served, okay? But in the meantime, you got big hairy car payments, get rid of the big hairy car. You need to prioritize very carefully and keep that business running

because it's the golden goose that's laying the eggs. But don't leave a bunch of extra money down there and don't do a bunch of reinvestment down there. Take it home and clean up the mess at home. It's a balancing act between the two. I wish I could give you a more detailed answer. Hang on. Austin will pick up for you. Jade Walsh, all Ramsey personalities, my co-host today. Thank you for being with us.

Caitlin is in Milwaukee, Wisconsin. Hi, Caitlin. How are you? Good. How are you? Better than I deserve. What's up? So I guess to get short with it it i need to figure out how to essentially get my spouse he is mentally on board with me but not physically on board with me in not just baby steps but financial aspects in general he has a bit of a addiction with instant gratification. Okay. It's not an addiction. It's not an addiction. It's just immaturity.

That's a very good point, yes. How old is he? He has the same age as me. He's 32. Okay. How does that manifest? What does it look like, his spending? We'll put it in addiction for quotes

right now. Sure. So he is pretty, he's got a little bit better. I'll give him that credit, but he is pretty selfish. Some examples are instead of, I mean, the family car was a decent family car, one that fits the kids. We unfortunately outgrew it, not to him knowing. But then he, instead of just leaving it as a daily, he needed to lower it, which makes it more expensive and removes the car more. Then he needed to buy a customized steering wheel that absolutely wasn't needed. Then he needed to do this and he needed that. He souped up your family minivan?

Wow. So not the minivan. It was was a wagon it was his daily that would still fit us at the time not anymore but at the time would fit all of us and then i had like a daily um that would fit all of us and is he creating debt while doing this oh i can't even argue like i can't even like fathom the amount. Like being a person that before I met him, I bought my own house as a single mom, it completely destroys me. Like I have so much stress from everything he's done. Actually, the last year I spent curing like stress seizures. Wow. Okay. You said you had children. How many? We have three children. One of them is not biologically his but he since day one has

taken care of her like he has said she is okay all right well i i this is not a money problem it's not a budget problem this is a marriage it's a marriage problem and so uh we end up backing into those sometimes through budgeting and that kind of stuff. But budgets don't control people. People control budgets or in some cases don't do a budget or in some cases don't live with a budget. But budgets, they don't have any magic powers. It's just simply a roadmap. Maps don't control people. You just look at the roadmap and am I going to go down the road or not?

You know, that's all a budget is. It's just a map. And so, and wives don't control husbands and husbands don't control wives. As much as they'd like to and as much as it would be awesome if we could pull it off, we just can't do it. And so what we've got here is, as you said, selfish and immature guy who's putting his own impulses ahead of the good of his family. Have you guys reached out to a counselor?

That's what you need. Yes. Yes. So we've done marriage counseling already that I set up that then he denied. You're not done. And then he did the marriage counseling, but he was ready. No, I know. So we've done these things because that's where it's led to.

Did he go? He went two times to the one I set up, and then he denied going because he was essentially being blamed for things, and he didn't like it. He was getting defensive, and it's like, well, not saying that I'm perfect, but your selfish habits are creating an issue then he set up marriage counseling he also more recently is going back to therapy

for himself years ago but he is going now and now he is seeing a and I don't remember the difference between psychiatrist and psychologist but technically I guess seeing both so he's got a lot of stuff going on huh unfortunately yes um yeah the the first thing you said when you said hey we went to

counseling he didn't like my counselor because this isn't that i will say both spouses need to feel good with the counselor because you know sam and i you know we we've gone to counselors and it's been like i don't like her or I didn't like him. And you do sometimes have to. But if you don't like them because they're telling you the truth, that's a problem. Yeah, that is a problem. Yes. He also didn't like it if a guy didn't get his name right a couple times, which I won't argue, whatever.

But yeah, it was mostly because he's telling him the truth and he doesn't want to hear it. Yeah, that's mostly. So he is going and he is going for himself uh that's good i think the hard part with this is this is not necessarily going to be mean that next week things are different right like this is something that's going to play out over time um and he's still actively creating debt for your family at this moment in time right or no that's not unfortunately yes even though we try to work out things that you know give him leniency isn't really the word um and the debt is to have if he's if he's running these things up on credit cards is your name on the credit card or is it

just these are cards that he's pulling out and he's doing this on his own so he he had like one in my name that he put into collections that then i paid off because I was also on it trying to help him build credit from when we first got married. OK, and that one's closed. Yep. And that one's closed. He did have he's got three of his own. He hasn't touched credit cards in a couple of years. And then he then, you know, he we kind of discussed how we're gonna make things work and I asked if he was ready and so he got a $300 limit back um like two weeks ago

and he racked that up plus he had $100 cash um so he spent $400 about five days so I took the credit card away I was like you clearly aren't ready you told me you're ready I think I think as a rule of thumb in your family in general you need to cut up all the credit cards and no one uses them no one uses any more credit cards so that's thing one is we just don't operate on debt anymore i mean my screen says that you know if you're in the trying to do the baby steps like you definitely cannot use credit cards anymore so those get cut up and then, yeah, you probably do need to have a real conversation about how his access is to this money if he's just going to go off and spend $500 and $600. I mean, that's a scary position to be in, Dave. Kaitlin, at some point through you working with a counselor and or working with his counselor,

the day is going to come, and it's coming pretty soon based on the tone of your voice, that you're finally going to say something like, if we can't get on the same page with money and you can't be a grown man and take care of your family instead of buying freaking steering wheels, then I'm not going to be able to be here anymore because you're terrifying me.

I am awake at night. I've never been in debt like this. You're out of control. Childish behavior with money is terrifying me. I can't live like this. So if you can't be a grown man and learn to control your impulses, you're not a 12-year-old little boy. You're acting like one. But if you can't be a grown man and we can't get a bead on, we're going to manage our income together for the good of this family that will include you doing some fun things and me doing some fun things, but it's going to include being

a freaking responsible grownup. And if we can't get to that point, I'm not going to be able to be here. And you need the guidance of a good counselor on how to say that and when to say that. I'm not suggesting you hang up the phone and say, Dave Ramsey said that. But I'm telling you, if you do not get there systematically and begin to put that in front of him, one day, here's what's going to happen. And I know this because I've counseled thousands of couples. You're going to have that little switch that particularly ladies have down inside them. And it's going to blow a fuse and you're going to be done. And no amount of talking

and no amount of conjoling and no amount of logic and no amount of preachers and no amount of nothing is going to get you back in the marriage. You're going to wave bye-bye because you're going to blow a gasket and you will have had it. And I've tried to reel these ladies back in after they've blown it and show them that the guy gave, he gave in, he gave in too late. She's gone. All you see is her back walking away. She's done. You wait, you just kept on, you kept on. You kept on. You kept on until she blows a freaking gasket. And it's in your voice. I can hear it. So you need to keep away from that gasket blowing by getting some coaching on how to bring him to bear before

you don't care if he comes to bear anymore. This is the Ramsey Show. Dade Walsh, all Ramsey personality, is my co-host today. If you're ready to buy your first home in this market, it's not because of luck. It's because you've been putting in the work. You've been kicking butt. You've been budgeting. You've been saving, and we're fired up for you.

We don't want your hard work to go to waste. Buying a home is the biggest purchase you'll ever make. So the last thing you need to do is fly solo or work with some kind of brand new sweet little real estate agent that doesn't know what to flip they're doing. Even if it's your aunt Susan. I know she's a nice lady, but you don't leave this up to an agent who's good enough. You need great. A Ramsey-trusted agent is a great agent. They set you up for success before, after the closing day, during the closing. Find the right house, keeping you on track with your goals, and making sure you're confident in your decision. Ramsey-trusted pros get our stamp of approval

because we know they work hard to serve you, not to pad their paycheck. You've worked too hard to buy your first home with anyone but the best? Find a Ramsey-trusted real estate agent by going to RamseySolutions.com slash agent. RamseySolutions.com slash agent. Mary is with us in Tampa. Hi, Mary. Welcome to the Ramsey Show. Hey, thanks for taking my call, Dave.

Sure. What's up? So, I don't know where I should start, but I've got over $85,000 with a debt with my husband that we've incurred over probably the last 15 years, been having trouble paying it off. So, we're married for now. I'm not sure how much longer because I talked to a lawyer. He calls him a schmuck, basically. The lawyer or your husband? The lawyer calls my husband a schmuck. Oh, that's nice. I know, isn't that beautiful? I have a high school graduate that's going to college in

August. We have a special needs daughter who's 13 years old. Um, and I didn't work for like eight years, but I went back about seven years ago and I worked my way up. Um, and I'm making about 75,000 right now. And he's finally, um, he had his own business, not doing anything, um, lost our butts trying to sell our house. Um, and you know, using our profits to pay off all the debt from his business. But he finally has a job, a stable job, in the past year and a half. So I'm trying to figure out how to pay off

or how we're supposed to pay off this debt and gracefully exit out of the marriage. We're renting it now because we sold our house. Let me stop you a second, okay? Mm-hmm. How long have you been married? 17, 18 years. I'm sorry, longer than that, 24, my dad.

24 years. Yeah, lost track. Why is your marriage over? It's been mentally checked out for some time, for many, many years. He worked a lot, worked a lot trying to make money, did it in the beginning and eventually nothing. And then the lockdown hit and we were able to stop some of the pain of not having money, but I've been working.

So a year ago he told me he had a relationship with someone. And so basically... There's the schmuck part. I was waiting for the schmuck part. Have you filed yet? Have you filed for the divorce yet? No, no. I just, I can't afford to like, I don't know.

I'm in Tampa. Things are just, everything's ridiculously expensive and I can't, I've been looking to see, you know, what my options are, but I can't afford to like live alone right now. Didn't you say you make $75,000 a year? I do. People make $75,000 a year, live by themselves all the time in Tampa. That's above average. They don't live in your neighborhood, but they live in Tampa.

We already lived out of, yeah, but we lived out of the neighborhood. We live on the fringe, so to save money, because rents were about $1,000 more where we were at. Yeah. When you talk to your lawyer about this, have you done any research to find out what the cost is, what might happen with your debt, that sort of thing? I don't know. Yeah, I don't know what happens with the debt.

I'm not sure if I remember asking him about the debt. Um, I just know that everything else is no fault. So basically we just kind of walk away. It's not like one of us makes more than the other person right now. Um, and she wants, my husband wants to consolidate the debt. Um, or maybe what kind of debt do you have? it's $85,000 in credit card debt. We paid off our HELOC and all this other stuff we had when we sold our house. So we were pretty much left with nothing after we sold our house. Okay, and I guess all the credit card debt is in both of your names. Yeah, the one card's in his and two are in mine.

But is it about of your names. Yeah, the one card's in his and two are in mine. But is it about half? Yeah. The two that you have are about $42,500? Yeah, they're all $30,000 across the board. And this is hard making the payments. Okay, so you're $75,000 a year, single mom, that has $38,000 in credit card debt after the divorce, right?

And you have a special needs child. Yes. And he would hypothetically be paying child support. I don't know. Yeah. For him. Yeah. My other daughter's gone now or she's 18 now.

Yeah. So hypothetically he'd have child support in the special needs child, right? Yes. Okay. So hypothetically, you have child support and a special needs child, right? Mm-hmm. Yes. Okay. And so you're, I'm sorry, this is a very sad situation. It is.

But you're not mathematically trapped. Mm-hmm. Lots of people make $75,000 a year in the Tampa area that have $38,000 in credit card debt and one kid. Lots of people. We have a lot of health expenses because my older daughter actually has more health issues than my younger daughter and my special needs daughter. They both do, actually. So we're constantly running the doctors, doing surgeries, doing different things, car repairs,

and just the debt. That's not going to change yeah you're not stuck mathematically you're not if you want to be you can decide you are but the numbers you've given us has not got you stuck in this and uh if he's having affairs and you're going to end the marriage based on that then you're going to have half of the credit card debt and you're going to have the care of a child and you make 75 000 a year and you're going to go rent an apartment i think i think what i'm hearing is you've never been in a situation where money is being managed effectively, right? And now you're about to go off on your own and you don't have the confidence of body you don't know that this is going to be enough that i'm going to be able to take care of my kids that i'm going to be able to pay the bills and i'm going to be able to pay this debt off you don't know that that's i mean you understand that

the the story you told us has you all mathematically in with him working and earning you working and earning in the best place you've been in probably a decade mathematically you're in the best place you've been in probably a decade, mathematically you're in the best place. Relationally, obviously you're not in the best place. She doesn't feel that. You don't have any respect for him because he didn't make any money during this time. He's a schmuck because he slept around on you. And so relationally, you've got those things to overcome for this marriage to survive if it's going to survive. But mathematically, you're in the best place you've ever been.

Because, you know, with his income, if the marriage survived, with his income and your income, if you both decided to manage money together, you could clean this mess up rather quickly. I don't know. We just re-signed our lease at $2,300. I mean, where we're at, that's like the cheapest that we could get. So we just renewed our lease. That doesn't sound like someone that's filing for divorce to me.

Who's filing for divorce that re-signs a new lease for a year? Well, I don't know. I don't either. Who does that? I had too much going on mentally. I don't know. I think you just made a choice thinking you got. Yeah.

Yeah. She was like, I have no choice. I have no choice. Well, you had a choice, but you felt like you had no choice. But you're taking your choices away. If you want to be stuck, I'll tell you, you can be stuck if you want to be, but you're not stuck. So, you know, I think that you guys could sit down with a good marriage counselor

and invest some time and energy into this 25-year marriage and give this a shot. Since you just signed a one-year lease, I kind of think you want to do that deep down. And by the way, if you ask a divorce attorney if you're supposed to get a divorce, 100% of the time they say yes. It's like asking a dog if it's hungry. This is The Ramsey Show. Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships.

Thanks for joining us, America. We're so glad you're here. The phone number is 888-825-5225. That's 888-825-5225. Jade Walshaw, Ramsey Personality, is my co-host today. Sula is on the line in Hartford, Connecticut. Hey, Sulaw, what's up? Hey, how's it going? First of all, thanks so much for the work that you do.

I've been following Ramsey Solutions for a while now and subscribe to the YouTube channel, and I'm really, really happy with the results that I've seen following what you guys are putting out. So thanks again for what you do. Well, thank you. And I think I butchered your name. Pronounce it for me.

It's Salah. Salah. Salah. Okay. I'll get it right. Sorry about that. Okay. What's up?

Tell me what's going on. All right. So some background. I'm 22 years old. I graduated college. I got married a year ago or yeah, about a year ago. And, um, I got a baby on the way, which has been kind of the driving factor in getting my affairs in order. And, um, yeah, so I, my big thing is, um, I, you know, I, I know

that I make, you know, definitely gross over a100,000 a year, but I'm just struggling with just balancing everything. I feel like somehow, some way, the money's not stretching the way it should. I come from a family who definitely didn't make that much money, and somehow things felt different. So I always thought six figures would be that big number, but it's just not what I thought it would be. It's not as much as it used to be. Is it just you working or does your wife work as well? My wife was working, but we agreed that once we have a child that she would be a primary homemaker. And so she's not working now. Okay. So tell me a little bit more about your debt to where you're feeling like this $100K isn't what it used to be. Okay.

So the primary debt that I had when I first started getting into credit cards, I would just, you know, get a 0% interest and then flip it on to a bet with a 0% intro offer for a balance transfer. And I did that about three times. So how much credit card debt do you have? So yeah, now I'm sitting at about $6,000 in outstanding debt. That doesn't include the month-to-month cards that I'm paying, but those are almost paid down to zero, probably like $1,000 between the three or four cards. I pay those fully month-to-month, but the two that are in 0%

interest, they end in March and they're about $6,000. What's the total amount of the debt? All the balances combined? Probably $9,500, I believe. Okay. What else do you have? I have $5,500 in student loans that, of course, just started being due for repayment. And my wife also has about $10,000 in student loans. Okay. How much on your cars? No cars. I'm a car guy, so we own our cars outright.

What's your mortgage? No mortgage I rent. So wait a second. How much is your rent? $1,500 a month. Okay. And how long ago did you start trying to follow our stuff? A month or two?

It's been like three months, but I mean, I didn't really have much income to go off of. Initially, I started, I'm an Uber driver. I have a full-time job with my degree in effectively in IT. And I also started Uber driving. And I started kind of kicking that into high gear to try to get these credit cards paid off. And that's been my avenue. So you're just getting started and you've not really gotten the budget dialed in yet? No. That's really all this is because I'm looking at a guy who makes $100,000 a year. You got $25,000 of student loan debt or of

debt, period. Actually less than that. So I don't think it's a lot of debt, but I don't think it's the big fire and exploding thing that you think it is in your head. I think that if you guys get on a simple budget and you live on $80,000 instead of $100,000, you're knocking this debt out super fast. That's if you just, okay, we're going to cut back. But if you really got crazy, you'd knock this out very quickly. Yeah, beans and rice, rice and beans, a detailed written budget on the EveryDollar app. You and your wife agree that we are doing nothing except eat and diapers and electricity and pay rent. That's it.

Nothing. We're doing nothing until we get this paid off. And $2,000 a month and you are free in one year. Yeah. You guys are newly married. You got a baby on the way. You guys have been spending a lot. That's what I'm seeing here.

Well, and I'll add to this. I'll take up for you just a little bit. You live in a very high-tax, high-cost-of-living town. Oh, that's also true. Connecticut is the highest-taxed state in the Union, and Hartford is a beautiful town, very expensive. Agreed? Yeah, that's kind of my big thing is i know it's 100 gross but yeah i mean after taxes it's definitely not 100 and no i know i know it's not yeah i know

it's not but you can do this you can still live on even in spite of that you can do this okay this is doable in new york city it's doable in la and so it's doable in hartford and thankful you have a good rent situation too so that's good So I think the thing is that the piece that'll come to this is you and your wife are in agreement that for a short period of time, we're going to live like no one else so that later we can live and give like no one else, including super big time, take care of this baby. And so you have a new reason to delay pleasure and that's adults devise a plan and follow it and children do what feels good. You're going to do great. So we're going to give you a, uh, a, a gift to say, uh, congratulations on a new baby

and help you get started on all this. And we appreciate you following us on YouTube. And the gift is we want you to guest you and your wife to go through financial peace university and get signed up in the every dollar app the world's best budgeting app and it'll break every one of your paychecks down for you it'll show you how to use the baby steps exactly and financial peace university will teach you the things you should have been taught about money but weren't taught the things we all should have been taught about money but we weren't taught. I know, that's right.

And so we're going to give you every bit of that, and it's completely free. You hang on. Austin will pick up, and we'll get you signed up for that. Jade, one of the things we saw with the EveryDollar app, you've been doing some of these EveryDollar webinars. Yep. Is that showing people how to do the budget. By the way, you can sign up for those if you just go to everydollar.com slash budgeting and jade will jade will be doing those and rachel cruz and george camel as well um anyway one of the things we're finding is is we've always said it feel like you

get a raise when you're on a budget yes but we've actually found a piece of research that they said you it literally is 10 to 15 percent a year yeah well most people are finding 332 dollars extra that's just money that they were piddling away at target groceries yeah they're able to find that money that i mean so when you happen to your money instead of the lack of money happening to you the efficiency increases yeah you get a raise and you it'll feel like you got a raise and then you don't use that raise to go buy a new car so what most people do most people get a 232 dollar raise and go take out a 400 car payment to celebrate no no no no no this is the ramsey show jade walsh all ramsey personality is my co-host today thank you for joining us america

well the stock market's been rough lately. It's been up, it's been down, and it's basically about where it was a year ago. But it was a wild ride to get to even. The facts are, if you invest $200 a month from age 25 to age 65, you'll have between a million and two million dollars. No, that's not too good to be true. That's based on the long-term average return of the S&P 500. Now, if you're not 25, well, that's okay. You can still get started. A huge predictor of investing success is that you actually invest. So get a pro in your corner to help you get started. Go to ramseysolutions.com slash smartvestor. Our smartvestor pros are people that have the heart of a teacher, do things the way that we teach around here.

They don't work for us, but we recommend them. They'll drop down a list of the smartvestor pros in your area. You can meet with all the different ones and decide which one you want, which one you match up with the best. You pick. RamseySolutions.com slash SmartVestor. They'll guide you through the ups and the downs of the market. Louise is in New York City.

Hi, Louise. Welcome to the Ramsey Show. Hello, Dave. Thank you very much for taking my call. Boy, I sure need your advice. We'll try. How can we help? Okay.

Well, let's just say in the past, I'm 68 years old, and right now in the past, my investments, anything I ever did was, let's just say it would make you cringe as far as money goes. However, at this age in my life, I'm about three years from retirement. I mean, I can retire now. I'm working. I have Social Security and a small pension. I'm taking all at once.

The question I have is this. I have a small mortgage on my house and a car that I'm leasing. Those are really the only debts that I have right now. And in my bank account, let's just say 125. I want to pay off the house and then start putting that money into like the 401k for these next three years. But people are like, every time when they see money around here, it's like, no, no, no, I can invest in this, I can invest in that. So I'm not too sure what I should do. Should I just wait till I retire, then pay off my house?

Why do you want to wait till retirement to be free? The question is, and here's the other thing, that maybe I'm just old school, don't know really honestly, ignorance. I worry about the income that I am having coming in right now, working full time, collecting social security and a small pension all at once putting money in the bank then i won't have anything to claim just me on your taxes yes on that on anything i mean does that matter so then i would have to really make sure so that i am not paying extra i would have to really you sure so that I am not paying extra. I would have to really sit down with some good...

You're not claiming anything now. You're not itemizing. You're taking standard deduction now, aren't you? I believe so. Yeah, I think you are. You have a small mortgage and a car lease that's not deductible. The mortgage interest is. What's the balance on your mortgage?

Right now, it's $73,000. And what's your interest rate? 4.2. Okay. So 4 times 7, so $2,800 is your annual interest. You're not claiming that. That's not enough to be. Your standard deduction is probably $15,000 or $18,000. to be your standard deduction is probably 15 or 18 000 bucks

you're taking standard deduction so you get no tax benefit whatsoever from this house mortgage okay and you certainly don't from the car and car leases aren't deductible right that i that i know so by paying this off you just don't give the bank three thousand dollars a year in interest which would be kind of nice. Oh, definitely, definitely. How much is in your savings? How much is in your account? How much money you got?

You said you had $100? How much? $125. Right now I have $100 and $125. Pay off your mortgage and your car today. All right. All right. How's that payment?

Wait a minute. Breathe that in. What's it feel like to have no payments? Oh, it sounds good. Yeah. Now what are we going to do? We're rich now because you've got all your income to start investing. Okay.

That's the thing, though, with investment, because everybody I meet wants to take the money and put it here, put it there, lock it up for three years, lock it up for three years. Why are you wanting to meet with people like that? I don't know because that's who I seem to run into when I go to my bank. Well, just keep running. You know, every time they see my money, they want it. Yeah, just bounce on that. You need to get online and get, go to Ramsey Solutions and find one of our SmartVestor Pros so that once you've gotten all of this paid off and you're working full-time, you're going to invest 15% or more because now you got your money freed up

and you can start really packing away on your retirement and as you know what are you working two more years at least two more years i'm going to be going to bible school so then you know parish bible so i just want to be able to when i do that well i'm going to do a part-time and then eventually my second year i'll be full-time get a smart investor pro in your corner and don't do what they say learn from them and do what you say nobody gets to tell you what to do with your money not even me and i'm good at it but not even me you get to decide you get to decide i'm teaching today and i'm giving you an opinion of what I would do if I woke up in your shoes. I'd be debt free by the end of the day. I pay off that car, call the lease company, find out what it takes to pay it off and be done with it. Call the mortgage company, find out what

it takes to pay it off and be done with it. And then I would take the fact that I have no car payment and no house payment and I would load up a bunch of mutual funds and build me up some money. So when I go to Bible school school i got a little pad and never lease a car again ever ever you don't need to borrow money ever again that's right you're now rich people k is with us k is in st louis hi k how are you i am certainly blessed that's the reason for my call oh cool what's up um well my family believes in generational wealth and based on their amazing decisions i have been blessed to get get incoming over a million dollars wow yes i knew these people existed but i've never met one way to go that's awesome who was it mom

and dad or grandparents grandma was 94 and she passed away peacefully one. Way to go. That's awesome. Who was it, mom and dad or grandparents? Grandma was 94, and she passed away peacefully and was ready to go to heaven. Wow. And it turns out she had been saving and properties were sold. Wow. That's something. I can't even hardly imagine. How can we help you?

So the only debt I have is my mortgage. That's automatically going to go away good um what's it how much is it i want to do uh like a hundred thousand dollars good okay so now we got 900 okay well it's going to be more than that that's at least what it is as of now but there's other things coming in so in excess of a million so i don't i don't want to do anything big with it i can't obviously put it all in one account it's over 250 good so i guess my question is what do i do with this for a year until i can actually absorb this and sit down and take the time like um high yield savings account yeah i'd pop it in some i'd pop it in some high yields and some different banks

okay so you're not over the 250 are you married yes okay well you can put oh you can put 500 in one bank right if you got both names on it so yeah and the um yeah if you want to do that and just let it sit there for six months and then study and read and listen and learn and think yeah and study and read and listen and learn and think. Yeah. And study and read and listen and learn and think. And get some people in your corner that have the heart of a teacher. Again, like we were just telling the last caller, the SmartVestor pros. Yeah. I'm just, I'm like you.

I'm blown away by this. I think it's really exciting. And I agree with Dave. You don't need to make any quick movements. You've got time to think about this and i like what he said about listening and learning because here's the thing at some point you are going to make a move with this money and you are going to get with an investment pro and you want to be able to understand what they're saying you want to have be able to invert your say on it and say this is

what i'd like to do and have those conversations and know exactly what's going on. And until you know exactly what's going on, don't do anything. Yep. Yeah. Just take your time. And so I, I end up with my investments, Kay, uh, in real estate that I pay cash for and in mutual funds that I understand. And both of those things, you probably got a learning curve on, and then you can decide if that's right for you. But that's all I do. Mine's very, very simple. And I ended up with a lot in both of those categories. This is The Ramsey Show.

Jade Walsh, all Ramsey personality, is my co-host. Hey, if you're out running around America and you're in the Nashville area, just south of Nashville is a wonderful town called Franklin, Tennessee. Civil War era square that you can walk around and enjoy. And one exit south of there, you'll find the Ramsey headquarters, which includes a lobby and free homemade chocolate chip cookies and coffee. Come in and visit. We do the show on the glass every day from 1 to 4 Central Time. And so you can come in and watch this happen every single day.

And part of what happens in the lobby is usually 50 to a couple hundred people sitting around. And part of what happens in the lobby is also we have this little thing called the debt-free stage. And standing on it are Ivy and John. Hey guys how are you good good love having you guys here where do you live appleton wisconsin appleton wisconsin awesomeness and how much debt have you guys paid off 347 356 000 get, Avi. I love it. Thanks. Well done. Well done.

How long did this take? 74 months. 74 months. Yep. And your range of income during that time? Anywhere from $80,000 to $180,000. Cool. And what do y'all do for a living?

I am a registered nurse. I'm a plumber. Very good. Two great careers. Uh-huh. Well done. Very good stuff. Always in demand, both of you. Yep. Yep. careers. Well done. Very good stuff. Always in demand.

Both of you. Yeah. Yeah. Never without work. No. Whether you want to do it. Very good. So I'm going to guess and say in Appleton, Wisconsin, on 74 months and 347, you paid

off your house. Yes, we did. Yay! Let's go! Baby step seven. Boom, boom, boom. What's this house worth? Roughly.

With this market? I don't know. I mean, guess. Just roughly. Probably 300. I'd say 300,000. Why did you owe 347 on it? It wasn't just the house.

Oh, you paid off a bunch of stuff. This is everything. Everything. This is what we paid off to get out of debt. So you live in a $300,000 house. It's paid for. Yes. And you paid off what other kind of debt?

Well, so I started back in 2012. I had all of the debt. I had the student loans, the car payment, the credit cards. I was diagnosed with multiple sclerosis back in 2004, so medical debt. And then I had a very short marriage in which I paid a lot of money, so divorce debt. Later that year, I was kind of wondering what I should do financially-wise, and in the bulletin at church was an advertisement for your class.

There you go. So I didn't know how I was going to pay for your class. When did John come along in this picture? A couple years later. I was hoping he was in the financial peace class. Just waiting on you. We took it together again. Again.

Okay, all right. I started working. I hear it's romantic. I'm not sure, but yeah. Well, it's something. No, I started doing it, and i met john later that year actually we got married in 2014 excellent uh but we didn't do our finances together uh-oh how long before you did that two years okay two years this was a journey this was a journey so in 2016 is when

we started with the gazelle intensity i'll let you i'll let you i have a question yeah sure i want to know what happened to make you guys get on the same page i mean two years of doing your finances separate then what was what what pushed you together well one i had my own business for 10 years before roughly 10 years before i yeah sold the tools and the truck um but i guess it came to he wanted to buy a brand new work truck and it scared me got it at the time it was going to be a sixty thousand dollar truck probably much more than that now um but we kind of kept the business and the personal stuff separate and the whole idea of a car payment a truck payment on a business where he was his only employee scared me so you're like i gotta be able to control this a

little bit so i said before we buy a truck can we go take financial peace university again because you're kind of hard to explain to people you flunked yeah okay i got it no i know you said again did he i never took it oh that was your first one that was my first okay so it wasn't Because apparently you flunked. Okay, I got it. I did. No, I know. You said again. I never took it. Oh, that was your first one. That was my first. Okay, so it wasn't again for him. I got it. No, but I wanted him to experience the whole experience.

You knew I could talk him out of it. Right, I couldn't. Yes, that's pretty much what happened. It's all good. It was, please don't buy a truck until you talk to Dave. That ended that. I think it was a trick, John. All right.

So very cool. Now you're 100% free. Yes. Now, obviously, you're doing really well with the MS. Yeah. I actually found out that a lot of it, the really expensive stuff, the drugs doesn't work for me. So diet and exercise. And stress.

Well, no more money stress. There you go. That's a big deal. I've got a good friend that has been dealing with it for about 20 years, and they keep her stress level down and her fatigue, keep her from getting fatigued. And she does great. Yeah. And is doing no drugs. Yep. Yeah.

But I mean, it's different for different patients. I understand. I'm not medical. You are. But I mean, you're obviously doing great. Congratulations. I'm proud for you. Very cool, guys.

Very cool. Congratulations. How does it feel to be 100% free 11 years into marriage? Awesome. Really good. No debt of any kind. Yeah, it's weird. You're going to be so rich.

It's going to be unbelievable. How much is in your nest egg already? Oh, you missed that part of the story. John will tell you that part of the story. Okay. Your retirement. What you did with your business. A mistake way back?

Yeah. So I worked for a company as a plumber, and then when I started my business, things were financially not that great. I ended up trading or... You cashed it in. Cashed it in, which I learned I wasn't supposed to be doing that.

But now we're doing really good. Yeah, we're playing catch up on that. So where are you now? What's your nest egg now between the two of you? Probably 500,000. There you go. So you're almost millionaire. Yeah.

Yeah, we're getting there. Baby step millionaires soon. Very bright. Very good. I'm proud of y'all. We just look at it as where could we be? No, no. It's a journey.

It's a journey. No, no. I mean, I could have been a slumlord i could have kept a bunch of lower income real estate aid that i had and it's all gone and i went bankrupt i could be there thank god i'm not you know i mean life is you could be a lot of places but now you guys you're together you got a great marriage you're smiling you're fun you have a paid for house and you're almost millionaires and you're still young pups. Well done. Thanks. Very well done. I'm proud of you.

Good, good work. Wow. Very cool. Yeah. I love to hear it. Okay. What do you tell people when somebody asks and they say, okay, how'd you do that? What do you tell them the key to getting out of debt and building wealth is?

You have to talk to the other person about money. I mean, we tried that the first couple years of our marriage and it didn't work um there's some pretty stressful conversations that are had you have to have them yes uh yeah you buy a truck i'm gonna kill you oh yeah that one well not quite that you would never say something like that. Pretty close. It'd be a slow death. Pretty much. Yeah, it's really the difficult conversations that you don't want to have, and they're tough.

But it's worth going through that, coming out on the other side of that. There's an incredible peace and cleanliness that comes with complete openness, complete unity. We're dialed in. We're doing everything together, making decisions together, even though sometimes it causes some momentary discomfort. The long term benefits are unbelievable. They're very good. Yeah.

So I'm so proud of you. Thanks. Thank you. Excellent job. Excellent job. You're why we come down here. Very, very cool. Good stuff.

All right. It's Ivy and john appleton wisconsin quite the journey everything's paid off baby step seven house and everything approaching baby steps millionaires status 347 000 paid off in 74 months making 80 to 180 count it down let's hear a debt-free scream. Three, two, one. We're debt-free! Yeah! Woo-hoo!

Yeah! Get it! I like it! Powerful stuff. Great. Hey, we've got the Live and Give bundle for them that includes the Total Money Makeover book, the Baby Steps Millionaires book, and another Financial Peace University membership. They'll be able to give those things or keep them for themselves.

Everyone who comes and does a debt-free screen gets that. This is the Ramsey Show. Our scripture of the day, Proverbs 4, 25 and 27. Look straight ahead and fix your eyes on what lies before you. Mark out a straight path for your feet. Stay on the path. Stay on the safe path. Don't get sidetracked.

Keep your feet from following evil. Francis Bacon said, Fortitude and the power of fixing attention are two marks of a great mind. Ooh, the ability to focus and stick with it. Wow. Scott is with us. Scott's in Pensacola, Florida. Hey, Scott, how can we help?

Hey, I want to know about bringing my credit score up. I haven't financed anything in 15 years at least or owned a on the credit card 15 years at least i'm 59 my credit score is a zero as of last week i i've looked it up and i have just a little bit of money i mean just a couple of thousand dollars in savings uh i just went recently unemployed i'm probably going to be making about 500 a week is self-employ be making about five hundred dollars a week self-employed my wife makes about 650 a week after tax uh we have a house that's uh we owe to about we owe well we owe about 50 on it's worth about 220 230 needs some work i can do all the work uh with equity because i did remodels for 25 years and i want to get that credit score

up so i can buy property eventually why you've done so good for so long without a credit score why can't you just save up and pay cash for the property that you want um because at this point you don't want to borrow well i mean um i could do something like owner finance of a house about to fall down, do all the work and sweat equity and not have to pay for that enormous labor bill on it is the one thing I'm wanting to do. I'm wanting to buy some old houses and flip houses and find owner finance and and with a little money down you know the thing um i had an idea of borrowing small loans against my savings and paying them off and then getting out of zero at least i can yeah i figure out within a year let's let's let's stop a second okay um you're you're new to this process around Ramsey and I appreciate

you calling and we'd love to try to help you get ahead. So what we have learned, Scott, and what we teach folks is the most powerful wealth building tool you can have is not borrowed money. It is your income and staying out of debt. My credit score, Scott, is zero. I don't have one either. And so, because I don't borrow money ever. I don't want those people in my life ever again. Life is too short to let banks speak into my life and own sections of who I am. And so I'm going to recommend that you don't do flips with borrowed money.

The number of people that do flips with borrowed money and are not bankrupt within five years is very small. The vast majority of people who do flips with borrowed money go bankrupt. It's a mythology. Now, can you get into the real estate business? Yeah, but you're probably going to have to improve your career and get your income up. You're not making any money. Well, my idea was to find people who, when I say alone, that would invest in, put up the money, invest. You don't need a credit score for that. Yeah, okay. You need a credit score if you're dealing with some stupid bank.

Yeah, right. And the only way to get a credit score is borrow money so that you can borrow money. Why so you can borrow money? Why so you can borrow money why so you can borrow money why so you can borrow money why so it sounds like we're supporting the banks when we keep a credit score open because we are right so i'm going to advise you to do your deals without going into debt and if you bring in somebody with you like a money player like you're talking about give them a piece of the profits and you don't have any payments with them and you don't have a credit score so let's say you go find a house that is um uh worth uh two hundred thousand dollars but it's all the pieces and you can buy it for a hundred okay right your money your money guy

puts up the hundred and puts up some money for materials, and you go do all the work. And a year later, you sell it for the $200,000, and you and the money guy split the money. But in the meantime, you don't have any payments. Right. Okay, that's an okay deal. I don't mind that deal. That's what I'm planning on doing eventually you don't need a

credit score for that what you need is a deal and a money guy that wants to be in a deal okay that's the two things you're missing it's not i need to go borrow a bunch of money so later i have the opportunity to play kissy face with a stupid bank right you don't want to be there man you work too hard to get away from them. Right. Yeah. And in the meantime, while you're doing all that, I think you need to get your income up too.

You're not making any money. So let's get your income up. You have the opportunity to make a lot more than you're making right now. If you poke around out there and there's a different side hustle, different thing to do, there's no reason you can't do all of it at once. But don't go borrowing that $100,000 from that bank and be making payments for two years while you finish up this rehab that takes longer than you thought it was going to take. And then it takes longer to sell it than you thought it was going to take. Oh, and then you become motivated because the

bank's about to foreclose. Now you become the guy who gives somebody a deal because you're in debt to the bank. This is how that world works. Yeah, these foreclosures eat each other sometimes. So that's what I would do, sir. Thank you for being a new listener. I hope we can continue to serve you. Chance is in Birmingham. Hey, Chance, welcome to the Ramsey Show. Good afternoon, Dave. how are you? Great,

how can we help? I was calling to get some guidance from you. I've been following you for years and you've helped me tremendously. I want to personally thank you for that. I'm debt-free now, however I am running into an issue where housing prices and interest rates here in my area, in my county, livable houses are at least in the $200,000 range. And I've been working for a while to set up a down payment large enough to get a 15-year mortgage with a payment that is less than my at least less than 25 percent of my bring home seems to be impossible sounds like your bring home pay is low what are you bringing home my gross is 70, i think after taxes i bring home around 52 okay which that includes health insurance and everything yeah we don't need what we're talking about by take-home pay is not a health insurance deduction it's just simply taxes

okay gotcha so a little different little different take-home pay than you're calculating on number one number two uh i'm looking for some ways to increase my income if I'm you, so that you can get into a house that you like. Definitely. See, I've been saving for the last year, which I intend to save for the next few years. I'm just afraid that by the time I have enough saved, interest rates and home processor is going to continue to increase. Well, I think what Dave was saying is the anecdote for that.

If you can get your income up and you continue to save, you're going to get there eventually. But you've got to do those things combined in order to make that happen. Because here's your other option. Your other option is you stop saving today. And if you stop saving today, then you're never going to get a house. But if you keep saving and you keep trying to drive your income up, then don't you think eventually you'll get there? Absolutely.

You will. You will. It's just... If interest rates go to 14, you're not in the market anyway. Right. True that. So you're going to wait on it to come back down at that point. And I was selling real estate in the 80s when they were 14, when they were 17.

They came down to 14 and we thought it was a deal. But, you know, six is really not exactly a hardship compared to history anyway. I mean, you have to look at your options and none of them's good. If you stop today, you're not going to have enough money saved. And if you bought a house with what you have today you're going to be house poor and that's not that's not an option for you so jenza i just want to assure you you're going to get there yeah you'll get there you're going to get there you're going to get there you're going to make it don't abandon don't let the fear of being priced out of the market cause you to do something stupid be patient patient. Get there.

Buy something you can afford. Move up later. Thank you, sir. Appreciate you following us. That puts us out of the Ramsey Show in the books. Austin, Ben, James, Zach, and Andrew, the booth dudes, are pulling it off in the booth. I'm Dave Ramsey, your host. We'll be back with you before you know it.

In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. Hey, here, you can find all of our shows with the Ramsey Network app on your smartphone. It's the only place to listen to the entire back catalog of episodes. Download the Ramsey Network app in your favorite app store today. If you're a leader, your personal growth matters for your organization because whatever you lead can only grow as much as you do. I know from experience, I've been CEO of Ramsey Solutions for over 30 years, and now I'm sharing that leadership and business coaching experience with you on the Entree Leadership Podcast. I'm taking your calls and helping you figure out how to overcome challenges within your organization. One

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