The Ramsey Show - Start Telling Your Money Where To Go

Episode Date: April 10, 2026

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Brought to you by the Every Dollar app. Start budgeting for free today. Normal is broke and common sense is weird, so we're here to help you transform your life. From the Ramsey Network and the Fairwinds Credit Union Studio, this is The Ramsey Show. I'm Dave Ramsey, Jade Washall, number one bestselling author, and Ramsey personality is my co-host today.

The phone number is AAA-825-225. The call is free, and some say the advice is worth, Exactly what you pay for it. Savannah, Georgia. Sally is calling. Hey, Sally, how are you? Thank you for taking my call.

Sure. What's up? So we found y'all through our church through FPU about a year and a half ago, and we are on baby steps four. And my in-laws kind of popped this idea to us about six months ago. We bought our house about two years ago, and it has a very large, unfinished basement. And they have had this idea that when they retire, which is going to be my father and most retiring at the end of the year, that they want to kind of put some money into our

house and finish off our basement for them to kind of be snowbirds, to be here, go in the south and then go up north, and then eventually kind of transitioned to living with us in our basement and I'm not totally against the idea because We have a good relationship. It would be great for our kids to have grandparents close by. But I'm a little bit concerned about the long-term effect of this. You know, they wouldn't really have an R-LI putting money into our house. Do they know that?

Yes, we told them that. And my concern is just, you know, like what happens if they do this? And, you know, in five years from now, someone has a stroke. And now they need more care. a lot of their money is tied up in our house. Or you decide to move and take a different job. And my husband said that to them, and they kind of were like, oh, well, I guess you just me and that two more people are moving with you.

Oh, boy. Listen, there's a difference between having grandparents close and having them in the basement. That's a major difference. I don't know. Like, I want to be, you know, I want to be a good steward of, you know, what we've been given. and, you know, to help out how we can. It's more just new long-term, you know, we're 33 and we have... Listen, hey, I got to stop you.

I got to stop you because you sound like someone who knows what they want to do, but you don't feel firm enough in it that you're talking yourself in circles about it. Yeah. You know this is not a good idea, but you're afraid you're not being nice. Mm-hmm. And your classic Southern, bless your heart. You know, oh, bless your heart. So no, no, no, no, no, they don't need to move in there.

That's a bad idea. There's more downside than upside. I think so. Yeah, and I just found out, too, that they got an annuity, and I got George's book, and I heard that, like, that is not good either, and so I'm concerned about, like, their financial future and their money. Yeah. I would rather them use their money to buy a nice little condo in your area, and that's cheap enough that they can use it and still snowbird, and they can still be around and babysit and see the grandkids,

but they have their own life over there, and it's not tied into your home and your decisions. That's we told them, and they said that they don't think they're going to have the money to move. But this is a snowbird thing. It's not their primary residence. Yeah, but they want it to be eventually. Right, but it's not today, which means they have a place somewhere where there's equity building, and he is retired from a job, so there should be some sort of retirement

something, some nest egg. I don't know how big or small. Well, bottom line is whether they've got the money or not doesn't determine whether this is a good idea. As a matter of fact, since they don't have the money, it further ensures that this is not a good idea. If I woke up in your shoes, I would say mom and dad, we'd love you. We'd love to have you close, but not that close. Does your husband agree? Or is he fighting for the in-laws? No, he does. And I think my concern is, you know, and we're actually seeing them next month. month to like really talk about this and more detail. And they, uh, based like I totally have like a good day. If I find out, you know, they have like five million dollars in their next

net day, get $100,000 to drop in our basement. Is it maybe a big deal? But no, Dave is right. The money side of this isn't the question. I don't care how much money they have. I don't care how responsible they are. This is a bad idea because it handcuffs you guys. The exit strategies on this, as you said, if something goes sideways and somebody needs help or whatever, you are stuck once you get in this. And there's no way out. And that's the problem with this. And you are not being mean by saying, no, we have to figure out some other way that you guys have a sustainable life. That's not mean.

It's not mean at all. You're not, you know, you're scared of death. You're not going to be nice because you're a sweet person. But you can just smile and be kind and say no. And you don't need to have the meeting next month either. There's no reason to leave these poor people along. You need to just, your husband needs to call his mother and say no. You need to stay out of it.

He needs to tell her no, not you, because you'll be labeled the wicked witch of the West forever. 25 years ago, I wanted to move in her basement and she wouldn't let me that witch. You know, that's the kind of, that's how that stuff gets started. You're not wrong. Yes. And so that starts a whole. narrative then and you'll get blamed for it. So now make him have a backbone and tell his mommy no. And don't have a detail meeting discussing it. I really would. I really would not do this.

I wouldn't do it either because there's no, how does this end well? Well, then it doesn't end well. If you have the meeting, it looks like you're considering it. I know, I know. And that's not fair. That's not fair. That's not fair at all. And so, you know, but if they do move in, I can't think. of an exit strategy that works unless both of them died in their sleep. No, everything becomes... I mean, other than that, I can't think of a good exit strategy here. No, and then everything becomes a family decision. And they need to do that in time for you to move.

Yeah, I mean, no, this is just no. No, no, no, there's going to be aging problems and disability issues and care issues and you all, and boundary issues and you guys, there's like 99 things that can go wrong and only one that can go right. Yeah, and all the risk is on you guys. There's no risk on them because they get, built-in health care. The risk it's on them is if you sold the house after they did a bunch of improvements.

Yeah, that's true. That's the risk that's on them. But still, they need to use their money more wisely. Yeah. And have a good life that's fine to be close by, but we need good, healthy, physical boundaries. It's a good thing. Oh, man. So, you know, we are now getting calls in the last three years that in 40 years of

of doing this show, I've not gotten. The parents? Much of. Just this idea of multi-generational housing. Yeah. The parents, we're going to, we're going to, I mean, I've had the mother-in-law question. We're going to build a mother-in-law apartment, right? Or we want to add on to our house, and she wants to give us $200,000 to do that.

And then she's going to give us that at her death and she's going to live over there. That question I've had. But now we're seeing this thing of the family compound. Yeah. You know, and four families are moving on to one single piece of property. And there's no exit. These things, you know, and they're doing it because they think it's more affordable to do it. But you guys have got to be real careful.

You have to think through what happens in divorce. What happens in disability? What happens in death? What happens when the sister-in-law across the way he starts doing cocaine? What happens when you decide you just don't like these people? Well, that could happen easy. You know? This is family after all.

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That's health trustfinancial.com. Ella is in Dallas, Texas. Hi, Ella, how are you? I'm doing great. I hope you can hear me okay, and I hope that you guys are doing great too. We are better than we deserve. What's up?

So I am actually calling because my husband and I are working through the baby steps. We're on baby step two right now. And, you know, we're fully aligned that we want to follow the steps all the way through, especially right now. He just turned 40. I'm 35. We have a four-year-old, a two-year-old, and I'm currently pregnant right now. Wow, wonderful.

29 weeks. Yay. Yes, so it's really great. But, of course, we change our mindset because of this understanding. We really need to do a lot of planning the future. So right now, getting out of debt, is pretty important for us. So at the beginning of the month,

you know, me and my husband, I go through my spreadsheets. I'm the finance person here and the budgeter. We go through a spreadsheet together at the beginning of the month, and, you know, we're like, okay, we're going to make sure that we're strict. We don't buy anything, just what we need, so that we can put as much as we can to our debt. But then halfway through the month,

my husband kind of goes through a rule, and he starts wanting to spend the money. You know, he starts clicking at his phone. He wants stuff for his hobbies. He's very much into guns and motorcycles and things like that. I am a stay-at-home mom right now. My kids go to daycare, you know, two to three times, you know, part-time just to give me a little break. He's really the sole income earner right now.

And he works very, very hard. His job is really mentally draining on top of that he's, like, in traffic 45 minutes there and 45 minutes back. So I feel like the spending is his stress relief. Has he always done that? Has he always been somewhat of an impulse spender? Yeah, yeah. He's a spender of the family. Okay, what we have to do is change the way this is being built. Okay. Okay. So I'm going to take you off of spreadsheets because he doesn't do spreadsheet.

He doesn't speak spreadsheet. Oh, no, he doesn't. And I'm going to put you on every dollar budgeting app and there's one on his phone and one on your phone for the same account. Okay. Okay. And the two of you sit down at the first of the month and both of you get a vote, not just you. Okay. Both of you get a vote and both of you emotionally shoulder the weight of winning with money at your household. We have three little babies soon. And we need to carry the weight of this on two adults. shoulders. Okay? And based on that, I'm a man, not a little boy, that is taking care of my family.

And so I'm going to look at this with my wife, who's a woman, not a little princess. And we're going to make two adult decisions that are good about our future. And we're both going to speak into that and lay out the game plan on the ever-dollar budgeting app. And then once we've both looked at that through that lens and we both agree to it. Then later in the month, if we decide to be a little boy again, we have to be reminded that we're a man. If we decide that we be a little princess again, but you're not his mother. He needs to step up and say, for the good of my family, this is what I'm going to do. For a short period of time here, we're going to clean up the debt mess that we've made with our immaturity and impulse spending. And that means no motorcycles and no guns right now.

And to take it to even a more practical level, and this is for anybody who's an impulse spender, there are practical things you can do to stop that behavior beyond just saying, I'm not going to do it anymore. Because if that's not working for him, then- The practical thing is to agree and look in your wife's eyes and make her a promise. Yeah, but he can also do, like, if you know, you've already identified, hey, the temptation is, you know, guns, motorcycles, cars. You know what the temptation thing is. Now the next thing is, okay, then you've also identified, like, what the cue is, like, what causes him to get in that mindset. Okay, it's his commute home, stressful work. So then it's up to him to go, okay, I already, I already know that I'm setting myself up to be in this situation. Instead,

let me replace it with something that's actually helpful for me. So now his new routine needs to be, I don't come home and plop on the couch and get on my phone and start scrolling the next product I want. I go and I mow the lawn or I go and I work on the budget or I go. He's got to replace that activity with something that's actually beneficial and relieves the stress that he was trying to relieve by spending. And that is just, I mean, that's psychology. That's how you change a habit. So, yeah. I completely agree.

So let me reset this one more time, Elena, because what's happening right now is the two of you have, have agreed on a concept, and then you went and implemented the detail. Right. And I want the two of you to agree on the detail. Pinky swear and spitshake and have a contract between the two of you. This is what we are saying together that makes our household go where we want it to go, and then you go do the detail. You execute the detail.

But I want him looking at every line. item on every dollar and agreeing this is what we're going to spend on food this is what we're going to spend on lights this is what we're going to spend on whatever and and by agreeing to that we're also agreeing that we're not doing anything else right not veering off yeah yeah and he's not doing that in advance instead he's way up above it in the clouds going I think it'd be good to get out of debt we got babies but I really want a gun yeah and and you know because he's not he's not gotten involved yet. That's right. And I want to get him more involved in the detail, not in the execution of it. You can do the execution. You're the nerd. You're good at it. But I do want him

to be involved in feeling the emotional weight of the plan that is going to be executed, the detail of the plan that's going to be executed. That's right. And even in every dollar, when you can see that roadmap in front of you and you know it's going to take X amount of months and something that you think a small three or four hundred dollars a month that adds up to time that this is going to take to finish this so so we're having a kitchen put in one of the houses that we own and um obviously my wife's going to be real involved in that design you think and and so she's real involved in the design I'm real involved in the design because I want to oversee it yeah the builder is understanding the design and the three of us have gotten in-depth detailed agreement with the

kitchen designer of what is going to happen on paper. Then they build the cabinets. We don't get halfway through the cabinets and then I walk in and go, well, that wasn't really what I was thinking. Yeah. You know what it's going to be. And that's the proper way to build a house, too, by the way. Build it on paper before you break ground. Every detail. And if you have 42 change orders as you go up because you didn't think this through, it's the most expensive. and slow way to build a house and you'll end up hating your builder and he'll end up hating you. So instead you've got a stinking plan and you stick to the stinking plan with rare exceptions. And everyone is aligned in the detail of what the plan looks like and then someone can go execute the plan.

But we all three aren't going to build the cabinets. Matter of fact, none of the three of us, the builder, me or Sharon, are going to build the cabinets. A cabinet builder is going to build them. But it's the same thing, right? but we're getting aligned on the idea ahead of time, both strategically and tactically. Strategically is alignment in the philosophy of debt-free, tactically is the alignment of we're not spending this, we are spending that. Yeah.

And then she can write the checks. Yeah. Well, then you can also both, all three have accountability. And in their case, all two have accountability to be able to say when something's going off plan. Yeah. And I appreciate you honoring him for him working so hard, but that does not give him a pass on being a man.

Lots of people work hard. Call the ambulance. I work hard. Shut up. Okay? Seriously, that doesn't mean, I work so hard, so I get to be stupid.

That's not a line that anybody should ever say. You know, but we do. We say, well, I work hard. I feel like I earned it. Earned what? Stupidity?

Earned not being rich? Earned being deeply in debt? What did you earn with this hard work? Yeah. You know? No, I want to get somewhere with this hard work. I want some dead gum traction. I want to be a millionaire, multi-millionaire. I want to be outrageously generous. Blow people's minds. I want to be torn up with

this whole thing, guys. And that's what hard work should do, not give me permission to go, I worked so hard. So, you know, now I get to be a little boy and it be irresponsible. No, no. And by the way, buying a motorcycle or gun is not irresponsible, but it is why you're trying to get out of debt. If you run a business, you already know this. Bad information leads to bad decisions. And right now, AI is everywhere. But AI is only as good as the data behind it. The best AI is built on the best data. That's why I recommend NetSuite. NetSuite is the number one AI cloud ERP and more than 43,000 businesses run on it, including us here at Ramsey Solutions. A.I. isn't bolted on. It's built in. And it connects everything that runs your business, accounting, inventory, customer data all in one place. Because when your numbers are connected, AI actually works like it's supposed to. NetSuite's AI helps flag cash flow problems, spot inventory issues, close your books faster, and cut down on manual reporting. If your revenue is at least seven

figures, go to netseweet.com slash Ramsey for a free product tour. That's net suite.com slash Ramsey. John is in Atlanta. Hi, John. How are you? I'm doing good. How are you all? Better than we deserve. What's up? I steal that line, so I hope you don't have a trademark. Nah. I stole it somewhere. I just forgot where. That's funny. So it's an interesting predicament. It's not really a predicament. I'm really fortunate to be in the position that I'm in and Lord has treated me great, but essentially the last

two years I've made about $300,000 plus or minus. Good for you. Thank you. And it kind of seems like the money just disappears. I'm not a big spender. I mean, I've bought big things, but I'm not a big

spender. But I just, I don't have as much money left over from that as I should. And where the changes is yesterday I made a pretty big amount of money. And I'm, I mean, the first thing I did was log on and talk to people and how to build a shop on my property. And I kind of stopped myself. I was like, all right, this isn't what I'm supposed to be doing.

So I'm 28 with this much money. I'm trying to take a step back and be like, all right, how do I turn this into more without spending? And just wanted some insight on it. Good for you. Are you single? I am. Yes, sir. Okay, cool.

All right. Well, the good news is you don't have anybody to control but you. The bad news is there's nobody to gripe at you. I mean, you have no accountability. Right, right. How do you make the money? What kind of business is it? So I'm a land burger, so I sell, like, farm ranch and hunting and fishing.

Good for you. That's fun. I've got a friend of mine that does that. He makes that kind of money and more. Yeah, well done. That's great. I'm really fortunate to have a job that I love. Yeah, yeah.

I get to walk around on beautiful. beautiful land all day long. That's neat. All right, our drive on it. So here's the thing. The emotion that you're having is that it's regret, it's disgust that says, I make too much money to have nothing to show for it. Yuck. It's a bad taste in the back of your mouth, right? I would say yes. Yeah, and I want to use that. say, okay, I'm going to lean into that and use that to say, that's going to force me to fix this. Because you don't want to wake up 10 years from now and have made $4 million over the last decade and have zero, except a new shop in the backyard.

And that's what you're saying. You're saying that out loud. So the first step to solving a problem is recognize there is one. So you're right on target. The way you fix it is you develop a detailed game plan before. the month begins. Okay? And so download the every dollar app and we'll give you a year free on it, okay?

Okay. And I want you to start with saying, okay, this is my monthly budget. Now, your budget is erratic because your income is. Sure. It's also cyclical, which is why this is important now. Exactly. But we also need to set a baseline of what it takes to operate survival per month. Okay.

So if you're making $300 and we said, okay, we're going to spend $10,000 a month, that's $120, to operate the household. That's about what it is right now with mortgages. And I do say that plural. Not a bad guess. Okay. So if it's a little bit more, a little bit less, I don't care. But set that baseline and lay that out and say, okay, where does this $10,000 per month go? or $12,000 per month.

Give every one of those dollars a name. And then beyond that, I would do one of two things is I would have a list forced ranked of where extra money goes. Forced ranked meaning the first dollar beyond $12,000 this month that comes in goes to this number one thing until it is completed. Then the number two thing until is completed. Then the number three thing. And so you've got a prioritized spending list beyond your operating monthly budget. Does that make sense?

It does. That spending could be generosity. It could be buying a shop in the backyard. It could be investing. It could be paying off the mortgage. But, you know, if I get an extra 10 grand, the first 4,000 is going to this, and the next 6,000 is going to this. And have that done before you. you get the money. You know, it's laid out and you're just going to like doing a to do list,

the most important thing I'm going to do first, and then I mark through it, and only then then do I move on to number two, and I mark through it, and then only then do I move into number four and mark through it. And I've lived off of that system for 30 years, because I've always had an irregular income, because I've always been self-employed. Yeah. I think one of the hard things for me, which I say hard, it's not, I mean, it's very doable, I know it is. So I've been in real estate for seven years. The first year I made 12 grand.

Second year, I made 24. Third year, it made 76. And it wasn't until the fourth or maybe fifth year where it really started to pick up. So, I mean, I was really scrapping, not scrapping, but I was really, you know, having somewhat pinch pennies and fortunate enough to have supportive family. But, like, putting this amount of money and this. spot when they're big numbers like this mentally is really tough for me. I know it's the right to, like I completely agree with everything you're saying. I'd be dumb if I didn't, but, um,

like I tithe 10% of all money that I, let me rephrase that. I donate instead of using the word tithe, I donate, I actually have a question on that a few of time, but I donate 10% of all the money that I make. And when that goes away, um, and then I have taxes and then after that, it's like that number just shrinks, just shrivels up so quick that it makes me, nervous that I don't have cash. Yeah. Well, I mean, think about, I get a royalty check-in from a publisher that's a substantial number, and I'm a tither. I'm an evangelical Christian. I give a tenth of my income to my local church, and so 10%'s gone, and 40%'s gone for taxes. So 50% of that check is gone before I even start the budget. Yep. And that's what you're saying.

Yeah. That's just reality. That's just reality. It's It's just one of those evil rich people that you should be taxed into oblivion. So, um, well, you just have to tell yourself that off the top. Like if you know, oh, I've got $20,000 coming in. It's like, you don't even let yourself feel. I don't have 20. I have 10. Yeah.

That's just the way your brain needs to start working. Yeah. And that 10 is already spent on this prioritized list. Yeah. And so I don't care what you do with the money because I know if you do it on purpose, you're going to do smart things. That's right. you know, you're, very few people say, I'm going to budget, you know, half of my income to completely

blow it. No one says that. No one does that intentionally. They only accidentally do that because they don't have a plan. Well, that's what they do. And I've been guilty of it. It's the, I account for all the necessities, mortgages, car payment, you know, whatever those insurance. And then the rest is just in a pile called treat yourself. And then that's where all the money goes because you think, well, I budgeted the most important things, but that's the zero-based budget teaching, which is every piece of it. Again, I don't care if you treat yourself, but just write it down. A line item. Just say, you know, and if you want to give yourself the whole thing to treat yourself, make yourself write it down. And then you're going to go, that didn't really what I want to do. Yeah. I really do want to treat myself, but I don't really don't need $10,000 for that. I don't really need $100,000 for that. I need $2,000. And you're in control of it at that point, whether you do or you don't. So it's the old thing, John Maxwell says, you know, a budget is people telling me. their money what to do instead of wondering where it went. And John, that's really the crux of your question. You tell your money what to do instead of wondering where it went. And, you know, you always

have some fun in there. You always have some generosity in there. You always have some investing in there. And fun equals lifestyle. Yeah. That's a lifestyle purchase. That's a couch, a car, a trip, a shop in the backyard, a gun, a motorcycle, but nod to our last caller, right? That kind of stuff. So that's all lifestyle stuff. And that all works really well once you've gotten yourself rid of the consumer debt. Now, if you've got any money left after food, lights and water, it goes on the debt until you're out of baby step two. That's scorched earth until you're out of baby step two. You get your every, except your mortgage debt, you get everything cleaned up but that.

But that's not John's question. John, the question is very simply you have to tell your money what to do before it gets there. some kind of a system, some kind of a plan. I gave you an example of one, or it will leave. And you will wake up with this financial hangover wishing you hadn't made that much and have nothing to show for it. Dave, we got a lot of calls on this show where life happens. One day someone's healthy, they're working, providing for their family, and then a curveball hits. You know, we hear it all the time. A car accident, a cancer diagnosis, a heart attack, and suddenly everything changes. Yeah, and that's why you've always said that having term life insurance from Xander is essential, because it protects your family if the worst happens. Yeah, that's right. You need 10 to 12 times your income in coverage. No gimmicks, no whole life junk, just straightforward term life protection.

But there's another piece that people often overlook, and that's long-term disability insurance. Yeah, it's important to understand the difference between them. Life insurance steps in when you die. disability insurance steps in while you're alive but can't work. So it replaces a large part of your income so the bills still get paid while you get back on your feet. Now, if your employer gives you free disability insurance, great. Take it. If it's discounted there at a better price, take it. But if not, Zander can help you find the right plan.

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and you get that tax stress off your shoulders. So as soon as you get all your tax documents, go to Ramsey Solutions.com slash smarttax and start filing. Andrew is in Orlando. Hi, Andrew, how are you? Hey, guys, how are you guys? Better than we deserve. What's up?

Hey, so my wife and I just got married this last November, and we've been working ourselves through the baby steps. We're in step two right now, and we've paid off more than half of our debt so far, but we have some to go yet. How much is that? We have about 19,500 on a car loan, and then about $4,000 in a credit card.

That's what's left? That's what left, yes. Okay, so you've already paid off 25,000? Yes, correct. Since November. Way to go. That's great. Yeah, yeah, it's been amazing.

The Lord has been so good. Amen. Huge blessings. So my wife is legally blind in her right eye, and we've been talking through how we can pay off this debt faster. We're attacking the credit card, super aggressive, but the car, the payment per month is about $420 per month. and once we pay off the card, obviously we're going to take what we were paying on the card and throw it at the car.

But a question that we have is, should we look for something different? Should we look for a car that's maybe slightly older, maybe a little bit cheaper that we can pay off sooner? Or are we, yeah, what do we do? What's your household income? Right now we're at about 108,000 per year. Tell me where the blindness plays a role in this. Is it impeding her ability to work? No, no, she works full time.

She's in healthcare industry selling, yeah, healthcare insurance and everything. But it's mainly with like the distances in front of her, especially at night. It's harder for her to see. But she does have doctors approval to drive and everything. So it's depth perception. Yes. Yeah. I've got a friend that's, you know,

Yeah, same thing. And is your issue with the car, what are you trying to do? Are you trying to save money on the car? Or are you saying because of her blindness, she could wreck this car, should we get a cheaper car, that it's okay if it gets dinged up? Like, what are you saying with all of this? Really just trying to pay off the debt. Okay.

It doesn't really have any do with the blindness. It has nothing to do with the floor. Okay. Yeah. That's good. I like that. So if you paid off 25 since November, can you pay off 25 by November? That's a great question.

I think we could. Do you like the car? Yes, we do like the car. I would keep it and pay it off. Keep it and paid off. Yeah, yeah. The problem I see right now with it, it's a 2019. It's a newer car with, you know, more sensors and stuff like that.

I'm just thinking like, man, like if we do get repairs and stuff, can we afford some of those repairs on a vehicle like that? Yes, you can. Yeah, you're driving a piece of junk. That's why you're. And you're a tight one. Yeah. Yeah. Yeah.

So if the cut, here's how I'm answering the question to give you the framework. I use two pieces, or we use, two pieces of information to determine if someone's car is their problem. And if the car is their problem, I'll tell you to sell it in a heartbeat, okay? Because it's often the problem. This show sometimes is called the sell the car show. Like they answer to every question to sell the car, right? But the, number one, you do not want all of your vehicles added together, anything with motors, wheels. That includes your stinking lawnmower, your se ado, whatever, all added together, your camper that's in the backyard.

If it's got a wheel or a motor, all your value added together should not be more than half your annual income. Which would in your case would be $56,000. Yeah. $59,000. So, you know, that's what I'm looking at. And yours is not. So it does not violate that. The second thing is, if there's debt on the vehicle, can we be 100% debt-free except

the house within two years without selling the car? And if we can, do we like the car? Then, yes, keep the car. But for instance, in your case, if the car was your rate of debt, reduction, you're easily going to be within that. And the car and your cheap car is less than half your annual. So you're in pretty good shape. The only difference was she just had a nicer car than y'all when you just got married. And so she won that battle. But it had debt and yours didn't have debt. And so now we've got to clean that up. But I think at the end of the story, two years from today

with a fully funded emergency fund and your money going into retirement, we're going to be glad she's in a pretty good car, especially if she's got some of the newer features on that car with her depth perception issues. So, yeah, I think I'm keeping it. Yeah, I think so too. And, but you know, you can sell it if you want to. If you just wanted to be free very, very quickly. You wanted to be free. You're super fast. You're not doing anything wrong by selling it. But here's what's going to happen when you do. You sell it. You get a $3,000 car and you're dead free in six months, four months. And then you build an emergency fund. And then what's the first thing you all are going to do. You're going to start talking about upgrading these cars because

they're crappy. And you're going to do that with cash. And so you're still going to end up two two and a half years from now in the same place that you are now with a paid for decent car. Yep. And so I, you know, it's not it's not, it's not, the car is not violating anything here. It's just kind of part of your old story. Yeah, I agree. Grace is in Fort Collins, Colorado. Hi, Grace. How are you? Hi. Good. How are you guys? Better than we deserve. What's up? So I have a question related to the gazelle intensity of paying off a house. My husband, I save anywhere from 100 to 150,000 a year after expenses and everything. And it's hard to not kind of look at the numbers and think.

We've about 500,000 left on our house right now to think, you know, let's just try to pay this off in five years. But my husband, you know, he's kind of been looking more into the investment side of things too, as far as, for whatever we make, should we do a portion of that towards. the house and the rest into investments if we're already doing 15% into retirement. 15% under retirement is all you should be doing, no more. Okay. The rest of it ought to go on the house. So there's 150,000 you're putting on something else. How much is in that account?

Well, so that's what we get basically at the end of the year. A lot of it comes from bonuses. Yeah, but you're putting 15% away, and then you said in addition to that, you're investing 150 grand. Well, that's just what we have in cash saved at the end of every year. Yeah, where is it? Well, high-yield savings. How much is in that account? About $70,000 right now.

70. How did $150,000 turn into $70? So at the end of every year, it will be about $150,000. So you just stockpile it until the end of the year and then you decide what you're going to do with it. Well, at the end of last year it was $150,000. How's it $70 now? So we just moved last year. so we put a good chunk of money down under the house, but we just kind of accumulate, and then year-end bonuses.

Okay. Any money of a 15% should immediately go on the house. Okay. Not in savings. Okay. And nothing like diverse by other types of stocks or mutual funds or anything. No. No. You're already investing your 15%.

No. You want to know why? Yeah. Yeah. Because the data tells us it's the fastest way for you to be a million. We did the largest study of millionaires ever done at Ramsey, 10,167 of them. And the typical millionaire in their first $1 to $5 million of net worth sounds like this. It took them 12 to 17 years from the time they started getting serious about getting out of debt and building wealth to get there.

They paid off their house in 11.2 years on average. And here's what their portfolio looks like. Let's say they've got a million six in net worth. They've got a $700,000 paid for house and $900,000 in their 401Ks and or other investments. But the paid for house and the fully funded, the 15% going into the 401K is what we found every time. Every time. We did not meet millionaires that said, oh, you know, we kept a mortgage and that caused us to have great investing. and that made us millionaires.

Nope. They got rid of the mortgage like it was a cancer because it is. Most people don't struggle with money because they can't do math. They struggle because they don't stick to a plan. And when your bank makes your money

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But with the Fairwin's app, you open it and you know exactly what to do. No clicking through 11 menus just to move your own money. Just tap, transfer, and done. You can deposit a check from your couch by taking a picture. You can get real-time alerts so you're not guessing what's in your account. And you can add your Ramsey Be Weird debit card to Apple Pay and tap to check out. See, a lot of banks leverage convenience to make it easier to go into debt,

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Hi, Dave. Hi, Dave. Thank you for taking my call. Sure. What's up? Yeah, we are recently debt-free, except our mortgage. And I wonder, yeah, and I'm thinking if I could afford to go to Europe to watch Wimbledon. I really love watching tennis and I really want to do it. But then my husband and I were talking last night and when he saw like how much we're going to spend me and my, it's only going to be me and my son. And he's like, oh, that's a little too much. It's going to, you know, delay our baby step number three.

So you don't have any money saved? We do. We do have money saved, but then, you know, I will take the money from there. And so it's going to delay our... Okay, so you have an emergency fund saved of how much? We have $15,000. Okay. And how much do you need in your emergency fund?

For the trip? No, how much does the emergency... The three to six months of expenses. Oh, sorry. Oh, 24,000. So that's the target. And your household income is what? We need about $320,000 or sometimes $350,000 if my husband goes in overtime.

Wow. How much does the Wimbledon trip cost? Well, the tickets are about $1,000 for my son and I. And, you know, when we were... Oh, that's the ticket. Yeah, the whole trip. trip. No, you're not going to London and buying a Wimbledon ticket for two grand. I'm talking about when you price this whole deal out, the tickets, the airfare, the hotel, how much will it cost?

So the total is 9,000. Okay. Oh, okay. The airfare alone, because of what's happening, it's about $4,000. Listen, I'm not mad at the number. I just wanted to get to it. And my question is, with the $320,000 income, and when actually, when do you have to have the $9,000? buy? So we have the $9,000 already. No, you don't. No, you don't. You have 15 of 24, so you don't have 9,000 dollars. You're, you're, let's, let's clarify real quick. The definition of the emergency fund is for emergencies. Wimbledon is not an emergency. So you can't say I have 15,000 for Wimbledon. You don't. You have $0 towards Wimbledon. My question and what I'm trying to solve for you is how quickly can we get the $9,000 on a $320,000 income and still make progress towards baby step three.

Because the next question I have for you is the $23,000, that's your goal. Is that three months of expenses or six months of expenses? That's going to be three and a half expenses. Okay. So I go back to my first question. I want you to have three months of expenses in order for this to even be something for you to consider. And then you would have to pay the $9,000 cash on top of it. that, not out of that on top of that. Does that make sense? Okay, so what do you guys have planned in the

next two months that you can take off of your calendar and cut your budget to bare bones in order to finish the emergency fund? Because, you know, Wimbledon's in June. And so you've got time, July, you've got time. Yeah. And so I think you can probably, if you went to scorched earth, Jade's point is you probably can do both. You can finish the emergency fund and come up with the money to go. It looks to me like you can because your income is so fabulous. Yeah. So, yeah, work extra. Have you got anything you can sell that you'd like to get rid of to cause this to happen? Have you got, you know, but I'm going to take everything out of the budget and go scorched earth to be able to live, to be able to do this trip if it's what you want to do. Here's what I won't do. I won't declare

a trip to Europe an emergency. No. It's not an emergency. Okay. I wish it was, but it's not. I could declare some things I want an emergency, but they're not emergencies. And so I have to, you know, at some point, I've got to categorize these things properly and say, one is a wish, a want, a dream, and one is a necessity. Being ready for Murphy, if it can go wrong, it will, is paramount for families to get ahead. And you guys have been making good money and been broke for a long time and you've finally gotten yourself out of debt and you're finally saving money. And for the first time in your lives, probably. And let's talk specifically about why it's important.

Dave just hit on the part that this is your emergency fund you needed in case, you know, emergencies arise. But I do believe that when you're in an income situation like you, it's very easy to get lazy and very kind of like, oh, it's okay. I can afford it. I can afford it. I can cover it. If something pops up, we'll just cash flow it.

You've got to guard against that, especially because you have an higher income. And that's the part where I think. Yeah. Agreed. You got to be extra careful. So folks, here's the thing. If you have no money, none, now not, shit, that's not her situation. But if you're sitting there with no money saved because you did stuff like this, you know, and not her situation, not picking on her, but have you ever noticed that when you're super broke, your life looks like a country song? Like everything that can go wrong will, it's like you have a Murphy, a tractor beam.

You know, it's like, beep, beep, beep, if it can go wrong, it will. You know, it's like crap breaks, people get sick, the dog goes out in the street and gets hit. I mean, it's like a country song. Everything that can go wrong will. It's horrible. And have you ever noticed that when you get a little money, all that stuff leaves? Like if you got, if she's got $25,000 and makes $320,000 and no debt, You ever notice that it's a different kind of song.

It's like smooth jazz now. I mean, you know, it's not, it's, it's, all that crap leaves. I don't have anywhere near the emergencies now that I've got some wealth. My life used to be one freaking drama after another. And I don't have anywhere near those emergencies. I don't, I think, I think an emergency fund is Murphy repellent. I think, well. I think it does.

But more than that, I think, uh, it changes the definition. It changes. He's like, I'm the type of person. I am never going to touch the emergency fund ever. I don't care what I have to do. Not even for an emergency. I will do whatever, move hell and high water to make it work. Yeah, I agree.

That's Sharon. We have an emergency fund for our emergency fund. Yeah. So we never touch it. You know, I mean, it's like that. But here's the other thing is this. When you got a little margin in your budget, a flat tire, you just fix it. You just cash flow it.

But when you're broke, a flat tire is an emergency. You know, the alternator goes out on the car. It's $500, 400 bucks. You just fix it. You don't think anything about it. It's not an emergency anymore. But when you're broke, every little thing like that is like, oh, God, the world's coming to an end. And the drama queen's doing a dance between your ears.

I mean, it's just like. But, yeah. So it's very interesting that the overarching thing of what I'm saying is when you get a little bit of money and you have a system and you're not just cold hard broke, your anxiety level just goes away down. Because the drama goes away down. But if you get a little bit of money and you don't have a system, you're going to be looking up wondering. Then you're going to be back to having no money again. Uh-huh. That's why a third of people who make $250,000 or more are living paycheck to paycheck because they thought they could out-earn their stupidity.

Ooh, I tried it. It doesn't work. Maybe my stupid was just bigger than my income, but I tried it. It didn't work. Hey guys, George Camel here. Listen, we need to talk about your phone plan because for a lot of you, it's like a bad roommate. You know the one. Unpredictable moods.

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Based on average annual payment of AT&T, Verizon, and T-Mobile customers compared to 12 months on the Boost Mobile Unlimited plan as of January 2026. See website for full details. Michael is with us in New York. Hi, Michael. How are you? Hello, Dave. Thank you so much for taking me. Sure. What's up? I appreciate it. I'm 52 years old. Basically starting over, I had some major health issues, and I've been permanently disabled for the last 16 years.

Whoa. Yeah, I've got the skills to rebuild a high-income trades business, but I'm also gaining traction as a published writer. If you and me, where would you put your focus for the next year? What was the nature of your disability and how have you overcome it? Well, I was a teacher and I taught trades. I taught welding metal fabrication, heating, ventilating, and air conditioning. And I became environmentally ill from the welding fumes. Ah.

Okay. So I had a neurological disorder, basically paralysis. Whoa. And I, you know, I've learned about juicing and things like that. And that kept me alive. And I had, thank God, a long-term disability. policy that paid me my salary all these years. And about a year and a half ago, they offered me a settlement.

I didn't take it. And then I looked at my wife one day, and I said, you know, I said, I can't live like this anymore. And I decided to call the insurance company. They offered me the same settlement. I decided to take it. And I took some radical responsibility. And I lost 40 pounds. I got off oxygen.

And I got a clean bill of health for my doctor, and I'm ready to rock and roll. Wow. Yeah. So the nature of the disability is completely healed and gone? No. I mean, I'm still probably permanently disabled, well, on paper, but it's not affecting me anymore. I can breathe at 7 liters capacity, even if it's only with one lung. Okay.

I feel great. I green juice every single day. I ground outside. I jump on a rebounder. I'm doing everything that I had to do to gain my health. Like I said, I drop 40 pounds. The whole thing, man, that's awesome. That's amazing.

Congratulations. That's amazing. Thank you. Well, I've become a published author also. So I can't imagine you going back to welding. No, I'm not. I'm actually a master electrician by trade. Oh.

So, and I basically did electrical work and mechanical work. So I was planning on maybe starting there with a service business, just on my end business, basically myself. Why wouldn't you? While I write. Yeah, good. You know, I want to be cautious because of my health. I don't want to go backwards. No.

I know a young, beautiful family. No. So I want to do it as intelligently as possible. Yes. My question is basically, you know, if it was you, like, what steps would you take not only to ensure that I don't overdo it? Because, you know, I figured I could probably do it three days a week, six to eight hours a day.

I think you are an expert at monitoring the metrics that are associated with your health. You've rattled them off to us. It's been the whole sole focus of your last decade. And I don't think you're going to overdo it because I think the instant you do, you're going to know it. That's very true. And it's not a permanent thing. It just would be fatigue. And you'd say, okay, I've got to take a week off or I've got to slow down back to two days instead of three.

Or you're going to know the metrics are going to talk to you because you're doing such a good job of managing your health. So intentionally, congratulations. So, yes, I think the electrician thing is a very good paying gig. It's 100% predictable that you're going to go get some money, where the publishing is very hit or miss. And as you know, it takes a while to get it moving. And so I think, you know, your foundational underpinning is the electrician. And then the icing on the cake, the gravy on the biscuit, is the publishing stuff. and if the publishing stuff finally takes off enough that you never have to do the electrician again, so be it. That's awesome.

Is the primary drive for you financial or personal fulfillment at this point? At this point, financially, I don't have to worry about money at all. I didn't think so. Everything I own for is completely paid for. My home, my cars. I have a brand new truck that's paid for so I can use that to start work. I mean, I don't want to buy a van right away. No. I want to build up to a van when I have.

have the cash to buy. Right. Good. That's just the kind of person I am. I think you can make really good money and start a day a week and then two days a week and then three days a week. And if it starts to wear on you, it go back to two days. And if it doesn't, occasionally you can pick up four days and you can make a lot of money

in the trades right now. I agree. And I would do that as a foundational thing to give you patience with the publishing thing. That is also going extremely well, I might add. How much are you making? What's extremely well? What are you making? Well, am I really making any money from it yet?

Then that's not extremely well. Okay. So basically... We measure this on money. Yeah, yeah. Now, 150 or so in articles not paying any bills yet. No, no. But it's fulfilling, and that's what extremely well means.

And you enjoy it, and that's what extremely well means. And you're getting some notoriety. That's awesome. But you're still working for free. I basically, yes, I am. Yeah, yeah. And so you're not ready to turn your financial destiny over to $150 articles. So the working for, as an electrician, running my business could pay for all that for pretty much.

It pays for your life, and you can continue to rebuild and build a good life. And then, again, if the publishing ever, the income from publishing ever starts intersecting the line with the, electrician, then you can start to slow down the electrician, because now you're making a living publishing things. Awesome. And that's where you need to get to, not just the fulfillment piece. But that's the problem. It's so gamified.

They give you feedback and make you feel like you're really winning, and then you add it up, and it's like, I make $400. I didn't make any money. But to your point, it's right now his success is defined not monetarily, but that's good, because he's got that. other thing giving money. And what a great overcomers story. So good.

So inspiring. I mean, everything from the trampoline to the juicer, man. I mean, that's very, very cool. Congratulations. That's taking the bull by the horns. Yeah. I'm not going to be defined by this. I'm going to define it.

Yeah. That's a big deal. Dustin's in Desmond, Iowa. Hi, Dustin. How are you? Good. How are you? Better than I deserve.

What's up? I just had a quick question with the snowball method and cards that have deferred interest. I just started the snowball method about six weeks ago. I've been able to pay off about $4,000 worth of debt so far. Good. I have a credit card that I put a washer and dryer on. It would have been 18 months ago. The deferred interest is going to be due, or it's going to hit in next month.

it would take about $900 to pay that off, which I can do. Okay, so wait a minute. Are you saying deferred interest, meaning the interest has accrued, but they've just not billed you for it yet? It hasn't been applied to the purchase. Correct. What if you pay it off? Is there no interest if you pay it off early?

It would be no interest. Yeah, you want to do that. Okay. So I can pay off deferred stuff versus just the smaller stuff. I can kind of go out of line there. I would, you know, just temporarily, it's only 900 bucks. Yeah, the zero, that's nothing down, zero percent interest until X, and then they backcharge you at 38 percent. Yeah, that's how they screw you. And 89 percent of those contracts, people do not pay them off in time. Yeah, if you can get

out of that, that's wonderful. So yeah, you want to, you want to knock that in the face. And, and you want to do it a month and a half, two months early. So there's no question. So they don't say, Oh, we didn't post it, and now we really are going to charge you the interest because the mail didn't get here or bull crap, okay? Pay it and get verification a month early that it's paid. Okay. Because they're going to try to screw you. It's what they do. Yep.

Nope. I agree. And clean them up as fast as you can. I don't know how many of them you got, but yes, I want to get rid of those. And if you need to shift your debt of snowball around just a little bit, because you're saving, you know, probably 30 or 38% interest, something like that, 50%, 20% whatever it is. Over the course of how many months and that kind of thing. Yeah, that's going to, it's 100% knock.

It goes away if you pay it early. And so, and folks, that's the rip off of the nothing down, you know, the rooms there they went, right? And, you know, you buy this couch and not pay for it for 24 months, no payments, no interest. And, yeah, well, that 24 months goes by in an eye blink and then you get charged all that back. and almost nine out of ten people don't do it. If you're at the point where you think bankruptcy is your only option, stop for a minute. You might have another way out. Guardian litigation group.

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mess and pay it off. But if bankruptcy is staring you in the face, Guardian gives you a legitimate alternative. They've helped over 55,000 people settle more than $600 million in debt. So before you make a decision that follows you for years, go to guardianlit.com slash Ramsey. That's guardian, l-I-t-com slash Ramsey. Attorney advertising, results may vary and no specific outcomes guaranteed. Well, I wish we could get to every call here, but we can't. The lines are always full, and I know a lot of you get a busy signal. Sorry about that. We do have an alternative, though. If you'll go to Ramsey Solutions.com, you'll find our Ask Ramsey AI tool there. And it's based, the data in the AI tool is based on three years of calls into this show,

plus financial peace university lessons, plus the books we've written, plus the articles we've written. And so only Ramsey information was fed into this, so only Ramsey answers come out of this. That's how AI works, by the way. It's artificial, if you hadn't heard. It's not real. And so it's going to produce an answer almost as snarky as you would get here on the air. and so we haven't been able to add quite the sarcasm level to it yet that we have in person, but we're working on that.

So the rest of it, though, the answers are exactly what you would get here on the air. Ask Ramsey. It's a free tool. You'll get the same answer. Try it out. Ramsey Solutions.com. Steve's in Green Bay. Hey, Steve, what's up?

Thanks for taking my call. I'm really excited to talk to you and Jade. So I have a very simple question. I'm 62, retired. My wife is 60. she's going to work for four more years. I want to know how much we should be contributing to my Roth now because my investors are telling me that I have a $500,000 in my investments,

and I only have 150 in Roth, and the rest are 401K and IRA. And I don't want to create a tax liability for my kids or grandkids. I have two children and four grandkids, but I only have an effective tax rate last year of 10%. So I just thought I should be contributing more to Roth, And they said, I'm good because of the way things are going to roll. And let's get your opinion on that. Well, when I first started this stuff with, when the Roth's first came out,

it was after we started this stuff, the Roth came about. I was so excited that, you know, I was in my 30s and 40s, that I could have tax-free growth. And I was pushing everybody to get tax-free growth. And I'm pushing me to get tax-free growth. And so I had everything in Roth. And then anytime I could convert something to Roth, I would. And so I was always moving into Roth because I was getting tax-free growth. Now that I'm 65, it suddenly has occurred to me that there's two other benefits to having everything in Roth that are even more powerful than tax-free growth or add to.

It's not more powerful, but they add to it. Number one, at 73, I don't have RMDs, required minimum distributions. So all of your 401K traditional, you're going to have to begin to withdraw at 73 under the RMD rule. whether you want to or not. Whether you want to or not. So, and of course, the more you have in traditional, the more that check is going to be. The second thing is, and in my case, all of mine's in Roth. So 100% of mine's just going to sit there and continue to grow tax-free because I don't have required minimum distributions, right?

The second thing is that the Joe Biden passed the Secure Act, and the Secure Act says that all inherited IRAs, in other words, if you name your kid as a beneficiary on your 401k or your IRA, and it's traditional, if they inherit that, they have to withdraw that money within 10 years on a 10-year schedule. So they have required minimum distributions. So they're going to pay income tax on 100% of that, and they have to do it over a 10-year period of time from the time of your death. on Roth IRAs, none doesn't apply because there's no tax due. And that's why this conference came up because my father passed five years ago, just left $50,000, but I'm still taking that out over time.

Yeah, you're having to do the Biden withdrawals, yeah. Within 10 years. And I just don't want my grandkids or kids, because we live simple. We can live on $50,000 a year, and I've zero debt, never had. And I just want to leave a legacy. Well, here's an interesting calculation. It's tempting to move the money that you have in traditional, gradually to Roth to keep you from having bracket creep.

That's a tempting thing. And you could run those numbers out. You're probably going to have to get a different investment group to help you with that because apparently your guys don't think this way. And if you want to get another opinion, you can go to Ramsey Solutions and check with one of our smart investors and have them run the numbers out with you. But you could run, you know, like bump a couple of brackets, but not go all the way to 40, not go all the way to 39, right?

That's one way of doing it and do a little bit of year and kind of dribble it out. The other thing that's interesting, though, is you think about like the last three years, you know, we had a 26, a 23% rate of return and an 18% rate of return on S&P. Now, that's not normal, but we've had a ridiculously good last three years, okay, in the market. if you had just moved it all and paid the taxes three years ago, you'd have had all of that 60% of growth with no taxation. It sounds like you're a proponent. I mean, it's interesting. But, you know, if we have normal market growth of 10 or 12% a year, right, it does take it takes you a little while to get it back.

But if you're healthy and you're 62 and you move 7 or 800,000 over, and that creates taxation of, what, $200,000 or $200,000, you're going to get that $200,000 back in tax-free growth so freaking fast. Well, I was telling that the very least I'd like to do is while my wife is working and has earned income, I can do this for at least three or four more years. I would do Roth IRAs for sure. Absolutely. Absolutely for sure.

100%. Anybody tells you to not continue to invest in Roth IRAs. It's only, what, $8,600 bucks at your age, right? You can do. I think you agree with everything Dave is saying. I think your hang up is that that's not what your tax perfect. That's not what your guys are saying. That's right. I have actually two people telling me that.

Yeah. But I think you can crunch the numbers out and understand it yourself with somebody and you'll figure out what I'm figuring out here. I actually, I took a call on this like a week ago. Maybe you and I were on the air together. It was a guy had, he had like seven or eight hundred grand. And I sat there and kind of was telling him, oh, I remember do it, you know, kind of do it a little bit of the and don't get bracket creep. And then it's suddenly at the end of the call that occurred to me, you're missing out

on all of that opportunity cost on that tax-free growth all those years. While you screw around with, you know, dribbling it out to avoid bracket creep over five years, all that money now has been taxable. All that growth is taxable. And it wouldn't have been taxable. So, I mean, I think there's something to be said to doing it all and rip the band-a-off. Yeah, that's it. Mathematically, I think you might come out ahead.

You got to run some numbers to be sure. I'm not positive, but it's something to consider and something to look at. And I would get a different set of eyes on it because you're in, anytime you have an investment professional in your life, their job is to teach you not to tell you. And if they don't teach you, in other words, they start saying all that stuff. You go, okay, wait a minute, you're telling me I don't want to save in a tax-free account. Of course I want to save in a tax-free growth account. What kind of, you know, what do you, you know, oh, no, you know. You know? Yes. So, yeah, I do a Roth every year and my net worth hundreds of millions, okay? The building I'm sitting in is 600 million. Okay. So the, you know, and I do Roth, backdoor Roth, Sharon and I do them every year. I'm going to keep the government's hands off of every stinking penny I can legally because I don't want them to buy a $22,000 toilet seat with my money. And that's what they do because they're idiots up there. And so I just, I don't want to give them money. It's not good stewardship.

if I don't have to legally. And so I'm going to do, it's the time of year when I'm pissed off right now. It's tax time. So just bear with me, people. But that's it. I mean, that's the thing. Yep, absolutely. So you got to, but the Roth IRA moving everything to Roth people.

That ain't bad. Or over time. That's the move. It gives you two things I had not considered early on. And that's no RMDs and no inherited IRA forced withdrawals. And so your kids get a Roth IRA. a zero income tax on it. Now, neither one have a state tax on them.

That's not an estate tax issue, but it's an income tax issue for your kid because it's a taxable account that they inherited or an non-taxable account that they inherited. Something to think about. And think about the, what if they held, let's take a million dollars and they hold that seven years after you die because they don't have to withdraw it under the Biden rules. It's going to double. It's going to be another million dollars. the million will be two million.

That's right. And then what if they hold it 14 years? Ooh. It's going to be 4 million. Building that wealth. And all of that is without taxes. Yummy, yummy, yummy, honey. Today's question of the day is brought to you by YREFI.

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Sorry about that. Thankfully, he had a $1.5 million life insurance policy, which I tithed on when it was received. I was able to pay off our home and put $1 million into mutual funds and retirement investments. I pull from the non-retirement funds as needed for expenses. How do I tithe on the money I withdraw? I know I'm supposed to tithe on an increase and I want to make sure I'm honoring God with the blessings he's provided. It sounds like you already tithed on the money when you received it. It says, I tithed on the insurance policy when it was reimb.

received. You'd be tithing on the growth. If the policy, I mean, if the investments made $120,000 in growth, then that's your income for the year. And you would tie on whatever they grew. Oh, I see what you're saying. Okay. You know, you could do it one of two ways mathematically. You could either, I don't tithe on investment growth until I take it out. Okay, because it's tied up in So I've got retirement accounts that have grown and I have not paid on that growth until I use that money. Okay. I don't tithe on the increased value of real estate until I sell it. Okay.

That's when I would tithe on it. And so what I would tithe on in your case, Nicole, is whatever money you're taking out if you're only taking out growth. Okay. So let's say you've got the million dollars in there and let's say it made 10%. That's $100,000 growth. But you're only pulling out $60,000. then I would tithe on the 60,000. Mm-hmm.

If you're pulling out 120,000, but it only grew 100, then I would tithe on the growth, the 100. Mm-hmm. Not the 20. Not what you pull out, but what you pull out is the, if you don't pull out all the growth, I would only tithe on what you pull out. That's what I personally would do. Now, let's cloak this in an understanding that you can't out-give God. number one. So giving you never hurts. You're never going to be, you can't over give. Yeah, it's such a

technicality. Yeah. And number two, don't get caught up in legalism because God doesn't love tithers more than he loves non-tithers. He loves everyone, okay? And so if you mess this up, he's not going to, like, okay, it's not a salvation issue. You're not going to get smacked around, okay? That's not, you can't, he's not, he loves you, he's got a plan for you. He has us to give not because it's a rule and not because we're trying to please him. He has us to give because we are the best version of us when we are givers. We are more like Christ, Christ like, who gave his life, right? and the father gave his son, we're more like them when we are giving.

And that's what he wants to tap into by teaching us to be givers. And the baseline, for those of us, they're people of faith, is a tithe, a tenth of our income. But don't get caught up in the legalism of it like you're trying to please God with this. He's already pleased, honey. You're a widow. You have a special place in the scriptures to be taken care of and love. and blessed and prospered. And that's what your father wants for you.

So do this with an open hand and an open heart with no compulsion, no need to follow a rule. Instead, it's I'm learning from my father how to be a giver. He's teaching me. And so I'm going to give something. Be careful not to get caught up in the details. Yeah, agree. It'll drive you nuts. you can really get in what the old what the old king James called the jot and

tiddle the crossing of the T's and the dotting of the eyes you the legalism yeah Andrew is in Houston hi Andrew how are you I'm doing all right how are you better than I deserve how can we help yes sir so my question uh is in baby's step two um and when you're listing out debts and it has to do with an upside down car loan um so So we just finally got real serious about debt and hate and being stupid, started budgeting, listed out all the debts. And one of our dumber decisions was this car that we're now underwater on. So my question is, and this is based on God has blessed us with the opportunity to learn to be mechanics on two beater vehicles.

So we have those. The opportunity to learn to be. Yes. So with some subpar mechanical assistance for myself, they get from A to B. Yeah, the YouTube instruction manual. I got you. Yes, that is correct. So this car, one, it's a turdmobile, but we owe about 113 on it, and it's worth about 72. And so my question is, when I listed in the list of debts, do I list it at the 113?

or do I prioritize it at the negative equity with the plan to sell it as soon as we break even on it? So put it in there as a $4,000 level in the debt snowball or the $11,000 level in the debt snowball. Correct. I'd put it at the four. I would too. I'm glad you said that. Okay. Yeah.

I'm making this up right now. I don't know if I've ever had this question. Well, because that's the amount that you're actually going to put into it. And we're trying to get out of it. Yeah. Yes, even. I am dumping this thing and we are moving on. Now, what are you doing to replace it? He's already got two beaters, right?

Oh, okay, so you're good. Yes, I have two old Fords that each have about 200,000 miles on them and they get where we need to go. Yeah, what's your household income? Combined after taxes and everything, it's about 77. And how much debt have you got? Not counting the house. 58,000 non-mortgage. Okay, all right. Good for you.

So here's what this sounds like to me. It sounds like to me you're going to have decent cars that you paid cash for in 36 months. Yes, sir. That's where I think you're going to be. In other words, you're going to be debt-free, have your emergency fund, save up and move up in cars. And I think that's going to take you about three years. Okay.

Yeah, you're a good man. You've got this figured out. I can hear it in your voice. You've got this dialed in. And if your wife is as aligned on this as you are, you guys are going to become very, very wealthy over the next 20 years. Okay. Yeah, we are 100% in agreement. And yeah, there was a lot of, like, shame and fear about debt.

And we've sort of sat down and, like, no, we're going to get serious about it. And there's hope now. Yeah. Yeah, you've owned it and punched it in the face. I hear it. I love it. And the level of personal responsibility you're taking in the verbiage and even the voice tone that you're using is we can hear that you're going there. That's pretty cool.

Yeah. Because you know what causes how we can read that from being on the air for years, both of us, right? And, you know, all of you can hear it too. You're listening. You heard this guy's serious. He's not screwing around. There's no excuses. Game on.

That's the difference. he's thinking about ways to get this done, but they're not ways that are excusing work or excusing the process. It's all about how can I do my part to get this done. How can I grind the most efficiently? Yeah. And here's the reason that that is so indicative, such an indicator, a metric on where his future is going to be. Because personal finance is not a math problem, it's a behavior problem. It's 80% behavior, 20% math.

About 20, the mathematics of becoming a millionaire, you learn by the sixth grade. You do not have to have a master's degree in business from MIT to become a millionaire. There's nothing that they teach you in that that causes a millionaire. Everything you needed to know mathematically, you learned by the sixth grade. The problem is the person in my mirror. This guy can do some stupid stuff. This guy has a Ph.D. in D-U-M-B. This guy likes donuts.

I can be skinny and rich if I can control this guy. Welcome back to the Ramsey Show in the Fair Winds Credit Union Studio. Jade Washaw, number one bestselling author and Ramsey Personality is my co-host today. Sarah is in Hartford, Connecticut. Hi, Sarah. How are you? I'm doing well, thank you. How are you?

Better than I deserve. What's up? So I have been, you know, watching your show for the past couple years diligently. And, you know, during the past six months or so, I've really tried to hone in on doing, you know, the baby steps and the debt snowball. Good. But my main question is today, should I decrease what I'm putting away from my retirement right now to try to combat some of this debt? So I am a single mom who, you know, is a single income household, everything. And, I mean, I have a car payment.

I don't have a ton of debt, but I work full-time and my daughter's in school. I ran into some debt over the past six months or so. We had the government shutdown. I have a government employee. I work in an admin position. And we had the shutdown happened last year in October. So I was being paid for a few months. And everything was still coming in where you have to manage the credit card,

the child care costs and stuff, even though the mortgage was on hold. So when the money came in and I eventually got back paid, I started just paying down some of the credit card. right now I just have credit card that's about 18,000 that I own credit card. You got $18,000 in debt in three months? No, no, no, no, no, no, no, no, no, no, no, no. I'm saying, I'm saying in total because I had a couple things like... Oh, well, you acted like the shutdown caused it.

Oh, gosh, no, no, no, no, no, sorry. So I took out a... I had to do a bathroom remodel on my tub shower for when I bought my house, and, you know, it had pieces of the metal kind of cracking off and stuff. So that was more of a safety issue. So I had that remodel done. So you have $18,000 in credit card debt. How much do you owe in your car?

About $30,000. Any other debt? And what do you make? About $75,000 to $78,000 a year. Okay. Your car is insanity. It's half your income. It's killing you.

Yeah. So, yeah, my car is right around $30,000. What's it worth? You bought a car twice or three times what you should have. Do you know what it's worth if you were to sell it today? Oh, at least, I could at least get $22,000 for it. What I want you to do is double check that. I want you tonight to go on Kelly Blue Book and look at private sale and see what you would get for it,

not what CarMax would give you, not what, you see what I'm saying, see what it would be if you sold it yourself? Because that'd probably be my first order of business because, To Dave's point, it is a huge part of your world right now, and it's a huge part of your debt. It's way too much. Yeah. I really didn't want to get into this car debt. You know, when I did, I wanted to, I tried to, you know, wait almost another year or so to get a new car. But we're here now.

You bought a $30,000 a car. You should have bought a $10,000 a car. Yeah. Let's get back to your first question, which is do you stop investing in order to attack this debt? The short answer is, yes. My question is, how much have you been putting aside? So they take it out of my paycheck every two weeks. So 500 goes towards my, yeah.

So $1,000. Okay, so $500. Yeah, I would stop investing. It's a total of $2,000 a month. Okay. Because that's biweekly. Right. I would stop investing immediately because you need your hands on that money to clean up this mess.

Now let's talk about why a little bit because you're doing this. You're doing good things. You're just doing them out of order. so let's get you back on the right track. Yeah. If you're familiar at all, have you heard the terminology of the baby steps? Yes, and I had the emergency fund put away. You know, I had the $1,000 put away.

And I was good. Within the last year and a half, you know, I just, I got divorced two years ago, and I was taking on a lot of the debt myself where I bought a new house, a new house, and you know, a new place to live. I handled the fee, like the lawyer fees and everything, paying for child care and now managing the mortgage and everything by myself. So you're feeling behind, you're feeling behind and you're feeling like I need to get caught up. You're not behind.

Yes. You're fine. You're doing fine. You need that $1,000 at your disposal. Temporarily. It's just, it's a short-term sacrifice. While you clean up the $18,000 debt and why you clean up the new $10,000 car debt, because we're getting rid of the $30,000. It's like it's a total of $18,000 in debt because the bathroom remodel.

I owe about $10,000 on that. Okay. So you need to get rid of the car and pay off $18,000 and then you're debt free, right? Yeah. And get a $10,000 car and then you've got to pay that off. So it's going to take you a little while to do this, but it's not going to take you 10 years. It's going to take you one or two years. Yeah.

And you're going to be totally focused on cleaning up all the debt. Because if you didn't have any payments right now but your house payment, you'd be okay. Yeah. And you could put 15 percent. You know, the interest rate on the credit card, it's killing me. No, the interest rate on the credit card is not killing you. What's killing you is you're out of control and you're not pounding this debt. You need to be pounding this debt.

List your debts smallest to largest. Stop all investing temporarily. Stop all lifestyle temporarily. Get rid of the $30,000 car and knock these debts out. And that's when this is going to work. Let's talk about why it's in that order. Baby Step 2, being paying off all of it. of your debt besides your house and then going to baby step three, three to six months of

expenses, and then getting to the 15% of retirement. Because I think that's the hardest part for people is just temporary pause, temporarily pause investing. If it was a permanent pause, it would be the wrong answer. Right. But it's not a permanent pause. It's temporary. But a lot of people would say, oh, well, it's just a little bit I can get the match,

but there really is a lot of thought behind that. And for me, the biggest thing is you want to make sure that you're setting your habits up the right way. Because if you're investing in a situation like this lady here, she's putting money aside. Let's say she does finish, you know, get a little bit closer to paying off debt, but something pops up and she's like, oh, I need the money for this. She's going to look over at that retirement and go, where there's some money over there. I don't have three to six months of expenses. Maybe that's some money that I can pull from. So it's not setting the foundation properly. Whereas if you say, okay, if I have all this money,

I can get out of debt even faster, which means I can set up my three to six months even faster. It just puts you on a light warp speed that allows you to accomplish those goals so that when you finally start investing, you never have to touch it. You can set it and forget it. You never think about it because the money that you need is there in your emergency fund. It's there in your budget because you've paid off all your debt. Yeah. If you don't have an emergency fund, you'll use your 401k or a credit card for an emergency.

Because you're going to have emergencies. A hundred percent chance. Dave, you need to be positive. I'm positive. You're going to have emergencies. It's going to happen. A hundred percent of the time. The only question is how you're going to cover them?

Are you going to have a plan and have a rainy day fund when it rains? It's going to rain. Have an umbrella. It's going to rain. Have an umbrella. Quit walking around. This is not about skittles and unicorns. Yeah.

This is, it's going to rain. You need an emergency fund. Because if not, you're going to put it on a stupid credit card and then you're going to go, Why am I so broke? Right. Or you're going to clean out your 401K for your emergency and guess what they do? They charge you a 10% penalty plus your tax rate. So you just borrowed the money at about 35% interest in taxes and penalties is what it works out.

Well, that was dumb. Oh, you need an emergency fund. Listen up, folks. If you've got a complicated tax situation and you're putting off filing your return, it's time to talk with a Ramsey trusted tax pro. Not next week, not April 15th, right freaking now. Ramsey trusted tax pros know the tax code front to back so they can do the heavy lifting to help you file on time

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Did I mention it's free? Go to Ramsey Solutions.com slash checkup to take the coverage checkup and find out if you have the protections that you need. Donna is in Columbus, Ohio. Hi, Donna. How are you? Hello, I'm good. Good. What's up?

The question about indexed universal life policies. My husband and I are going to stop, I know, contributing, now that we know better. But we have a little bit of a balance. Each of us have about 28,000 that we're going to be withdrawing. I would like to put it on the house or maybe into a Roth IRA and wondering what you would suggest. Cool. Where are you out on debt? Do you have any debt left at all?

Mortgage. So you're doing baby steps four, five, and six, right? Yes. So you're putting 15% away in retirement already? Yes. Good. I'd put it on the house. house then. Yeah, that's a big chunk. What is that 56,000 you'll take away from this?

Yes. I love that. Oh, you both have 28. Oh, wow. What do you owe on the house? 250. 250. Oh, wow. Very good. Okay. So down to 200 and your household income's what? About 320. Oh, cool. You're going to knock his house out in no time. Very good. That's the point. We want to get it out in about a year and a half. Yeah, you're on the way. I definitely throw it at the house. Now I'm getting real excited. That's fun. I know, me too.

That's fun. How old are you guys? 54, 57. Yeah. Your millionaires are getting ready to be. Well done. Very good job. Jesse's in Ann Arbor, Michigan.

Hi, Jesse. What's up? Hey, how are you? Praise God. Yes, sir. How can we help? Well, I got a question for you. So I'm 58.

My wife's 56. Retirements coming. I'm probably around my age, 62. She won't quite be there yet. But the question is, is when we go both to retire from the companies and I want to transfer the 401K that I have and then what she has into an IRA, roll it over, I don't understand why can't we combine? IRAs and 401K's retirement plans do not have marital component to them. They're all for individuals only. I don't know why you would need to combine them because if you're both

access to the money, because, you know, you're working together. Well, I'm just. Yeah, but you can't put both names off. When we retire to combine them into an IRA to get more of a compounding effect. Yeah. No, it doesn't. It's not going to change it. It doesn't change the compounding at all.

Two accounts of $100,000 each compound at exactly the same rate as one account of $200. I gotcha. You get no compounding advantage by combining them, zero. I gotcha. Yeah. So no loss there, no problem. It's just a legality, a technicality. And so your 401k rolls over into an IRA in your name,

and you name your wife as a beneficiary. Hers rolls over into her name, she names you as a beneficiary. And as you pull money out of either one or both, you're sharing the money because you're married and we're talking about this. We have a combined approach to life and that's how people prosper the most. Correct. Yeah, yeah, you're, you know, so you're right on track with all that. But, you know, but my wife has been a full-time mom since she was 40.

So the retirement accounts are 90 some odd percent in my name. I mean, we've done Roth, spouse, Roth IRAs for her every year, but they've not added up to nowhere. near what I can put in my 401k here at Ramsey, right? And so I've got the vast majority would be in my name. But, you know, she's got legal access to that in the event of a divorce. She's got, you know, beneficiary access in the event of death. She's got practical access in the event of life because I'm obviously going to share whether she's my wife.

If we need any of that money, we'll probably never touch it. But that's neither here nor there. So that's how, yeah, how you get at it. But that's a good question. And, you know, that's a common misconception mathematically. So, and the way you can run it off in your head is, let's say that you had $100,000 at 10%, that means you'd have a $10,000 growth. And you got another account that has $100,000 at 10%.

That's another $10,000 in growth. Or you had a $200,000 account at 10%. That's $20,000 in growth. And the other two are 10 each. So it's exactly the same. And the next year, when it compounds, it's exactly the same. It's just in one pile versus two piles. Our brain likes to see a big pile.

The total is still the same. The aggregate is still the same. And oftentimes people run into that. So John's in San Francisco. Hey, John, what's up? Not much. How are you? Better than I deserve.

How can I help? So I have a pretty weird kind of situation. I'm 28, my partner and I are looking about possibly buying a home We don't know we're currently renting I have about a million dollars In assets tied to some watches That I've been collecting and buying and selling since I was 18

And I don't know if I should possibly sell some of them Or all of them try to put a down payment on a house Or to buy a house Wow Wow Are any of them airlooms or like Legacy pieces? I know. I have been really fortunate. I've built great relationships with a bunch of watch dealers and boutique. So I bought all of them at retail, with the exception of like one or two.

Okay. And I'm curious, have you tracked how they've appreciated? Yes. Oh, my gosh. Have I? Some of them, I've been really fortunate. I have a couple of protects. I have an Aquanaut and Analyst. Those have both doubled in value. I bought them for a bit under-hundred. hundred thousand. I'm really fortunate. Combined, they make about 400,000 a year. So how long ago did you buy them at 100,000 and then they doubled? That was 2018, I believe, 2017. So this is before the kind of watch boom sort of happened. I didn't know a watch thing happened.

I was going to say, I didn't know. There was a watch boom. Yeah. A lot of people started buying and signing on COVID. I've been really fortunate to go on a bit earlier. And a lot of my watches have appreciated in value. Well, in general, collectibles, which watches would be, guns would be, art would be, wine would be, in general, collectibles do not outperform the market in appreciation. The exception to that is if you add in some expertise, so an art dealer will make more on art than he would make in a mutual fund.

you will make more on watches because you're completely freaking nerded out about them. It's bad. Yeah, it's like OCD. Yeah, it's awesome. I love it. And it's fun. It's amazing that you did, that you have this. But overall, you know, you just ask yourself where 10 years from now, what would I rather own?

And not just mathematically, emotionally, relationally. and so what do I want to own with my wife 10 years from now? I personally want to own a house more than I do a collectible. Now, I've got a bunch of cars. I've got a bunch of guns. And I would, if I didn't have a home, I would, in a heartbeat, get rid of those and move into, move that money into houses. It's a hobby for me. It's not anywhere near like you've got. That's crazy, John. That's me. I've never had a call from somebody had a million dollars in watches. I mean, I'd play urgency into it as well if you're, if it's a hobby. It's not an urgent thing to buy a house. If you hold on to them a little while longer, you have a really nice income, you could start to cash flow more of that house and have to sell less of the watches. So I think that there's probably a play where you could keep some of these, the ones that mean the most to you and still cash flow of the house if the home is not urgent. Yeah.

I have noticed that sometimes when people are doing something like this, and I've noticed a couple times with me, that, you know, I'm real enthused about it for a while. And then it's like, Fizzles out. Yeah. Yeah. Just dump them. I'm done. Fizzles out. On to the next thing. Hey, guys, Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now, you can get that same kind of help any time with Ask Ramsey. Ask your money question and get answers built on Ramsey. we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to Ramsey Solutions.com

and try Ask Ramsey today. That's Ramsey Solutions.com. So here's an interesting thing. You guys have heard me quote this 100 times, some of you, but I'm going to do it again anyway. We did several years ago the largest study on millionaires ever done in North America. to airtight research to where if you disagree with the conclusions of this study, you're what's known as wrong. The data is that tight. And it's the largest study by far that anybody's ever done on millionaires. And so there's somewhere around 24 million millionaires at any given moment in America. And a millionaire is someone whose net worth is greater than a million dollars.

Now, that's the definition of a millionaire. It's an accounting thing. And your net worth is determined by your assets minus your liabilities. What you own minus what you owe. So if you have no debt, it's simply what you own. And so when you have a million dollars worth of things, money, 401K's, house, that kind of stuff. Then you are a millionaire. Well, no one should have a million.

Well, that's, it's not a moral construct. It's an accounting function. It's not enough. That's not what we're debating. What we're saying is there's a simple thing. You either is or you isn't. It's an accounting thing. And it's not a million dollars of income and it's not a million dollars of cash.

And it's not a million dollars of liquid assets. And it's simply assets minus liabilities. That's how you define it. Period. And if you don't define it that way, you're wrong. This is the definition. A billionaire is the same thing. When assets minus liabilities equals a billion,

which, by the way, is a thousand. million. It's a lot. So if you have $100,000, you're a lot closer to be a millionaire than a millionaire is to being a billionaire, like a bazillion times closer, say a thousand versus a tenth, right? One thousand versus a tenth. That's a big difference. So all of that to say, we've studied these things. One of the things we figured out was we wanted to track and say, okay, what careers caused people to be millionaires most often? The number one career field that became a millionaire, the most that appeared most often in the 10,000 that we studied, was engineer.

Number two was accountant. Number three was teacher. Hmm, didn't see that one coming. Number four, business person, business executive, someone in business of some kind. and number five was attorney. Medical doctor didn't even make the top five. They're number six. Wow.

So you always think of the doctor and the lawyer being the millionaire, right? But they are, but medical doctors are notoriously bad with money. They're stereotypically bad with money. They're like artists or something. You know, it's like, you know, a music star is notoriously bad with money. Football player, notoriously bad with money. Same thing. But they're still number six.

But what we couldn't figure out is how teacher lands in the middle of those things because all of those are highly paid professions except teacher. Right. So how does teacher land in there? And what we figured out was after studying it a little bit more was that all of those lawyer, accountant, engineer, teacher, business professional, they all have a process that they have to submit to and have to follow the process to do their career. So when you're an engineer, if you don't follow the process, the bridge falls down.

When you're an accountant, there's generally accepted accounting principles. There's not three ways to do accounting. There's one. It's not art. You don't get to make it up. When you're an attorney and you're in court, there's a process to do litigation and you have to follow the process. Or you'll be held in contempt. And so on.

Teachers have to follow a process. They use a detailed lesson plan. So these are all process people. So they simply took that process mindset and applied. it to building wealth. And that's how teacher ends up in there. Fun fact is, Scott's on the phone in Spokane, Washington. Scott is a Baby Steps Millionaire, and he's a teacher that teaches the Ramsey Foundation's high school curriculum. Is that right, Scott? That is 100% correct, did. I wish I had a high school teacher that was a millionaire because he followed the principles that he was

teaching me in his class. I would have sat there with rapt attention. It is fascinating to watch my students when I walk into class because I teach the why. And when I walk in, right, and you watch those light bulb moments with those kids because I tell them on day one, I don't want you to have to live the life that I had to live because I learned the lessons the same way you learned them, Dave, that I was in debt and I don't want you to be in debt. I want you to live your life the way I'm living right now in your 30s, not in your 50s. Yeah. So how old are you?

I'm 56. And what is your net worth? My net worth right now is $1.83 million. Good for you. And give me a little breakdown on that. How much of that's house and retirement and so on? So about $700,000 is in my house. And we just recently paid that off within the last year.

Good for you. And then thank you. And then the majority of it, I would say another probably $700,000 is in my retirement and my 401k. Then I have a pension attached with that as a teacher. And then we have other investments, IRAs, investment accounts, things like that. And then small portions in savings and checking accounts as well. Wow, way to go, Scott. So how much of this did you inherit?

None. Zero. Okay. We have a very small amount that we inherited that helped us pay off that last little bit of my student loans, but a very insignificant amount. Yeah. It did not mathematically cause you to be a millionaire. Oh, no. No.

So you didn't inherit your money. You got the old-fashioned way you earned it. Yeah. Yes. As you say, you know, when you're broke, you go to work. I hear you. That's it. So you've been a teacher for how long?

Over 20 years. So it's funny that you had mentioned engineer as well. I was a computer engineer and an actual engineer in the military. So, yeah, I built those processes and applied them, obviously. But the main thing is, right, when you are teaching the foundations, the kids, they just kind of glom on. It's interesting to watch those light bulb moments with the kids, because they really do start to process that information. And you just kind of watch them, you know, day one, they're like, yeah, whatever.

But you tell them in the curriculum, you tell them on the show, what we're teaching you is what grandma taught you. This is common sense information. They look at you like, whatever. But as they go through, they learn, and they start to process and begin to just kind of grind at it. And they're like, yeah, you're right, you're right, you're right. And they kind of just figure it out. And it becomes very hard. It's almost second nature.

And they figure out really quickly that we need to avoid debt. This is not something. Do they ever say, well, Mr. Scott avoided debt, and he's a teacher, and he's got 1.83 million. I mean, do they ever look at you and go, my gosh, I got a walking social proof right in front of me? Well, it's interesting because I am very, very, very, very, honest and open with the kids. And when I tell them my stories, because I, I open up. And when I tell them I had to work three jobs and my kids are like, Dad, why you never home? And they, I mean, some of the kids break down. Yeah, they probably relate to it. Yeah, and they relate to it. And they,

I have kids crying. I have kids. I had one student come into a class the first day of school and go, it's easy for Dave to say, you know, you don't need a credit card. He has millions of dollars. Four weeks into class, she was like, I have a friend that wants to get a credit card. How do I talk them out of it? Wow. Love it. Love it. Very cool.

Well, how long have you been teaching the curriculum? 14 years. I taught it before it was digital. Wow. I taught it out of a book. Wow. I remember that. Oh, my gosh.

That's amazing. Very cool. Well, thank you for teaching it. And congratulations on being a Baby Steps Millionaire and another hero in the American story right here, absolutely incredible. If you didn't know, we have a high school curriculum called Foundations and Personal Finance that's been taught now in 48% of America's high schools, six million kids have graduated from it. So if you can help us get it into your local school, that'd be awesome. And sometimes you need to knock a noggin on the school board. But,

you know, hey, whatever it takes, baby, that's what we're going to do. When I talk to people on the Ramsey show, 90% of the problems I hear come down to one thing, not having a plan. They're not living on a budget. They have no idea where their money's going. Money is just happening to them instead of them happening to their money. And guys, that is so normal, but it doesn't have to be normal for you. And that's why I want you to go download our every dollar budget app. Every dollar not only helps you tell your money where to go with a budget, it also builds a plan to free up extra money so you can pay debt off faster and start building wealth. And the best part, your plan is completely personalized to your life. It's the same advice that you would get if you

call the show. And it's right in your pocket. So don't keep living normal. Go download the Every Dollar app, answer a few questions, and get your plan today. Our scripture today, John 114, and the word became flesh and dwelt among us. And we've seen his glory, glory as of the only son from the father, full of grace and truth. Bill Murray said, people are like music. Some speak the truth and others are just noise. Mia is in Seattle. Hi, Mia. How are you? I'm great. How are you guys? And thanks for taking my call. Sure. What's up?

My question, basically, in a nutshell, is two weeks ago for my 60-second birthday, I paid my mortgage off 16 years early. Good for you. Well, all my friends, I mean, all my friends are telling me I made the big mistake of my life. And now I'm really terrified that they're correct given the current market situations and things. So my question was to try to get some guidance from you based on my current situation. You need new French. Well, let me give you just a quick content. I'm 62. I'm single. I'm in the midst of an eight-year canceled battle. And my doctor said, I won't be able to

return to work for the foreseeable future. So based on that, you know, my friends are telling me I took my liquid assets that I had to pay it off 16 years early. And that was a big mistake because my interest rate was 3.5% and I could have been making all the things you hear. But now I'm afraid maybe they were right. Do you still have a nest egg? So what I basically, I have is I'm currently my income. I have a disability benefit from my former employer that separated me last. June for disability of $7,070 a month. And that will end by three years the way the policy

set up when I turned 65, but it could end before previous. I get a $3,000 monthly SSDI payment after the taxes and the Medicare deducted. And then I've got my assets, I have an $80,000 emergency fund in cash, and I have $23,000 in cash for insurance premiums that are going to be changed in November. And then my investments, I've got $1,430,000 in the traditional IRA. You're okay. Your friends are morons. And I'll go a bit further. They're talking about a stratosphere that they've not yet entered.

So how can they know? You're the only – stop for a minute. You're the only one who's actually done it. So don't you think you have a better frame of reference than they do? They've only had debt. Right. So I'm death-free. I've got 2-18-in-a-Rawroth.

You're a debt-free multi-millionaire. You're okay. Calm down. Okay. I'm just, you know, with the current situation. Current situation is what? If you're not in Iran and being bombed, I think you're okay. You are in Seattle, but.

Because I can't, I can't go back. to work like I'm going to be in time. You have a $10,000 a month income and a million dollars. That's your current situation. Okay. You're okay. Okay. Well, I was worried that I'm really not okay.

What do you think is going to happen? How would you not be okay? What current situation are you referring to? Well, so, for example, my medical is going to change in November because my secondary is my premiums are going to go up really high. Do you have a million? But the million dollars really doesn't, they tell me, go very far. Yes, it does.

It goes a long way. Because it's making $100,000. Is it invested in good mutual funds? Well, yeah. So the traditional IRA is that, and then I've got $2,000, $2,000 in a rock. I've got $170,000. Is all of that invested in good mutual funds? Yes, yes.

Okay, so it's all going to make around $100,000 a year that you're not even touching. Right. So I basically structured, you know, how you, the four buckets that you advise. They're in the traditional and the Roth because I have to protect against Irma. So any capital gains I make stays in the retirement. And then I've got 440,000 in municipal bonds and 342 in some core equities that's managed. So, but I'm trying not to touch. any of that. You're not touching any of you. Do you have a $10,000 a month income without touching it? And you're going to have that for sure for the foreseeable next three years. Well, the long-term disability benefit, the way my employer wrote the policy, it could go away before three years, but the max I have left on it is three years. And depending on whether you remain disabled or not. Right. Even if it went away, you'd still be okay. Okay. You did not make a mistake.

The only mistake you made was in choosing your friends. Okay. Or in listening to them. I have some friends that I actually like that are also not smart, but that's okay. Okay. But they're all over me. I just looked up how long it would take to wire the money and have it clear so that I got my letter saying the write-off was closed on my birthday. Because for my present for myself, I wanted to do that free scream.

Good. So I told my friends, and then I just, I was in tears. because they were like, that's ridiculous. And I just think that's jealousy. I do. Well, or idiocy or both. Yeah, who in their right mind when somebody has done something incredible like that would not celebrate them? Even if it's not your personal choice, that you wouldn't celebrate what somebody else views as a personal accomplishment.

And it's zero detriment to them. Okay. But I still have like a 600 a month HOA. So I have, you know, a lot of expenses. Hey, Mia. Mia, your worries and your worries and your mind. math don't add up. Okay. Okay.

Your worries are a 10 and your math is a 1. Or let's be as logical as humanly possible right now. Who do you think knows more about this situation? Dave Ramsey or your three little buddies at home? No, I get it. Okay. There you got that said. Honey, you need to breathe.

You need to breathe. You're okay. You are in great shape. You have done a wonderful job. I don't know what the house is worth. If it's worth a million, you're in Seattle, it probably is, and you've got a million dollars. You're a multi-millionaire. It's 62. I want you to concentrate on fighting cancer, not arguing about whether you should have paid off your house or not. I want you to go beat it. Go beat the big sea and live your life, kiddo. Wow. Matthew's in Phoenix. Hey, Matthew, how are you? Good. How are you doing today? Better than I deserve. What's up?

So my question for you is I'm recently going out on my own business-wise I'm in home-y models I've been doing it for a long time I'm just trying to do it on my own now my question is I've been cash flowing everything on this is bought paid for vehicle, a truck, everything's bought paid for

absolutely no debt no credit card my question is would it be a bad decision to take out a small business loan, maybe $2,500 to $5,000, just to help backfund this. You know, I'm doing it. Backfunded. What does back fund mean?

I don't try to think of the right word. Just, you know, when tools come up that need buy, stuff like that. You've cash flowed everything. Just continue to cash flow. Don't stop now. Don't stop now. Don't fall into the debt trap because when you fall into the debt trap, you have to take jobs from customers that are unreasonable to pay the debt payments.

And then you get an unreasonable, no-fund business to operate because you have to put up with the butts. You don't want to have to deal with the butts. You want to deal with the good people. And you can send the butts to your competitor if you don't have debt payments. Say, I think you need to, I've got, here's my competitor's business card. You need to go talk to him. That's so good. And let them worry someone else's ears off.

Instead, you go work with the good people, make some good money and do a good job and help those people and make you some money and you're in a great line of work. Please continue to organically fund it with cash flow. No debt. Please, Matthew, please do that. Just swing that hammer, turn that wrench, baby. You got a great thing going. You're sitting on a gold mine if you don't screw it up by going into debt. Absolutely. I know lots of remodel guys and repair guys that are running businesses that are half million dollars a year right now. And that's the profit. Hello. You can really do good at this. That puts this hour of the Ramsey show in the books. We'll be back with you before you know it. In the meantime, remember there's ultimately only one way to financial peace.

And that's to walk daily with the Prince of Peace, Christ Jesus.