The Ramsey Show - Stop Avoiding The Hard Truth About Your Finances

Episode Date: April 1, 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 Fair Winds Credit Union Studios, this is The Ramsey Show. I'm Dave Ramsey, Jade Washaw, Ramsey Personality. Number one, best-selling author is my co-host today. Open phones at AAA 8255-225. Stefan is with us in Denver. Hey, Stefan, what's up? Hi, Dave, how are you?

Better than I deserve, man. How can I help? So I'm in kind of a tight pickle here. About a few months ago, I was looking to move, and I needed to move quick because the living situation I was in was not good for my kids. the neighborhood drastically turned and became extremely dangerous. And so I took out a bridge loan to kind of try to get me into a new home. And I was hoping that I was going to come in at a competitive price. My price was already like $30,000 less than what my home was worth.

And it's almost six months now. And my old home still hasn't sold. and I owe 169-5 by the end of the month. And their two options for me are not the greatest, so I don't know which one to do. They will either purchase a home, but I still have to bring $7,000 to the closing plus $2,000 carrying cost every month. It's not sold. Or I refinance, again, with them at $143,000 and pay. $33,000 at closing and then sell it for,

which keep it on the market for whoever knows how long. I've tried reaching out to investors. Who did you put this loan with? With up equity. Oh, okay. So this is not a standard bridge loan? This is I'm going to screw you, Rachel. Uh-huh.

In a very short period of time. Mm-hmm. Yeah. And I didn't realize that. And like I said, my situation, I mean, there was ramp, their crime was raising, and I needed to get my boys out of there as quickly as possible. You can't use that excuse anymore because now you've stepped neck deep into stupid. What you should have done is gone and rented a property if you need to get your boys safe instead of going into this, instead of stepping up with some loan shark. Yeah.

So, instead, you went and bought a house that was not required for you to get out of the neighborhood. You could have got out of the neighborhood and gone and rented something. So anyway, we're here now. What do we do now? And you're not bankable? What's the house on the market for? Right now I just dropped the price again. It's at $170.

And is it free and clear? No, I had... I mean, it was before the bridge loan. Like, what do you mean, like free and clear? Did you have a mortgage on it prior to taking the bridge loan? Yes, I did. Of how much? 128.

The bridge loan pay off the 128? Yes, it did. Oh, okay. Okay. So your only debt against this is the $169,000 bridge loan. You drop the price to $170,000 to try to get rid of it. Correct. Okay.

All right. Ouch. And the investors, like so far the offers that I've gotten are 115, 120, and so I'm looking at $50,000 to $60,000 of basically deficient pay. Do you have any money? I have about $26,000 savings and checking. What about cars? I own my car outright, but yeah, I have a car.

What's it worth? I don't know what it'd be worth now, maybe $17,15. What do you make? I make just about 92 a year. Okay. Have you talked to your credit union about a, you know, like a $100,000, $150,000 loan, and you put $26 with it and get rid of the loan sharks and just put a credit union loan on it and take the panic out of this discussion? No, I haven't really considered that yet. That would have been where you should have gone first.

before you did the Loan Shark deal. But, wow. Yeah, I mean, refinancing it and getting these people out of the picture on a five-year balloon note or something makes a lot more sense. And then you've got some room to take the beating that apparently you're going to take on price and some room to cover the difference. But right now, I mean, if you write a check for $7,000, you're still on the hook for $2,000 a month for an $1,000. for another $24,000 a year. Is that what you told me? Basically, yeah.

With the loan shark guy. So you ride a check for $7,000, you're not out. No, I'm not. Okay. So that's not really an option. That's like going from bad to worse. So I would rather you write a check for $26,000 and take out $140,000 loan with a credit union on $170,000 house.

or something along those lines. Or for that matter, I would rather you, let's establish you are in debt, 170,000 with a ripoff. Okay? That's where we are today, right? So now if we restructure that debt, I don't care how we restructure it as long as we get rid of these guys. So if you borrowed $100,000 from the credit union, put $26,000 in it and put $30,000 on a credit card, fine. That's a better deal than you got now.

And just because credit card. card, you're just got a series of payments. They're not going to come take the house. They're not, you know, but these guys that you signed up with, who, guido, man. Wow. Yeah. I really, I really wish I hadn't done that. And I thought it was doing what was best for my cell and for the kids.

You were leaving was best for your kids. I'm not making that argument. But how you left, oh, man. Oh, my gosh. Yeah. I wouldn't just put the house on the market left and gone and rented it. Rented something. That's behind us now. For those of you out there that are listening. So yeah, that's restructure this somehow and get these gobs out of your life.

Get guido out of your life. The lesson for the listener is when you're fearful and you do things out of fear, you have to really think every way about the decision you're making and when you do things in urgency. So those are the two things that need to make you stop and go, wait a minute, let me make sure I'm making the right choice. And I'm not, does that make sense? Yeah, I can look back on the worst deals I've done in my life, and they usually followed me being desperate. Yeah, there you go. Desperate for me always equals stupid. As soon as I get desperate, right after that, my brain quits working, and I do something stupid. Right, because that's exactly what he did. The logic behind wanting to move is exactly right, but that's just a good word to the YAs. Yeah, and, you know, and when you do something stupid and it costs you money, when I do that, I have to write a check for my stupidness.

I write in the four column on the check, stupid tax. Yes. You have to pay a tax when you're stupid. And I have paid so much stupid text in my life, which qualifies me to host this show. Exactly. Because I have a PhD in D-U-M-B. So I know from whence you come. And so if I say you've done something stupid, it's because I love you and you're just like me.

Your people are my people. You're my people. Hey guys, George Campbell. 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, always asking for money, hard to get rid of, and they never do the dishes. And that's what the so-called big wireless carriers are like. They're counting on you overpaying forever. But Boost Mobile flipped the script. You can unlock up to $600 in savings per year over the big guys when you switch to Boost Mobile on their unlimited

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Are you sick and tired of working so hard but having nothing to show for it? Well, that's most people. Normal. You don't want to be normal. Normal sucks. Normal's broke, right? You don't have to live that way. Our every dollar budget app helps you find extra money every month

and builds you a personalized plan to get out of debt, become wealthy. In just 15 minutes, you're going to find thousands of dollars in hidden margin. And you're going to feel like you've got to rest. raise. You do not have to live this way. Oh, by the way, the whole Ramsey plan is built into it and we walk you through it. It's like having one of us in your back pocket. Don't live normal when you can live like no one else. Start every dollar for free in the app store or at Google Play. Check it out. Andrew's in Atlanta. Andrew, what's up? Hey, how's it going, Dave? It's really nice to talk to you.

You too. How can we help? Well, me and my wife are trying to decide if we should sell our rental property to pay off our debt. So if 2024, my income was around 105,000, and hers has stayed consistent, but my income dropped down to about $85,000 last year. And we had this house built when I was making a little bit more money, and we have our rental property. And we're just looking to see if it's a good decision to sell it and pay the debt, or if we should just go with the snowball effect, like the snowball program.

How much debt? Yeah, how much debt? We got about $90,000. It's actually about $87,000, if you include everything. And how much of that is cars? About $65,000 of it. Oh, wow. $65?

Yeah. So I have a truck in her car. Yeah, and what does she make? She makes $48,000 a year. Okay. And so you have $135,000 income, right? Yeah. Did I get that right?

Yeah, I did. Yes. Maybe a little bit more. Maybe 140. Okay. How much of the 65 is the truck? 40 of it is the truck. Okay.

What's the rental property worth? It appraised last year at $265,000, and we owe about $160 on it. Okay. She got $100 in equity, roughly, not counting fees and miscellaneous. And what's your home worth? The one we live in right now appraised at 410. And what do you owe on it? 328.

Okay. All right, cool. Okay. Do you, if you did not have $100,000 in debt, would you be looking to sell the rental property anyway? No, no. I look at real estate as kind of a long-term investment, something that... I mean, how long have you had the rental property? property?

So we've had it for six years. How are you doing as landlord? Are you good at it? I think pretty well. Yeah, I mean, we've had only had two tenants. This last tenant's been there for three years. It's actually been relatively pleasant. We kind of live out a little bit away from the city, so it's been relatively nice.

When your income went down, did it affect the amount of your mortgage on your take-home pay? Is that where this is stemming? from? Well, I think so it just, I think cash flow just kind of died when my income went down. Right. It exposed the stupidity of these car purchases. So no, I wouldn't sell the rental property. I'd sell both cars. Yeah, because what's the payment on those combined? I'd get two five or ten thousand dollars that are cash, and then I'd plow my way through with a hundred and forty thousand dollar income, plow my way through the little bit of debt that's left and keep the rental property. Because it's going up in value, and that stupid butt truck, Edding.

No, no. I do use the truck in my line of work. Way. Right, but the cars are three quarters of the debt. How great would that feel for those to be gone? It would feel good. What would I do in a situation that they're upside down? I mean, what's the best route?

How much upside down are they? Well, the truck's not upside down. That's the first one to go there. Yeah. Yeah. Yeah, the car is probably $10,000. You're not going to do it. I don't think you're uncomfortable enough.

I think that you had some discomfort. So here's the thing. You had a pile, you had $100,000 pile in the middle of the table, and instead of buying a rental property, you went and bought cars. If you keep the cars, that's what happened. If you don't keep the cars, you say, I bought a rental property with my $100 grand. But you're deciding right now between the two, based on this. and, you know, you've already dipped your toe in there twice since we've been talking to you about keeping this truck. Trying to figure out a reason to keep the truck.

Trying to figure out of a way. If I'm you, listen, I got a great truck. I got a Raptor R. It's one of my favorite cars. I'm a truck guy, loud breadneck muffler. I love it, man. It's incredible. And I'm with you on owning a truck.

I'm not with you on trading a truck for a rental property. No, no, no, no, no, no, no, no. Rental properties go up in value. You're in the Atlanta market, for God's sakes. You also got to play best and worst case scenario. Have you ever had to make a decision and you're scared of it? Worst case scenario, he sells this truck. He hates having the $8 or $900 a month back in his pocket.

And he says, you know what, I didn't like that. I'm going to go get the truck. I'm going to go back and sell the rental property and then go buy a truck. Yeah, that's the, I mean, truly you have that choice. Yeah, you could actually upgrade in truck if you did that. If you decide owning this truck is a better idea than owning the rental property. which I'm not in agreement with. We were telling you up front.

But she's right. Sell it and test our theory. And if you hate having that cash back in your life, then get it back. Go back in debt. They'll sell the rental property and go buy a car for cash. And then you can undo this at any time. That's true. It's very good.

Yeah. I would get rid of the cars, both of them, and see how my life feels. And after 90 days, if you think, oh, Ramsey's full of it. It's like, I think I joined a cult. You know, then sell your rental property and take the money from that and go buy some cars. Because it's the same thing, dude. It's the same thing. But at least you could test the theory.

That's a good point. It's a good point. It's a test the theory. Try this stuff for 90 days. And if at the end of 90 days, you hate it, you'll never go back. You've been on the air for 30 years? Never had anybody go back. No one's ever called back and said, Dave.

I hate, I hate you. Because you made me debt free. Because you told me to sell my car. and I don't have an $800 car payment, so I hate you. That is that call I've not gotten. Now, I've got a lot of people that hate me for a lot of real. That's saying something. But I mean, there's a long list of reasons to be pissed at Dave, and they're out there

on the internet. If you know, just type in Dave Ramsey sucks. It goes for days. I'm sorry. But that's not, but that's not one of them. That's, listen, we let calls through. I sold my car and I am dead free and I hate Dave Ramsey is something we have never heard once.

I've never even seen. I might go on the break and look on social media and see if there's, there's any sort of hashtag about that, I guarantee it's not. No, there's not. There's not. And our social media team would have already told me. Yeah. I don't look at it, but I'm afraid they do. And so, testing, testing it is good. Yeah, and here's the same thing with paying off the house. Those of you got, I have $150,000 in my CD, and I owe $100 on my house. Should I pay off my house? How many times we're taking that call? Oh, yeah.

Like five million times. And I'm like, pay off your house. And if you hate it, you can go get a mortgage. And same thing you did. Just test it. And you know what? Never. I'm there going to anybody write me hate mail. David paid off my house. I hate you. I've never had that one time. Now, there's a lot of people have all these theories about this. Dave Ramsey tells people pay off their house and they're not going to be rich because of it. But then there's all these tens of thousands of millionaires that are millionaires because they paid off their house and took the mortgage payment and went and became millionaires. And there's one sitting in front of us right now from Houston. Yes. Yes. Let me tell you. Yeah. Hello. I had a guy. He had a pile of stocks and a bunch of debt. And we would say if you have stocks, sell the stocks, use it to pay off the debt. He didn't want to do that because he'd had the stock for quite a while. He'd had it since he was 18 years old. And I said, listen, I said, try it. I said, take a portion of the stock. Just take a portion of it and pay off a portion of the debt and see how you feel. And he said, I never considered doing that. It was in his mind, it was an all or nothing deal. And because it was all or nothing in his brain, he

he chose the nothing. And so if you're on the fence, just try it. And do you want to know what? He got a hold of me later and let me know it felt so good. I sold the stock and I ended up paying off the rest of the debt. Just let me know. Lots of pastors that have said, try tithing for six months. If after six months you think that tithing to your local church is wrong, I'll give you a money back guarantee on it. None of them have ever had anybody asked for their money back. Wow. If you're looking for a more budget-friendly way to save on medical costs and stay true to your values, Christian health care ministries is a great option to think about.

CHM is not health insurance. It's a health-cost-sharing ministry, a biblical, community-based way for Christians to share each other's medical bills. That means no enrollment deadlines, and you can choose any doctor or hospital you want. That kind of freedom is big, especially if you're self-employed, between jobs, or you just need to, something that fits your budget better. CHM has been around for decades, faithfully serving the Christian community, and many members save hundreds of dollars a month compared to traditional health insurance. And that margin gives you breathing room when you're working the baby steps and trying to steward your money well. And right now, CHM's offering new members a 50% credit towards their first month

of membership. Get started at CHministries.org slash budget and use promo code Ramsey. That CH ministries.org slash budget and promo code Ramsey. Christian is with us in Fort Worth, Texas. Hi, Christian. How are you? Good. How are y'all? Better than we deserve. What's up? So I am a college student, and I do have a little bit of credit card debt, but I also have a pretty big tuition payment coming up in June because I'm looking at transfer schools, and I don't know the best way to go about this. Saving up for the tuition? Yes.

So my tuition in June will be 15,000. Oh, boy. You have the money? Yeah. Yeah, I have 11,000 saved up because I do work two jobs and I'm a full-time student. And my credit card debt is about $2,400. And so I don't know if it would be better just to throw $2,000 of a credit card debt, then take a little loan out in student loans or save up to $15 the rest of the way and then pay that.

And then pay a little more of the credit card debt when I can after I make the payment. Yeah, I would pay for the tuition in K. and not add and not use debt ever again. Yeah, because I've been paying for cash the last year for school. I paid about $1,800 a month. So why are $15,000 a semester? So it's an online degree. And so I'll start in June and make the payment and I'll be done by next June

because I already have my associate's degree. And then this will be online course to get my bachelor's in biomedical sciences. Okay. So you're making this payment and then when's the next? payment do before you finish in June? Or that's it? When I'm not going to just this one payment that's done. I know if the advisors have told me as well.

It's just the one payment. I don't know if they do payment plans or not. Okay. So you're prepaying for the entire year? Yes, sir. Okay. And you said you have 11,000 saves. So you're just solving for the 4,000, right?

Yes, man. And he can have the 4,000 by June. Yeah. So pay cash for the tuition. No, so here's the thing. The trick to getting out of debt is to vow never to borrow again. You already have debt, so let's just let that sit there, pay minimums on that, and save up and pay cash for this tuition, and then work on the debt beyond that. Now, if you're doing online, are you going to be working full-time at that point?

Yes, sir. So I work full-time as a certified medical assistant and also a bartender on the weekends. Okay, good. So that's where all this money is coming from. So you're going to have the money to live during this year while you finish this up and go ahead and knock out the credit card debt. Yes, sir. Look at you. Look at you. Well done. Yeah. Yeah, I wouldn't fool around. I'd pay cash for the tuition, not have anything lingering from that decision. And then the old decision that's still sitting there, come back and attack at as quickly as you can once you've got $15,000 in the bank. Do you know why, Christian, we're telling you not to go into debt? Further. I did not know. No.

Okay. Let's talk about that. So, because you've considered, obviously, you've considered debt. that you used it for credit cards. You considered it as a solution for your problem right now. The reason Dave and I are telling you, hey, draw a line in the sand, no more debt going forward is because debt eats at your ability to build wealth over time. It steals your hard-earned income and causes you not to be able to do things like invest, not to be able to do things like pay cash for emergencies. And that is a vicious cycle.

That is why we're on the air is because it creates a vicious cycle in people's lives and they can't get ahead. No, exactly. Well done, sir. You are working your way through this. I like you. Well done. It's good to find people that work hard and achieve their goals as a result. Quinn is in Philadelphia. Hi, Quinn. How are you? Hi. I'm so excited to talk to you and Jade. So my question is about my employer who's telling me that I owe them about $17,000 due to an error that they made with overpaying me over the past year and a half that I recently uncovered and brought to them. Oh, boy. You figured it out.

Yes. And they want you to repay them. That's correct. And what? Yeah. What did they say? When do they want the money by? So they want the money by the end of this fiscal year, which is July, but then it's actually

October because that's when we get our bonuses. So the error was, I came back from maternity leave in September, 2024. I wanted to start work at 9 a.m. instead of 8. I'm a physician. And getting there at 8 was just too hard. We have four kids. And so it was really just a couple days a week. I went from a 1.0 employee to 0.95 or like 95% effort, basically.

I didn't notice the change on my paycheck. Back then, I really wasn't paying attention to anything. I was the typical doctor out of school with Doc I just came on a fellowship I thought I could, you know. So what is your total income now, Doc? So my husband and I together make about 420. I'm at like 4. Well, it was 440 prior to, I'm sorry, 240 prior to the change.

Yeah, I didn't notice on my paycheck until recently last July, we came back from our like fourth vacation and I could. couldn't pay off my credit card at the end of the month. And that's when I found you, read the total manning makeover, I'm convinced my husband, although I feel like I'm still convincing him some days. But we're actually two weeks away from paying off all of our debt except our house. Way to go. And going from $2 to $3,000, yeah, about $80,000.

So the $17,000 accrued over the course of how many years? About a year and a half. About a year and September of 2020. So it's about $1,000 a month. But your income is substantial. You didn't even notice it. Yeah. So it's not, it's $1,000 a month.

I mean, I'm probably going to get a bonus about that much. I'm just, like, I'm still upset about it because it is so much money. And, like, right at that time, I'm going to be going from step. We're going to get out of step three in the summer. And that bonus would really help us, like, kickstart steps four, five, and six. Yeah. So I'm having a meeting with them next week, and I'm just hoping you can give me some advice going in the meeting. I'm wondering if I should talk to a lawyer ahead of time or just,

Rachel Astorward or if I have any leg to stand on. I am, like, highly productive. They measure doctors, like, productivity based on how many patients you see. And I've looked back, and there were many months that I was over 100% productive, basically seeing more patients than I had slots for. So here's a thing. You can ask an attorney. I don't think you have a legal case.

So I don't think that's the list. ends through which I would open. If you want to gather the information, it won't hurt anything. But ask so, ask an attorney to learn that because I'm not one. I'm trying, okay, so if I had a highly compensated, and I do, I do have highly compensated folks on our team. And we made a clerical error that amounts to 5% of their income or 10% of their income, okay? Here, we would say, oops, we screwed up.

Right, yeah. And I wouldn't ask for it back, okay? Because I would be embarrassed that we screwed up. You didn't steal the money. You didn't deceive anyone. Quite the opposite. You're the one brought it to their attention. Hello.

And so I would just say, hey, you know, I think it would be, if I'm in the meeting, I might say something like, guys, if you look at my productivity, it's well beyond 100%, which is very unusual on your staff. I brought this error to your attention. You probably would have never found it if it wasn't for me. you made the mistake, you should be embarrassed, and you should consider just waiving this for all of those reasons. And now you probably don't be quite that belliger. I was going to say. But I mean, but that's the message.

You know, okay, let's let's, you know, I'm going to be sitting with my boss and say, okay, boss, I'm one of your top guys. I brought you the error. and I wondered if you would consider being embarrassed about making the error and just wave it. You think? Yeah. Listen, I think they should. But only you know.

But I think it's a morale, an employee, a highly productive, because finding another doctor to replace you when you leave over $17,000. The thing is, though. And they don't know that's not going to happen. It's going to cost them a lot more than that to fix the mess. made here if they hold you to this because you're going to remember this forever. And the first time some other group comes knocking, you're going to be thinking about $17,000 instead of $817,000, which is what the deal. I mean, don't be stepping over dollars picking up nickels.

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And once you understand what you can actually afford, you can move forward with clarity and confidence. So if you're ready to buy a home, choose the right guide and stick to a plan. Go to Churchillmortgage.com and get started. That's Churchillmortgage.com. This is a paid advertisement, NMLSID 1591, and MLSC consumer access.org, equal housing lender. Bridgetson, Savannah, Georgia. Hi, Bridget. How are you? Good. How are you doing? Better than I deserve. How can I help? Yeah, I was calling because my husband and I recently paid off about $24,000 worth of credit card debt.

Good. And, yeah, we're very excited about it. But that frees up about $600 to $700 a month for us. And we still have some medical debt that we were, of course, considering, you know, just quickly paying that off. Good. But my sister actually lives overseas, and we haven't seen her in two years. And I've since then had the whole pregnancy and a baby. So I would really like to be able to go over there and see her and introduce, you know, her needs to her. She can't come over here due to visa reasons.

But I didn't know if that would be a bad idea, and we should just continue with, you know, going with the medical debt route. How much medical debt have you got? $6,000. How quickly could you have the $6,000 paid off? You've already paid off $24,000. Yeah. It's not like you're not going to see your sister for seven years. We're talking a handful of months.

Paying off the crack card, a large majority of it was due to a good tax return. No, no, no, there's no such thing as a good tax return. A tax return is when you overpay your taxes and they give you the money back with no interest. That's not good. How big was the tax return? About $10,000. Good Lord. What's your household income? My house breaks in roughly $4,800, and then I do a few contractor jobs and roughly bring in between $1,200 to $2,000.

How in the world do you end up with a $10,000 tax return on a $50,000 income? I'm not entirely sure. I'm not either. I'm not either. She has a tax business and was able to figure it out for us. But I do know, we had a very high-risk pregnancy, and our son was admitted to the children's hospital for a few days that same year. So I'm not sure if that had anything to do with that.

I don't know. Okay, stop. Number one, you need to get your crap together and you do need to know. Someone else taking care of your taxes is how you end up not paying the proper amount of taxes. And you have no idea what's going on. I don't mind having someone prepare my taxes, someone does my taxes, but I'm going to understand how my tax bill works and why. And you need to understand this, because if you have $10,000 too much coming out of your check every year,

that's $833 a month that should be in your check this next month because you should change your W-4s so that you quit over withholding out your ears. And that will help you clean up to $6,000. $6,000. No, honey, you should not go to Europe until you pay your $6,000. You should roll up your sleeves and finish the job. It's not like we're at not like we're saying, don't see your sister for four years. It's four months. Bridget, this is what I'm concerned about. I'm concerned about when you told us you were very excited that you cleared out the existing credit card debt at $600 a month. But then you very quickly let us know that that was an anomaly. And that let me know that.

that you are not really ready to go on this journey. And I want to talk about this for a second because when you decide you're going to work the baby steps, you have a moment in time where it's like, I have to, I'm setting the bar for what gets passed, right? I'm setting the bar for what my lifestyle must be for this to happen. And there's going to be a lot of things that are going to try to compete with the priority of paying off debt.

But you have to set a clean bar. We don't do anything. We're cutting our lifestyle. We're not taking trips right now. and you're so early in the process and you had an anomaly of a win, but you're already thinking about taking trips. And you've got 6,000 to go. I would really encourage you to lock in because if you take a trip to Europe,

then something else is going to pop up and you're going to go, ah, let's do that. And then something else is going to pop up. And before you know it, you've been kicking the can down the road two years. So that's why this is so important. And if you emotionally rationalize and justify decisions that you know in your brain are wrong, well I haven't seen my, hey, when you start doing that with your voice, that's when you know you're getting ready to do something stupid. Because I do it. I can't, because the drama queen that lives inside of our brains, all of us have one, we'll just, you know, sounds like a beagle chasing a rabbit.

You know, it's like, whi, ho, hey, hey, hey, hey, I've heard that, yes. You know, it's just like, your voice octave goes up and you, and you're like, well, I haven't seen. And all of a sudden you sound whiny. I do it to myself. I hear it at my own voice sometimes. I'm like, you are a whiner. Go back and look at any purchase you had buyer's remorse over and replay went went over in your brain. Exactly. The little whiner came out. Yes. And I like, I deserve it. I work so hard. And I tell myself, you work so many years you paid a price. I deserve it. I deserve it. As soon as you do that. And I'll guarantee you, my, your octave always goes up one. Everybody does it. We all do it. And Bridget, you're doing it. So don't do that.

drop your octave back down and be like a grown-up and go, you know, I still got to clean up this stinking mess I made. And then I'm going to go see my sister. Yeah, flip the script. Let it motivate you to get there faster. Yeah. But you do whatever you want to do, Bridget. But you called and asked us, and we're always going to love you enough to tell you the truth. And we're not telling you anything we haven't told ourselves.

And we're not telling you anything we haven't told 5,000 other people before you called. It's fairly predictable what's going to happen when you call the show. We're going to love you so much that we're going to be very truthful or even brutal with you when you call here. And that's because we want you to win. And in the end of the day, you'll have a better truth for it. The whole Ramsey brand is about trust because you trust us because we love you enough to tell you the truth. That's right.

And, you know, that's what this whole thing is about. And, you know, and then you get to hear the other side of it sometimes. And, you know, a young guy that called last week, I don't know if you were on. I think Rachel was on the air with me. And he said, I called you when I was 22 years old and you said, if you will do these four things exactly and don't argue with me, do them exactly. You'll be a millionaire by the time you're 30. He said, I'm 28, six years later, and I'm a millionaire. And I called to tell you that.

I love that. And it's like, he said, I did exactly what you said to do. I didn't argue with you. And he goes, and I got there two years earlier and you said I would. And I want to ask you about this other thing. And it wasn't a whining thing. He was asking about it. It was a legitimate question.

But that was the preface to his question that he was called. in about though. That's cool. Yeah, that's very cool. If you do this stuff, because we want you to be that story. Absolutely. Absolutely. And that, you know, live like no one else so that later you can go to your point you want. And it's true. He said it and she'll have a better trip for waiting and doing it the right way. But when you start to do the things we teach, the way that we teach them, no holds barred, you do. You go faster than you thought you were going to go because momentum is on your side and it's like the moving sidewalk at the airport. And that's my favorite. a part of it. Yeah, you're walking along and you're walking under your own power and God looks down and says,

oh, you're faithful with the little things. 100%. If you're faithful with the little things, I'm going to give you more to manage. And so you're walking along and then all of a sudden you're moving like you're moving on the sidewalk faster than you're actually walking. So you're walking, but it's also moving under you and you end up arriving at the point faster because when you're faithful with the little things, 100% of the time it gives you more managed. And please don't expect for him to give you more to manage when you're unfaithful with the little things. Disorganized, chaotic, immature, impulsive. When you're all of those things, and now we're not fussing at Bridget, we've moved on from Bridget. Just in case Bridget, you know, we're not preaching at you,

but preaching to all of us. But don't you think, Dave, that's the secret sauce behind this, because I can say when Sam and I were paying off $460,000 of debt, looking at the Ramsey plan and going, you know what, this is biblically based. That means I can ask God, hey, help me do this. Yep. And then I can get a yes. Because it's based on what he wants me to be doing anyway. Yeah. God, you're really. word says the borrower is slave to the lender and then Jesus said it's tough to serve two masters. So help me, Lord. Help me out.

Help me get out of this. And give me some work to do. Here's the thing. I was going to say. Give me a raise at work. It's not going to be a check in the mail. It's going to be work. Yeah, this is not a random.

Yeah, the duck is not going to fly in the window already cooked. But he will take you duck hunting and let you get a duck. Yes. And so then you get to pluck it and you get to cook it and eat it. So expect the blessing to come in the form of more work. More opportunities, more work. Because the diligent prosper. You know what diligence is?

That's excellence in the ordinary. Excellence every day. That's diligence. And those are who prosper. That's who gets a raise. That's who gets the promotion. That's who the competitor comes along and steals. If you work in a toxic environment where they don't reward diligence, someone who will look over there and go, well, you look at that.

And they will hire you away and you'll make more money than you've ever made in your life because you're diligent. Hmm. 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

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Roman is in Atlanta. Hi, Roman. How are you? Hey, I'm doing okay. How are you doing? Better than I deserve. What's up? So I'm here to have $100,000 and I'm likely going to get $60,000 more when a house sells. I paid off my $30,000 of student loans already. Good. I just turned 23.

I graduate in May. Wow. What's your degree in, Roma? I'm doing film and a focus on, like, documentary. Good for you. So, but that's kind of like, kind of led me down this path to where, like, I've been, looking at government a lot, like involved in government documentary a lot. And I'm trying to get myself in a place where I can attend law school in 2027. And I plan to work and save and tell

them. And I'm just like, I have family who's advising me to put like my money in like 50K in a CD and like 10 in a Roth and like 5% liquid investments or 5 in liquid investments. And my bank is trying to get me to invest it with their financial advisors. But I'm just not sure to do with that money knowing that I'm going to have that big expense of law school coming up. How much is law school going to cost? Well, I mean, if I can, I'm aiming for UGA, which would only be, UJ is only $60,000 in total. Okay.

Okay. Okay. I mean, this is only a year away. What if you just let it sit in the high-yield savings account until you need it? And I do have somebody to tell me to do that, too. So I just don't know. I just don't know, like, I can tell you why I would do that. I would do that because knowing that this is really,

short term, I wouldn't want to mess around with any risk of investing it. I'd want to keep it pretty liquid because you're going to need it. I mean, you said this is 2027? I'm guessing. Yeah, if I applied now, it'd be 2027. You've not been accepted yet? No, I still have to take the LSAT. I've been studying for that. Okay. So here's the thing. You have two pretty big hurdles to go to UGA. you're going to have to score well on the L-set because UGA is tough to get into it. And they have to accept you. Right. So there are two big blockers yet before this actually happens.

So we don't know if it's going to happen or not until we cross those two mountains. And you've probably got some backup schools there, yeah, that you've considered in the prices of those? Yeah, there's a lot of, yeah, there's a lot of, like, good schools in Atlanta, too, like John Marl. Marshall and whatnot. But that you can afford to pay cash for with this money. So you have 130,000 cash laying around between all of these events. Did I understand that right? After you paid off your debts?

Well, the 60 is still in a house that hasn't been sold yet. Yeah, but it'll sell. It'll be selling sometime. I mean, it's up for sale, right? Yeah. Okay. Yeah. Good.

Okay. Well, the other people are trying to be, your family's trying to be. your family's trying to be helpful. Your banker's trying to be a banker. So asking a banker what to do with money is like asking a dog if it's hungry. So no, we don't. There are 100% of the time they have an opinion, and it's put it with me. So, no, we don't need a banker's advice on anything.

No, thank you. Mom and dad mean well, and, yeah, a Roth IRA with 7,000 of this is not going to keep you from having the money to do to go to law school. if you're filing a tax return and making at least $7,000, that's not a bad thing to do. It's not going to make or break your life. The best investment, Roman, that you can make is to attend law school and pass and then pass the bar. That's a better return on the $60,000 than if you invest it in mutual funds or real estate. Okay. So the $60,000, you're investing in the best investment.

I know of, which is you. Right. And so I want you to just, like Jade said, just protect this money. And does it kind of feel calm to do nothing? I think doing nothing is a really cool idea. Just park it in a high-yield savings, super boring. I don't have to worry about being sophisticated. I simply got the money sitting there making a few points while I get ready to go to law school.

Tadda. And then just go have a good night's sleep. Yeah, that does sound nice again. Yeah, and then just tell everybody else, thank you for loving me, and I've just decided what I'm going to do is concentrate on law school, and when I get out of law school, I'll be a lawyer, and I'll make money, and I've got plenty of time to build wealth with that. Uh-huh.

Because $60,000 is not going to make you wealthy anyway, Roman. Right. I mean, they didn't leave you $6 million. They left you $60. So it's nice. I'm glad you got some. But everybody's acting like you hit the lottery or something. Like this is going to be your big break.

But it was like a small ticket, you know. So just calm, calm, calm. One of the things having too many choices in front of us, it gets confusing and anxiety goes up. Is that right? Yeah. Yeah. And so when I narrow my choices down and go, decision has been made, I'm going to do. nothing on purpose. That's my decision. I'm going to park it in high yield savings. Super boring. I'm not

going to lose it. It's going to be sitting there when I pass the LSAT, get a good score and get into UGA. And then I'm going to head to Athens in the edge of the mountains of beautiful North Georgia. And I'm going to be a lawyer. Yeah, that's right. Yeah, doing nothing doesn't mean you're not being 100% intentional. You're still being very intentional. You can intentionally do nothing. But the power of making a decision when there's too many decisions in front of you is the stress and anxiety drops immediately. Yeah. Too many choices is very stressful. And so I just go, no, no.

You know, I think that's what happens when people look at their money and they think, should I be paying off my debt? Should I be investing? Should I be saving for kids college? Should I be paying off my credit card? And then when we just say, don't do this. One thing at a time. And then do this. And then do this.

their stress level goes down and they go execute. Yeah, it's a plan. Yeah, it's a plan. Work the plan. Work the proven plan here, Roman, is the best investment Roman can make is in Roman. And that is in training your brain so that it is more eligible for more income. Yes. And that is not dropping 100 grand in an independent film that you decide to go make.

That's not what I said. Okay. You got a degree in film. No, but it's not what I said. And say invest in a track record. I mean, you know, if you want to be a lawyer and you want to be a good lawyer, you can make a good income as a lawyer. That's a good thing. And Lord knows we need some good lawyers because there's plenty of dumb ones out there.

So, pshu. All right. Don't get started. I feel like you almost went on a tangent. That's okay. I just self-edited right there on the air. That was a good job, Dave. Good, good move.

Yeah. So guys, anytime you're a college. student or you have a college student and they say I have the money for tuition should they invest that instead of a mutual fund always tuition assuming they're studying something that is marketable don't get a degree in left-handed puppetry or german polka history you'll be a barista okay that's not what I'm saying what I am saying is get a degree that's usable in the marketplace and the knowledge that you put in your tool belt will make you valuable in the marketplace that is the best return.

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Matt's in Philadelphia. Hi, Matt. How are you? Good. Thanks, Dave and Jake. For taking my call. Sure. I got a quick question. I'm wondering when I should hire for my business. I'm a small mechanic Work on like ATVs and motorcycles Just like stuff like that And I've been in business for about 15 years

Kind of I feel like I've hit my max I can't seem to get out of the groove of making the same each year So I don't know if I should hire or if I should be doing something else Are you turning away work? No, I'm taking as much work as I can and in the past two years, I've actually opened my business up to, like, repair for customers to, you know, bring their machines and I can repair for them. I used to just buy machines to come up and resell them. And that was such a, you know, such an overhead.

And if they didn't sell for months, you know, it's just a lot of sitting around. So I opened it up the past two years to work on other people's machines, charging $75 an hour. And, you know, it trickles in and out. You know, I always have three or four machines I'm working on for customers. customers, but, um, so if you hired someone, what would they do? Um, I would like them to do the, the basic stuff, like clean machines, um, you know, quick, just go over the machine, tell me what needs to be done on it, and then we can order parts or if they need to order parts, just the stuff that you don't, which would allow you to do more machines, but you don't

have more work. Right, right. And so I just, I don't, if you, if you, have the past two years, can you get more work? That's what I guess. I'm trying to figure out how to get. Yeah. Okay. I opened a Facebook page and, you know, started advertising that way and just getting my name out there. But, you know, it's just still slow. Have you, and you're raising your prices at the correct rate over the past 15 years?

Yes. Like I said, I've only really started working on customers' machines over the past two years. And I started at 55, and now I'm up to 75 an hour. Okay. So it's up there. You know, most big shops are like 110 an hour. So I'm under, I guess I'm under what big shops are charging, but it's just me. Okay.

The big shops are dealers? Right, right. Okay. Is there any independent non-dealer shop competing with you? There is one that's like 10 minutes from me, and his shop rate is 95, but he turns away a lot of work. Interesting. I wonder if he would send it to you. That could be a question I could look into.

I just stopped by and have a cup of coffee with him and go, I understand you're turning away work, I'll take it. Right. Should I offer him something? Sure. I'll buy you a steak dinner ever so often. And in the meantime, I'd also be studying what he's doing. And if you send me $2 million worth of work, I'll send you on a cruise.

Yeah. But I mean, you know, I don't know what this amounts to. But yeah, but you don't need to hire someone, and then both of you end up. board. Right. Then you're losing money because you're paying him, but you're not making any more yourself. You need to be making more money as a result of having hired the person. And that person is either because you're making money on the work that that person's doing or you're making money on the work that you're doing that you weren't able to do because they're doing work you used to do, either one. So, you know, like our guy that our CFO, our chief financial officer, does not create

revenue here, but he keeps me from having to do all that so I can create revenue. And that's what you're talking about. So you need to create, but there needs to be revenue on the other side of the equation to justify hiring. And yes, right, I would work on growing the business so that you do need the help so you can get some scale to it. Because today, when you're a solopreneur like this, Matt, you're incredible. But for 15 years, you've just owned your job. That's different than owning a business. you know you're on your job when if you don't show up the income stops that you own your job but you own a business if you don't show up and the income keeps coming in people keep working

so like when i'm not here rachel and jade do the show right and so the revenue keeps coming in and i'm not here so i own a business then but if it's just me on the radio or on the podcast and then i don't show up there's no podcast there's no revenue then i just own my job and so So that's different. But the first step of business, and I'll send you a copy of my latest bestseller, it's called Building a Business You Love, and it's the five stages of business. You're in the first stage of business. You just been there a long time, 15 freaking years.

But the first stage is the treadmill stage, where we feel like we're stuck on a treadmill. We've got no one to delegate to, and you just run, run, run, run, run, collapse on the couch every night. What did you do today? I don't know, but I did a lot of it. I'm really tired. And so that's treadmill stage. And it's fun stage. It's an exciting stage.

You do have control of your destiny. It's a nice, it's a fun part of that. But then when you start hiring people to do work when you're not working, oh, now life starts to get good, assuming you get the right people and you want the first time, you'll have to fire them and get new people. But you'll finally find people that actually work. And they're out there. There's not many of them, but they actually work. And then you'll start to grow the business. So hang on.

I'll have Christian give you a copy of the book, Building a Business You Love. Jason's in Toledo. Hi, Jason. How are you? Hey, good. Great to talk to you to Jane, Dave. Hey, so I'm trying to help guide my parents on their finances and helping clean up some things. Did they ask you? The basic question is, hello? Did they ask you? Yes, they did.

How old are they? They are both 79. Okay. How old are you? I am 54. Okay, good. Okay, then it's possible, though, listen. That's why I was asking. Okay, good. Appreciate it. Yeah, when you answer questions, people didn't ask, then sometimes, you know, don't help.

But anyway, okay, so good, cool. So you're helping them. They're 79 years old. Yep. The question is, should they pay off their home equity loan that they have or continue to pay that payment so that they have the cash that they have in retirement, they only have about $100,000, just so that they can have that. on hand for medical emergencies.

They'll probably never pay off the home equity loan before they pass, but then those, you know, that would come out of the proceeds of their house. What's the home worth? Probably about 250. And how much is the HELOC? So there's about 50 left on it. Okay. And that's the only debt, or is there a mortgage as well?

That is the only debt. Okay. And the only money is they have 100K? That's correct. And what's their income? They're fixed on Social Security about $44,000 per year, and we did a very detailed budget with them, came to about 40 per year in expenses,

so that's close, but they think that they can maintain that long-term with Social Security, but that's all they got. Wow. Tight, very tight. Yes. Yeah, I agree. I would not use the 100.

and only have 50 at 80 years old to pay off a $50,000 loan. But I really am scared. That loan is very destabilizing for the situation. So I do want to come up with some thoughts on how to get rid of it anyway. But no, I would not use 50% of the little bit that they have to clear this little bitty loan. Do they have any vehicle, do they have any other assets that they could sell? Not really have any significance, no. There's not a lake lot?

No, unfortunately not. Okay. All right, are you the sole heir? No, I've got a couple of siblings. Okay. Okay. What's the financial condition of you and your siblings? We're decent. I don't know that any of us are in a position to, you know, find together and pay that off for them.

I would love for each of you to throw in 17K and it to go away. Yeah, I don't think that that's probably going to be happening, unfortunately. Okay. How's their health, your parents? It's okay. They're not like in dire health, but, It's not great either. My thought behind what Dave said is you probably stand to inherit the house, so it's money that you would get back. Yeah, that's the reason I did it.

But if they can't come up with the cash, it doesn't matter. Yeah. Yeah. It's not like the money's going away. It's going away for a short period of time until they pass and you sell the house. Yeah, I was right where you are. But if you can figure out a way to pay it off, also I would. I would get rid of it.

because it's more destabilizing than your words make me think you think it is. 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,

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Well, my least favorite subject. Let me guess. Taxes. Taxes. Just saying the word kind of pisses me off. But, yeah, I just don't like it. it at all. But we're going to talk about it because you guys ask a lot of questions about it, especially this time of year. So, Jade, when are taxes due, someone asks, and what if I'm late?

Well, they're due on April 15th. That's the date. But you shouldn't be late because if you think you're going to be late, just file an extension. That's what I would say. But even if you file an extension, the taxes are still here. You still got to pay them. If you don't pay them on April 15th, the penalties and interest begin. Oh, yeah. So the extension is not on payment. The extension, you file is on the paperwork. The paperwork on the actual filing of your taxes. So you can file an extension to file your taxes, but you should pay them anyway. Pay what you think they're going to be.

Yes. They're going to start penalizing you that day whether you file an extension or not. Tax deduction versus a tax credit. I like this. So a deduction that's going to lower your taxable income, whereas a credit would lower the overall amount that's due. I like to think of a credit like a coupon. $30 off.

Yeah. 50% off. Yeah, and not many things are tax credits. Most things are tax deductions. That's right. So a tax deduction is $10,000 deduction means you reduce the income that is taxable by $10,000. And so if you're in a 25% tax bracket, that then would save you $2,500 on your taxes because you don't pay taxes on $10,000 worth of income at 25%.

So that's a tax deduction, and that's 99% of the time what we're talking about around here. occasionally there's something that gives you an actual tax credit which is dollar for dollar 10,000 tax credit reduces your tax bill that's great by 10,000 dollars that is 75% better than a deduction okay but yeah not many of them out there but there's a few things that you get tax credits for okay this one blows people away it does the number of people that don't understand this is like everybody how do the tax brackets work yeah so the tax brackets that's They're a progressive system. So there is a range of income that is taxed at a certain amount.

Your entire income is not taxed at the same amount. A higher bracket never means that you're going to pay that tax percentage on your entire income. So if you've never done it, go through and you can Google the tax brackets for the tax year. And you can see how it's broken down. Everyone pays the same amount of taxes on the first 25. $5,000, everyone pays the same amount of taxes on the first $50,000. Even if you make $2 million, the first $50,000 is taxed exactly the same. And so as you go through the bracket, when you jump a bracket, it does not jump your entire

income by that percentage amount, only the amount above that last bracket. Okay. And so it might be that you have $5,000 above a bracket. That's right. And so it's hardly anything. So that's so good because a lot of people are like, I don't want to make more. I don't want to be in that bracket. That's crazy talk, you know?

Well, there's not a 100% bracket yet. So, of course, you want to make more because you get to keep it. There's not even, I mean, I think the max is what 30 something percent. So you still get to keep 70 cents on every dollar no matter what you make. So go make more. Shut up. Yeah. So how much to set aside if you're self-employed?

All right. You always want to take 25 to 30 percent, set that a sense. aside for income taxes. And just know that you'll likely need to pay quarterly taxes. I like to do a quarterly estimate, set that aside. That way Uncle Sam has his cut. Yeah, the quarterly estimate is a one-page document. How much were the revenues for my business? How much minus the expenses for my business equals the profit for my business times tax bracket? And you have to pay that once a quarter if you're self-employed. Yep.

If you don't, you're going to get penalties and interest on that after the first year. First year, they give you a pass, which also leads people into doing stupid stuff like not paying their taxes. But you need to do your quarterly estimates, and it's really not rocket surgery to figure this out. It's not that hard. So you just sit down and go, okay, the business made $100,000, and we spent $90,000, so our taxable income is $10,000 on the profit, and we're in a 25% bracket, so I'm going to set aside $2,500, and I'm going to send that in to the, you know, in with my quarterly estimates. And then that has the same effect at the end of the year as those of you that have a W-2 job where you're withholding automatically out of your check. The only difference is you actually have to send the money in, which pisses you off more.

And so because you actually know that you're paying taxes. When you have it with hell from your check, it's out of sight, out of mind. You don't think about it. So about a fourth, about a fourth of your profits. So if you're running a business, you're on a separate checking account, whatever's left in that account, if you pay only business expenses out of that account, which is what you should do, and you only put business income in that account, which is what you should do. What's left in there is profit. And so if you pull $5,000 out, you should set aside $1,250. And, you know, only pull $3,750 into your checking account and set aside $1,000,000.

50 so that when you're ready to do your quarterly estimates, you're ready to do your quarterly estimates. Standard deduction versus itemizing. All right. So that's usually people's question, which should I do? And the answer is whatever is going to lower your taxable income more. For most of us, the standard deduction is where we're going to sit. If you're just normal W2, not much going on but the rent. I mean, if you're a married filing joint, that's $31,500 that they're deducting. And so that's where most people sit. Now, if you own your own business, and there's a lot going on, and maybe you're working with the tax professional. They might say that itemizing is the way, but most people are going to fall in that standard deduction

because it's easier, often higher. Only itemize if your expenses exceed that standard deduction amount. Yeah, exactly. Because you need, you know, that 315, married filing jointly. If you don't have that much in write-offs for whatever reason, then you're better off. And here's how silly it is now. With this huge amount of standard deduction now, the 31-5 is way high, way high. It's now 91% of Americans do standard deduction.

Now, if you do standard deduction, you are not writing off charitable giving. You are not writing off interest on your home mortgage. That's right. Because you're taking a standard deduction and you're not itemizing. You only write those things off if you're itemizing. That's right. And so you say, I'm keeping my home mortgage because I get a tax rate. There you go, Dave.

You lied. You lied to yourself. You didn't get a tax break because 91% of you So good. Did the standard deduction. Life changes that affect taxes. Yeah. So like I was saying before,

most of us can maybe file our own taxes if we're doing, you know, normal W-2. But if you've had a major change, maybe you got married, you had kids, you got a new job, you bought a home, maybe you entered retirement.

All of those things definitely can affect your taxes. And after major life changes, just go ahead and review a gesture withholding, decide if it's now good to work with a tax. tax professional versus filing them yourself. Yeah, and that ends up, you know, why your refund changes is those things. It's stuff like having a kid, buying a house, starting a business, stuff like that. Those are pretty big old divorces, deaths, all those things like that. Anything, that's going to cause your refund to change. Now, if you're constantly getting a refund, you need to remember

Santa Claus does not live in Washington, D.C. That is not free money. That's not the Disney Fund. That's not the Disney Fund. Walt Disney doesn't live there. either. No one charitable lives in Washington, D.C. Everyone in Washington, D.C. wants your money. They're parasites. They're a tick on the butt of America. They're parasites. They're sucking the blood out of you. And so do not think you are getting a blessing from Washington, D.C. If you got a refund, honey, it's because you had too much of your money taken out of your check, and then they send you your money back at the end of the year with no interest on your money. That's what a blessing DC is.

That's what a blessing the IRS is. So you get $3,000 back. All that is is $3,000 of your freaking money because you had $250 a month too much taken out of your check. Change your W-4. Stop having refunds. No more refunds. And it's so easy to do. Correctly calculate your withholding.

Oh, I use the IRS tables. Wait a minute. You just assumed the IRS was competent? Well, that was a dumb thing to do. do. It's like saying the DMV is competent. No. No, you run your taxes out. You figure out what your withholding should be and get the proper amount withheld. A way to do that is look at your last tax refund, divide it by 12, go on your W4. There's literally a line on there that you can decide what your withholding is. Change it. We wish we could get to every call around here, but we can't.

If you got a money question and you want it answered the way we would answer it, go to our website at Ramsey Solutions.com and use the Ask Ramsey tool. Ask Ramsey is our free AI tool that's built and trained only on Ramsey. So here's the way AI works. AI is pretty simple. It's going to regurgitate, spit out only the data that you put into it. Whatever data set you put into it is how it's going to make the answer. So if you're so stupid that you're Google and you put Reddit in the,

data set, then you're going to get stupid but answers like Google's giving you out of Reddit. But if you only put Ramsey, like three years of this show, all the transcripts into the AI tool, all of Financial Peace University, all the books that we've written, all the articles that are on our website that we, the way we believe, the way we teach you into the tool, then guess what? That's the only data set it's got to work from. So it will answer the question exactly better than we would answer it here on the air because it's the culmination of all that data and it's free and it's blowing up y'all

people are hitting it like bing bing bing bing bing bing bing bing have an argument with your brother-in-law bing bing bing bask ramsie I mean he can this is what david and jade would tell you right here ask your question today ramsysolutions.com click the ask ramsie tool you're going to love it it's completely free paul's in Tampa hey paul what's up Hi, sir. Thank you, Jay, and Dave, you're a blessing to our nation. Really appreciate so much.

Thank you. I have a question. I see to a couple principles that you've talked about are in opposition in my life. I'm nearing retirement. I have the money to buy a boat in cash. We live near the water. It is going to be more than half of our annual income in boats, motors, wheels, etc., which you say not to do. On the other hand, we have the money in cash, and it was through it to burn in the middle of our living room. It wouldn't be the end of our world.

What's your net worth? About $4 million. And what, wait a minute. So are you counting the income that that $4 million would be creating? Or just your loan. You're just counting yourself. And the broke money is separate. No, that's not what I meant.

He's saying to make the rule work. Number one, you're right. When you're at a no-income, low-income portion of retirement and a huge net worth, that rule does not apply. The half of your income in boats and motors and wheels, that rule does not apply. So if you're worth $10 million and all of your investment income is rolled back into your investments and you don't count that income in the equation. And so you're living on a $70,000 pension or something, but you're worth $10,000. million dollars, then we don't apply that formula, okay? But if you take all of your net worth and use the income off of your net worth, you probably would, the formula would probably work, but we don't have to do that. How much is the boat? About $400,000. Okay, and you have $4 million, so it's 10% of your net worth? Correct. And what is your income? How old are you? 50. And you're retired? 60. 60. Oh, 60. Okay. And what is your income?

Right now it's about $250. Okay. Yes, I would buy that boat. Okay. But that's based on the ratio into your net worth and based on the fact that you're, and again, if your net worth was $40 million and you made $250, you know, you still could not buy the boat if we only used the 50% of your income. But most people were not dealing with a net worth as substantial when we were. apply that formula. So, yeah, I would buy this boat for sure. It's a sweet boat. What is it? It is a trawler, a 40-foot trawler. Triple engines or quadruple? Double engines.

Double. What horsepower? Yeah. Oh, slow with the trawler. It doesn't go very fast. Oh, okay. All right. And what brand? It's Great Harbor. Oh, yeah, okay. Yeah, and you're what on the intercourse? to Waterway? We have access, yes.

Okay. All right. Wow. Yeah. Good for you. Yeah, I mean, you're in a position to do that because. Yeah. Yeah.

The bottom line is the reason that the decision makes sense is the other rule that you used is if I burn that much money in the middle of the floor, would my life change? And the answer is no. And that's because your net worth so high, not because your income ratios are correct. on this. And so that's, if we were doing it off your income, you know, we'd be going, okay, $100,000 if you burn that. But if I'm in your shoes, I'm buying that. I would buy that boat. That's what I would do. If you want a boat, I mean, that's a lot of money in a boat, but it's a small percentage of your net worth is tied up. And trawlers go down in value too, just like cars,

just like, I mean, 100% of boats go down in value. What's maintenance on a boat like that a year, you know? No, I don't. But it's the docking fees and the insurance and the gas and or the fuel, probably maybe diesel. But I don't know. It's something to, I'm sure he's considered that. It's probably pretty substantial, but it's not hundreds of thousands on that because you don't need a crew and all that on that thing. So he's the crew, 38 feet long.

I mean, it's not. So, yeah. That's, yeah, when you get into a thing where like Zuckerberg shot pulled up the other day, yeah, Rachel was putting that up on her Instagram, right? You know, that sucker's got like 59 people or something on it. Yeah, just the daily rate to keep that thing running is a small city. True. But that's a different world.

But again, as a percentage of his net worth, it's nothing. Nothing. One of the wealthiest guys in the world, you know. So it's a 300-foot yacht that's probably worth, I don't know, a billion or half a billion, something like that maybe. That's nothing for him, though. Yeah. But again, he's got hundreds of billions.

Yeah. And this is a half of one of them. You know what I mean? So it's hard to get your head around when you're like regular people. But it's if you, it helps you if you just go, it's ratios. Percentage. Look at the ratios. What ratio is this?

What percentage of this? And it keeps you from saying stupid stuff. And here's what stupid people say that are envious. And I actually have said it, but I hadn't said it in 35 years. Yeah. About 35 years ago, I quit being that stupid. No one should ever dot, dot, dot, dot, dot, dot, that's redneck envy. Okay.

That's trashy. No one should ever have a car that nice. They're starving children somewhere like your car caused children to starve. Would you shut up? Unbelievable. Of course you should get that car. Yeah. You live like no one else.

Later, you can live and give to the starving children like no one else. But these over-saved people that think they're Jesus, that are going to tell you that the only car you can drive and still be holy is a 93 Camry. And that's the car of the evangelical. Anything beyond that. Any car beyond that is not holy and you're overspending and you're not a good steward. Oh, bull crap. It's actually not a Camry. It's in accord because Jesus said it.

They're all in one accord. Dad joke. Okay. Anyway. All right. I'm going. Just keep that one going. Just keep on moving past that.

All right. But yeah, but seriously, I mean, the judgment of other people's decisions. Yeah. Would you please manage your life? It's like a full-time job to manage you. It's like, you know, the person in your mirror is a problem, child. Work on that one. instead of working on fixing everybody else's spirituality.

Jeez, some of you people. So, yeah, that's the problem with stuff like this. Yeah, it's a very small percentage of his life. So when I look out there and I see Zuckerberg's yacht, I go, not a big Facebook guy, but man, he killed it. Good for him. Well, I mean, how mad can you really get? Because how mad can you really get? You're probably on meta somewhere.

You're probably on Amazon. I probably paid for a few days of that thing to operate. That's what I'm saying. With the Facebook ads that Ramsey buys. So it's probably my fault. But, yeah. But money well spent, Mark. You know, it's like you're living life large.

But, I mean, there's nothing wrong with it. Yeah. Honestly, I've never had, you know, $300 billion. So my mind can't get, my emotions can't get my head around that. But it is throw away money for him. And that's what we keep talking about here. You know, work hard. so when you're old, you don't have to work in McDonald's.

You're not a Walmart greeter. Welcome back to the Ramsey Show in the Fair Winds Credit Union Studio. Jade Washaw, Ramsey Personality, is my co-host today. Kelsey is in Seattle, Washington. Hi, Kelsey. How are you? Better than I deserve. What's up? So I have a question for you, of course. And I guess I'll just flat out say.

I feel like I either was or am being financially abused, and I can't really tell. I'm very confused. We have a very complex financial situation. So where would you like me to begin? How old are you? I'm 37. And how long have you been married? Seven years.

Okay. and what's your household income? I'm not really sure. What is complex about your financial situation? So we have a lot of debt, but I guess we do have a lot of equity. We have numerous businesses, and we just have money coming in and out, and I'm just living on one credit card that is constantly maxed, out and I never have access to cash.

Why don't you have access to cash? I'm not sure. I have asked to be put on the account. My name isn't on anything. And I have been asking, and he seemed willing that we were waiting because I never got my name change because we got married during COVID. So I did get my name changed finally, my last name. And then so he was telling me that he was waiting for that. But now that it's changed, you know, my name's still not on anything.

None of the properties, none of the accounts. So he just, he tells me that the financial situation is so complex that I just wouldn't understand it, which frustrates me because I'm very organized. And I have always paid bills on time. Do you have children together? Yes. We have a blended family of five. We have two 18-year-olds, a 16-year-old, and then together we have a 4-year-old and a 5-year-old. Do you work outside the home? No.

Did you use to? Yes, before we got married. What did you make? It depends. I used to make, I would just say on average I used to make like five or six thousand, but then there was a time where I switched jobs, so I was making significantly less. What did you do for a living? So I was a nursing assistant.

And so how does it feel when someone says you're too dumb to understand this? It's really frustrating because I know, because I have been homeschooling our kids as well since we got married. So, I mean, I'm really organized. You have to stay organized to have this many kids in homeschool. Frustrated. Frustrated is a word that describes when you're trying to do a task and you can't get

traction on the task. Yeah. I don't know that that's the right word to describe what Dave asked. Yeah. Yeah. When someone says you're too dumb to understand, that's demeanor. meaning. Yeah.

I can't think in 43 years I've ever told my wife she was dumb. I think that would make me dumb. I think that would make me pretty dumb. I think he just said it was very complex. Oh, it's too complex for you to understand, darling, but I got it because I'm the smart one. He's an arrogant butthole. So we have about four. $1.3 million in equity.

How do you know? Oh, so last year I really started pressing. I wanted to have transparency and clarity on our financial situation. And I slowly have been asking questions and putting stuff together. So let go back there. When you say slowly, is the purpose of the slowly for your own understanding? I'm just building this mentally piece by piece, so I'm understanding it. Or is the purpose?

or is the purpose of the slowly, I can only ask him so many things at once before he shuts me down. So I'm just going to do a little bit here, then wait five months and do a little bit here. Tell me the purpose of that, or is it a little of both? I think it's a little bit of both.

If I did sit down and ask a list of questions, I'm sure he would tell me. Okay, did you sign a pre-nup? No, I didn't. Okay. You've got to decide how much of this you're willing to put up with. you've already put up with way more of it than you should have, I think. So if it was at my house, this would be over today.

We're going to sit down and go, Bubba, you got 24 hours to put everything out on the table, and I'm going to understand every bit of it, and it's your job to make me understand it, and I'm going to have access to all the accounts in the next 24 hours, or I'm going to go see a divorce lawyer, and I'm going to have a $2 million net worth, because I'm taking half of this crap. We have $2.9 million in debts and loans. I thought you said you had equities of $4 million. Even still.

Do you know what equity is? I guess I didn't. I just figured that I would subtract the loan amounts and the debt amounts. The amount of the value minus the loans is the equity. But honestly, that's a little bit beside the point. The point, the biggest point is. I'm taking half of it. Yeah.

Because you're not being treated with respect. Because I'm getting a divorce because I'm tired of you screwing me over and treating me this way. Well, also, I think the biggest dynamic is I had come to realize that he's not pain for my knees. But so he has a daughter from a previous marriage that he adopted or actually wasn't a marriage. It was an engagement. It's not got anything to do with this. No, it is. No, it is.

Because you need to know everything that's going on in the next 48 hours. That's fine. Her large amounts of money on the side that I was discovering. That's the whole point. He's been doing a lot of crap. And you're going to find out more. That we're not going to put up with anymore, starting today. But I did confront him about it.

Oh, you're just useless. No wonder you have this problem. You can't stay on task. I'm trying to give you a simple thing. The simple thing is the overall way you're being treated needs to stop immediately. And then you go down these different rabbit holes 14 times. I can't even have a conversation with you. No wonder.

The first question you asked is, I don't know if I'm being financially abused. Help me figure that out. Yes. The answer is yes. And yes, you should do something about it. And not one-off every little stupid thing you're talking about here. It's the overall thing. A hundred percent of everything that's going on, I'm going to know it, and I'm going to have a vote in it.

starting today. Or I'm going to see a divorce attorney. Yeah. And here is Kelsey, we're on your side. We're trying to be on your side because we agree that the behavior you're talking about. But you're like a dog chasing its tail, girl. Yeah, you're worth more than that. You're circular with this.

You can't even have a discussion about it. I think you've been living in this toxic mess so long that you're, you know, you're clouded on everything's just circular. No, it needs to be very clean and crisp. And either we get this healed or we end this. You decide. That's what I would do if I were in your shoes. You work your butt off for your money, but your money's never going to return the favor if all you do is hope for the best. If you're ready to learn how to make your money work for you, check out the SmartVestor program. SmartVestor can help you find advisors who specialize in retirement planning, charitable giving, advanced investing strategies, and more.

Whatever your goals, your pro will take the time to explain your options, so you never have to invest in, anything you don't understand. Head to ramsysolutions.com slash smartvester to get connected. Ramsey Solutions is a paid non-client promoter of participating pros. Learn more at ramsysolutions.com slash smartvester. We use a couple of terms around here that sometimes are confusing, so let me clarify them. We use the term financial infidelity, which is when someone lies to their spouse and hides financial things like debt. And so it's a breach of trust like sexual infidelity is. But the fact that

we call it financial infidelity does not really put it in the same category as sexual infidelity. Sexual infidelity is much more traumatic. Both are a breach of trust. One is a less traumatic breach of trust, but we use the term to describe the fact that it's a breach of trust. Another term that we use around here is financial abuse. Probably not accurate a lot. Okay. Abuse is like domestic violence when someone's beating the crap out of their spouse. That's real abuse.

Okay. So financial abuse, where you don't have access to the numbers, is not as traumatic as actual abuse. And so when we use the term financial abuse, it's not real abuse. It's a descriptive term to say, you know, you're in a situation where you're not being treated right. That's different than abuse. But in our culture today overall, we have taken some of these words and we've used them so flippantly that we forgot what they actually mean. And so anytime I disagree with someone, I call them a narcissist. Well, you need to actually understand what a narcissist is before you say that.

Because just because someone hurts your feelings doesn't mean they're a narcissist. And just because we use the word abuse doesn't mean that it's descriptive of what is going on at the trauma level. Okay. Yes, it's a toxic and horrible marriage, a bad relationship. That's way different than real abuse. So we're guilty of participating in overstating, over-dramatizing some of these things like financial infidelity or financial abuse as if it was as bad as infidelity or real abuse. It's not.

Okay. So when you call us up and say, am I being financially abused, it's way different than if you call us up and say, my husband's hitting me. Totally different reaction here because different parts of the way you deal with trauma in those situations is completely different from a psychological viewpoint, from Dr. Deloney's insight and input on this, way different. So if you call me up and say, I'm in an abusive, physically abusive relationship, I am not going to shame you. I'm going to walk you out of that and get you some help immediately because shame is one of the tools that's used by physical abusers.

but if you call me up and say am I being financially abused and then you give me 16 different stories I'm going to call you out on your inconsistency and that's not me abusing someone that's being abused because they're not actually being abused they just don't have insight into the money and don't know what's going on with the money so it's not actual freaking abuse but it is a toxic horrible marriage, and yes, she does need to stand up and put an end of the bull crap, but that's just basic relational advice, not someone that is actually being abused. Now, she's actually being abused. She's going to get a different reaction from us on this show. And so if you don't like how I handled the last caller, kiss my butt and go listen to a different show, okay? Because that's the

way we do it here. We love people. We love people well, and we tell them the truth. So, that's how that goes down. All right, Duke is in San Francisco. Hi, Duke. What's up? Hi, Dave. Hi, Dave. Thanks for taking my call.

Sure. How can we help? Yeah, so about three weeks ago, I got caught up in all the tech playoffs and I lost my job. And I have enough cash to pay off my mortgage, which I was planning to do in November anyway. But now I'm wondering if I should just hold on for that cash. Yes, for now. How much were you making, hon? The last year was 600,000.

Whoa. What are you doing in the tech world? I'm a web engineer, mostly focused on digital accessibility, which is making sure software works for people with disability. Yeah, big deal. That's a big field, okay. So what do you have? Well, what's the outlook for the new position? Well, it's kind of a rough job market for what I do right now, so I don't know how long it would take.

but I'm also contemplating on stepping out on faith and starting my own business. Doing what? Same work, consulting. I wouldn't step out on faith, that step out on facts. Okay. But, I mean, you know how to do what you're doing. Do you think there's a market for it that you could build up enough consulting gigs to make anywhere near what you used to make?

It probably took me a while to get up to that amount, but, yeah, there's more than enough work, I think. Okay. And do you plan to live in San Francisco? I don't think I'll be able to stay here too much longer. Okay. Then why would you pay off the house? Let's put the house up for sale. Oh, that's certainly an option that I hadn't thought about.

If you're leaving, you don't need to keep it. Yeah. And then that changes the whole formula, right? Because you may be buying a property that's twice the size and half the price in a different market, more affordable market. You're in one of the most expensive real estate markets in the world. world. You know that, right? Yeah. Yeah. And so if you're going to, I don't know where it's best for you to operate this consulting firm from. I was going to say, what's your timeline for making that choice on whether or not you're going to step out and do your own thing versus continue to search the job market?

I give myself probably about two months before I need to start looking again. Yeah. You need to start looking now. What are you going to do? Sit on your butt until then? What do you mean? No, I needed to take a break. Okay, so how much money are you sitting on? Well, you got a break. They just gave you one. But while you're on break, look for a job, honey. I mean, for real.

Anyway, that's what I would do. Set yourself a timeline. What I would do is nothing with the money to answer your question. And say, okay, for the next two months, I'm going to look for a job. If I don't land something, I'm going to launch the consulting firm, and we're going to move from San Francisco to fill in the blank of the name of the city. And that means the house goes up for sale that day. But in the meantime, yeah, you might land something there.

to stay in Silicon Valley, right? Yeah, you could do that. My whole thing, if I were in your shoes, I would set a timeline. If you're going to take a break, I guess that's your business. But I would set a timeline to say, if I haven't found, if I want to look for a job, but haven't found one by XYZ date, this is what I'm going to pull the trigger on the next thing that I want to start on my own. And in the meantime, you could start doing research on that, just so that you're using that time

very, very wisely. That's what I would do. It sounds like you have plenty of money laying around to kind of. of take a little bit of time on this, but I wouldn't get reckless. Yeah, exactly. Yeah. Good, good question, Duke. I'm sorry you lost the great job.

I'm really glad that you had a great job like that. And so you know what it feels like to make 600 a year? That's pretty incredible. And I'm really glad that you'll know what that feels like again someday, either as owning your own thing or staying there and just working for a different shop now and so forth. But, yeah, wow, wow. And it's pretty incredible that, well, that's awesome. So, yeah, you got, the good news is you got options because you've done a good job of putting things in place to do that.

He sounded like a single guy, too. He didn't sound like there was anybody else's. The words he was using didn't sound like, yeah. But yeah, he's been working all the time. Exactly. Sounds like he's been working day and night. 24-7. Yeah.

And then all of a sudden it came to a screeching halt. There we go. Wow. Yeah. So that's the thing. Yeah. So when you're in the middle of a storm, yeah, wait till the storm passes to do permanent planning. I think so, yeah. In the middle of the storm, you do temporary things, which is like he said, hold on to the cash. We're not going to pay off the house because we may not be staying in the house. You don't know what's going to happen. That's right. Not be staying in the house. Might be staying in it. Once the decision is made that we're staying here, then I would pay it off. Yes, I would too, quickly. Yeah. If you say, all right, I'm staying here and I'm going to open the business, okay, or I'm staying here because I just landed another job making 400

in Silicon Valley and we're staying. Okay, either one of those is fine. Yeah, very cool thing to pay off the house in San Francisco. You spend hours researching before making a major purchase like a home or car, but it's also a good idea to put in the work searching for the right insurance coverage. To protect your biggest assets, I recommend using Ramsey trusted pros. Whether you're looking for car, home, or any other type of insurance, Ramsey trusted providers have been coached and vetted to serve you like we would. Find what you need at Ramsey Solutions.com slash insurance. The Ramsey Show Question of the Day is brought to you by Why Refi. Defaulted private student loans don't define you, but dealing with them does. Why Refi helps you refinance into a low fixed rate

payment that you can afford. So you take control of your money and you get back to work on the baby steps. Go to yrefi.com slash Ramsey. That's the letter Y, rafyfy.com slash Ramsey might not be in all states. Okay, today's question comes from Alex and Florida. They say my reoccurring bills are paid for on my credit card, which I also use to buy things throughout the month. I pay the balance in full before the date is due. I'm retired in my 50s with a net worth of million and I have no debt. I drive a 15-year-old Nissan. My question is, if my goal is simplicity and convenience, what's wrong with using my credit card for monthly spending and recurring bills? The balance usually runs between 1,500 and 2,000. Nothing crazy because I live very frugally.

Okay, so if I look at this question, my thought is you're probably doing it for the points. You didn't say why other than simplicity, but there's got to be something linked to that. And so I would say if there's a points argument here, I mean, if you just did the math, it's really minuscule. I mean, we're talking about $15 to $2,000 per month. If you look at points, maybe that's $300 a year, you know, $330 per month. So there's really no financial gain there is that would be my first thought towards that. But I think what's really going on is, and I'm saying this out of love, But they won.

Like, they got you because that whole industry, what they want to do is move your mindset from being independent to dependent. And they got you because you've decided that in your mind debt equals getting ahead. My goal is simplicity and convenience when in reality I use a debit card for my recurring and I use debit card for purchases. And that is more convenient and more simple. That's why, yeah. Because I don't have to pay a bill at the end of the month. Yeah. If you think debt equals simplicity, they got you.

Even if you're paying it off at the end of the month and not in debt, you know, if you're paying it off in full, you're still not the simplest way. Well, and- The simplest way is a debit card. Yeah. The studies show that if you use a credit card, you will over time spend 10%, 30%, in some cases, depending on what it is that you're purchasing, up to 100% more. using a credit card, things like fast food, things like entertainment, you are up in that high percentage of how much more you'll spend. Yeah, and I don't think this guy is going to be in that super high percentage because he's a

frugal guy. So he's like 10 to 15%. But if you're just doing your normal purchases, you're going to spend a little more. But the big thing is, you're paying it off at the end of the month anyway. So what's the difference in a debit card? Oh, one extra step. It's not as simple. That's why I said it's a mindset thing in his mind.

They got you. They got you. is right. They talked you into believing this was smart somehow. And then you defend it with all of your numbers. But you're, yeah, I don't think I'm going to talk you out. I don't think I'll be able to talk you out of it because I think they got you. Yeah, I think they got you. But yeah, your argument is invalid. It is not simpler or more convenient than using a debit card. Nothing is easier than I get my paycheck and I take my paycheck to pay for my things. Yeah. Well, or I use my debit card. I mean, like a lot of my utilities on stuff on odds and ends, like personal stuff,

like utilities automatically hit the debit card or some of the odds and ends. And I don't have to do anything. It hits his credit card and he has to pay the bill off at the end of the month. Yeah. I don't have that. I don't have that extra step. So it's not simpler or more convenient. And I want to say this because I think that this is a very subtle thing that's worth saying. This guy, do I think this guy is going to end up in debt? No. Is he going to end up on the side of the road? No. I'm not being a fan. to listen anyway. He's going to go about his life. He's going to be fine. He's going to retire. No, no problem. My problem is the mentality of it. The borrower slave to the lender. So at the end of the

day, I want to be able to have as much freedom and autonomy in my life to know, hey, I actually went out in the world. I made a living. I didn't have to depend on a system of debt to keep me afloat or make me feel like I was something. That's all it is. But that's a big thing. Agreed. Margie's in Dallas. Hey, Margie, what's up? Hi, thank you for taking my call. Sure. I've had a lifetime of bad decisions and have sucked myself into a hole in debt. And I'm debating whether to file bankruptcy to try to settle some things out of pocket myself when my house sells.

I'm going through a divorce and I know I'm getting 50% equity. And I just don't want to continue making bad choices. So I just kind of need some guidance as to what route I should take and where I should prioritize. How long you're married? 30 years. Oh, baby. That's tough. Wow.

I'm sorry. A lot going on with you. A lot of pain. How much debt do you have, Margie? Total for myself, not include, my husband and I have always kept our finances separate. So just my debt, including the mortgage, because my name is on the mortgage. Your debt not counting the mortgage. What do you have?

Okay. Well, it's 609 total minus 343 for the mortgage, so whatever that leave. I've got 108 in unsecured credit cards. I have 137,000 in student loans. And I know bankruptcy won't erase the student loan, so I'm stuck with that. And I'm good with that. I got my, I got that. I'm going to pay that.

So I'm sorry. That is heavy. Yeah, that's just a lot. And what do you make? 87,000. Okay. And how much equity will you get from the sale of the home? So the house would probably sell for 440 to 480.

We owe 3.43. And so my half, I'm thinking after closing, would probably be about 50K. Okay. Well, bankruptcy is not going to work for you. Because when you go to file, there's two types of... of consumer bankruptcy. There's Chapter 7 and Chapter 13. Chapter 7 is the clean slate where the student loans are not bankruptable, but the credit cards get zero. And in order to file a Chapter 7, you have to pass what they call a means test, meaning they look at your income and any assets

that you have. And when they see you have $50,000 and make $87,000 a year, you're not going to pass the means test. So you're going to be forced to. into a payment plan in Chapter 13, which is five years, 60 months of paying payments on the credit cards. You can put the student loans in there too, but they get paid in full. The credit cards can be paid all or a portion of in the Chapter 13. In your case, they're going to get most of it anyway. So are you delinquent on the 108 on credit cards? Yeah, I stopped payments in January. Okay. That was part of, you know, being able to afford an attorney for the divorce.

And so honestly, my thought process where I wanted to do is wait for the sell of the house and then just start calling creditors and say, like, hey, this is what I got. I think you can probably settle the credit cards for the 50 or something like that, okay. If they went seriously delinquent, they're not seriously delinquent yet. but and it'll be a long it'll be you know a year and a half while your heart is broken over a 30-year marriage ending and you're fresh trying to get a fresh start you're going to have a lot of work to do here um i've got another idea the guardian litigation people that we work with this is what they do They negotiate with them when you're in default.

And they're very, very good at it. I just had lunch with the CEO the other day and was listening to their whole process. And I think they can take care of you. And we'll help them do that because you are in a pinch. All right. And so we'll hook you up. Christian is going to get in touch with them and hold your hand and walk you right into them. And I think they can walk you through this.

Because you're not going to qualify for a Chapter 7. It's going to put you into a 13. And so some kind of a payment plan or settlement process is going to be better for you outside of bankruptcy. It's going to be more efficient. And it doesn't require all of your emotions to deal with the anger and the crap that the collectors are going to throw at you if you do it yourself. And if I'm in your shoes, I don't need that right now because your heart's already breaking. So hang on and we'll help you with this, hon. Dave Ramsey here.

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so long as you don't do too many things wrong. Guys, Ramsey is taking over an entire cruise ship. That's right, one of the top lines, Holland America, fancy, fancy cruise line, not the cheap ones. This is a 2,500 people coming together for the ultimate debt-free celebration. If you're on Baby Step 4 and beyond, you're out of debt except the house and you're working on getting out of, you're working on getting your emergency, I mean, your pasture emergency fund, working on getting your retirement bill and getting the house paid off, all that, or even beyond anywhere, this is for you. We're not asking you to spend money while you're on baby step 2 and go on vacation with us. Please don't.

But let me tell you, we'd love to have you on this. All the Ramsey personalities are going to be on there for seven days, including me. My wife Sharon will be with us the entire time. We're going to have new wealth building teachings. We're going to join the world's largest debt-free scream. We're going to watch live episodes of your favorite Ramsey shows be taped right there and so much more. So you get all kinds of opportunities to deal with every one of us and we're going to be all over the place. We did this last year.

It's going to be one year from right now, be in March of 2027. It is well, it's not sold out, but it's getting close already. So if you want to go, click the link in the show notes or go to ramsysolutions.com slash events to book your cabin. Laurie is with us in Salt Lake City. Hey, Lori, what's up? Not much, Dave. I'm so excited.

Thanks for taking my call. Sure. How can we help? So here's my question. I think we went to stupid university and made them mistaken. I'm just wondering what you would do in our case. We bought our home about a year ago. And when we bought it, we understood it was selling.

finance, but the day we went to sign the papers, like we didn't hire a lawyer in advance. That was probably our biggest mistake. When we got there, it turns out it was more of like a seller takeback. Like they didn't give it to us with their money. They are using the loan they previously had. I did not realize that was like weird. So would you be concerned if you were me? Like, would you go refinance?

I don't understand. What do you mean? They're using the loan they previously had. What do you mean? They didn't pay off. The home with the money that we gave them to, okay, so we paid like a $1 million home. We paid $750 but still owed that extra like $300-ish. And they just kept the loan they previously had.

So they're not financing it out of their money. What is the balance on that loan? So the balance on their loan is $320 and we owe them $3.80. So we borrowed $60,000 from them. And then the like overall balance is $320 on the house. Is the house been put into your name? Yeah, we have the title. So that's right.

I thought we were all above board, but then I looked at it today online, and it said it was a seller takeback loan. And I was like, I've never even heard of that before today. I don't know that was the same. That's something so I made up on TikTok. I've been doing real estate 40 years. I've never heard that phrase. So seller take back. What this is is an illegal loan, though, because when the mortgage company finds out, and they will,

when they discover, for instance, that the homeowner's insurance that has to be reported to the mortgage company is not in the seller's name, it's in your name. And it's in their name still. So if anything goes wrong, we have to have been. Did you put the house in your name or not? Yeah, the house is in our name. Then they cannot have insurance on your house. I can't buy insurance on your house. It's not possible.

Great. So would you refinance like now? Yes. Okay, okay. Because here's what's going to happen. If that is a standard mortgage that's laying on the house, in paragraph 17 on that mortgage, it has what's called a due on sale clause. Due on sale means if that seller sells the house, that mortgage becomes due in full. And that seller has sold the house.

And when they discover it, they're going to call that loan. and they're going to demand that seller give them $320,000 in 30 days. And if they don't, they're going to foreclose on the house that you thought was yours. Right. But it's not got... Okay. But you have recorded a warranty deed into your name. Is that right?

At the courthouse. Yes. Yes. And that's where I thought we were legal. Because how... You are legal. You are legal. You're just vulnerable because this seller is either a sheister or a morguezer.

or a moron or both. Okay? Okay. Because they don't understand that you cannot keep a loan in place with a due-on-sale clause in it. And all current modern mortgages have a due-on-sale clause in them. If you got an FHA loan from 1972, it does not have a due-on-sale clause on it. But they don't exist anymore because they've all been paid off. That was 50 years ago.

Okay. So the, but, you know, so back in the day when I first started in real estate in the late 70s and early 80s, we had all kinds of FHAs laying around that you could assume without a due on sale. But those have been gone for 50 freaking years, okay? So anyway, this thing, if you pulled up their mortgage deed, okay, the trust deed in most states it would be, you can, if it's a Fannie Mae, a standard conventional loan, You just flip it over to you see paragraph 17. It will say, do on sale. If the title is transferred, it becomes a balloon note, and they call the, it's in default, they call the whole loan.

And the seller does not have the ability to pay that loan off. And so they're going to get foreclosed on, because the lien is still on your property, you're going to end up losing the property. So you need to get this refinanced and get these shysters or morons or whatever they are out of your life as fast as you can. And you need a standard $380,000 mortgage and pay them off as, or $400,000 mortgage or whatever you've got to go get to get them paid off as fast as you possibly can. How long have you had the property in your name? A year. Good. Because it's going to take 12 months before they'll look at appraisal versus acquisition. Okay. And so now they can look

at appraisal. And I assume the house is worth more than when you bought it. Probably, yeah. So you guys have any money? You obviously put down everything you had, right? We did, but like over this last year, we saved up 100 grand. So I was just thinking we'd put some of that toward cranked. And if you can get a, if you can just get like your credit union to give you a $300,000 mortgage. Oh, okay.

You know, just easy, just something quick, right? Or call Churchill mortgage and they can help you walk through it. But I would get this out of these people's names as fast. as you possibly can. And for God's sakes, get the homeowner's insurance in your name. You have $700,000 of equity if this thing burns down that's going to go to them. Oh, wow. That would be awful.

Yeah. Yeah, because the homeowner's insurance is not in your name. And by the way, you can't have insurance. Insurance law is basic. You have to have an insurable interest. I do not have an interest in Jade's house legally. Right. So I can't go be buying insurance on somebody.

else's house. That's the, so they can't buy insurance on your house. This house is in your name. They, their insurance policy is not valid. Yeah. So you're going to,

they're not going to get the money. You're going to end up with nothing. Nobody's going to get nothing. Because the insurance company is going to go, you didn't own the house. Yeah. Is that, illegal?

Like if that, if something like that happened. It's not illegal. It just invalidates the policy. So the, the insurance company is going to go, no. I'm not,

we're not right. a check for a million dollars on a property to the people that are not our client, and our client doesn't own the property. Right, right, right. So it's not worth the paper it's written on. Wow, that's a mess. It's useful, useless. So there's so much wrong with trying to do what is effectively called a wraparound mortgage,

where they wrapped around the old mortgage and they carried back 60 and they wrapped around the 320 for a total of 380. You can't do a wrap around mortgage where there's a do-on-sale. clause. And I promise you, there's a due-on-sale clause on that. I promise you there is. So, yeah, that's what you get into. Ouch. Scary, scary, scary, scary. Yes, get refinanced as soon as possible. And go buy insurance on your property today. Go buy homeowners insurance today. Forget that they've got it. And no, we're not paying them for it. Because paying their policy is ridiculous.

But that's why they didn't want to change the policy. Because when you change the policy names out, it tells the mortgage company that we've sold the house, and it activates the due on sale clause. That does sound a little shifty. Well, it's just dumb. It's somebody doing real estate on TikTok. 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.