The Ramsey Show - The Best Financial Plans Don’t Rely On Debt

Episode Date: May 27, 2026

❓ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Have a money question? Ask Ramsey is here to help.⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠��⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ 📈 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Are you on track with the Baby Steps? Get a Free Personalized Plan.⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Dave Ramsey and Rachel Cruze answer your questions and discuss: “Am I about to become my boyfriend's retirement plan?” “How do I avoid taking care of my parents financially?” “Should I put our home in a trust to protect it from my husband's bad decisions?” “How do I get out of debt when I can't stick to a budget?” “When can I make my side hustle my full-time job?” Next Steps: ✔️⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠Help us make the show better. Please take this short survey.⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ 📞 Have a question for the show? Call 888-825-5225 weekdays from 2–5 p.m. ET or⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠send us an email⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. 💵 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Start your free budget today. Download the EveryDollar app!⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ 🏠 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Get organized and prepared to buy or sell a home⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ 🦸 For help with investing, get connected with a SmartVestor Pro 🏢 ⁠⁠⁠⁠Join the Crusade! Apply Now!⁠⁠⁠ Connect With Our Sponsors: Get 10% off your first month of ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠BetterHelp⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Go to ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Boost Mobile⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ to switch today! If you want your car to keep going and going, trust ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Christian Brothers Automotive⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Find a local shop and get an exclusive Ramsey discount of 10% (up to $250) off Learn more about⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Christian Healthcare Ministries⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Get started today with⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Churchill Mortgage⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Get 20% off when you join ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠DeleteMe⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Go to⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ FAIRWINDS Credit Union⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ for an exclusive account bundle! Debt collectors hassling you? Take back control of your life at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Guardian Litigation Group⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Find top health insurance plans at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Health Trust Financial⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Use code RAMSEY to save 20% at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Mama Bear Legal Forms⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Visit⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ NetSuite⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ today to learn more. Get started with ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠YRefy⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ or call 844-2-RAMSEY Visit⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Zander Insurance⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ or call 1-800-356-4282 for your free instant quote today! Explore more from Ramsey Network: 💸 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠The Ramsey Show Highlights⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ 🧠 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠The Dr. John Delony Show⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ 🍸 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Smart Money Happy Hour⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ 💰 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠George Kamel⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ 🪑 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Front Row Seat with Ken Coleman⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ 📈 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠EntreLeadership⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ramsey Solutions Privacy Policy⁠⁠⁠⁠ Learn more about your ad choices. Visit megaphone.fm/adchoices

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So we're here to help you transform your life. From the Ramsey Network and the Fairwinds Credit Union Studio. This is the Ramsey Show. I'm Dave Ramsey, Rachel Cruz, number one bestselling author, co-host of the Smart Money Happy Hour, Ramsey Personality, and my daughter is my co-host today. Open phones here at AAA 825-5-225. Lynn is in Los Angeles. Hi, Lynn, how are you? I'm fine, thank you.

How are you guys? Better than we deserve. What's up? Perfect. I'm 77, retired, and about 10 years ago, I took out a reverse mortgage on my home. That was paid for, but of course now I owe that. And it's about $98,000 in rocking up interest, of course, every month of astronomical. And I don't use it, and I haven't used it probably right after I first got it.

And I'd like to pay it out. By using it, you mean you haven't been receiving the payments? I haven't been taking funds out, no at all. One time I think I did. Well, for a while to get it up to 90,000. Yeah. So what is the interest rate on this ridiculous mess? Oh, I think it's about six something, six percent.

And I know the interest. When I look at the statement, it's about $500 some a month, it seems like now. That'd be about right. So that's kind of killing me. But I don't know what to do. I have a traditional IRA with about $230,000 in it. And I also have a high-yield savings account with about $80,000 in it. I'm very reluctant to use my high-yield savings account to at least pay a portion of it off

because I just like having that security of knowing that money is there. And I was wondering if I used my traditional IRA, would the taxes kill me? You'll have taxes on it, but you won't have any penalty. What other nest egg do you have? Is that it? Your total balances? No, I have about another $15,000 in just my regular savings account. What are you living on? I have retirement, Social Security, and a teacher's retirement.

Okay, cool. So how much a month do you have coming in? About $4,500. And you live on that? Yes. And you're in Los Angeles. Yeah, believe it. Do you, Lynn, do you have? I have no debt. I have no debt.

I have no debt other than that. And a little reverse mortgage, yeah. Do what margin do you have per month? Like out of the 4,500, how much is left after you have all your living expenses? Oh, gosh, probably. Well, my son and daughter and I live with me, and they chip in and everything. So I probably have about, you know, $28, $3,000 left at the end of the month. Oh, wow.

Okay. What's the home worth? Probably about 850,000. Okay. So with the tune of $6,000 a year in interest is just being added to it. That's right. So it's just shipping away. So if we did that for 10 years, you'd be 87.

If we did it for 20 years, you'd be 97. Right. Okay. And that would still only be $120,000. It would be more than that because the interest is going to be on the interest, but it'd be 150,000 more. And so at that point, you're going to have $350,000 owed on whatever that property is worth 20 years from today. Right. It doesn't bother me.

I'm going to let us sit there. You would. Now, the other thing is, what if something happens to help life and I have to, say, move in with my daughter. Technically, I'm with a reverse mortgage. I have to live in that house. So then I'd have to sell it. Exactly. That would be the only other option.

Exactly. And you probably would do that anyway. If you had a paid $4 million house and you moved in with your daughter, you probably wouldn't keep the paid $4 million house. Okay. So your suggestion would be just... I'm going to let it ride. If you told me...

Yeah, if you told me you had another $300,000 or $400,000 laying around somewhere, I would use $100 of it and pay it off for peace of mind only. But I don't want to tell you. you down by $100,000 from $310,000 worth of money. What do you think, Patrick? I guess. I'm a little shocked just to say to keep it, but as you go out the math, well, and especially since you're not working, Lynn, and my thing is, too,

even with the margin though, per month, you're still not going to, it's going to take a while to get to. You know what the other thing is you could do this. You could do what you're talking about. I see where you're going already. You could take like 50,000 of your 80, throw it at it, and, you could take, and you could, you could take, it at it, and then run over the credit union and get a loan and pay off that loan out of your margin in a couple of years. And you'd be back to debt-free in two or three or four years. I could do that.

I could also, I also thought about doing the $50,000 out of my high yield and then also maybe $50,000 out of my... You could, but that's going to cost you a 20% or 15% or something more than that. the interest at the credit union. And I probably would nibble at it and say $1,000 a month for 50 months and be done that way or 40 months or something like that, yeah. I got you. You could do $1,000 a month. And also, if I paid it down even by $50,000, the interest wouldn't be obviously that much. Well, your payment for months, yeah, it would be less. Right. Yeah, it's just going to accrue at whatever the balance is. But if you ran over at the credit union, it got just a simple little loan and, you know, on a four-year note or something, you probably would pay it off. Because a credit union interest rate would be lower. Three, four?

Yeah. Probably five right now. But somewhere in there. I mean, just ask them what they would loan $50,000 on a million-dollar house. Oh, my gosh. Talk about a deal for a credit union, right? Yeah, but are they going to consider the, well, I guess. I want a ridiculously good interest rate and no closing costs is what I want.

if I'm you. But that's an idea. You could explore that with them and then you could pay it off. Well, because the 80 grand sitting there, Lynn, technically I look at that as your emergency funds, right? And if you did three or six months of that, it would not add up to 80 grand. Yeah, you got some extra there. Yes. So even if you left 30 and through 50 out of like what you were saying, I think that gives you plenty of room to be there. All we're doing there is not solving a financial crisis because you don't have. one, we're solving an aggravation. You do have that. And we're solving, as Dr. John Deloney says, we're solving for peace. And so I love the idea of you being 80 and zero debt on this house, because it's aggravating you so much that you called us. When you're home, it's the,

it's a, there's a safety net there. There's something to be said when you own it out, right? Especially in your 80. Yes, yes. That if you don't get, you know, if you get in trouble or something. And the good thing is to, Lynn, regardless of which way you, you know, you slice it or you do it, is the value of the home now. So, outweighs everything. So even if you did have a crisis and you did have to sell for something, you know, you still have a good amount of equity. Hundreds and hundreds of that. Yeah. Yeah, you're in good shape. So, yeah, this is a, it's a bad product, though. You see it on cable news. Yeah. Reverse mortgages, walk in bathtubs. Stay away, people. Stay away.

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Eddie's in Denver. Hey, Eddie, what's up in your world? Thank you for taking my call. Sure. Certainly. So I had a, I'm third generation in a family business. We farm and ranch. In 2018, my dad got real sick and stepped up

the plate and bought everybody out and just me and my wife run the place now. Wow. How did you do that? I have with no sleep, frankly. A big mortgage? Yeah, yeah. How much do you owe on the ranch? Well, that's, I owe nothing as of last November.

Wow, you got it all paid off. Yeah. Might be the luckiest person. You talked to, Dave. How much was it for? A little over $5.5.5.5 million. Wow. Good for you. Way to go, Eddie.

Just a few things kind of fell in my lap, and we took advantage. And, like I said, just a lot of luck. And I've got a really good partner on my side. My wife is fantastic. Yeah. Sounds like you worked a lot. It's not like you work to create luck. I like it.

No, I think it's just luck on my end. But anyways, I got everything paid off. And now we're stepping into a different season here. And I have a neighbor place that connects straight to us. And it's a good place. We've farmed and ranched next to each other for three generations. And they don't have anybody in line. And they came to me here last month and asked if I was interested.

And I am. I am interested. And the reason I am is I've got two little boys. They're pretty young. They're seven and four. And I got a nephew, 21. on sale. All three someday, I hope, will work for me. I don't want to play anybody's life, but that's the goal. And to do that, I would need to grow the place a little bit. And this

would be a heck of an opportunity for me. Yeah, sounds good. Even if you were just building a business to sell it, which you've got so much family emotion in this one, you're probably not doing that. But, you know, it sounds like an opportunity to grow the business, period. So what's the place going to cost? Up front is going to cost 4.65. What's up front, Maine? Well, that's what they want is 4.65, but they've got a residence on it that I'm on interested in owning.

And I've talked to two real estate agents, and that and 40 acres should bring a little over a million and a quarter. And then there's another quarter section that is detached that I'm uninterested and that should bring right around 380 to 400,000. Mm-hmm. So it would be about a million. So you came up with five and a quarter how fast to pay off your debt? 2018 to now.

Okay. So you did that in eight years? In eight years. Eight years, yes. Okay. All right. And now that you're- And little sleep with a lot of luck is what you kept pushing to.

Yeah, I understand. I understand. So I don't borrow money. for anything, particularly for business. Because it doesn't always work out the way this last one worked out for you. I'm proud of you. I'm glad you got out, but I don't want to sign up again for the hell you just got out of. But I do want this piece of property.

So how do we do this? So the way Dave does it, I bought an office building many, many years ago for $5 million. And I didn't have two nickels to rub together at the moment, but I was making really good. money like you've been doing. You've got more than two nickels. But I leased that building with a five-year option to purchase it for $5 million. And I closed on it at the five-year mark. I mean, I scratched every nickel out of the corner of the couch, right, to get to do that. The good news is by the time I closed on it, it was worth $13 million. So it was a great deal, right? But I didn't have any debt.

Yes. And I didn't have to close on it if crap went sideways. And welcome to agriculture, right? Crap goes sideways. Yes. And so we cannot predict this rain and sunshine thing. We cannot predict, you know, disease and everything else that you guys deal with that are the... Yeah, what do you do on the land, Eddie, specifically?

Is it farm? You said ranching? Like, what is it specifically? We run cattle mainly. Cattle. So, yeah, beef prices, hello. Can we spell volatile? Yeah.

And so, you know, if I'm you, I'm going to talk to them. How much cash could you scrape together to pay them for a right to buy it for five years? Could you give them a half million dollars? Yes. Without going in debt? Yes. Okay. How much could you give them now?

Cash, probably a million and a quarter. But that would leave me. I don't want you poor. I'm just asking how much cash you got. Okay. I'm not suggesting that, but my point is, okay, so we need four if we turn around. So you could, if you don't want to borrow money and I don't want to borrow money, so that's how I'm trying to figure this out, okay? You're probably going to go do it the old way if you, but because you got away with it the last time you did it. Okay. But if you did it my way, a way to do it would be to option it and line up the sale of the two pieces of property to simultaneously close the day you close to buy it.

So that gets your need all the way down to under $3 million. Yes. And you've got a million of that. You don't want to put it all in there today. But that's the number. So I need two million bucks. So how fast am I going to come up with that? Oh, a three-year or a five-year option.

And I give you $500,000 to be applied to the person. purchase price, and I'm going to rent it from you for a maximum of five years, and as soon as I can scrape the money together, we're going to close on it. But I don't want to borrow money. And you talk to that old ranch that's four generations, and he's going to understand I don't want to borrow money. They want their money now, but they can understand you're saying that. So if you could talk them in to give them a half million dollars now and a three-year or five-year option and you scrape together the other two, two and a half, you line up simultaneous closings on the other two parcels and you close on all of it the same day.

Your actual cash need is not that high, and you're going to get there. Well, and for them, if you really did that, that's 1.8 that you pay them with the other properties selling. Yeah. And then you throw in, you know, even if you threw in 200,000, it's $2 million bucks that they may get on closing day, right? So you're getting there. No, they're going to get their whole $4 million on closing day.

4.6. The buyer next door? Yeah. We're going to give them 4.6 the day you close on it. But you're closing in five years. Some time between now and five years. Yeah. No, but I'm saying can he parcel out now and sell some of those properties?

Go ahead now and let them sell off those. You can't sell off. But can they, though? Oh, let them sell them off. Yeah. And then it takes it down for what you owe them at that point. If you guys want some of your money today, that's a good idea. Well, because they want the cash, is what you're saying.

Yeah, if they want some of their cash today, they could go ahead and get almost two million of it now. you know, whatever the 40, how, 40, and then the back track that you don't want. Yeah, whatever the total of that is, let them go ahead and do that. And I do want this, but this is what the net net's going to be. And, yeah, that actually puts half the money in their pocket now if they sell off those tracks. Yep, which is what I just said about 45 seconds ago. You know, that's good. Thank you.

I'm catching up with you. Took me a minute. So what happens when I'm not on the air for a while. I know, Dave, you're great, though. Running slow. No, you're not. The mind is sharp. Very interesting deal, though.

The mind is sharp. Here's the thing. You love a puzzle, though, of real estate puzzles, is what you love. And what I love is when you take debt as an option off the table, now you've got to figure out a way to do it. And now your creativity kicks in. Now you start to think, okay, I could get the neighbor to sell off, or I could sell it off, or I could sell it off, or I could sign simultaneous closings, or I can do options. But if I'm just unwilling to borrow money, and I don't have the money, how am I,

I'm going to figure this out? And so, you know, the way we've grown Ramsey, I mean, we've got a thousand people working in this building and 300 million a year in revenue, 100% the way we just talked about. We have, in every case, use the profits from something we were doing here to start a new something that we were doing here. And the profits from that starts the things drives the next thing. Which takes a lot more work. and a lot more patience and some frustration, but so much more peace, right? Because at the end of it, there's no risk. And it's sustainable. No banker is going to come and screw you over. And believe me, it's like their full-time job. When you've worked hard to buy a car the right way, you paid cash

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Better than we deserve. What's up? So my question to you is just how do I continue to honor my parents biblically if they are dishonorable, especially when it comes to financial matters? They're dishonorable, meaning they're not great with money, what they do with money you don't agree with? Well, so I'm assisting, but they say all kinds of things to me. that are just, to me, are not honorable as parents,

and I'm trying to still honor them biblically. Okay. Biblically, to honor someone is not to honor everything they do, it's to honor the position of parenthood. We honor our father and our mother so that we may live long in the land, okay, to quote Old Testament, right? And so we want to honor, but if mom's doing cocaine,

we don't honor the cocaine use. Or she's being verbally, abusive to you clear. In other words, if she's misbehaving. Yeah. Yeah. So we don't honor misbehavior, but we do honor the position. So the same would be true where we're called biblically to honor our leaders and pray for our leaders. So, you know, I didn't agree with much of anything Joe Biden did, but I honored the position he held as president. And I prayed for him as a person, But I don't have to agree with any of his policies to do that. It's the same thing.

You honor the position, not the, and that's got to do with your nobility and your dignity. But that does not mean you are enabling or allowing ridiculous, you know, interactions. And so, you know, just, if you get above that guy, you know, I honor, you know, you can honor fatherhood and have never met your father. Claire, what's what what is it currently your relationship dynamic? Because are you taking care of them financially? What's going on? Yes. So my, um, my mom lives overseas. So I was financially taking care of them, taking care of her, um, in terms of just like helping out monthly. Um, but it got to a point where I was overextending myself too much and I fell back into a lot of debt that I thankfully was able to pay off by just hustling for the last couple of months with work and picking up as much overtime as possible.

And I still owe a little bit more because I still have to pay for some things that I shift overseas to her that have landed. But I talked to her today and she got frustrated at me because I had to cut off from things financially because it just was not in my means anymore. And she said some very hurtful things to me that I know it's not true to my character, but I just, and I, It was not right. I yelled at her and I got upset because of what she was saying to me. And, you know, I prayed about it and I repented and then I sent her a text, but she blocked me. So I'm just like, I don't. It's a dysfunctional relationship. And then, you know, you're trying to be generous and kind and helping her, right, with the financial support monthly. So it's more just about boundaries, Claire, and you having integrity within yourself to say, I still feel good about this action of taking care of. Because you may, right?

She may be horrible to you, but I don't know what her living situation is. And maybe you think I still want to be able to make sure that she's good. And that's the route you want to take. Then maybe from the relationship perspective is where the boundaries have to be. Or vice versa. Maybe you look up and you're like, I can't have a relationship anymore. And I don't feel good financially, maybe because of your numbers or just because of the whole situation. Right.

With whatever you decide. Yeah. Yeah, the thing that happens is when we're helping someone, entitlement can set in. And she felt, she felt entitled to your money. And when you said, I'm not able to do that for whatever reason, it was as if you took her money away from her because she already owned it in her mind. That's what entitlement means, okay? She feels like she already owned your money and like you stole it back from her.

And that can be compounded and made even worse by cultural norms. What country is she in? West Africa. Yeah. For sure. Cultural norms are at play in this, right? Because it's much more normal there for generations to take care of each other, even if they go broke doing that, which is dysfunctional, then it would be in America.

where we have, where we're very compartmentalized from our extended family. And that's a cultural norm here. One's not right. One's not wrong. It's just norm. Because, you know, that there has its roots in just sheer survival, this idea that I'm, that you take care of your mom. You take care of your kid. You take care of your auntie.

You know, you take care of. Well, yeah. And yeah, you could look at all different cultures, right? And families living together, multigenerational, all of it. But, okay, so going forward, Claire, what's your gut? What are you thinking? So moving forward, my thing was to just, I told her, I said I cannot help for a while because I have to get financially stable. And I can't help you if I cannot help myself first to get on a proper footing.

And she seems like she understood, but at the end of the day, I really come down to. I don't think she understood really because it's hard for her to comprehend that. The more I try to explain my financial situation to her, the more she thinks, oh, well, you make this much money, then you should be able to. to help me with this much. So I kind of had to stop telling her so much about it. So I sent her some things overseas that should

help her for the next six months to a year. Like I and that's what put me in debt because I spend a lot of money on things that I knew would be beneficial to her for her to sell and make money over there. So and I told her the reason why she's upset

of me is because I told her I cannot transport the things from the dock to your house because she lives three hours away from the port. I said you have to figure out a way or I can talk to the shipper to maybe like work something out where you can go get it little by little and she's just like, oh, you left me in a bind and my husband's not working and I'm like, okay, well, and she's my stepdad. I'm like, it's not, I didn't make him not work. So I didn't know how to respond to that.

And I just like got so mad because she kept on telling me, you know, oh, you're good for nothing. Like you don't help me out. You put me in a bind. You're doing this. I'm like, in my mind, I'm like, wow, okay. So I just started starting yelling. I'm like, I have feelings too, you know, and it's not fair to me. And she's like, it is fair to you.

You need to like, you know, it was just a lot. And I, like I said, I, every time I heard about it because I didn't want to yell at her. Yeah, yeah. Well, it's, yeah. Is that a pattern though with your relationship? Does that, did that shock you that she responded like that or? It did not shock me, honestly. It was just more of like a quick instant response just because of all that's been going on,

but it did not shock me. I was not like upset in the sense, but I was more than hurt by what she said. Two areas that you need to clarify in your mind, your boundaries, and you may want to sit down with your pastor or somebody and discuss it. You need to clarify your relational boundaries as to what I'm going. What am I willing to let someone that I love say to me? How am I, you know, Mom, I'm not going to have this discussion. If you're going to raise your voice, we'll have to talk another time. If you're going to cuss at me, we're going to have talk another time, okay, and just hang up.

And when you, you know, I'll talk to you as long as we can talk, We can disagree, but we're not going to be disagreeable. And that's one set of boundaries. And the second set of boundaries is what amount of money is reasonable. You putting yourself in debt does not make sense to do this. So that's not unreasonable. But if you're going to ship goods over there, you need to think about how you're going to get them to her. You know, the three-hour gap is a bit of a problem on your end.

So, I mean, how did you think that was going to work? I don't know why it would work. It shouldn't work. So you probably should have gotten them all the way to a doorstep or not done the whole shipping of goods thing, one of the two, because you knew she didn't have the ability to get there. So, yeah, so, yeah, you set your financial boundaries and your relational boundaries, and they should be two different. They're not tied together. My financial boundaries aren't tied to my relational boundaries. I can have a quality relationship and give no money.

I can give a lot of money and not tolerate misbehavior. They don't have to go together. But for sure, those things. But what this did is it puts you just completely into a tornado. And it hurts. It hurts. And so, yeah, just back up and de-escalate and reset what you are willing to do. And then the next time you approach a conversation,

what am I willing to do with the way we talk about things, our relationship? What am I willing to do financially? Dave, we got a lot of calls on this show where life happens. One day someone's healthy, they're working, providing for their family, and then a curveball hits. You know, we hear it all the time. A car accident, a cancer diagnosis, a heart attack, and suddenly everything changes. Yeah, and that's why you've always said that having term life insurance from Xander is essential, because it protects your family if the worst happens.

Yeah, that's right. You need 10 to 12 times your income. in coverage. No gimmicks, no whole life junk, just straightforward term life protection. But there's another piece that people often overlook, and that's long-term disability insurance. Yeah, it's important to understand the difference between them. Life insurance steps in when you die. Disability insurance steps in while you're alive, but can't work. So it replaces a large part of your income so the bills still get paid while you get back on your feet. Now, if your employer gives you free disability insurance, great. Take it. If you.

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It's fast. It's easy. and it could make all the difference. Go to zander.com or call 800-356-42-82. Protect yourself, protect your income, protect your family. Jessica is with us in Los Angeles. Hi, Jessica. How are you? Hi. Hi, I'm doing well. How are you? Better than we deserve. What's up? Hi. Well, I wanted to ask you guys a question. A little background. I'm 32 years old, and I am an attorney in L.A. County. I've been working hard.

to save up for my retirement and investments and all that. And I've been in a long-term relationship for about three years with my partner, who's 41. And marriage is on the horizon. And I just kind of, I had, I had my suspicions, but I recently found out that or confirmed that he doesn't have any investment accounts or like retirement account. And so this really concerned me. And I just wanted some insight from you guys about, you know, how big of a red flag is this? you know, can he catch up? Am I being superficial for even being concerned about this at all?

So just really wanted your insight. Wow. Do you know why, Jessica, that he has no retirement? I asked and kind of the common responses might be like, you know, while I was just planning to work my whole life, which it's like you don't have that choice, right? You could get injured or have a disability. Other things were like, you know, I haven't had benefits in the past. be working for smaller employers. He's a sole proprietor now, so it's just kind of a mix of...

What does he make? I don't know exactly. It's three years. You need to know. I know. I think approximately probably gross 100 to 150. That would be, that's kind of my guess. He told me once. Gross is not net. I mean, what's his taxable incomes when I'm... Is he making 30 grand and trying to live in L.A.? I know I should know that, but I don't because, you know, he's, you know, he's not.

He recently went out on his own, and so when you kind of start your own business, year one is, you know, zero pretty much. Does he have a lot of debt, Jessica? No. If the reason that you want to know is because you're greedy and all about money, then yes, you would be superficial. But if the reason you want to know and the reason you want a plan in place is because the way we handle money is indicative of our emotional, psychological, spiritual maturity, and our character is reflected in how we handle money, then yes, this is of great concern. Yeah.

And the reason why I felt, and this might come from a selfish place, but I couldn't help but feel like all this time that I've, you know, the money that I've responsibly saved in multiple accounts and whatever, I couldn't help but feel like it would be a subsidy for someone else. And I know the whole, you know, once you're married, you're one, I totally understand that. But you can't help it feel like maybe your retirement quality of life would go down because. Yes, but I think you would feel different, Jessica, if we painted a little bit of a dramatic picture.

But if his parents were sick and he was their caretaker and, like, did all this and didn't have the margin to say for retirement, but he was telling you at 45, this is his plan. You know what I mean? Like, if there was like an effort for the reason why and a good reason, I don't think you would feel like that. I think you'd be like, God, you are a good man. And you're going to be a really great husband, and I'm excited to partner with you. It wouldn't feel like a subsidy if what he was doing was honorable. But if you're subsidizing, if you're subsidizing, I really don't want to plan. And I kind of just want to work for myself, even though I make half of what I would make working for somebody else.

And, you know, all of this screams lack of ambition, lack of, you know. Well, lack of planning and forethought. And when you go into a relationship with someone, right, a long-term, lifelong, and they don't, have the ability to think far out in the future and monetarily of just taking care of. It's not a deal killer. It's not a deal killer. But it is not superficial for you to be concerned either because what it's indicative of. And so what's the source that's driving his lack of doing it?

Because you're, you know, and we could go on the other side and go, are you obsessed with money? And all you do is think about retirement. I don't want to live with somebody like that, you know. And no, we don't want to go that way either, right? But this idea that we're solving for peace, again, to quote Dr. John Deloney, which we do over and over, I'm afraid. But, yeah, I'm solving for peace. Why am I saving for retirement? So I can eat.

That's solving for peace. Yeah. And if I don't have a partner that's going to be not even equal dollar amount, but equal effort. You know what you mean in that? Yeah, that's hard. Equal concern. And it's not a, you know, a woman versus. versus man thing. I think the opposite would be the same if a guy called and said, yeah, she has

nothing. She hasn't really thought about it. I'd be like, golly, what is, what is she doing? Like, you know what I mean? I don't want to be a kept woman. Yes, yeah. That's an old phrase. Some of y'all have to look that one up. I will. I will have a break. There you go. Kelly doesn't know either. Well, again, it's someone who doesn't do anything and is being taken care of. Yeah. Kept. Yes. That's the, that's the definition. That's an old. And that's not a stay-at-home mom. No. No, I know.

I didn't say not earning income. I didn't say that. I said doesn't do anything. Yes, that's it. That's it. I just want to say that out loud. Yes. Your mother's a full-time mom for 40 years.

She's anything but kept. Yes, that's right. I'll just tell you that. Don't even have that word near her. That's not even going to be good. Hey, buying or selling your home is a big deal. And you want an expert in your corner because it's expensive. You want somebody fights for you to help you get the best deal for the right price.

The Ramsey trusted program is the only way to find the top high-octane, high-protein agent in your area that you can trust to make buying a home a blessing, getting your home sold, make it a blessing. It's easy. To find Ramsey trusted real estate pro for free, just go to Ramsey Solutions.com slash agent or click the link in the show notes and in the description. And Rachel, I think the later people get married, and they're getting married later and later and later, the more this type of discussion comes up. 100%. Two broke 21-year-olds don't have this issue. You know, they're like, game on, here we go, whatever it is, let's go, you know. And saddle up, right?

Yeah. And it's worthy of the discussion. Oh, definitely. Because if you've built a life and you've worked hard on something and you have had a set a principle. financially through your 20s, even your early, your 30s, whatever that is, timeline-wise for you, and then you choose to get married to someone, you have built a substantial life over, you know, one to two decades of working. And I do think it would be easier to merge and mold those two lives when your values are the same. But when you're coming at it so separately, and your results

have been so different over the same amount of working time, or hers even, I mean, he's 10 years older than her, you know, and he has nothing, and she's 10 years, you know, the last caller. You know what I mean? Like, that's where the, that, that's the hard part. That, that is, that's the tension point. Um, because it, it reveals, it reveals who you are and what kind of partner you're going to be. Yeah. Ratio wise of income to savings. Mm-hmm. There should be some kind of something going on. Yes. So, so. Dollar amount, maybe, maybe, it's not about the money amount. That's right. It's not about, I'm going to measure your value based on your bank account. That's not it at all.

But we are saying what created that, what character qualities, and are those character qualities attractive? Or are they going to cause you to become bitter out of lack of respect? Yes, resentment of what they're doing. If you lose respect right after that comes resentment. Yep. And so, you know, okay, I really like him. He's a lot of fun and all that, but I don't respect it. That doesn't play long.

That's right. But if it's something as simple as, I've got to address this because I'm afraid it can go to that. That's okay. And you go, before we go forward with marriage, we've got to be on the same page with this. And I want to be able to respect your effort. Yes. Respect your forethought, your maturity. And if we can't do that, that is in it.

That's going to be a deal killer, not the fact that there's no money. That's right. Absolutely. No, I totally. That's a deal breaker. And that's really tough when you've been in something for three years and you're 31 or 32 and you're an attorney. Yes. And also knowing people's values can change.

We get the question a lot. Should I marry someone with debt? And we're like, yes. Yes, you can marry someone with that. But what is their value around that subject for you today? Should you marry someone that wants to stay in debt forever? No. If you want to be out.

Not if you want to be out. You're going to be pissed off your whole life. That's going to be hard. So people can change their values, right? with what the decisions you make. And that's the beautiful thing. There's redemption in it, right? It's not like who you were at 21.

Has to be who you are forever. Thank God. Yep. But it is, it's a more weightier discussion with people getting married later. You're exactly right, because you have built a- It's coming up more. A life, you know. We're getting a hair on the air more.

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Randy is with us in Green Bay, Wisconsin. Hi, Randy. How are you? Hi, Dave. I'm great. How are you? Better than I deserve. What's up?

I'm going to try to keep this as quick as possible. My husband and I have a varying income and recently sold one rental property, but now we're questioning whether that was the right move. We still own a duplex that cash flows. and we're also going through probate with an inherited home. We could potentially sell both properties, pay off around $225,000 in debt, and fly through almost all of the baby steps besides retirement savings, or should we keep them for long-term wealth building and cash flow?

Okay, so you own currently two properties that are rented. Do I understand that right? We have a duplex, and both sides are rented. But the other home, the other home, you have. You said COVID, what did you say? It'll be an inherited home. And it's not rented or anything right now. We're just starting probate.

Oh, so someone passed away. Yeah. Okay. Who passed away? My husband's mom in March. I'm sorry. Okay. And so you're going to inherit her home, and you're going to do what with it?

Well, we don't know if we should rent it. There currently is about 40,000 in death. on DSA. So the home is worth around $150,000, but we would have to pay the, you know, $40,000. Yeah, was that his childhood home? No. Okay, all right.

And the duplex, does it have debt on it? It does. How much? It's about, so it's a little confusing because we have two properties tied up in one mortgage, and we did just sell an older home that my husband lived in, we sold that, and it didn't knock our mortgage down. All in all, for our house on 40 acres, and that duplex, we only owe around 180,000. The duplex is on the same piece of property as your home?

No, it's in the same town, no. It's just in the same note? Are they, they have one mortgage on the two of them? Yep. I'm sorry? Yes, they do. Okay. All right.

So 180 blanket mortgage across two pieces of property. One of them is your home and one of them is the duplex. And then the inherited home has $40,000. And the $200-something,000 in debt is what? Is both our current properties, my car and some consumer debt? Okay. So it's the 180 plus the 40 is 220 plus a car? Right.

Nope. It's around altogether $2.25 for all debt. How much is the car? The car is, I'm around, it's around $28,000, and I'm about 5 to 10 underwater, depending. I've had it for sale since summer of last year, and it's not selling. I even have it undervalued. No, you don't, or it would have sold. The, um, my bank told me not to sell it for, for, for, I mean, I have it listed for 22,000 and the bank told me it's worth 24 and I'd be silly to sell it. Yeah, bankers don't, bankers don't get to advise me on finance. They're just where I keep money. Um, the, um, last thing you want to ask is a banker about debt. That's like asking a dog if it's hungry. And so, um, so what is your household income?

It varies. So my husband works full-time. He doesn't make much. He makes around $20 an hour. I stay at home with my baby, but I do work on weekends. I bartend, so it's all over the board. How are you paying all these bills? Our rental income is a big one. It does pay the mortgage and all of our escrow. That's why we're like, we don't know if we should sell because it cash flow so well. How much you guys on average would you say, Randy, bring home a month, though? in total. I would say around 4,500.

Okay. Yeah, okay. Okay. I would sell mother's house and I would pay off your car and I would pay off your consumer debt and I would get on a detailed written budget to where you're running this like a business, not just a wish, not just like a wish. You've kind of just been throwing stuff around and hoping it worked. And you've got to really have to get very, very practical and very detailed.

and live on your income, and the two of you are going to work on your careers. Y'all suck at earning money. And so you need to really get some income coming into this house. And then you can work to pay down the 180. But no, I wouldn't sell the duplex today. I would sell mom's house and clear this stupid car. And don't go buy in $28,000 cars when you make $20 an hour. Yeah.

And hopefully they could clear, what, almost 100? after if she owes 40 it's 150 yeah and then well you got to pay off the 28,000 dollar car and the consumer debt which I didn't get all the way to the bottom of that yeah yeah so another 10 or 15 probably there because the numbers don't add but anyway that yeah so you need to get very detailed on your monthly income and and what it goes to and begin to whittle down the 180 that you do keep at the end of this story but everything else I would I would sell mom's house and I would pay off your car and then get on a detailed budget payoff. All the consumer cut up the credit cards.

And I don't think she didn't give us her primary home total of what they owe and the duplex. All together. But all together. It was a blanket mortgage, one mortgage on the two of them. On both of them. Yeah. So they've got that deal down at the credit union. Yeah, the banker helped them with that.

So, yeah, blanket mortgages set you up for problems when you get ready to divest properties, when you get ready to sell a property, because most of them don't have properly done release clauses, meaning that you can sell the duplex for 180, and they take the whole 180 against the debt, and you get nothing because there's no partial release clauses on blanket mortgages. So that sets you up for a problem, and that's typical thing. Is that one reason why you wouldn't sell the duplex because of that? Because it's tied into the same mortgage? No, I think she's making money on it right now, and they're dependent on it right now.

But if we got rid of the car payment, now the cash starts to flow, and we get on a tight budget, now the cash starts to flow, and we can start to whittle it down, you might be able to keep the duplex in time. But I'm hoping it can. And I can't tell where this is out, where this, you know, we didn't get into every single dollar there. But yeah. So. But income is key there, Randy. If you guys, and run, and after you sit down and run your numbers, I think it will give you some piece of having. actual plan because everything is just feels so muddled together and you're like, I don't even

know like what to do here and there. And once you've laid out a plan, then you guys are able to say, okay, I need to work X amount more per week. He needs to work X amount more per week for us to clear everything in four years, three years, you know, whatever the time frame looks like for you guys. And to actually have a plan and then you can, then you can shape your life around it. And that actually will probably give you the motivation then to actually play all this out. Because when everything is just in your head and it just feels like there's no succinct order. It feels like more like chaos. Let me tell you something I see all the time. People are working hard, trying to get control

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BoostMobile.com slash Ramsey to make the switch today. That's boostmobile.com slash Ramsey. $25 forever requires customers to remain active on BoostMobile Unlimited Plan. Well, one of our favorite things is when people share their stories about how they're winning. We got in a great review for the every dollar budgeting app. Van Quote says, every dollar is excellent. It really helped me get my personal finances in order now that I'm married. My wife and I use it together on our joint checking account. helps us maintain a common vision and set of goals. There we go.

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Hi, Nate. How are you? I'm doing well and you. Better than I deserve. What's up? Well, my question today is, so me and my wife were about $65,000 in debt. I recently left my full-time job and started my own business because I was making significantly more. My question is, I want to get the heck out of debt.

And my question is, how much should I be taking home from the business, but also leaving enough in the business, to grow it. Okay, so what is the business profiting? You said you're doing a lot better. That's awesome. What's your profit? Yes. So my profit, I am consistently bringing in $2,500 to $2,800 a week.

Profit or gross? Profit, what I'm bringing and what I'm doing home. My gross is being close to $5,500 to $6,500. Okay. What are you doing? What kind of business? I have a mobile mechanic business. Oh, good for you.

That's awesome. Thank you. Okay. And so it costs you about $2,000 to $3,000 a month to operate, and you're making, did you say a week or a month? You said a week? A week. The past three weeks I've brought in consistently $2,500 into my household. Profit after expenses.

Okay. Yes. Okay. So you're making like $10,000 a month? close to, yeah. Yeah, if you keep this pattern going anyway. All right. And good for you.

Man, you're hustling. Yeah, well done. That's awesome. Thank you. Thank you. Yeah. So what do you need to put back into the business to grow it? You seem to have it operating very well already.

Well, part of this is I've been operating part-time about 16 hours a week since January. And the last three weeks, I went full. time. I have. That doesn't mean you need to put money back into it. You're making more money. Right. So I have about $50,000 in tooling that I still have to get.

And I'm also getting to the point where potentially in the next two to three months I could look into adding another person. I'm not adding anybody right now. This is a whole three weeks old. Right, right. So, no, we don't need to, we need, let's just put off talking about adding somebody. And by tooling, you mean purchasing tools to do the job? Yeah.

So you already have enough tools to make $10,000 a month if you never bought another tool. Right? I guess that's correct. He's excited. He's excited about his business. I want you to be excited. I'm excited, too. But let me tell you, let me tell you what happens with guys like you and guys like me.

Okay. If I go in Home Depot, I discover things I need. Right. That I don't even know what they do, but I need one of them. And so what happens in your world is you can tool yourself all the way through your profit. Right. And the Matco guy is making all your money then. Yeah. Been down that road and getting out of that road.

Exactly. So or whoever, whoever's pitching you the tool. So you need to be very good. careful. Tools are not fun. Tools are overhead. Overhead is evil in business. And so you don't buy a stinking wrench unless that wrench is going to make you more than it costs you within the next two or three weeks. Well, the reason why I'm talking about tooling is specifically like there are jobs that I'm currently not able to do. So what? And they make, okay. You're making 10. You're making 10. $10,000 a month after three whole weeks in business. I mean, you can get it.

It's okay to add some of those jobs, but I don't know when you're going to do them. Right. But he's saying they pay more, right? So one job could be two grand. And then if you had this tool, I don't know, what double? I don't know, or whatever, whatever it is for you. Yeah, only if you by yourself can make more money because you bought the tool, not because you can get jobs. Yeah. The tool has to make you more money because we get caught up in this thing of

I could, you know, I'm turning down work. No, you're not. You're busy already 15 hours a day. Right? Unless you can make double the hourly rate because of the tool, the tool has zero value to you right now because logistically you booked up. Gotcha. So I'm doing accounting now is what I'm doing. I'm not working on cars. I'm doing accounting with you. So if you're averaging 10,000, dollars a month with the hours you have unless you can average an extra five thousand dollars don't spend two thousand dollars on the tool gotcha because it doesn't it didn't cause your income to go up it just meant you could go to a different kind of a job than you're doing right now whoopty doopty now when we get ready to hire somebody six months from now

and you've actually got some downtime that you need to fill up some available hours in the day and the tool adds those jobs. Now that tool is going to ROI quickly and you're going to buy that one. Gotcha. But your goal is not to end up with a trailer full of tools. Your goals end up with a pile of money. Yeah. That's what the tools are for. And that, I get, like, I'm sitting in a studio right now. It's a different world, but it's the same kind of principle. Okay. When it comes to computers and electronics and cameras, my friends in the engineering department that work from me and Ramsey have no end to their appetite. They will buy two million dollars worth of crap that this crap sitting here would already do. And I have to go, no, we're not doing that.

But then also, Dave, you're going to look prettier. I'm like, not that much prettier. And probably not. She's probably going to show off my ugly a little better. But that's all. But I mean, this is the world you can get into where the increase in equipment, minimal functional. Yeah. Okay, so where's the balance of putting money back into the business? Only put money back. I know, versus paying off the $65,000 that he has in his consumer, like in his household debt. I don't think he's going to have trouble with this because I think he needs to take most of it home right now. And pay it off.

The reason is that putting money into the business right now is not going to cause his income to go up because he's already fully booked. Now, if you're not fully booked and you can buy a tool that causes you to be fully booked, then you put that money back. in. But that's a, that's not $50,000 worth of tooling. That's, which was his original quote, and I'm all the way down to about 2000 now. And so, um, but $2,000 at a time, then when you add somebody and you've got available logistic hours, now we can grow the scope of the business, the size of the business with the tooling. So, you know, we're going to tool up a little bit with cash. But you still got plenty of money, making more money you ever made in your whole life. It's awesome. Because you're ain't afraid of work and you're out there doing it, man. And you know

out of do it. This is, I got a feeling you're going to, this business, when we talk to you in three years is going to be, you know, six trucks running. If you're not careful, because also, I would say him, I would say you, certain personalities, you do get excited and then you get up over your skis and you're like that. And that's where, well, I could borrow on this truck. I could do I could do that. You know what do you mean? And you start to, right. But you, you can start to expand so quickly. And so. But let's pretend that. There's a level of stability that's good. Let's pretend he was making fun.

$5,000 before he quit his job. Now he's making $10, and he got $65,000 in debt. He's debt-free in a year. Mm-hmm. Easy. Yep. Easy. And so, you know, just figure out your math that way.

And then what we have done at Ramsey, I've organically grown this from a card table in my living room to where we're sitting now. And organically mean, I took profit from the company and I bought tools. I hired people. I used some of the, I didn't take the money home. I put it back in here. But in every case, those things have to give me a return on investment. Otherwise, we're going backward.

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Mary is in Charleston. Hi, Mary, how are you? Good, Dave. How are you? Better than I deserve. What's up? Yeah, mine's probably pretty simple there. I have a question as far as our mortgage and paying it off. So we owe $110,000 on our house. It's worth about $400,000.

and we pay $5,800 a month right now. Our mortgage is only almost $1,500, but we've been paying extra. And in doing that, our payoff, if we pay it off in, we have 23 months and we'll have it paid off. But if we chose to pay it off in 12 months at $5,800, then we would have to take some money out of our high-yield savings to, to finish paying it off. And we have about $70,000 in high-yield savings right now,

and I've proposed that we take out after 12 months, continue paying the $5,800 for 12 months, and then take out $55,000 out of our savings is what we would have. I believe that we would have to pull out and leave about $15,000 in there

at that time and pay the house off. So I just want to So the difference is... So the difference is... So the difference is 12 months with your plan or the original plan is 23 months. Right, right.

So the argument is 11 months difference. And how old are you guys? I'm 56 and my husband's 60. And how long you've been married? For 11 years. Okay. And how much do you guys have in your... NISTIG, you're retirement-nistic.

In retirement, we almost have almost close to $200,000 in 403B. We've quit putting so much into it while we've decided to pay this $5,800 a month rather than the $1,500, the almost $1,500. We cut back and only... Yeah, and your household income is what? $160,000. Okay. All right. So let's just back up and say both plans are in the smart column.

Okay. There's no, you're so stupid, I can't breathe checkmark on this one, okay? I mean, both of these are very wise. This is an argument between, you know, minutia, okay? And so neither one. You said he wants to do it the other way. You want to pay it off early, but he's worried about having not as much emergency. fund. Is that my reading between the lines?

Yeah. And I told him, I watched your show once and I said, I think he said, get uncomfortable for a while. And that's when I came up with the plan of, I even suggested we leave a thousand in there. And he's like, no, I'm not that uncomfortable. No, no, no, that's not, that's not our plan. Our plan is, your baby steps four through six, four through seven, you leave your fully funded emergency fund in place. And I think 15,000 is a little tight. I'll kind of come down on his side there. So maybe between the two of you is the answer, because I also think 70's a little high. Okay.

Yeah, how much are your expenses every month, Mary? You know, not much, really. We were bringing home about 80, 200 a month, and like I say, we're able to pay $6,000 on our, and live with the means and not take out of the high-year-old savings or anything like that. So our expenses aren't. We don't wear out of debt. So if you went in the middle and just said, if we lost all income, right, and we had four months worth, right, that's $32,000. So maybe you do throw, you know what I mean, some at it. But you guys are reasonable in the three to six month emergency fund, right?

Four to five months. Yeah, you're in good shape. The 70 is high. The 15 is probably a little low. And so here's a fun game. if you want to play it. Do the 5,800 for 12 months and then keep doing it every month until you look up and the balance and the high you can pull enough out of the high yield.

I don't like that game all of a sudden because the high yield's not paying you what your mortgage is. What's your mortgage interest rate? It's high. It's 6.875. And your high yield's not by three, right? Yeah, it's just over three. So I want to go ahead and pull some of the high yield now.

Yeah, why don't we see 15? He says none and you said 50. I'd go 35. Yeah, split the difference. That leaves you guys again with a four to five month emergency fund. And with what you're going to save in the mortgage once it is paid off, you're going to have it bumped back up in six months, you know? And then you can also play my game.

Okay, so you put 35 on it today. You pay 5,800 on it. And if you look up and he's okay with one month pulling another 10,000 out and knocking it off, and that's the last 10,000, you could every month look at it and go, if we pay it off this month, that would leave this amount. Oh, yeah, yes, we'd pay it off this month, it would leave us this amount. And both of you sit down and look at it and be laughing and giggling while you're doing it, not wagging your finger.

Okay, it's like, this is fun. Okay, are we going to pay it off this month? Are we going to pay it off next month? Keep the levity. Yeah. Are we going to pay it off this month or next month or the next month? And then, you know, he's going to look up one of those times and surprise you and go a little further. You know, go on down to $20,000 balance or $25,000 balance.

Now, Mary, I would want you guys investing in retirement, though. I mean, if you are following the babysaps, you guys need to be investing 15 percent. Are you? Because you said you pulled back some. And I'm putting none in. We pulled back. We were doing 15 percent. Yeah.

Yeah. No, we're still investing four percent. We were at 15. You need to go back to 15. Go back to 15. Okay. I was advised to cut back while we're paying the house off because our mortgage is so high. Six point, our interest rate and the mortgage is so high.

Yeah, but the rate of return on mutual funds and a good retirement account is higher than your mortgage. Okay. So whoever advised you that's not following our plan. And your age right now. I mean, like, you know what I mean? I think it would be a little bit of a moot point. So if it, you know, but if you're in your early 30s doing this. But they're in their, I mean, he's going to turn 60.

So I'm like, I want, you want some in that account. More than 200. Yeah. So be able to retire. Yeah. Because that's, that is the balance about the paid off home, like where we are all about, yes, getting to that point, which is our baby step, you know, baby step six. But, but it does no good if you have a paid off house and you have no money. Exactly.

Not enough money. So, like, you do, you do want money in retirement. Okay. So what we teach, Mary, to follow our planning. exactly would be to start putting 15% of your household income. That's another 10% more than you're doing now. Well, actually, if you lower the emergency fund. And lower the emergency fund down to, you know, three to six months, which would be 25,000.

Okay. And so I'm going to put 45,000 onto the house. I'm going to start putting 15% of my income away for retirement. And then I'm going to figure out how much I can put towards the house while putting 15% under retirement. It won't be 5,800 anymore. Yep, it'll pull back some. It's going to be more like whatever, 5,200 or whatever. And you're still going to be out in 23 months. That's right.

And you will have been all along putting money into retirement and all along had a sufficient three to six months of expenses retirement plan and all along all your extra money then is going towards the house. And so that's what we teach. The baby steps four, five and six are simultaneous. Four is 15% of your income into retirement. Five is kids college, not relevant in this discussion. And six is everything extra goes towards the house. And no more should be in savings, non-retirement savings, like high yield, than three to six months. And we're

going to call that $25,000 right now and call it a day. So that's what we actually teach. If you're going to work our plan, exactly, that's what we would do. And the truth is you'll end up with more money working that than either of the plans we discussed for the last eight minutes, but it was fun discussing it. And either way, Mary, you're going to look up in two years and your life's going to be great. None of these. None of these options are in the stupid column. None of them. And well done, Mary, I mean, to get to this point, that's a lot of hard work. So you and your husband both. It's amazing. It's a good, healthy discussion between someone who's debt averse and someone who wants a pile of savings, husband and wife. Love this discussion. And the fact of the fact that you have a lot of the fact that

that they're having the discussion. And it's a healthy argument. I like it. Chris is in Boston. Hey, Chris, what's up in your world? Hey, guys. Thanks for taking my call. I'm big fan of any else. Well, thank you. How can we help? So I wanted to ask the basic question of did my fiance and I make a poor decision on the house we just bought. And I was hopeful to kind of briefly go over my plan going forward and see if it aligns with y'all's advice slash what you might suggest I do differently. Okay. What do you do on the house?

Tell me about it. So the house was a $670,000 house, and we did 10% down. And so our monthly payment is $4,700. And what do you make? I have a salary. of 120,000 per year, and my fiancé has a salary of 70,000 per year. The big variable in that is that I work in sales and I get a bonus every quarter that can vary. Typically, it can, three

of the quarters will vary between $10,000 and then one quarter will vary between $30,000, all the way up to maybe $100,000. $1. Okay. Well, what we recommend for married people is that your payment should not be more than one-fourth of your take-home pay, and you should be well under that with the numbers you gave me. So that's what I was, so with the outside of the bonuses, if you remove the bonuses, our take-home pay is roughly $11,540 per month. Yeah, but we're not removing the bonuses because they're there. Even on the small end, maybe around $60,000 per year at the small end, that would still fall. They still put you at a fourth of your take-home pay. I guess our main question was, you know, did we overindulge?

Because it did drain pretty much all of our savings to, to, get to it. Now, I did invest. And the way I did it was before listening to y'all's show and learning your take on it. I invested in real estate before I was paid off fully on. So we do have some debt that I wanted to go over as well. And so I, but I long story short, I invested in real estate prior to paying off all of our debt. And not only, and including only having 10% down on our primary residence, worried me a little bit, and I know that that's not... It's not best, and no, I would not be investing in real estate before you bought a house, and no, I would not be buying a house if you weren't debt-free, but you already did,

so now let's get out of debt. Why don't you sell the rental and pay off the debts? That was going to be one of my questions. We've only owned it for about a year and a few months. My thought was selling the rental before it appreciating to its full value. It's not going to appreciate to its full value. At what date? When does it stop appreciating?

Yeah. No, I understand that. There's no end to that question. But you just feel like the quick turn after you pay commissions and everything. All you're doing is admitting your mistake, and that's the problem. But if you sold the property, Chris, I mean, if you only had it for a year, it probably doesn't have much equity in it. Which means it sucks. Like it shows.

Because it should have some equities? No, it's draining him. He's not making any money on it. Right. Unless you got a bunch of equity, you're not making money on it. Yeah, but if he sells it for the same price, basically, he bought it for a year ago because it hasn't really appreciated much. And he pays commission, I mean, fees all of it. He's going to be under, you know what I mean?

Can you get out even, Chris? Yeah, that's my question. We probably could get out even, yes. Good. After everything. Okay. We have 20% equity in it. But we do have very stable monthly income.

come on it. We're not, we're not, no, you don't. No, you don't. And I agree. I agree. It's useless. You're, you're, you're, you're, you're, you're, you're, you're, you're, you're, making even at best on the monthly cash flow. By the time you include vacancy repairs and crap, owning rental property, you have to make a lot more than you're making to break even. You are not breaking even, not net, net, net, over a 12 to an 18 month period of time. When you look back on it, that's what's going to have, I own $600 million worth of real estate. Believe me, you have to have more margin than you've got to break even. Now, so I would get out of that. That's what I would do. And then all of a sudden your house starts looking smarter. And I would, you know, use anything I can do to

clear up what other personal debts have you guys got? I have 20,000 student loans, 9,000 car. She has 20,000 roughly student loans. Yeah. And you guys make a pile of money, so clean that mess up. Yeah. Yeah. See, if you don't have, if you don't have this rental property hanging over your head, like a hatchet, and you don't have any personal debt at all, all of a sudden we're not sweating the house. Yeah, but I do hear you, Chris, with when the bonuses come, depending on the month, right? The instability is, yeah, on the low end,

you said if you bring home 11,000, right? And 5,000 almost of its being taken by the mortgage. On that one particular month, you need to have a fund. We call it the peaks and valleys fund. So when the bonuses do come in, throw some of it in that fund. So when there is a low month, you can pull from that fund and that the house, you know, is fine, that it is around a fourth year

take-home pay. If you didn't have any car payments, so you wouldn't be noticing it. Okay. Okay. Yeah, I mean, my plan going forward was to try and save three months reserves and then get to 20% equity in the house. So you would add step one to that be sell the condo. I would sell the condo.

I'd get debt free. I'd build my emergency fund, baby steps. Do you guys have any cash saved, Chris? So we really did pretty much get Put everything there Very low But in a few days When's the wedding?

In October We are very lucky that we do have Family help for that We did put a small portion of our money Already into it But that wasn't a big factor But I should be in a few days I'll be getting another one of those quarterly bonuses

That will at least replenish some of that So the advice I gave you is what you do from today forward. Okay. Had you called me a year ago, here's what I would have told you for the rest of you guys out there. Not to shame Chris, but for the rest of you guys out there, don't buy a home until you're married. Number one. Number two, don't buy a home unless you're out of debt, period.

Don't buy a home unless you're out of debt and have three to six months of expenses plus a down payment. and then don't buy a home where the payment on a 15-year fixed is more than a half or more than a quarter of your take-home pay, and don't buy rental property unless you pay cash for it, which is way after all those other don't things that I just covered. So if you had done that, you would now have, you'd be planning a wedding with a pile of money sitting there and no debt. and you'd have no rental property and no house. And you'd be looking at October going, I'm sure, ready for it to come. And then the following spring after your marriage, after renting an apartment for six months, I would talk about buying a home.

By then you'd have a great down payment and you'd have no debt. And you'd have an emergency fund too. That changes the level of anxiety to this discussion dramatically. And when you buy a home with someone you aren't married, to you are extremely vulnerable, both of you. It is legal and financial suicide to do this. They're probably going to get away with it because it's probably going to work out. Well, they actually have a wedding date. They have a wedding date. Some people call and they're like, we're not sure.

I mean, Saturday works for me as a wedding date. But the, you know, because she, I mean, if something happens with this relationship and everything's already. exactly tied down and tight. And so we're stressing this relationship right now. And if anything, God forbid, happens, y'all are going to find out what screwed looks like. It's going to be a mess. So, but I'm hoping that for y'all, it just sails right on through October and you can just execute the plan we talked about. And we're going to start selling stuff and we're going to get this mess cleaned up. But that's what I, not, again, not to shame him, but all, you know, you guys got quit buying houses aren't married yet.

It's really, the nightmare stories that come into this show. By houses together when you're not married, yes. Both your names on it. It's just, you, je, je, je, je, the stuff that can happen is all bad and not good. So, yeah, please don't do this. Again, Chris, we're hoping for you that this all works, go out. We're not trying to beat you up, but you called and asked, so we're going to tell you. Welcome back to the Ramsey show in the Fair Winds Credit Union Studio.

Rachel Cruz, Ramsey Personality. My daughter is my co-host today. Matthew's in Portland, Oregon. Hi, Matthew. How are you? Hi, good. How are you? Good. Better than I deserve. What's up? Well, I'm just wondering how to, you know, attack this mess that I'm in, basically. Yeah, I kind of figure out where to start. What's going on, Matthew? you? Well, I have a total of $48,090.49 of total debts. I have some goals for myself I want in the next year or so, but I want to climb on all this before I can start doing those. What are those goals? I want to be able to buy a house. The house payment is kind of an interesting situation, family situation sort of.

Um, so I've really great parents who basically are giving me $300,000 for a house. And I want to be able to be secure and able to be able to buy home. But I want to get out of all this debt I have before I do any of that. What do you make? Um, so I make 77. My wife makes about 55. Okay. Very good. Okay. And so how much a day, the 48,000, what's the breakdown on that?

It's 19,305 in students, student loans for my life. Mm-hmm. 12,000, 639 for one car and 11,145 for another car. Gotcha. Okay. And then 1545 on one credit card and 31, 39 on another. Okay. All right. So when the two of you sit down at the kitchen table with the television off and you put these numbers in front of you, what do they tell you?

There's probably been living above our means. That's what tells me. Okay. But what they tell me is, I mean, you make $125,000 a year. You have $48,000 in debt. I think you can attack this debt fairly rapidly. the $300,000, is this a cash gift from your parents? Yes. And where are you living now? I'm living outside of Portland. No, I mean, are you living in a rental? I'm renting.

Yeah, I'm renting. Okay. And how much is your monthly rent? 1470. Okay. And you're outside of Portland, Oregon, right? Yeah. Okay.

What will $300,000 buy outside of Portland? on Oregon? It won't outright buy anything. Oh, yes, it will. I mean, it would get close. It won't buy something you like, but it'll buy something. It will buy something, sure. Okay. That's what I asked. What will it buy? Small piece of property. Probably needs some fixing up at that price. It's not too cheap up here, unfortunately. No, I mean, that would be reasonable, because the median household, median house price in all of America, and Portland's much more expensive than most of America. But the median house price is 400 and, right now 400 and something thousand.

In the Midwest, it's, I can't see that, you're flipping it. But anyway, the, it's like, 600 and 15 in the West. In the West, but that includes California. Well, it includes Portland, too. Okay, anyway, that's the median. So you would be, but bottom line is you're going to be substantially lower than median. How old are you two? I'm 29. My life's 30.

Okay. All right. It may not buy an outright house, though, in Port, like outside of Portland. Yeah, it will. Yeah, well, it's just not a house he wants. Yeah, it definitely will. I mean, 100% will buy one, but I'm not sure that you want to live in it. I want to live in it.

He wants to live in it. Okay, that's fair. I'm not saying it won't buy. I'm not going to say it won't buy a house. Definitely, you can find a property a 100% chance for 300 grand. None of us are going to like it, but we could find one. Okay. Now that we've gotten that established, for real.

Well, I mean, I'm still considering it even if I don't like it. So one thing that's interesting about this money is my folks want it split in a certain way. They want a title titled a certain way when we do it. Why? I'll pass. No. Why? Wait, stop.

Stop. Why? Why? Attendance and common title is what they would want. I don't know what that is. I'm sorry. Say it again. Why?

It's a attendance and common title. I know. Why? So they could have it if something happened to you? No, between her and I. Between your wife? They don't like your wife. Oh, no.

I'll pass. They've done this for all five of us. They have five siblings. And their idea is that, not that they think anything's going to happen, but if it was, you know, this is their message. They've worked for a long time to keep and have and giving it to us. If something was that happened between us, they wouldn't want. some of that going towards, you know, in a divorce or something. I'm sorry, I completely disagree with them, and I would turn that gift down.

If it requires that, yeah. If that's a, if a gift is contingent upon splitting you and your wife and to protect you from your wife and protect them from your wife, no thank you. They are now interfering in my household. They came across my threshold. No, thank you. I'll have to pass. And then, I would not do that to Rachel and Wendell, Winston in a thousand years.

And if I did, Winston would bow up and he would be right. Well, if that happened to me, I feel like I'd be pissed. Yeah. Y'all, we just got married. Like, I don't know. I don't know. I don't like it. Nope.

Nope. Nope. Nope. Nope. I have about 47,000 invested in a brokerage account. And I just really want to get. If I were you, I would just start working my way out of debt. Work your baby steps.

You guys need, the two of you need to get on a budget together. And you need to be on beans and rice, rice and beans. And let's start paying off these $48,000 worth of debt with your $125,000 and then start saving towards a house. But I, you're going to, you're going to do it unless your wife bows up and she should. But you guys are probably going to do this. But you shouldn't do it. This is bad medicine. Well, it's just bad relation.

It's bad relational side. Yeah, it's not, it's not good. You're insulting. You're inserting spiritual things into this that shouldn't be there. This is bad. Yeah. And sorry, mom and dad. You don't get that level of control.

Well, if you want my money, you have to do that way. Okay, I'll pass on your money then. You're not driving a wedge between me and my wife. Not a chance. You don't have enough money to do that. And so because you don't have enough money to be generous. Instead, you're still got your fingers and everything. and you can't let go.

Control people. And all my siblings did it. I'm sorry. Hey, you get to be the first one to say, well, all of the siblings didn't do it. I didn't. There you go. Oh, man.

Hey, George Camel here. So you're thinking about buying or selling your home. It's exciting, but there's a lot to think about. And all those decisions can feel overwhelming. Well, here's the good news. You don't have to tackle the process alone. Ramsey's real estate home base is the place to find all of your free tools and resources for help to get prepared to buy or sell your home with confidence. You'll find

calculators, start to finish guides, a podcast, and even an in-depth video course hosted by yours truly. What's not to love? So if you're ready to take the next steps toward your home goals, go to Ramsey Solutions.com slash real estate. That's Ramsey Solutions.com slash real estate. The Ramsey Show question of the day is brought to you by Y Refi. Out of control, private student loans can make it feel like you're stuck financially. But Y-R-R-R-R-R-R-E-FI helps borrowers explore refinancing with low fixed rates and payments that make it sense for your budget. Visit Y-R-R-R-E-F-I-com-slash-R-R-E-F-Y. Today's question comes from Allison in Alaska. I recently discovered my husband has been opening credit cards, maxing them out, and only making the minimum payments each month. Should I put my home

into a trust to ensure it cannot be touched by his decisions. All of our assets are in my name since I own them because I owned them before we met and we both agreed that they need to be protected for my children to inherit. I fully understand the bigger issue of him hiding debt, but first I need to take steps to fully protect my children's future before addressing the elephant in the room. Oh man. What a trust. protect the home? I don't know Alaska law. In most states, if you enter a marriage owning a piece of real estate, you will exit that marriage

owning that same piece of real estate. Now, then the question becomes, if he takes out a bunch of debt, can they put a lien on the house that she owns? because he's married to her. And in some states, they can. So in some states, they could lean, in the event it's not unpaid credit card debt, for instance, could become a lawsuit. They would become a judgment against any real estate. And his marital rights to that real estate in some states would be, it would cloud the title for her children.

And putting it in a trust probably won't change that. You'd have to ask an attorney about all that. here's the thing. When I'm teaching leaders in small business and we coach, in Entree leadership, we coach about 10,000 small businesses. And when I'm teaching, for instance, business legal issues from a business perspective, more than a legal perspective, I remind those guys that contracts are useless when you are contracting with a crook. you can't sign a contract with a crook and then yell later, I have a contract, because it's not worth the paper it's written on.

You've heard that saying. And the reason is you just did a deal with someone who doesn't have integrity. And so you could put the house in a trust, and according to Alaskan law, that could protect it. That's possible. But then he could just decide to sue you into law. divorce court because you fraudulently did the trust without his permission. Even though you didn't, he could just make that crap up and you can make up crap in a lawsuit in any state and just file a lawsuit and just make up crap.

It's called pleadings. Okay. And so what you do is just make up crap and file a lawsuit. And the only recompense the other party has is to spend thousands and tens of thousands and hundreds of thousands of dollars to disprove the lie that was a lot of. in the pleading. And that'll be coming out of her pocket. And by the way, that's going to cost you the house in legal fees to defend against a crook. So the problem is you can't anticipate the moves of a crook, except that they're going to be a crook. That we can establish. And now I'm

talking about your husband. And so you can't fix this problem with a legal document, ultimately. You might make it somewhat safer, but you'll be under the illusion. that it's done and it's not done until the crook quits crookin until the husband quits being a jerk and hiding and spending like he's in freaking Congress and running up credit card debt so you have to deal with the problem the elephant in the room is going to crap on whatever you try so you got to deal with the elephant because a hundred percent chance you're going to have elephant crap if you don't there's a hundred percent chance and no matter what you do, it's going to have poop on it.

So, I mean, you really have to deal with it. So you've got to go out. There's no legal maneuver that makes this guy not be a problem except divorce. And he's not a problem and he's still a problem until the divorce is final. And I'm not suggesting divorce, but I am suggesting that you could go do everything exactly right according to Alaska law. and he could make up a big story and file a lawsuit, and you will spend the cost of the house defending it. That's my point. Can you tell that's happened to me?

Yeah. And so, I mean, people make up crap. Okay? They just lie. And the court system allows them to get away with it. Yeah. So for you, Allison, I mean, honestly, yes, if you wanted to go and do it to make yourself feel better, that's great. But the elephant is in the room, just like you're saying, Dave.

It is the thing that it does. It has to be. Call the zoo. It has to be interesting. I'm going to get their elephant. He's lost. Oh my gosh. It's really sad.

I mean, it's horrible that you're facing this, but you're trying to fix the problem without fixing the problem and you can't. You're going to have to fix the problem. You got to deal with the dude. The dude is the problem. Not your legal structure. That's going to be, yeah. So you can't get this. A lot of time pack.

Sorry, Allison. Yeah. So an example of that is, okay, you do a will and you do a full estate plan. That doesn't keep someone from suing. They might not win. It would be harder for them to win. It would be very hard for them to win. You can put a very detailed thing in place.

But by the time you finish writing checks to lawyers so they can send their kids to Harvard, by the time you finish writing all those checks, you ain't going to feel like you won, although you want. And so you're still dealing with, you know, entitled little trust fund baby brats who didn't get what they wanted. And so they sue the estate. And so the problem was not how the estate was structured. The problem was you raised entitled trust fund baby brats. And so you suck as a parent.

That's what that was. And so you've got to go back and deal with the issue because the legal system does not, there's not legal processes or systems that protect. the righteous from being sued or from having to run up legal fees to an offset. Yeah, but a will. I mean, that stuff holds up in court for people out there to get a will in place and to get these things. You need to get a will and it will hold up in court. But if you have crazy, if you have crazy in your family, you might spend $100,000

making sure that will is appelled. You might spend $100,000. But still do it. So, yeah, do it anyway. It's your only shot. But don't do that and say, this fixes the crazy. crazy in my family because you still hadn't dealt with the crazy. That's the problem. You've got to go to the root behavior when you're dealing with this. And so when I'm teaching these small business guys,

I'm like, don't sign a contract with a crook. Here's an idea. If he's a known crook, the guy's doing cocaine. I'm kind of worried about him. Well, then quit using him as a sub. Hello. No kidding. He's going to steal everything off your job site. Dumbut. He's doing coke. Hello. Have some sense. You know, this is the stuff I get. All these questions are not trade leadership all the time. It's the same thing. So you got to fire this up. There's a lot of cocaine. You got to get rid of it. Well, we got it. This is a great segment. We got elephant poop. We got cocaine. We got elephants in the room. Lord have mercy. There's so many metaphors here. Now there's an elephant on cocaine.

All because of Allison's question. Oh, poor Allison. Question of the day. Poor Allison. So yeah, you got to deal with the husband. The husband. Wow. If we could, you know what, we'd be out of business if the husbands would behave. We wouldn't have any callers. Money and marriage, that's a real. We wouldn't have any callers. It's a real thing. Yeah, we'd have people.

We'd be reduced to boring 401K questions. All tax and estate. Tax and estate law. That's all we'd be doing in 401K. I don't invest in that far. This is so much more fun. We've got elephants and cocaine and just a lot more stuff in this question. It's a lot better.

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. SmartVester 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 Ramsey Solutions.com slash smartvester to get connected. is a paid non-client promoter of participating pros. Learn more at ramsysolutions.com slash smartvester. Well, we wish we could get to every call and question here on the show.

If you have a money question and you can't get through, head on over to our website and use Ask Ramsey. Ask Ramsey is our free AI tool that's built and trained on only proven Ramsey principles. So if you want to follow the baby steps and you want to know the details about any type of question, We've loaded three or four years worth of shows answered into Ask Ramsey. We've loaded the books and articles into Ask Ramsey. And so it's going to sound particularly like one of us here on the show actually answered your question. And no other crap was led into the database. And so you don't have to worry about the artificial intelligence part being screwed up.

Nope, it's just us. And it'll give you the same answer. So ask your question today. It's completely free at Ramsey Solutions.com or click the link in the description if you're listening on a podcast. or on YouTube, and you can ask Ramsey for free. Johnson, Boise, Idaho. Hey, John, what's up? Dave, thanks for taking my call and Rachel.

I tried using Ask Ramsey on this one, but it didn't come back with an answer. Really? What did it tell you? I got plenty of issues. Well, it said unable to answer this question at this time. Interesting. Okay, I can't wait to hear the question. It might have been the topic, but it's pretty simple.

I've got plenty of debt. I've got a lot of issues, but specifically, I know you guys tell counsel not to do debt consolidation, but you also tell us to be very wary and try to get rid of our IRS debt as quickly as possible. So I owe about $20,000 to the IRS and wondering if I should consolidate that or transfer that over to another lender and have the IRS paid off, and I just deal with that lender. Yes. Okay. The interest rate will be better, and they have nowhere near the power to screw up your life that the KGB, I mean the IRS has.

And so what you're paying in penalties and interest with the IRS far exceeds a credit card rate, far exceeds a home equity loan rate, far exceeds anything else. And I'm not suggesting this, but the IRS is not bankruptible and all other debt just about is. So if you did hit a worst case scenario even, it turns out better. But you're not going to be there. That's not going to be your problem. But, yeah, I would move it. How much total debt have you got? Oh, boy.

Here we go. Do you want the house to? No, everything but the house. Okay, $315,000. On what? Let's see. We've got $192 in one school, loan, let's see. Let me do that real quick. We've actually probably got about 220 in school loans. My wife

was an attorney, and she graduated recently, although we're in our 50s. Great. So is she making lawyer money yet? She is making government service lawyer money. Why did she take like a real lawyer job and get this debt paid off? Because she's got this bleeding heart. She's looking to make a change soon. Okay. And so we're hoping for a good change in the positive there.

Good. All right. That's sweet, but also keep you broke. Okay. Yeah, 30 on what? 35,000 is in a 4-0-1K loan. But I'm paying back. That's 10% interest paid back to myself.

Lending club. consolidated some other loans. That's about 15 grand. My student loan is 13 grand. And then we've got other consumer debt. Together we make, we bring home about $10,000 a month. What is she being paid? She is getting paid 80.

Now, she just got a raise to 90, and I'm getting paid 100. but I see only about 4,200 a month after I have everything taken out. So what is 10 now? My paycheck comes on my 401K, maxed out on benefits and everything. Now, this coming paycheck, this Friday, is going to be my first paycheck without putting $1 a month into my 401K. Okay. And I'm calling that out and bringing it toward the debt. Are some of the benefits rip-off stuff that you need to get out of?

I don't know. I haven't delved closely into that. Yeah, because you're not getting home with half your money even. Yeah, yeah, that's true. That's kind of crazy, yeah. So I want to find, I want to let's clean that paycheck up so we can address this thing. And then, of course, get her income up so we can address this thing and get this mess cleaned up. Yeah, good.

Oh, yes, to answer your original question. And that question, I don't remember answering it in the last five years. So I have answered it, but I don't remember recently answering whether I would refinance IRS debt. So it would not have been in Ask Ramsey. So now it makes sense why it didn't answer it. Because it wouldn't have had the data to do it with. So, but anyway, yeah, that's the answer is yes, refinance IRS debt because it's better interest rates. You don't have the penalties and they don't have the power to, you know, suddenly come start leaning accounting.

and everything else. If you, folks for you're listening out there, the IRS can just place a lien. They don't have to ask a judge. If you have a loan with your bank, they have to sue you when and then ask a judge to place a lien. It's a five-step process. And you're going to get like tons of paperwork at your front door by the sheriff before any of that happens. With the IRS, they won't even tell you. they'll just be money disappearing out of your checking account.

You won't know what happened because they have almost unlimited power. Not that often, but I have had it happen to happen to me when I was going broke. They just came in and just took money. And I'm like, where's my money? We just took it. You can do that? We can do whatever we want. I'm like, yeah, apparently you can.

So, yeah, be very afraid of your government, yes. So, yeah, especially if you owe them money. You know, that's the thing. See, get them out of your life. And that's a 5% of your situation, though, John. 95% is getting organized and starting to squeeze the juice out of everything here to be able to clean this mess up as fast as possible. And get yourself where you're not broken.

You're very wealthy. And then your wife can do pro bonar work the rest of her life if she wants to help the hurting and not charge or something. That's cool. That's wonderful if you want to do that. You just can't be broken doing that with $3,000, $220,000 in student loan debt. So you kind of lose your options for your heart to bleed when you do that. Yep.

But, um. And I just got, I just did ask Ramsey because I was curious. Because we've, we've answered that recently. You have. Okay. Yeah. Yeah. Yeah.

Yeah. I mean, it asked. Did it give you an answer? Yeah. And it just you have to, which is great about it. You could, you know, it's asking me to have a thousand dollar starter emergency. It takes you through the baby steps. And then you get to it.

It made you jump some hoop. Yep. And then the installment agreement, yep. Offering compromise, currently non-collectable. Yeah, it goes on and on. Okay. All right. There's plenty in there.

Oh, oh, okay. May it just been a fluke at the time. Yeah, might have been. But more often than not, but we do, I mean, I feel like we've gotten that question a good bit with the IRS debt. And the answer is to anyone out there, if you have a large amount enough that you have to be put on a payment plan that you can't pay off. in 30 to 60 days.

Yeah. The IRS is not an installment plan company. No. Yep. This is not Clarna. Afterpay. Don't do afterpay with the IRS. Don't do afterpay with the IRS.

You want to clear it up as fast as possible. Because they got power. Well, I'm glad to know. Ask Ramsey's doing that. That's good. After I just did an ad for it. I know. And he said that's like, oh, no.

Doesn't work. Yeah. Oh, no. Doesn't work. Well, good news is it worked for Rachel. Okay. So that's a. there we go. Yeah, John, but I really do hope for you guys that y'all can get into a high-income

situation, knock this debt out, and then you can, yeah, spend the rest of your life with that degree that she has and use it, you know, for good and where she wants to, to have the freedom to do that. It's just hard to have that freedom when you have $300,000 of consumer debt. Yeah. Hey, George Camel here. We often talk about how being normal sucks when it comes to your money. But guess what? Normal isn't so great when it comes to your job. either. Normal is staying in a job you hate, dreading Mondays, and working for people you don't even like. Sound familiar? Well, the good news is you can break free from normal because Ramsey Solutions

is hiring, and we refuse to settle for the ordinary. In fact, we are anything but normal and we are proud of it. And right now we're hiring for technology, sales, marketing, writing, copy editing, and creative roles. So head over to ramsysolutions.com slash careers and apply today. Our scripture of the day, Matthew 1129, take my yoke upon you. Let me teach you because I am humble and gentle at heart and you will find rest for your souls. Jim Rhone said formal education will make you a living, self-education will make you a fortune. Scott's in Twin Falls, Idaho. Hey Scott, what's up?

Hey, guys. Been following you guys on my Facebook videos for a long time, so good to do. jump in. Well, thank you. Good to have you. Hey, I'm engaged. Yay! When you're getting married? Super excited. End of November, sorry, September coming up. Yay, good for you. Thank you. So listen, my fiancee owns a house. She's got three kids. The house is the house where the divorce went down, all the, you know, the bad stuff, I guess, that led us here. And so we are now trying to make a decision on what to do with this house. And the realtor is recommending a short sale.

I don't love that idea. But I'm just, I guess, trying to decide whether to take this financial hit now for kind of a clean break, a fresh start, or preserve cash, stay put here temporarily while we stabilize, even though that will delay sort of this, I guess, breaking free of that baggage. So anyway, I love some insight. So she owes more on the house than she can get for it?

Yes, sir. Yes, sir. Anywhere from 25 to 40-ish is what the realtor is recommending. And the house is obviously in her name. Yes. And does it have the X on it? I believe that the X is on it. The X has got medical issues.

out of a job right now. We're basically not considering him as... No, does he have to sign to sell it? Yeah. He may. Yeah, yeah. Yeah, I guess. If he's on the deed and he's on the mortgage, if you're going to do a short sale, he has to sign that he's not paying his bill because that's what a short sale is. Mm-hmm. So a short sale is like a voluntary repossession. Okay. It's like turning in a car on a repo.

and not paying the difference. So if you do a short sale, or if she does a short sale, you're not involved, okay? But if she does it technically, if she does a short sale, make sure you remember these words, it is without recourse, without recourse. And what that means is they can't come after her for the difference. Okay. that 25 or 40, they're accepting that the houses, if they foreclose on it, their analysis tells them, the mortgage company, that if they foreclose on it and resell it after foreclosure, they're not going to get any more for it than you're offering them.

Okay. You see what I'm saying? In other words, if they go through all that and they lose 45,000 or they accept a buyer's offer and do a short sale, they lose 45,000, that's their analysis. If they think they can take it back and sell it for enough to get all their money, they would rather foreclose than take a short sale. But that means that the house is worth more than your realtor says it is, and I doubt it. Right. Why has the house gone down in value in Twin Falls, Idaho? I wouldn't think that's the case.

I don't understand it, to be honest. I'm trying to get to the bottom of the— Is there something wrong with the house? The house is fine. I suspect that there was some more— payments not being made. Yeah, I'm still trying to get to the bottom of it. I feel like there's details I'm missing, but... $45,000 where the mortgage payments not made? I doubt it. Yeah. The thing is, Dave, I've got, I've been saving, I've been following your principles.

I don't have any debt. I have money set aside that I've been saving up for a house payment myself before her... Does she have debt other than this? only a small student loan of 5k which i'm expecting to just kind of write off as soon as we are together as soon as you're married and we've got a car yes sir and you got to pay off the car okay yes sir if you're debating on doing that you know i paying it all down right now so you could either pay the 45000 and keep this house with all the bad memories and still not be shed of the x because he's on everything or you can let it be, let her do a short sale before you're married. Mm-hmm.

But she's going to have the equivalent of a repo. Her credit score is going to disappear. No, you wish it would disappear. It's just going to be very low. And would that be a problem when they go to buy a house? Yeah, it's going to be a problem when you get ready to buy something later. Could I not do it my own? Probably.

Have everything in my name? You probably can, depending on the Idaho law, yeah. Yeah. Okay. And she probably has marital rights, even if she's not on the mortgage. So you could talk to Churchill mortgage, and they can tell you, you know, if your spouse has a super low credit score in Idaho, and you have the money in a good score or no score, in your case, it would be a good score, then, you know, can I qualify that way and get a house? I really, I think this lady and these three kids need to be, need to physically be off of that site. Yeah, I agree.

I think I heard you say that clearly between the lines. And so, you know, based on their emotional well-being and being rid of the guy with medical problems, which that can mean a whole lot of bad stuff I don't even want to get into. Yeah, I'm going to ask her, I'm going to ask her to put this house on the market and get it sold. I will tell you that the short sale is a long and arduous process, though. Mortgage companies don't forgive debt. easily. Right.

They're going to want appraisals. They're going to go. They're going to drag this thing out. It's very difficult. It's a hard-time job for a bit. Real estate has appreciated in most areas enough that they don't do many short sales anymore, so they're not as adept at it as they used to be. Like back in 2008, everybody got to be experts on short sales.

But, yeah, it's where the bank agrees to accept a price that yields. them less than their payoff and they eat the difference if you do it without recourse. For God's sakes, there's no point in doing it with recourse. I'd let her be foreclosed on before I did it with recourse. Because then that's the same thing they got in. Is that hard for them to agree to? No. No, they pretty much, that's what a short sale usually is.

Yeah. But just make sure they don't forget to put that in there. You know, like City Bank forgets to do stuff. Yeah. So, yeah, wow, interesting. All right, Josh is in Canada. Hey, Josh, what's up with you? Hey, Dave, thank you so much for taking my call.

Sure, how can we help? So I'm wondering if I should quit working for my family business and work on my side business that I had started to get out of debt. My wife and I are in Baby Step 3, and I was just, it's taken off more than I ever expected it to. How long have you been doing it and what are you making? So I've been doing my side business for about three years. I've started taking it more seriously this year when we decided to just completely knock out the debt. Currently it's making about $10,000 to $12,000 a month in profit.

That's just before taxes, though. And I'm making about $90,000 at my job working for the family business. What is your side business? My side business is automotive and commercial and residential window tinting. So I just go to people's places and tint their windows, basically. But it's great margins, and it's just, like, I'm already booking three weeks out at this point. And you are a good salesman. Yeah, way to go.

I'm proud of you. Yeah. So what are the relational repercussions when you quit the family? I don't know. It's not the family. When you leave the family. Some off you. I feel like they're going to basically cut off the relationship with me.

Wait. For real? Are you being for real? Yes. You think they'll cut off? Yeah. Yeah. The reason being my brother left the business.

He was in it for a bit, left the business and he had moved away. There was problems on his part, too. He didn't do it like the same way. But anyways, yeah, he, He left the business and now they just don't talk anymore. Part of that is mutual, but yeah, it's just kind of a he doesn't exist. I would give them a long runway of communication. Yeah, don't bank it sudden.

Just go, hey, Dad, I'm making $90,000 over here. I'm probably going to, or I'm making $10,000 a month. I think I'm going to go this direction. I need to know how I can do that and help you guys and be a blessing to y'all. If I need to put six more months in here to help you, I will. But I'm probably not going to be here from now. So let's talk about how I can do that and be a blessing to you, Dad. 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.