The Ramsey Show - The Only Hack To Paying Off Debt Is Doing The Hard Work

Starting point is 00:00:04 Brought to you by the Every Dollar app. Start budgeting for free today. Normal is broke. Common sense is weird, so we're here to help you transform your life. From the Ramsey Network and the Fair Winds Credit Union Studio, this is The Ramsey Show. Jade Walshaw, Ramsey Personality Number One,

Starting point is 00:00:27 best-selling author, is my co-host today as we answer your questions. The phone numbers, AAA-825-5-225. Jade is in Memphis. How are you? Hi, guys. Thanks for taking my call. Sure.

Starting point is 00:00:40 What's up? Okay, so I am, we were in Baby Step 2, but now we're in Baby Step 1, and I got a notification that one of our credit card is in threat of being charged off within 30 days. And so I don't really know what we should do if I should take out a loan. Asked friends for that money because they're trying to settle or if I should just let it go to collection. How much is it? it's 10,000 but they're letting they want to settle for 4,800 okay do you have any money anywhere so

Starting point is 00:01:14 I lost my job in October and I found out I was pregnant and then I lost the baby um in December I'm sorry and so we have less than the thousand dollars in savings and we're paycheck to paycheck right now okay what I'm sorry I'm sorry you went through that uh what are you and your husband earning combined every month? Well, so before, I mean, my job, I got $60,000, so we took a $60,000 pay cut, and he makes $50. Are you getting a job? Have you found a position? So I have got a new job.

Starting point is 00:01:51 I'm a mental health therapist, but it's part-time right now while I build clients. So I'm bringing home, like, anywhere from $500 to $1,000 every two weeks. Okay, okay. That's not too, too bad. $500 to $1,000 every two weeks. Okay, so here's what I'm thinking. Right now you really are, you've been through a lot very quickly, and I applaud you for jumping back on your feet really quick. Is this $10,000? Is this the only debt you have? Is there more? No, so we have two more credit cards, so 30 and then this 10, so 40. The other two were in payment plans for.

Starting point is 00:02:31 So when I lost my job, I went into, I closed them and I went into payment plans with lower interest rates. But this one, they wouldn't work with us. And so we didn't have the money to pay it. Okay. Tell me a little bit more about, I'm just trying to figure out what you can scrounge up, if there's anything you can sell, how quickly you can get this. Or if you can even negotiate a smaller amount than the $4,800, likely not, but I would try it. See, I didn't know if I should call and I should try that.

Starting point is 00:03:01 I would. Why not unless you have the money line. Not unless you got the money. Is there anything you can sell off? Tell me about your cars. So one car we own outright, and then one car we still have 10 left on, 10,000 left on. Okay. And that's our main vehicle.

Starting point is 00:03:18 How many kids do you have, hon? We have one. Okay. And we pay for daycare, so she's four. So we pay. How quickly is your income going to ramp up, do you think? I'm hoping within the month. So by February we should get back to my income.

Starting point is 00:03:35 Oh, wow. I get paid 53 an hour, and I have 10 clients right now. So if I can get up to 20 clients, then I should reach that by February. But this will be charged off by the end of January. How much is it? Let's stop a second, okay? Charged off does not mean anything. Okay.

Starting point is 00:03:57 Okay. Okay. you already have a debt that has gone to collections. Your debt is already bad. Agreed? Okay. Yes. Okay.

Starting point is 00:04:08 When they charge it off, it simply means they are not going to count it on their books anymore because they don't think they're going to collect it. But it doesn't make your credit worse. Your credit already is trashed. Yeah, it's bad. I just didn't want them to like sue us and garnish. They'll get it. They'll get around to that eventually, but charging it off is not, that is not a sign you're getting ready to get sued.

Starting point is 00:04:34 How long ago, what did you pay the last payment on this account? Probably September. Okay. You're, I doubt you're in any danger. Okay. Okay. I don't care if they charge it off. Guess what?

Starting point is 00:04:48 If they charge it off, the next day you talk to them, they'll take the $4,800. Because they still want their money. The only difference is just, the only difference is just, you know, just they're coming up with these boogeyman in the closet. Oh, we're going to charge it off. No, please. What does that mean?

Starting point is 00:05:05 No, please. What does that mean mean? It doesn't mean anything, really, okay? So let's not worry about it today. I just want to be kicked while we're down. I know. You could get sued, but even then, you could settle the lawsuit for the same $4,800.

Starting point is 00:05:23 Okay? It's not like every day this gets later and later and later, the chances statistically of them collecting it is smaller and smaller, so they are more and more flexible. They'll settle for less and less flexible. Okay. So it's not like it's a one-time, good time deal. This is a one-time okay deal, and you probably could get the exact same deal or better two months from now when you guys are back on your feet. Okay. I think I'm just going to say, you know, guys, we just lost a baby.

Starting point is 00:05:56 I've got a brand new job. We simply don't have the money. It's a very kind offer for $4,800, but I don't have $4,800. If I did, you probably wouldn't be late. Well, I didn't know if I should stop paying the other two cards that we're current on to try to make a deal with them. No, no. I would just keep doing what you're doing, and let's get back up on our feet, and then let's get never get the debt snowball working and start paying those minimum payments you're paying you can

Starting point is 00:06:27 save up some money and call these people and say hey i got four thousand dollars i got three thousand dollars you want to take that if they want to take it fine if not hang up on them call them back in two months they'll do it then you know and just keep working your plan working your debt snowball but i don't think we're going to let them establish the urgency okay matter of fact i know we're not going to let them establish the urgency i literally when you're telling this story jade it's funny because because I literally wrote a similar, about a similar instance in my book, and you're saying the same thing. What you just said about, oh, I'm thinking of taking these other credit cards and not paying those and paying it to other people.

Starting point is 00:07:04 You feel that because of the stress and they're calling you and they're blowing up your phone and you're trying to focus on other things and they're just inundating you with calls and offers. And Dave is right. Like, just do what you know to do. Keep those minimum payments going. Get on your feet and don't let them be in control. because if you let them be in control, all they want to do is take. They don't care about the fact that you need to buy groceries. They don't care about the fact that you lost a baby.

Starting point is 00:07:30 They don't care about that. And so don't give them any more power. And don't give them any ammunition. There's no sense in having a discussion. Yeah, that's why I stopped making assignments because I just wouldn't work with us. And guess what? Now they're very flexible. Okay.

Starting point is 00:07:44 And guess what? They'll become more flexible. Three months from now, they'll be flexible again. Be like little gymnasts calling you up. I love it. I'm going to give you a copy of my book, okay, Jade. Yeah. Yeah.

Starting point is 00:07:56 Jade to Jade. Yeah. Friend to Jade. Friend to friend. I never meet anybody with my same name. That's a very new thing for me. And with a question that you've been through. I know.

Starting point is 00:08:07 Exactly. It was meant to be on this publishing day. There we go. The book comes out today. It's on the street. What No One Tells You About Money. The Real Key to Getting Unstuck from Some who's been there and has talked to credit card people at the credit card time charged off.

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Starting point is 00:10:27 Jade and I will be hosting this, and hundreds of thousands of you, probably millions, will be joining us. Thank you for that. It's free. We're going to give you the clarity in the middle of the chaos. and we can show you actually how to take back your money, get ahead with money. And we're going to be giving away $20,000 cash that night. Hello.

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Starting point is 00:11:15 Ramsey Events Center this coming Thursday night. I'm looking forward to it. Me too. Yeah. Ramsey Solutions.com slash live stream. And I watched Jade do her portion of it the other day in practice rounds, and you guys, listen, I should charge you a lot for this, but it's free. I'm just saying it's really, you're going to get some solid information, some things to help you cut through all the garbage is out there. There's a lot of squawking out there.

Starting point is 00:11:44 Have you noticed? And the only way you get rid of the squawking is to have a plan because then you quit listening to all the squawking. And everybody's got a dead-go opinion about why you can't win. Have you ever noticed that? And they're all people that aren't winning, by the way. Hello. People that are winning, they don't write in the comments section.

Starting point is 00:12:04 Good point. You ever seen successful people that stop and write stuff negative? in someone else's comments section? Mm-hmm. They don't. And your comment section, if you don't know, is not necessarily your YouTube page. It's just your life. When you're sitting there saying something positive and they're going,

Starting point is 00:12:18 oh, yeah, but don't you know about? And it's the little man can't get ahead. And, oh, it's all rigged. And the corporations, the corporations and the taxes and the government and the inflation and Biden and Trump and, oh, oh, shut up. Mm-hmm. Seriously. See, that's the chaos and the voices, the squawking I'm talking about.

Starting point is 00:12:42 We're going to help you with that this Thursday night for free. Ramsey Solutions.com slash livestream. Be sure and jump in. And it's the free every dollar live stream. Catherine is in Dallas. Hey, Catherine, what's up? Hey, how are you? Good.

Starting point is 00:13:00 How can we help? So I was recently laid off, effective at the end of the month. And now me and my husband are trying to figure out what we should do with what we have in saving to kind of make that work the best for us. Okay. What were you making? I was making about $42,000 a year. Okay. Doing what?

Starting point is 00:13:24 As a legal assistant. Okay. And they laid you off after Christmas? No, before Christmas. Oh, that month. The week before. The week before. Oh, I'm sorry.

Starting point is 00:13:37 So you were working for Grinch and Grinch? I mean, wow. I can't imagine. If I was going to lay somebody off the week before Christmas, I would do it the week before Thanksgiving. Just so I didn't do it the week before Christmas. Just give it some air. It didn't really. It came after they flew me out for a Christmas party.

Starting point is 00:13:58 Oh. The week before. What did you do at the Christmas party, Catherine? There's one for you drink. I live to my hotel. Oh, boy. Oh, man. I'm sorry that happened.

Starting point is 00:14:12 I'm sorry. Okay, this sucks. Okay, anyway, aside from their lack of quality timing, who, let's see. So how's the job hunt going? So I started it that night after a bottle of wine. Good for you. A bottle of wine.

Starting point is 00:14:30 It's a good thing to sign, you know, start filling out your resume after a bottle of wine. Yeah, so I've got a couple of interviews lined up in the, The goal, obviously, is to not have any laps. There you go. There you go. So you got a little severance? No, no severance. Oh, okay.

Starting point is 00:14:45 They told me that the notice was our seventh. Oh, I see. So you're just trying, you don't want to have any lack of. Good, good, no laps. Yeah. Good, that's a good plan. Yeah. All right.

Starting point is 00:14:57 So how's the, how are you getting some nibbles? I've got a couple of interviews lined up, and I hope that, again, I hope there's no lapse. and that I hope that something, anything, I will do anything. Okay. Can you not cover the laps for one month on your husband's income? Yeah, what's he make? On my husband's income, he's military, so I think he puts down, like, if we're selling out of form, I think he puts down like 70,000 a year is what he makes.

Starting point is 00:15:27 When we did, because that night we did a breakdown of our expenses, if we changed absolutely nothing, we would be in the negative every month. How much? It was like a few hundred bucks. Okay. And how much do you have in savings? We have about 16,000 between the two of us. Bonarney.

Starting point is 00:15:45 I was actually going to be a surrogate and had a miscarriage about partway through that process. So we have a decent amount of money in a separate account. I purposely did not want to spend it that we have not touched. Aside from the 16,000? No, that is the bulk. Okay. So here's the deal. Here's the deal. Don't do anything. Just go get a job. And if you don't get one and you have a gap for two or $300,

Starting point is 00:16:13 $300,000, $16,000, and then the next month you're back up to even, right? Okay. Okay. That's what the emergency fund is there for. Yeah. Now, you've got debt and other stuff, though, right? Yes, we do have debt. So for right now, for right now we're not doing a total money makeover. we're just going to sit here in the middle of the hurricane until the wind

Starting point is 00:16:38 quits blowing and that's when you get the new job and then we will assess the damage and that might be that you have to pay a couple hundred bucks out of the 1600, out of the 16,000 to float you for that one month until you get your paycheck going again but I'm pretty dead gum sure listening to you you're going to have a paycheck in a month I sure I mean really I think you are don't you? I want you. Okay, so if you don't, if you don't, if you don't, it costs you 200 bucks of your savings, right?

Starting point is 00:17:10 Yeah, it would cost us a couple hundred. And if you don't, if you don't the next month, it costs you 200 more. That's $400 whole dollars out of 16,000. And if you start creeping up on two or three months, you could easily pick up a little side hustle to cover that. She's not going to do that. She's going to have a job because you've got too much going on here. You're going to get a job.

Starting point is 00:17:32 So my point is, is you just don't do anything. And if you have to cover a little bit, you know, less than $1,000 out of the 16, it's no big deal, right? Mathematically. Right. It just goes all with the fear of looking for a job and the pissed off of being mistreated and all that stuff mixes in. And then the math quits being clear. Right. Yeah.

Starting point is 00:17:58 Okay. Because my husband and I disagree. He wants to pay things off. No. No. No. But you can't right now. You've got to get right side up first.

Starting point is 00:18:05 As soon as you get back to work, the two of you need to combine your income, combine your debt, combine your savings, and start the total money makeover and start getting, you know, save the $1,000 and take the rest of that 16 and throw it at the debt, smallest to largest, once you're moving again. And, you know, I want to change your mindset on this a little bit, Catherine, and I know it's easy for me to say it on this side of things. But you've got to look at this as an opportunity. instead of looking at it like, oh man, I got fired, I got fired the week before Christmas and all these negative things. Maybe it's an opportunity for you to make more money than you've ever made and have a better job than what you had before in a more fulfilling workspace, right? It's not a high bar to get better people to work with. Yeah. This could turn out to be the best thing that's happened to you, but you got to switch your brain into that mode and it's going to change the way this feels for you.

Starting point is 00:18:55 Yeah. And note to self, don't fly out to next year's Christmas party. Yeah. Wow. No bottle of wine before the interview. Yeah. They started budgeting and did that resume right after that first bottle of wine. We're going to get everything straightened out now, by our gosh.

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Starting point is 00:20:58 Jesse is in Memphis. Hi, Jesse. How are you? I'm doing better than I deserve. How about you did? Just the same, sir. What's up? Good, good. Okay, so little preface. I work for a great company, and I did fairly well last year, and so they were taking my wife and I on a cruise in February, along with a lot of the people who have also gotten the metrics. And I was just wondering, I'm in Baby Step 2, and so I know I shouldn't be on any vacations or going out spending, but am I allowed to have an allotted

Starting point is 00:21:50 job to use on this vacation? And yes, I get paid for it. Is it just, you just need pocket money? You're allowed to do whatever you want to do, Jesse. But, you know, what would we do if you're in Baby Step 2? This cruise is not costing you anything? No, I get paid the whole time I'm gone. I get room and board and the company vehicle down to the port.

Starting point is 00:22:12 Okay. So just pocket money for meals or whatever? or not even. It should be included on the cruise, right? Yeah, but she still needs a little bit of money. It's just for like excursions or to have a little fun, this is the only vacation that I'm quote-unquote planning. What if you planned it out and you've looked at it,

Starting point is 00:22:33 what do you think is the number of the amount of money you think you would need for it that you would spend? Oh, yes, we did it last year and I did like bare bones so I didn't spend anything. And I know that we could do it again. like that. Good. Great. That's the plan.

Starting point is 00:22:47 Don't talk to me about I don't ever get to go on vacation. I did a cruise last year. That's the plan. Oh, whining. Way. Agreed. Wait, let me get you back to your senses. How much debt do you have?

Starting point is 00:23:00 Okay. So I got about five in consumer two cards that started this in Y'all in November. So I've already cut that down from 7K. And then I got my car and that's about 14. That's it. I would go, Jesse. but what I would do is I want you to reframe this in your head. Okay.

Starting point is 00:23:21 The reason that we teach people to stay out of restaurants and stay out of vacations while they're in baby step two is total focus. That I have one job, and that's to defeat the debt, because if I live like no one else, later I can live and give like no one else. I'm paying a price to win. Okay. And that's how you frame this decision in your head. Not Dave, I want to go and vacation. We're not going to get to you on vacation for a long time. And we went on a cruise last year, but come on, man.

Starting point is 00:24:01 Wait, let me frame it to you like this. I'm sorry. No, I mean, really. You need to frame it up with, I'm going to do this. I don't need Dave's permission to do it for sure. You're like a grown man and you hit your metrics. Okay. But I'm going to do this, but I'm also going to make sure that the altitude and the attitude and the angle of my heart is permanently changed. Oh, yeah.

Starting point is 00:24:27 Away from the rationalizations and the justifications that allowed me to get into this mess in the first place. Yes, sir. That's why we do this. Yeah. Because we're trying to shock your spirit into saying you're not entitled to vacations or eating out. Those are entertainment luxury items while you're broke people. And I want people's spirit to be shocked. That's what happened to my spirit.

Starting point is 00:24:51 I didn't have the option of doing it voluntarily. It was snatched for me because I was so stupid. I went bankrupt. So I got you beat hands down on stupid, right? And listen, I thought whining was a little known form of prayer. So I had whining down too, you know. But what I figured out is that you have to change the, the altitude, the angle of your heart permanently regarding these things.

Starting point is 00:25:20 So you never again talk yourself into something that down deep, you know you shouldn't be doing. I think this is fine mathematically. Okay. Yeah. And on Jade's point of view, I just wanted to add this real quick. I am picking up a side job this year too. Doesn't matter. That should all go towards a debt.

Starting point is 00:25:37 It's still, it's about what we're talking about is you set the boundary. and once, if you have said to yourself, I'm getting out of debt, that's the priority. If you let these little things start sneaking past the goalposts more and more sneak past, it's like when you say, I'm not eating any sweets. And then somebody makes the pan of brownies. Well, already you've gone past it.

Starting point is 00:25:55 Because the pan is it. But then what do you do? You slice off a little piece and you go, oh, I'm just going to have that little piece. Then you go back in and you slice off another little corner and another little corner. Before you know, you've ate the pan of brownies. Are you following me around?

Starting point is 00:26:07 I saw you. That's what we all do. We've all done it And that's a great way to think of it You got to pound in brownies Because they gave you the free trip You get to decide how much you slice off Don't slice any of it off

Starting point is 00:26:20 You already got the pan is just sitting there And you know What we're doing is you have to set new Neuro pathways in your brain Yeah that's the real part That says I'm done with this crap So I would go But I'm gonna

Starting point is 00:26:33 You know your your side hustle Is to set the new neuro pathways And go I'm going, but I'm going to be unbelievably disciplined about this slice. Yes, very disciplined. Because I know the danger is not the actual slice. The danger is I'm still going back to the brownie pan. Yes.

Starting point is 00:26:54 Throw the pan away after this slice. That's the thing. That's what it is. I mean, that's what we're trying to. You have to permanently change your way you talk to yourself about this. The words that you use out of the abundance of heart, the mouth speaks, the Bible says. Very true. And so the words that we use and the way we talk to ourselves and even the tone that we use to ourselves about talking ourselves into or out of something reflects whether or not, you know, is your heart right on this?

Starting point is 00:27:21 And that's the thing. So, guys, that's the lesson, the takeaway from Jesse's call because it's a good call. And Jesse's obviously a good guy. And he's obviously a high-producing dude. And when you go out there, though, take a step further what Dave just said. When you go out there, Jesse, what you can't do is, well, I can't spend any money. I can't do. No, no poor mouth.

Starting point is 00:27:38 You have to say, you have to form the words of what you want, which is I'm choosing. Everything's a choice. I've chosen to be grateful that I do this, that the company gave me this, because otherwise I wouldn't be able to do it this year. Yes. Because this year, we're not going on vacation. Yeah, but paying off my debt is my priority. Exactly.

Starting point is 00:27:55 And that's how you talk to yourself. You reset this whole set of tapes that's running in your brain, man. Vocab rehab rehab. That's why we do some of the things we do, y'all. It's like the, and what we're doing is the pendulum has swung too far to the consumer side where he says everything's okay. Just push the submit button, load the cart, right? Right.

Starting point is 00:28:16 And I can impulse anything I want and I work so hard and I deserve and all these things we tell ourselves. And all we're doing is swinging the pendulum back to the other side and go, you don't deserve nothing. Shut up. You're broke people. Man. You know? Dave, it's like you're quoting the book. Good job.

Starting point is 00:28:30 Your book. Yeah. The new one. The new one. That's out today. What no one tells you about money. the real key to getting unstuck from someone who's been there. It's the emotional part of this.

Starting point is 00:28:39 That's right. And that's what we're dealing with. The neuropathways, the behavior shifts, all of those things. And, you know, the feedback loops you put for yourself. Yes. You know, one of the other things that goes with this, too. And, Jay, I know you talked about this in there as well indirectly. I don't, not exactly the way I'm going to say in other words.

Starting point is 00:28:57 But one of the things I did, Jesse, when I was at your thing, is completely different from your question. but if it's in the same bucket of stuff, I don't do things mechanically, tactically with how I pay things that aren't automatically always getting me the discount. Okay. Okay. So before there was online bill pay, because there was no online, okay, I prepaid my utility bills. To get the discount.

Starting point is 00:29:29 To get the discounts. Prepaid to get the discounts. And I set it on an auto calendar, right? I have automatic draft to this day on my checking account that goes straight into a mutual fund every single month, automatically out of my checking account. So I don't accidentally forget it. That's right.

Starting point is 00:29:47 I have automatic discipline all the way through there. So there was a guy out 100 years ago when one of my first bestsellers called Automatic Millionaire. His name is David Bach. It was a bestselling book. He said, just put everything on automatic so that you're automatically doing smart stuff Automate smart, yes. And you don't have to think about it.

Starting point is 00:30:05 You don't have to be built-in discipline with the systems, not like I'm going to grip my teeth and do this every time. That's right. That's right. And that's the same kind of thing. We're resetting how we view this. And what's the attitude, the altitude and the angle of my heart on this stuff? Very good. You know, every year I hear the same excuses for why people don't get the life insurance they need to protect their families.

Starting point is 00:31:10 So this year, let's clear. clear the air and look at the facts. Having 10 to 12 times your income on a 15 or 20 year plan is in many cases just plain cheap. That amount of coverage lets your family keep the lights on and keep food on the table while they're grieving. Second, life insurance through your work is not enough, especially since these plans go away if you change jobs. You need to have your own policy so you're not without protection when your family really needs it. Third, stay-at-home parents need life insurance, especially those with young kids. People don't realize how quickly the call sat up without someone at home taking care of things.

Starting point is 00:31:52 So no more excuses, folks. Get the protection your family needs. Go to zander.com or call 800356-4282. They've been my choice for all my insurance for over 25 years and are the only people I trust. Chris is with us in Denver. Hey, Chris, how are you? I'm well. Thanks for taking my call, Dave.

Starting point is 00:32:34 Sure, man. What's up? So I used to make good money as an engineer, and I was on Baby Step 4 before I knew what the baby steps were. Good. And then three years ago, I made what I realize now two major mistakes in a row. I bought the biggest house I could buy with 3% down and PMI, thinking that house hacking would be easy. I'm now doing Airbnb.

Starting point is 00:33:02 And then a few months after that, I quit my job because I was miserable there, thinking I had enough savings. I can give you some financial details, but I'm wondering if you think I should sell my house. house. Tell us more. What's what? Okay, yeah, tell us more. Yeah. So I cool my job. Uh-huh. And then I realized that I would not be making my mortgage if I were to do house hacking. Uh-huh. So I pivoted and then started doing Airbnb. Okay. And where are you living? to renovate. During this time, I was in the house, during renovations, I was living in the house. Sorry, yeah, I was living in the house. And then while I was Airbnb, while I Airbnb be my house, I was living with my friends that have a couple of kids and I was helping them.

Starting point is 00:33:54 Oh, gosh. Okay. Okay. So, Chris, how old are you? I am 37. Okay. All right. I mean, sometimes if you wake up for, from a nightmare and you're standing knee-deep in the swamp, the best thing to do is to return to the last time there was solid ground and retrace your steps.

Starting point is 00:34:17 And so that would, in this case, sound like, get a job as an engineer and sell the house. Yeah. And then you would have their life back. Yeah, what prevents you from doing that in your life? Yeah, I was interviewing for some engineering jobs in 2025. It was difficult to come back after taking some years off. And I also know that I'm not suited for a 9 to 5 now.

Starting point is 00:34:45 And I'm pursuing another clear-ass. Why are you not suited for a 9-to-5? What's wrong with you? That's a great question. Are you trying to say that you're entrepreneurial? Yeah, I believe so. You're suited for it. You don't want to do it.

Starting point is 00:35:00 Okay. I don't blame you for that. I don't blame you for that. I'm entrepreneurial too, and I wouldn't want to be trapped. somewhere. I don't have an issue with that. So what we're saying is not suited for is not the right phrase. What we're saying is it's not preferable for you. But right now, right now you're not really in a phase where you can do exactly what you prefer. Exactly. Preference is no longer a point. You're neck deep in quicksand. So I'm wondering if I do some numbers if you think I am in

Starting point is 00:35:30 quicksand. So in 2024, I broke even with my mortgage with Airbnb. And then in 2025, I was negative 10 or 15,000 with my Airbnb. Is the Airbnb the only money? Where does this sound like it's fun to you? None of this sounds fun to me. If this was a business unit at Ramsey, we would close the thing and call it failed. Yeah. I'm wondering if an alternative is, yeah, maybe.

Starting point is 00:36:06 Why are you reluctant to sell the house? Yeah. You just don't want to get, you don't want to admit that this screwed up. Yeah, I think I might be falling into sunk cost fallacy. Okay. Yeah, definitely, 100%. Tell us, tell us the property. Can you sell the house for as much as you owe on it?

Starting point is 00:36:26 Yes, I believe so. I put about 100,000 into it, renovating it. Oh, you believe it's that. I mean, what will the house sell for? Yeah. So I'm looking at Zillow and Reds it right now. I bought it for $650. Zillow saying $615,000, what I've been saying $580.

Starting point is 00:36:49 Oh, so you're not going to get the money out of it. But you put $100 down or you put $100 in it after you bought it for $6.50. $100 into it after buying it. So you owe $750,000 invested in a house that's worth $600,000? $600,000. You know better than I did. That's what you just told us. I don't know if I got an appraisal if it would be worth more.

Starting point is 00:37:15 I'm guessing it would be. Okay. But I mean, you're telling me you paid $650,000 for it, plus you put 100 into it, meaning you have $750,000 in this house, correct? Correct. And you don't think it's worth anywhere near that, is what you're telling me. I don't know. Get a real estate agent.

Starting point is 00:37:37 Go on our site. You need to go to ramsysolutions.com and just in the box type in real estate. agent, it'll take you where you need to go. And you need to have somebody come out there. Okay, and what did they say? What would they list it for based on what they saw? I started doing that step and then I was like, I'm going to talk to Dave directly. Facts. And now I'm telling you, go do it, see it through so you can see what the actual numbers are on this. Facts are your friends. You're in trauma. And you need to sell this thing if you can. And you need to retrace your steps and get back on solid ground. And then from there, think about how you

Starting point is 00:38:12 can come up with some career choices after you're making a living again. How much money do you have in a bank in retirement? Not retirement. Non-retirement investments? Probably like about $10,000. $10,000. You've got to get a job, man. We'll send you find the work you're wired to do because I think you don't know what

Starting point is 00:38:35 you want to do. And I think you're just kind of coasting and this idea that you might be an entrepreneur. I'm glad that that's so, but we need to get some beef around that and figure out what that's going to be. In the meantime, yeah, we'll send you the book, but you also just need to get a job. Yeah. So the first thing you're suited to do is buy food, lights and water. The second thing you're suited well to do is pay your stinking bills. The third thing you're well suited to do after you've done those two things is find something that is a style of work that you enjoy, meaning entrepreneurial and more free

Starting point is 00:39:14 wheeling than in a nine to five. But you don't really have a lot of choices right now, man, because you've done screwed this up. Hello. Yeah. You've made a mess. And so you got to get the shovel out. The barn is full of poop. Today is J.O.B.

Starting point is 00:39:28 Yeah. There's some shoveling that needs to be done here. So, you got a mess. Wow. So you do not get to, as an adult boys and girls, ladies and gentlemen, do something that you saw on TikTok, that feels fun or good or well-suited, when the mathematics around it, don't math. 100%. That's called, you know, you can't.

Starting point is 00:40:11 That's not a reality. The math does not form to your desires. No. Math does not form to your suited. The math forms to the math. The math. When Sam and I were getting out of debt, we knew we wanted to start a business, but that takes time, right? You got to build it up.

Starting point is 00:40:33 And so in the meantime, you have to work and you have to do the things that close the gap so that the math maths, so you can continue to accomplish your goals financially while you accomplish your goals, career-wise. You have to do it all at the same time. You can't just go, well, I want to be an actress or, well, I want to own a business, and I'm not going to do anything until I have that success. That's not real. God designed me to be on the stage. Good. And in the meantime. That means you're also destined to wait tables. That's what that means. Every time. I mean, we're in Nashville. How do you get the next country music stars attention? A waiter. That's exactly how you get it, right? Yes. And so, I mean, you know, the, these, There's calluses that are involved in these things, okay?

Starting point is 00:41:19 Yes. You know, God designed me. I'm suited for. I'm good. Me too. We all are wonderfully made. We have these, that's why we have finding the work you're wired to do that we're going to send to Chris.

Starting point is 00:41:31 Okay. That's all great. But you don't get to use this specialness that card to try to violate mathematics. It just, it'll destroy your life. It's too harsh. It's mean. there boys and girls mean out there. After the holidays, a lot of people start feeling budget pressure.

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Starting point is 00:42:57 See boostmobile.com slash Ramsey for details. Welcome back to the Ramsey show in the Fair Winds Credit Union Studio. I'm Dave Ramsey, your host, Jade Washaw, Ramsey Personality, number one bestselling author and author of a brand new book that lands in stores today. What No One Tells You About Your Money. She's my co-host today. Open phones at AAA 825-2-2-25. Luan is in Indianapolis.

Starting point is 00:43:37 Hi, Luan. How are you? I am doing better than excellent, Mr. Dave. How are you? Just the same. What's up? Well, I got kind of an interesting one for you. My husband and I run a construction company together.

Starting point is 00:43:51 You started the business in 2018 before we met, which was 2021, engaged in 2022 and married in 2023. I help him with some aspects of the business, but I'm not totally 100% full-time with it just yet. I still have a full-time job on the side. Not on the side. It's the main job for me, unfortunately. But right now, my current access and our banks, finances for the businesses as a signer because the bank, I guess, needs me to be listed as an owner with a state, which wasn't a problem until recently. My husband wears many hats and doesn't

Starting point is 00:44:34 need to take care of the minutia of running a business like fixing business associate debit cards for our team members. So I went into the bank to help an associate with their debit card fix their pen and I wasn't allowed to because I wasn't an owner. So I asked, them what we needed to do. I needed a file through the state, all that fun stuff. We asked our CPA, got some advice on what to do, and he told us the things that we needed to do. One of those things was we needed to assign business ownership percentage. Here's where my question comes in. As a married couple following the biblical principles, I said 50-50 because we are one flesh. We do this thing together. And that's just...

Starting point is 00:45:21 where my mind and my heart was at. My husband has his business, what I call business glasses and hearing aids in, so his mindset was thinking business, and he came back with 51-49, and that didn't sit right with me. We talked about it. Something came up and we had to table it. And so my mind was kind of racing. I was emotional, and so I went to one of your podcast.

Starting point is 00:45:48 Let me ask you this. Yeah. Regardless of the percentage that's on the piece of paper, how will the two of you treat this business? We treat it as we both own it. You're going to treat it as 50-50 regardless of what's on the paper. I bet, aren't you? Yeah, I mean, it's kind of what we do now. I kind of think you do now.

Starting point is 00:46:13 I kind of think that's the way you're both. You were in agreement until he went, well, that's a little weird. Okay, so I'll give you an example. We have several LLCs that I own zero percent, and Sharon owns all of it. Oh. In case some idiot decides that Dave Ramsey's got a target on his butt, and he finds an idiot lawyer to help him. Makes sense. And you know how much I'm worried about that?

Starting point is 00:46:43 About Sharon having 100% of it? Not at all, because I told her if she leaves, I'm going to. going with her. Yes. So. You're stuck together, period. That's it. So, I mean, I think the spirit of your marriage is really what matters in this discussion is

Starting point is 00:47:01 what I'm saying. Right. And so I couldn't care less what's on the paper. I think your 50-50 is the spirit. And when he said 51-49, it violated your spirit. It's like, what? More than you were actually worried about him, quote, being in charge, because we all know he's not in charge. He's not doing the details.

Starting point is 00:47:25 You are. You already covered that. Yeah. And he knows that, right? But it's as if he wanted to have that one little Trump card somewhere in case he thought he could flex at some point. Ha, ha, that's funny. But, you know, I mean, this is kind of the way this went down. Am I missing something?

Starting point is 00:47:45 No, it was more so like he's been married before, so he understands things happen, and so his mindset was sort of protective mode. Yeah, it won't matter if 41, 59. If things go down, he's going to have to take care of you anyway, and it's going to look suspiciously the same. And I had a feeling this was going to be the answer because I started thinking about it. It's like, it's splitting hairs because all I need to do. do is have some ownership to change debit cards. Yeah, you already had practical, spiritual ownership. And for that matter, legal, because he would have had to deal with the asset if he owed

Starting point is 00:48:30 100% of it in the event of a divorce, it's got to be on the plate. It's up there to get cut in half, just like everything else is. Just like his 401K has got his name on it if he works in corporate America. But guess what? You're going to take a big bite out of it in the event of a divorce. divorce the wife is, hello? Right. Even though your name's not on it.

Starting point is 00:48:50 So that's the same exact thing. So he's not, you don't get clear of the worst case scenario with this part of the discussion. You get clear of that, this part of the discussion with a pre-nup, if you want to go that way, or a post-nup in this case, which is really hairy. So, no, I think as long as the two of you are in spirit, we own everything together, we're doing life together, we're going forward together. I don't care what the paper says.

Starting point is 00:49:17 Right. And I mean, does it really matter what the paper says? And the other thought was, in case something happens to him, continuing to let the business run smoothly, as a 1% owner, I could still do that. Yeah, but I'm, you know, 49%. Right now, on that LLC, I'm talking about if my wife passes away in a car wreck, I don't have any ownership in that.

Starting point is 00:49:39 Now, I have a will, and she has a will in an estate plan, it's instantly mine and I've got control over it, but I don't have the bank. I've got to take documentation to the bank to start cash and check. I'm on the checking account, but I mean, if I wanted to close that thing down, I've got to bring documentation and death certificates and stuff now because I'm not the, I'm not even on the ownership of it at all. Right. So I've still got all that crap to deal with.

Starting point is 00:50:05 It's just, it's just your worst case scenarios are always worst case scenarios. So the big deal is, are we okay? in our marriage relationship and are we aligned on how we view marital assets that it's ours, as you said, and you clearly articulated that, Luanne, and beautifully, by the way, good, good job. So, I mean, do you have, Sam and you have a business? We do. And there's things, especially now that I'm not part of it, that I'm not part of it, but I also know that if something happened to him, all of that I would be able to have, then have access to whatever it is and it would be willed to me.

Starting point is 00:50:44 I know, like he said, 50, 50 in spirit. I think what really bothered you is what Dave said that. He said it in a technical way and it had you questioning if you guys view yourselves the same way. And I would just ask about that. At that point, it's really not about the business. It's really not about the money or anything like that. It's just, hey, when you said that, that just, that hurt my feelings because I thought that we were 50-50 and it kind of made it feel like you were going for some power there.

Starting point is 00:51:09 Ooh, good call. You know. Yeah. It was kind of a flex. Yeah, it was a little flex. I had this before I had you. Sometimes she just got to flick it. Woo.

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Starting point is 00:54:03 Becca is with us in Denver. Hi, Becca. How are you? Hi, I'm good. How are you guys? Better than we deserve. What's up? A strategy question, so I am in Baby Step number Q.

Starting point is 00:54:17 I am 35 single paying off a good amount of debt. And I had a question about my student loans. I'm about 46,500 in student loan debt. but they're technically in forbearance. And I guess my question is I've seen some horror stories of, you know, people opening up their student loan accounts and, oh my gosh, they've doubled or whatever because of interest. But my question is, is it worth it to budget a specific amount to my student loans,

Starting point is 00:54:52 even though I technically don't have a minimum on them right now and use whatever that amount could be towards my credit card is my big focus right now. Mm-hmm. Okay. I get your concern, but you're not going to make any extra progress by doing that. You're going to slow down your progress as all. Yeah, yeah. The math is exactly the same.

Starting point is 00:55:19 Actually, it's a little better if you pay it on the credit card because the credit card is a higher interest rate. So if your interest, let's say you were going to give $100 to the student loan and the interest rate on it's 5%. And instead, you put the $100. $100 on the credit card and the interest on that's 24%. Well, obviously the $100, you know, you saved more interest by reducing the 24% account. Agreed?

Starting point is 00:55:43 Mm-hmm. Yeah. Okay. So it's mathematically incorrect to do what you're talking about. But I'm not as worried about that as I am that I just want you to pound that credit card with viciousness. Yeah. And then open up the smallest student loan and pound it.

Starting point is 00:56:01 with viciousness when you get to it in the debt snowball. Yeah. Yeah. I, yeah, I'm about, in total, in debt. I'm about 92,400 in debt. I have about 3,000 in medical from an ER visit. My credit card is at like 16.5. My car is at 26, 6. What do you make? I work in ministry. I make about $76,000 a year. You got an awfully expensive car. Mm-hmm. Yeah. Okay. Yeah.

Starting point is 00:56:34 My car payment is like $5.43. Ooh. What's your car worth? I'm not good with cars stuff if I'm being honest with you. It's a 2021 Infinity QX-50. That'd be my homework for you tonight is to go on Kelly Blue Book and see what it's worth. And if it's, you know, if you're not upside down or hardly upside down. Get a hoopty for a while and start pounding and not have a $500 car payment.

Starting point is 00:57:01 for a while. I don't want you to drive junk the rest of your life, but I'd love for you to drive junk so you can get rid of the rest of this junk. Because with that 543 back in your pocket, you'd be finished with that medical debt, very quickly. Boom, boom, boom. I, and I have taken on because I am serious about my credit card debt. I actually have two other, with my full-time job, I actually have two other part-time jobs now. Good. Wow. Like at the grocery store, just, you know, doing some shopping, and then I have friends who opened up a business, so I'm helping them on the weekend.

Starting point is 00:57:32 Good. So every month, what are you bringing in? Do you know? Both part-time jobs, I actually just kind of started. I'm hoping between the both of them per month, I can make like, maybe like $500 at one per month and then $600 at the other. I'm just doing them on the weekend. Yeah, that's good. Okay. So here's, you're not afraid of hard work, and you're focusing on this. These are all really, really good signs that you're going to win, okay? And so what I'm trying to do is how quick can I plow through? What mathematical shovel can I use to shovel $92,000? That's what I'm looking at.

Starting point is 00:58:08 And so if I do $30,000 a year, it's three years. That's $2,500 a month. Okay. If I sold the car, it's two years. Right. And that's how my brain starts thinking, because I want to be free. Because if you didn't have a single payment in the world, including these student loans hanging over your head that you're not making payments on right now,

Starting point is 00:58:33 but you're worried about building up. But if you didn't have any of this in your background, your freedom in the spirit to do ministry would be completely different. Would you agree with me on that? Yeah, yeah. Yeah. I actually like the thinking behind that, and I want to double click on it. When you're looking at a high number of debt, like in your case, 92,000, some folks have 150,000.

Starting point is 00:58:56 Sam and I had $4,000, you know, 60,000. what you have to do is focus on that monthly number because it's overwhelming to say, I have $92,000 of debt I need to pay off. But if you reverse engineer it and you've already done the math to say, if I pay $2,500 a month, I'm out in two years, then the only thing you need to focus on is $2,500 a month. I've got to make $1,500 on the side job. Yeah, the extra is what I'm saying.

Starting point is 00:59:21 Yeah, I'm saying, and we've got $1,100 on the side job. So that means we only need out of our budget, X, and which means we might be able to do $3,500. Right, but that smaller number, that's a lot easier for your brain to break down and go after than 92,000. Do you see what I'm saying? Yeah, yeah, yeah, for sure. So it's a much, it's easier to digest for you and then you can actually go for it. Then what we're going to do is we're going on a tight budget, increase income, which you've already done the increased income part.

Starting point is 00:59:47 We're going on beans and rice, rice and beans. We're going to list these debts regardless of interest rates, smallest to largest, pay minimum payments, which is what generated your call. on everything, nothing on the student loans right now, and cut up the credit cards, and we're going to attack that smallest debt, which is probably one of those stupid little medical bills. We're going to pay off a whole bunch of those in month one, and then in month two, we're going to start hammering this credit card like it's evil, and you're going to start seeing Samuel L. Jackson on the TV and start yelling at him, start yelling at him, what's in your wallet? My wallet's got cash in it.

Starting point is 01:00:22 Hello? With my medical bills, with my medical bills, I'm actually, I'm not as well. worried with the medical bills because my employer actually, I have an HSA and they contribute to it very generously. So I kind of, not that I don't count it. Of course I do, but I'm like, oh, that's another account that I, when the money comes in, then I just spend from that. When does the money come in? I contribute to it monthly, and then they contribute a nice portion quarterly. Okay. All right. So we're still going to, we're going to take that free money, but we're not going to wait on it five years, okay? Right. So I still want you to clear those debts smallest to largest. So

Starting point is 01:01:01 really, you get to screw around with this H-O-A stuff, H-A-S-A stuff about three or four months. And after that, you need to just pay it off. Mm-hmm. Mm-hmm. Yeah. Just get it done. Get it done. Yeah. I am worried about all this. I want it out of your life because I want you free, my friend. Yeah. Okay. We're going to set you up with every dollar, which will help you the budgeting app. And it also helps you walk through. It's not just budgeting anymore. It's got all the stuff in it now. And it's going to walk you through all the steps we're talking about.

Starting point is 01:01:31 It's going to coach you along the way. It's very personalized now. It's very, the algorithm on it is incredible. And it's all, we're going to give it to you, okay? So you hang on,

Starting point is 01:01:39 Becca, and Christian will pick up and get you signed up for every dollar. And it's going to walk you through this whole process. So you're going to win because you're paying attention. Yes. You're not afraid of hard work. And you're learning new things you've never learned before. You've been victimized by these things.

Starting point is 01:01:52 And instead you're going to turn. around put your thumb on the, put your foot on the neck of it and say, no more, no more, we're done. And, you know, you've got to stand on the neck of the snake and say, you're done. You don't have a shot anymore, buddy. Absolutely. Absolutely. I like what you said about the, I keep thinking about that. When you're thinking about a grand total of debt, it helps so much to jump into every dollar and do the financial roadmap so you can see the snapshot with what I'm earning now. How long will it take and it might show you something like three or four years and you get to say that's too long. So I add the $1100.

Starting point is 01:02:27 I'm going to add more money to it and then when you get to a point where it's too long. I'm going to sell the car. Yes. Or it's too long. I'm going to have a garage sale. And reverse engineer it back and then you can focus on what are the three things I do to get that money. I sell the car. I do the garage sale instead of focusing on, you know, $200,000 of debt and I'm stuck.

Starting point is 01:02:43 I'm stuck. I'm stuck, yeah. The way you eat an elephant is a bite at a time. It's exactly right. This is Dave Ramsey. We all want to know that the money. we give to charity is doing something that matters, that it's making a real change, giving someone lasting hope. And here's one way to make sure of that. Give to preborn. They're the real deal,

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Starting point is 01:04:28 Go now to preborn.com slash Ramsey or call 855-601-229. That's preborn.com slash Ramsey. ABCNews.com reporting the stock market recorded stellar year-end returns for 2025 when the market's closed before New Year's. performance marked three straight years of double-digit gains. The S&P finished up the year up 16%. Jade, we often talk about around here how the only thing you hear on the news about the markets is bad news. That's right.

Starting point is 01:05:12 They never report good news. So let me give you the good news, okay? The stock market was up, the S&P, in 2023, 26%. The stock market was up in 2024, 25%. The stock market was up in 2025, 16%. That's a total of 67% in three years. That means three years ago, if you had $100,000 in your 401k in a basic growth stock mutual fund, if you've added nothing to it, you now have almost doubled it at 170.

Starting point is 01:05:50 That's right. That's not on the news. No, and that's a lot of money. That you missed. because you're watching the news, worrying about government shutdowns and tariffs and artificial intelligence bubbles, whatever that is,

Starting point is 01:06:08 and whatever else it is that you believe that you're going to watch bad news for every day. So meanwhile, I'm just the tortoise. I just keep investing every week, every day, every month. I just put a little more in, a little more in. And all these years, 65 years old, I've been doing that over and over and over. Not worrying about what the news said.

Starting point is 01:06:37 We've outlived the Internet. We've outlived Sirius XM Radio. We've outlived Bill Donahue and Sally Jesse Raphael. That's a blast from the past. Wow. I'm trying to think of weird stuff from the past. And here we are. And, you know, you just keep investing and you just keep living.

Starting point is 01:06:57 living and you keep, and guys, you're not going to hear this on the news. Okay? The only thing you hear on the news is when the whole world's coming to an end, right? And what happened to the stock market when the president did so-and-so? Or when he didn't do so-and-so. Or when Iraq did so-and-so, or Iran did so-and-so, or name it. And it's in the news and the, oh, the market, the market, of 16% last year. 16%.

Starting point is 01:07:25 that means if it had done half, if you have a mutual fund that sucks so bad that your mutual fund did half as good as the stock market, you still did three times what your high yield savings would have done. It's a big deal. Smoke on that for a second, okay? Hello? This is a big deal, y'all. This is why you start investing, you keep investing, and you don't stop investing. And if you need to turn off the news, it's not a bad idea. And this is also why you get started on the things we teach so you don't,

Starting point is 01:07:58 miss out on stuff like this because the time is passing. You get your butt out of debt so you get to take advantage of this. The time is passing. Because I mean, if you got a million dollars in there during this time, it's looking nice. That means you made $700,000. Oh, yeah. In three years on your million. Sleeping. If you got 10 million, you just made $7 million on your 10 million in three years. Now, is that a guarantee? No. Is it going to happen in the next three years? No. But it explains why you're in such a good mood. That and coffee. Yes. I love it. Oh, that's fun. Tyler, Tyler's with us in Toledo. Hey, Tyler, what's up? Hey, thanks for taking my call. Sure. How can we help?

Starting point is 01:08:47 So my fiancé and I kind of have a interesting situation, I guess. We've been working a side hustle for about two years now at our farm, and she's been the manager, and I kind of just, I know, I get to do the fun stuff, sit on the tractor and drive around and pretend I can help him. Okay. So the previous owner passed away, and now the son owns it, and he's, you know, 18 hours away in Oklahoma. So he's trying to sell it to us.

Starting point is 01:09:22 So it would be buying out the business and the house. And we've been looking at houses. I'm sorry, the business is what? A farm? It's a horse farm. So it'd be a boarding facility. Are you going to get the land? Yep, we'd get the land, we get the house.

Starting point is 01:09:41 What is the land and the house worth? About three quarters of a million to $800,000. Okay. And what does this business profit? The profit right now is about $8,000 a month. Okay. All right. Okay. And what does he want to sell it for? Hasn't given us a hard number yet. We're still in the financial stages, the planning, beginning stages of it right now. But he's talking like $6.50 to $750.

Starting point is 01:10:17 So he's going to sell you a $750,000 piece of real estate for $650,000 and give you a free business? Pretty much. He just wants to. Why? That doesn't feel right. Why? Well, he wants us to have it and wants us to run it under his dad's legacy and all that good stuff. And he's still got younger siblings in the area.

Starting point is 01:10:42 Okay. So let me poke a second and make sure. Because when I hear something's too good to be true, you know what the saying is, right? If something sounds too good to be true, it's because it's too good to be true? Yeah. So is this land and house really worth this, or are you just wishing it was? No, that's, I mean, you know, that's what Zillow says. And that's what the last estimate was, I think, five years ago.

Starting point is 01:11:11 Then that means there's something on the business side that's, well, I'm not saying this, but it feels like something on one of these sides isn't performing the way it seems. If I, if, I mean, this guy really likes y'all. He really likes you. Like, $400,000 likes you. Is that what I'm saying? Okay. Yeah.

Starting point is 01:11:33 No, I hear what you're saying. Okay. So I really want to dig into this if I'm you guys because I, I, if this is, if these numbers are all accurate, this is a sweet, sweet, sweet freaking deal. Okay. Now, how does he want to be paid? That's what we're trying to figure out right now because we've been, you know, planning our lives. We're supposed to get married in September this year.

Starting point is 01:11:59 Good. And then we were planning on, you know, buying a house. Yeah, get married before you close this deal. If you're going to close this deal, get married before you close the deal. Now, the $8,000 a month profit is that after you're paid and your wife, is paid by the old man that died? That is after everybody's paid all that good stuff. And what do you get paid?

Starting point is 01:12:27 Well, right now I'm currently working for free board for my horse. What were you getting paid when the old man was alive? About $12 an hour, just for barn work. Okay, so in a month you would make, in a month you would make what? We'll call it $500 a month. nothing okay and what is your wife being paid your fiance to be wife being paid she's making about three grand a month over there okay so let's pretend for a second jeez that you gave uh almost all of the profits from the business after you all live on 30

Starting point is 01:13:10 if you live on 40 thousand dollars a year which is what you're making okay And you live on the property and you give the $100,000 a year roughly to the sun. And we're going to give you almost like 95% of the profit goes to you until we get to $6.50. Would he do that deal? I guess that would be something I'd have to bring up with him, but I would think so. That'd be it take you about six years to work it out. You'd be able to make it $40,000 for six years. And then the whole thing would be free and clear.

Starting point is 01:13:44 Yeah, and I wouldn't quit my full-time job. either. Oh, you have a full-time job. He sure does. Okay. Oh, yeah. I'm a, I'm a bricklayer. Oh, I missed that part of the conversation because you didn't bring it up. Okay. Even better. Yeah, I didn't bring that. This has been a side hustle for us. I got you. Riding the tractor for the fiancé is a side hustle. I got it. You know what? And I also think this deal, if he likes the sound of it, that's going to give you a good indicator if those profit numbers are right. But if he's like, I would never do that deal, then I definitely want to dig deeper. A percentage of profit after you make enough to live,

Starting point is 01:14:16 on. A healthy, like all the profit almost, until he gets his money and then he's done. And then if there's no profit, he don't get his money. I love entrepreneurs. Don't forget, guys, I started my company on a card table myself. So I know what it's like to have people counting on you, your team, your family, not to mention your customers. And when you're the one signing the paychecks, you can't afford to fly blind. But I'll be honest, early on, one thing that nearly sunk us was wasting time with spreadsheets that didn't add up because business units didn't talk to each other. I finally told my team, just fix it. And they did.

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Starting point is 01:15:44 become problems. So you can trust the data. Stop wasting time and make the right decisions faster. Take a free product tour today at netsuite.com slash Ramsey. That's netsuite.com slash Ramsey. Today's question of the day is brought to you by Y Refi when it feels like your private student loans have buried your future. Why Refi can dig you out? They can help you, that is, with low fixed rate refinancing and a clear path forward. Go to YREFI.com slash Ramsey. That's the letter Y, R-E-F-Y.com slash Ramsey, not in all states. Okay. Today's question comes from Lucas in Arkansas.

Starting point is 01:16:36 He says, how long is too long to save for a down payment? on a house. We're expecting a baby soon and we'll go down to a one income once he arrives to purchase a modest but well built home in our area. We would have to save over 120,000 as a down payment in order to qualify with one income. We're debt free, but it will take us years to get there. So there's a couple things that I'm thinking about here. When we teach the baby steps, baby step 3B is when you're saving for a down payment. And then after After that comes Baby Step 4, where you're investing your 15%. And I think, Dave, what happens is people go, okay, I want to do 3B, but I don't want to sacrifice Baby Step 4 in the time in the market.

Starting point is 01:17:21 Like we talked about the last segment. How do I kind of juggle that together? Because the truth is, obviously, if you have focus and you take all the money, you're going to put more money towards the down payment. But with a long horizon like this, do you want to really go five, six years or whatever the time frame is and not invest? So I would probably split the difference. probably once I got past the two, I would say two to three years. Is that what you would say? Two to three years is when I'd say, okay, no more putting every dollar to the down payment. Now I'm going to split it. And I'm going to try to do some towards retirement, not miss out there. And I know that that's a sacrifice. We rarely say to do multiple things at one time. But in this case, it's all good. It's all good for you. I would do 100% towards the down payment for two to three years. And then you have to adjust after that if you haven't gotten there. But the other thing, Lucas, is.

Starting point is 01:18:08 is this. You know, your income during that time is probably going to go up. Your personal income. Her income is going to disappear. Oh, wait a minute. Maybe we don't need to do that exactly that way if we want to buy a house. That's true. You can think through that. Maybe she needs to find some work at home type work, something that's flexible where she's home with the kid and does some work at home. Well, a baby is sleeping and so forth. And so, yeah, we need an alternative where mom creates an income. And that'll change the picture too. And then of course also, you know, what you're saying is, here's the thing. You can't just yell at the sky and say, my wife's going to stay at home and we're going to buy a house in our 20s, in our 20s. In our 20s. Happen. Yes. It doesn't,

Starting point is 01:19:04 you know, Shazam. It doesn't work, right? And so, You are making a choice. And it's a good choice, if you ask me, to say, Mom wants to be home with the baby. That's a fine choice. I would never shame you for that choice. But it is a factor in an equation. You just cut your freaking income in half.

Starting point is 01:19:28 That's right. And so you are deciding not to be able to afford a house as quickly. You're sacrificing one for the other. or you could say the opposite of that, like a lot of ladies that work here at Ramsey, full time. I'm looking at several of them while I'm saying this, right? Jade, my daughter, Rachel, and, you know, Kelly across the glass and so on. You know, we have kids, we are raising a family, and we are professional ladies. And, you know, we work around that, and that's not only for money, but it's also what you've chosen to do with your life, okay?

Starting point is 01:20:04 It's also for money. And so I've noticed that we pay y'all. And so that kind of stuff. It plays a big part. It's for money. Hello. So, you know, and so I think that's the thing. You can just decide that that's what you're going to do.

Starting point is 01:20:22 But by deciding that, you're also deciding some other things. That's right. There's some unintended consequences or they should be actually intended consequences, as my point. You say, by definition, I'm going to choose to live in, that neighborhood because we have one income instead of this other neighborhood because we have one income or this other type of house or whatever this nicer property right and by definition we're going to have to buy something that's a little different to get our foot in the door to get started

Starting point is 01:20:50 on this home ownership thing because we're choosing to do this on one income and i i don't think it's a bad thing but you don't get to just say i i do whatever i want and yell at the sky you can't yell at the sky. It doesn't work. You know, you still have to, there's mathematics involved in all this. And it's, it's, you know, this idea that when money is one place, by definition, can't be another place. It's a fixed thing. It doesn't, it doesn't float around. It's not omnipotent. So, hey, guys, speaking of homes, buying or selling is a big deal. The market is picking up. I predict a robust spring. Right now, we're sitting at. about 5%, just a little bit over 5% on a 15-year fixed rate.

Starting point is 01:21:38 The median house prices have been holding pretty steady right around that low $400,000 mark for quite a while now. And with these interest rates ticking down, we're about to see these markets take off. And so if you're thinking about buying a home, this is a really good time to start getting your act together, get out of debt, have your emergency fund in place. And if you were going to learn more about the housing market trends and get some free tools to help you with your buy and sell, and you're doing a job. all that with confidence, go to ramsysolutions.com slash market, and we'll get you going.

Starting point is 01:22:10 Julia is in Albuquerque, New Mexico. Hi, Julia, how are you? Better than I deserve. What's up? All right, so my husband and I are starting babysat two this month with $75,397 in debt. So when would it be most advantageous to refinance our balloon mortgage? Immediately. That's a panic.

Starting point is 01:22:37 When is the balloon due? So the balloon is up in 2029. Jeez. So our current interest rate is 5.5%. Yeah. And if we refinance now, that'll give us about 6.6%. No, I won't. I just said just a moment ago.

Starting point is 01:22:58 15-year fixed right now is 5%. Really? Yeah. Mm-hmm. We've been watching, wow, we've been watching the, because we just budgeted everything, and we were Googling the interest rates, and it said 6.6. It's going to be between 5.5 and 5.08. Yeah, right now, it's hovering in the low 5s for a 15-year fixed this week, as you and I are talking. Now, I don't know when people are going to be listening to this particular version of the podcast, but, yeah, at the moment you and I are talking, that's what we're looking at.

Starting point is 01:23:30 So call Churchill mortgage and talk to them about refinancing. If you roll 100% of your refinance, have you got a lot of equity? Yeah, we have 100 to 120. Just roll your refinance costs in and nothing out of pocket. Okay. And get rid of this balloon, because this thing's hovering over your head, and you're just inviting, you're inviting an earthquake in your life. Okay.

Starting point is 01:23:57 You know, you ever heard the saying, if anything can go wrong, it will, Murphy's Law? Yes. As you approach this balloon, if you leave the balloon in place, you increase the likelihood of job loss, medical problems, all these things that happen at exactly the wrong time. Screw up your income and keep you from being able to refinance and you lose the house. Okay. That's what I don't want.

Starting point is 01:24:23 Okay. Right now, everything's sitting pretty and sassy. Let's not do a bunch of little half percent math and try to screw something up here. Let's get rid of this danger that you've signed up for in your life. This is nightmarishly suicidal. You've got to get this off your home. before something happens and you're not able to. Right now while you can, it's called get it while the getting's good.

Starting point is 01:24:46 Right? Yes. Man, that stuff's at blooms scare me to death. Can you all tell? Oh, yeah. I hear the fear in my voice. It turns into anger. Yeah.

Starting point is 01:24:53 Oh, man, I can't stand it because these people get stuck. And, you know, when we end up with them and financial counseling with one of our coaches is they're having to sit down because they are stuck and they lost a job or, you know, the sister got cancer or whatever, and they've got all these income problems and credit problems and stuff's popped up or some kind of identity theft thing, blew up their credit scores, and now they can't refund. Taking them six months to get it fixed and they can't get refinanced in the meantime. All this other crap happens just exactly at the time you're doing that.

Starting point is 01:25:25 It's just a disaster. Oh, yucco, yucco, yucco, you. Please act like your hair's on fire and get rid of that thing. Quick, quick, quick, quick, quick, quick, you're scaring me. Welcome back to the Ramsey Show in the Fair Winds Credit Union Studio. Jade Washaw, Ramsey Personality, number one bestselling author, an author of a brand new book that hits the streets today called What No One Tells You About Money, the real key to getting unstuck from someone who's been there.

Starting point is 01:26:31 You do need a copy of this book. It's available today anywhere great books are sold. John is in Los Angeles. Hey, John, how are you? I'm doing good. How are you today? Better than I deserve. What's up? My situation, I'm trying to figure out the practicality of purchasing a home in or around the Los Angeles area. It's very, very expensive.

Starting point is 01:26:57 You think. I think I do relatively well, income-wise. What do you do? What do you make? So this year I made $200,000. That's pretty good. Right around there. Yeah, but even with that relatively high income, it still feels a bit out of reach.

Starting point is 01:27:16 In 2024, I paid off all of mine and my wife's student loans were 100% debt-free. Way to go. But, yeah, but that down payment still seems like a little far-fetched. And even if that is achieved, the monthly mortgage payments, like, honestly, I mean, not regardless of the interest rate, but it's going to be a lot. Yeah. Because, you know, the fixer uppers out here run you about 850 or like 800 to 850. And that's no palace. Yeah, exactly.

Starting point is 01:27:49 It's definitely a fix wrapper. And what do you do? I'm just trying to navigate. What do you do for a living? I am in sales for a large Fortune 10 company. Okay. Is it tied to Los Angeles? No, it's not.

Starting point is 01:28:08 Okay. So why Los Angeles? That's, well, sorry. Let me rephrase that. So my career is in Los Angeles. I am directly correlated with my territory out here. Oh, okay. Okay, that's what I was asking.

Starting point is 01:28:23 Yeah, so it is tied to Los Angeles. Yes. Okay. Yes. Okay. Well, I don't think the numbers that you're giving are wrong. I think you've realistically assessed this, and it's kind of like, well, crap, I thought $200,000 a year was a lot of money. You know, it's like, golly, this is weird.

Starting point is 01:28:44 And that's the way it feels. It feels that way to me every time I hear it. and it's still the reality of the math is what you're giving me. And I think everything you said, I think, was the truth. I don't think there was anything as exaggerated or fatalistic or anything there. So, you know, the thing is, how old are you guys? I'm 24. Okay.

Starting point is 01:29:04 All right. That's good news. Okay. And the 200,000 includes your wife's income? No, she stays at home with a child. Okay. All right. So it does include her income.

Starting point is 01:29:13 Okay. Good. All right. So that's your house. household income. You're doing really well, man, for 200K. You're killing. Yeah, so you got two or three options or ways of looking at this, and that is, one, you

Starting point is 01:29:30 can say, okay, I'm in Los Angeles for a while. This is my adventure. Probably not going to spend my life here. And so if I rent for three or four years and see how the career thing goes, that's not the end of the world. And then you end up moving to a market that you can actually afford, and hopefully you can make the same kind of money. somewhere. Okay, that's one thing that could happen. Okay, another thing that could happen is you say,

Starting point is 01:29:51 okay, I'm a scratching claw and I'm going to buy this little dinky house for $800 or $900,000 that's a fixer upper to at least get my foot in the door. And then at least I own something, right? And at least then as prices go on up, I get to ride the wave instead of being crushed by the wave, right? Right. So you sacrifice, uh, home ownership being like a dream come true. Instead, it's like barely getting in. And even still, you'll still have to embrace a bit of a timeline on this. Yeah.

Starting point is 01:30:27 And just knowing that going in so you can set realistic expectations on both sides, what you'll get for the money and how long it'll take you to get the money to get it. And that's an okay strategy as well. It might be two or three years. That's not the end of the world. Yeah. It's not the end of the world, okay. Yeah.

Starting point is 01:30:42 The other strategy, the other strategy is to start thinking about, okay, where do I want to live where I can buy a piece of real estate because I can't buy a piece of real estate in Los Angeles because you literally live in one of the easily top five most expensive cities in the world. I mean, can you just realistically speaking as I mean you're making 200,000 between you and your wife, can you guys live on half that? Can you live on 100,000? Yeah, so we can. But the 200,000 I do want to specify is before taxes. Yeah, sure. And we're talking, I'm talking round numbers with you. I mean, if you start, if you start chunking somewhere around 100 grand away, though, you'd have 300 grand away in three years.

Starting point is 01:31:24 That's what she's saying. Yeah. Yeah. And I mean, we can live on half that. Because that's what you're looking at. I mean, I'm just, and again, I'm round numbering this. I'm just plugging it in. So I'm looking at it with you. But if you commit to a three or four year journey on this and do what Dave said, I definitely think that's worth it. Because, again, you're getting your foot in the door and you're climbing the ladder at that point, the real estate. ladder. And I don't think the L.A. real estate is bad. I think it's excellent. It's just really expensive. It's just really expensive. I mean, it's that simple. For sure. And also, like, my career is here, and I could see, like, a lot of positive career growth, like, in this area. Yeah. It's just kind of like that mental battle with, like, well, is it practical to stay? Yeah, but you're, yeah, it's practical to stay for a while. It might not be your 10-year dream career, though. Yeah. It might be.

Starting point is 01:32:17 It's okay if it is. And if you got a lot of growth and, you know, that's the other thing. If your career continues to hockey stick, I mean, dadgum, dude, you're 24. You're killing it to 200 grand. That's amazing. Yeah. You're stud. Okay.

Starting point is 01:32:29 So, I mean, what if you went to 300 and then 400? Well, these numbers all start to change real fast. Very quickly. Yes, right. So I don't know what your comp schedule is or what this thing looks like on your career, but you're an impressive young dude. I know that. I got to believe he's making more in three to four years from now.

Starting point is 01:32:45 I think he is. And I think also that you've done a very dispassionate, logical. There's no shaking your fist at the sky. Just looking at it for what it is. I'm mad. This is not fair. There's none of that tone in what you're doing, which is the first clue that you're actually going to make it probably. Yeah, he was not very emotional.

Starting point is 01:33:07 No, he was just speaking. There's no like, yeah, yeah, this isn't fair. It's like, you know, we get that a lot. Yeah. You know, but I understand it's not fair, but I can't. You know, your feelings don't, the math, your math doesn't care about your feelings. Thank you. That's the thing.

Starting point is 01:33:22 So I think you're a sharp young dude. I think you're going to get there. And I would just sit right. I'd sit tight, start saving some money and just monitor your career and monitor the market and save like a crazy man and get your foot in the door. And what you said just then is so, so true because, yeah, he wasn't, he wasn't emotional. He wasn't whining. But a lot of people they do, they look at the numbers and it feels overwhelming to them. so they don't even start, Dave.

Starting point is 01:33:47 But if you just start putting aside. Or worse, they ignore the math and go buy something that crushes them. Oh, even worse. Crushes them. Even worse. Because it's just not fair. So homeownership's not reachable with reasonable. Ramsey's not reasonable.

Starting point is 01:34:00 Oh, crap. They ain't going to do with Ramsey. Just start. You know? Just start putting aside. I've already got my house. It's not going to do with me. It's got something to do with you.

Starting point is 01:34:09 So what are you going to do? Are you going to crush yourself because you had a little temper fit on the candy aisle? and buy something you can't afford, that drives me nuts. Please don't do that. He's the opposite end of the spectrum. This young stud is, he's got it going on now. Like this guy. He's going to win.

Starting point is 01:35:02 When you're stuck in a cycle with your money, try, feel, try again, it can feel like you're losing your mind. But you're not alone. And you're not crazy. That's why I wrote my brand new book, what no one tells you about money. It turns out money is emotional. And no one's been talking about feelings like fear, shame, or guilt keeping you stuck. Until now, I'm going to tell you about the real fight and show you how to win.

Starting point is 01:35:26 Get your copy today at ramsysolutions.com slash store. That's ramsysolutions.com slash store. Mike's in San Diego. Hey, Mike, welcome to the Ramsey Show. Mike? I didn't push the button. Is that what you're saying? All right.

Starting point is 01:36:03 I didn't push the button. Thank you. Goodness, you'd think I know how to do this by now after 40 years. Hey, Mike. How are you? Hey, I'm doing great. How are you? Well, I'm kind of challenged right now.

Starting point is 01:36:13 But other than that, what's up? Well, I had a question, honestly, not kind of similar to the guy before, but I'm 25 years old. I live in San Diego, also work a job in software sales, and about 18 months ago, I started a side hustle that's kind of taken off of it. And I'm really kind of looking for some guidance, I guess, from an entrepreneurial perspective on like when I should maybe consider doing that full time, versus trying to rack up as much income as I can. Good for you. So what's it doing? How much you're making on the side hustle?

Starting point is 01:36:52 So I started it in summer 2024. Didn't really do much the first six months, maybe like $5,000 in profit. Last year we did $68,000 in profit. Good for you. And then this year I think we'll do about $100,000, maybe $120. What do you make at your day job? About $175. I'm in soft. Thank you. I'm in software sales, so some years it's 150, some years it's 200.

Starting point is 01:37:19 Yeah. It can just vary. Yeah. And so you're 25 and between the two, you're making 300 grand. You're killing it, man. Thank you. Okay. So how much time does the side hustle take? That's the thing. Like, it takes me probably, I want to say 20 to 30 hours a week. My average day kind of looks like working on the business maybe from about 5 to 8 p.m. I'm fortunate enough to where I work remotely to where I can just kind of log off and start working on that. Yeah. Are you married? I'm engaged. Okay.

Starting point is 01:37:54 All right. Wow. Yeah. It's kind of ideal right now. I mean, you're just stacking cash. Yeah, pretty much. I've been able to sock a good amount of money away. Yeah.

Starting point is 01:38:03 If you worked double the hours, would you make double the money? Is it that cut and dry? Not exactly. So the business is very online. focus. It's very dependent on Facebook, actually. So essentially, what do you think the shelf life of the new business is? How long do you think it's going to last before some platform takes you out or a shift in technology or something? Yeah, that's a good question. Honestly, I'm pretty optimistic about Facebook and the way they're kind of investing. I would say that,

Starting point is 01:38:37 I mean, conservatively 10 or 15 years, but, you know, who knows, right? Like Google. I'm 100% 100% sure that Google and Facebook are going to do one thing. Take care of Google and Facebook. Right. And they don't give a crap about you. I can promise you. Okay. So you need to be defensive about your platform usage and don't think that they're on your team.

Starting point is 01:39:03 Okay. Because about the time you get something figured out, they turn it and screw you. I mean, we've been playing with these guys for 15 years since they started. I mean, I've been doing it from the time. back when SEO was a thing, you know, and not even exist anymore. So, you know, whatever, about the time you get it figured out, they figure out a way to monetize everything you've been doing and then they flip it on you. So I'm not cynical. I'm just telling you, you need to be realistic about your platform life blood, and it ain't 15 years. I'm not going to, there's no way. Not without you

Starting point is 01:39:33 iterating substantially. Now, it doesn't mean you're going out of business, but you're not going to do it the way you're doing it, but probably 36 months. And then they're going to change something. So, okay, cool. That's still awesome, man. Get off my entrepreneurial cynicism. But the, all right. Is there a reason to quit? No, I just feel that if I had more time and energy to put into the business,

Starting point is 01:40:05 I could scale it nonlinearly, if that makes sense. Yeah, it does. And I believe you. I think you're right. We have a lot of systems in place that kind of run the business itself, but it is a volume game. Yeah, sure. So I think with more time and attention, I could get it to a point to where it's making more. Yeah, and then you'll hit the point of diminishing returns curve on their time as well.

Starting point is 01:40:29 But I do think you can make, I think you could easily make, I don't even know what you're doing, okay? But it just sounds like the trend line on this. You could make what you're making now if you went full time. Which I'm just curious on where your passion lies. did you start the side hustle out of money or I just really like this field. I want to see if I can do something in it and possibly make some money. Which one are you more passionate about? It's just honestly like a passion thing.

Starting point is 01:40:53 Like it's actually adjacent to my career. So I'm actually doing the things that a lot of my clients are doing in my career side. And honestly, I just kind of listen to them talk about what they were doing right and what they were doing wrong. And it kind of inspired me to do my own version of it. So if you jump to what you'd be fulfilled. No, no, it's completely independent from what they're doing. It's just a variation of it. I got you.

Starting point is 01:41:18 Just best practices, yeah. Okay. Pretty much, yeah. So, I mean, it kind of sounds like to you, like, I mean, it would be my dream to really be able to do it full time. That's awesome. I definitely understand. When are you getting married?

Starting point is 01:41:32 Next year, like maybe 13, 14 months. What's she make? She is actually, I talked to her. into helping me with the business about six months ago, which is why we saw such strong growth. Hmm. And so, is she doing that full time? Yeah. Oh, interesting.

Starting point is 01:41:53 Yeah, so she was working as like a web designer. Uh-huh. And I told her, she wasn't, she was doing it like a contract freelance work, wasn't enjoying it too much. And I said, hey, I'm really time locked here with my job, but I really believe in this. I think you have the skills. What could you hire someone to do what you're thinking about doing? What would it cost you in addition to her?

Starting point is 01:42:18 I'm not sure. I think that I've had experiences hiring people on Fiverr where it'll kind of take what you're doing and try to compete against you with it. I'm not sure we have the capital to go out and hire somebody like W2. Yeah, you do. You got a hundred grand.

Starting point is 01:42:34 Well, I was going to say, you paid yourself that. Did you pay her anything or that's part of the 100 grand? Yeah. So right now we're basically splitting it. So she's getting 50 and then I pay myself 50 and kind of run the expenses out of that. All right. So I love where you are. I love what you're doing.

Starting point is 01:42:51 I love the, you're thinking about it logically. I think you guys are a power couple. So you're not, there's not a screw up. There's no, no, no,

Starting point is 01:42:59 uh, check the box in the stupid column here. None of that's going to happen. Okay. It's only a question of what you want to do and what is best. All right. So one idea that. popped into my head if I were sitting exactly where you are and I'm very entrepreneurial and I'd

Starting point is 01:43:13 rather work for myself than anybody because I'm too contrary to work for somebody. So one idea that popped in my head is let's just burn the midnight oil until we get married. I love that idea. And just crank this thing and see how high a stack of cash. Let's fill a bedroom full of cash over there. Okay. Just make some money. Okay. And during that time, you, You can start to see what some of the trend lines are and the platforms you're using. And if your prediction or my cynicism, which one is more accurate? And, you know, if you do that and you turn it on, you come back from the honeymoon and you just made 200 grand on this thing and you want to punt the day job and go on, then go on. And if the whole thing crashes in two or three years, you've got a bedroom full of money and you made some money and you could go do it again.

Starting point is 01:44:05 You go back again. You go do something else. The beautiful thing about this is you can land. like a cat on carpet when you're done because you've got the skills. Yeah, honestly, I love that idea. I've really been going back and forth between like, I got a good job. I want to keep it. People tell me like it's a dream job, but also like I have to passion on the other.

Starting point is 01:44:24 I mean, you know how to do that job. It'll be waiting there if you ever want to go back to it. And you're at a great time of life where you can do exactly what Dave said. You're not married yet. You guys are in that time of adventure where it's like you want to go. I want to go. Let's go do it. Let's scramble here.

Starting point is 01:44:38 eat peanut butter and jelly sand. Like, you'll do whatever we need to do. Let's go crazy. Let's make hay while the sun shines, baby. You know, and, you know, after the marriage, quit. If you make a bunch of money. You know, I mean, you've got to be making about what you're making or more. But if you are, then quit. The downside of both of you doing this is if it goes sideways, your whole freaking deal goes sideways. Your lack of diversification on your income base is a little scary, but it's okay. I think you've got the margin to handle all of it and I think you're on top of it. Listen up guys because I've got a big question for you. Where will you be with your money at the end of 2026? Will you be better off? Worse? Or exactly the same? Believe it or not, you get to choose. Look, I know there's a lot going on that can make

Starting point is 01:45:53 you feel powerless over your money, but I want you to hear me. You're more in control than you think. You can turn your finances around. So let me help you out. Start your year off with me and Dave Ramsey at our free every dollar live stream event on January 8th. We're cutting through all the lies and all the chaos out there that's keeping you stuck. So you have the clarity you need to finally get ahead. And you could even win $2,000 just for signing up. Listen, another year is going to pass anyway. So decide that this is the year you're going to take back control of your life and your money. Go sign up for the free live stream at every dollar.com slash live stream. Logan is with us in Louisville. Hi, Logan. How are you?

Starting point is 01:46:46 Hi, Dave. I'm great. How are you doing? Better than I deserve. What's up? So I am 26 years old, and I bought my first house last May, whenever I was 25 years old. And I'm kind of realizing that I probably made a very big mistake because I bought it on a 30-year mortgage with 5% down at 6.5% interest. and I'm wondering what I should do. Okay. Is the home affordable? It is. It was $220,000, and the mortgage is $16.23 a month.

Starting point is 01:47:25 And what's your household income? So I make $65,000 a year last year, and I work at a major auto factory in Louisville. Sure. And I will be eventually making $100,000 a year. in about a year and a half or two years or so, according to our union contract. And so I'm basically wondering. I've never heard. No, sir.

Starting point is 01:47:49 I do live with my girlfriend, however, because she had to drop out of college. And her parents aren't really supporting her financially. And she didn't really have another option other than she either move in with me or it was be homeless. So I went ahead and moved her in. and so she has about $10,000 in student loan debt, and then I additionally have about $12,000 on an auto loan. Okay. Well, there's no we.

Starting point is 01:48:18 She has her life. You have your life. You're not married. And so you have $12,000 in student, you have $12,000 car payment and you have a house payment that is tight right now. Okay. So I don't think I would do anything. I think I'd sit right there. What I would do is as your income goes up and you need to clear this car debt off,

Starting point is 01:48:36 when those two things happen and these interest rates continue to go down, I would just refinance. And when you refinance, put it on a 15. Okay. But you're going to get down sub-fives probably this spring. Okay. So refinance is the 15. When you can afford it. I don't know when your income is going to go up.

Starting point is 01:48:57 You can't afford it right now. Correct. Yeah. So when do you think you're going to be making the move from 60 towards 100? So we go up on a yearly basis. I'll be getting about a 10% raised in May. Okay. It's probably going to be the following May before you start talking about refinancing.

Starting point is 01:49:16 You're probably in Coast mode. Okay. And then I actually have a lot of retirement account, and then I've got some in an index fund that's not in a retirement account. Pay off your card a day. What's in the index fund? Almost 14,000. Pay off your car today.

Starting point is 01:49:35 Pay off your card a day. pay off the track completely. Yes, today. Okay, got it. I was thinking you were going to say that. Yeah, and then let's build our emergency fund. And as far as the house, we're going to sit with the 30, and we're going to sit with the six and a half until the rates drop and your income comes up and you can afford to refinance. And it's not going to kill you. We're talking about 18, 24 months here. And, you know, you'll be okay. Like you said, it isn't what I would have signed you up for, but you're there now and there's no, There's no panic in these numbers. There's nothing here that's just destroying you or something.

Starting point is 01:50:08 It's just a good lesson learned for next time you want to make a large purchase to wait until you're in a better position. And don't be combining finances with girlfriends, only with wives. Yes. Yes, I'm not even going to get into that. There were some things there. Yes, there were some things there. Some things there. Britton is in San Antonio.

Starting point is 01:50:31 Hi, Britton. How are you? How did sir? How are you doing? Better than I deserve. How can I help? So I'm in a little bit of like a family pickle. I have a brokerage account that was gifted to me for college graduation that has about $13,000 in it. But based off the previous gentleman, you just told him the liquidate stuff and pay off the car today. I have a $7,000 car loan for my wife's car.

Starting point is 01:50:58 I have a $25,000 car loan to my truck. and I have about 40k in student loans putting us at about, what's that 70, 75K, cumulative debt. Yep. And my gross income is about 100K a year. My wife and I have been married four years. We got a two-year-old, and we got a baby in March. Y'all are normal. And you figured out normal's not fun.

Starting point is 01:51:23 No, I'm tired of thinking, oh, yeah, I make $100,000 a year. And I'm broke. And I'm broke, yeah. Right. Right. Right. Yeah. So, yeah. So you got your first piece of advice, which is to liquidate that non-retirement savings that gets you the 13,000.

Starting point is 01:51:40 So her car is paid off and you're able to put a little onto the truck. What does she drive? I'm just curious. She drives the 2019 Jetta. That's, I don't know, probably got 70,000 miles on it. It's in a really, really good shape. What about your truck? How good a shape is that in?

Starting point is 01:52:00 It's in really good shape. It's a 24-soirado. I bought it with 2,500 miles on it with the little gift from her grandpa to really knock down my payment. Okay. I pay 500 bucks a month for it. Only 500 bucks.

Starting point is 01:52:14 That's a lot. Yeah. I thought it was great for basically a brand-new truck, but I mean, hindsight's 2020. But I drive a lot for work, so I depreciated. I've put on like 30s-10 miles. It means you're destroying the value of a brand-new truck.

Starting point is 01:52:30 You are. Listen, you're going to have to put the pedal to the metal on this debt. You have a great income, so that's good. But what's going to get you is these 40,000 of student loans. It's easy to let that sit around and collect dust. But this is the time, you know, to kick it up into high gear. I want you and your wife to get into every dollar. Have you jumped in there yet? I have not jumped into every dollar, but I, we used like rocket money and we sat down and did our financial planning for the year. Well, there's a problem right there. I'm playing with you, but I'm going to give you a budgeting app that's actually going to help you and it's not going to sell you debt products along the way. So Christian will pick up and make sure that you get every dollar. And I mean it. I'm not just trying to be funny towards a competitor.

Starting point is 01:53:13 I'm saying that if you go into every dollar, their goal is to get you out of debt. Yes, ma'am. The other budget you're using, that's not their goal. Their goal is just to keep you around as a customer later. They can sell you debt. We want to get you out. And therefore, in the app, it's going to ask you things about your life. life and you're going to be able to plug that in and then it's going to walk with you. You called

Starting point is 01:53:32 into us to talk to us for a hot two or three minutes. It's going to give you the advice we would give you step by step along the way so that you stay focused and actually get this done. Very good. Bobby is in Pittsburgh. Hey, Bobby, what's up? Hey, how you all doing? Great, man. How can we help? I have a weird question. I haven't heard before on your show. I have a minor son who received a $15,000 settlement from an accident he was in. Mm-hmm. And on court-ordered to put it into a federally insured bank until he reaches majority, yep, which is in 12 years.

Starting point is 01:54:11 Yeah. And I'm struggling to pick where to put it, because returns are trash. Yep. And I don't know. Which means the court is stupid. And the court generally is stupid. That's what happens when lawyers do financial planning. Mm-hmm.

Starting point is 01:54:25 Lawyers that become judges that are stupid. that I mentioned this is stupid, but you're still court order. You're court ordered. It's aggravating this crud. Yeah, you can't do what you should do with it, which is put it in a decent gross stock mutual fund. That's terrible. You can't do it. So you're going to be in a high-yield savings account at your local credit union or bank that's got federal insurance, and you're barely going to keep up with inflation.

Starting point is 01:54:50 Exactly. I mean, another thing I'm seeing is like less than one percent. Oh, no, no, no. You can get three right now. You can get some high-yield savings up around two, two and a half or three. It's still a crime. It's a crime. It's still a crime.

Starting point is 01:55:05 The whole thing was this kid got hurt, and somebody's trying to take care of him here, and then the judge is an idiot. So, yeah. Well, I mean, the good thing is he currently have, we have some sizable money for him and our daughter currently, but it would be really nice to add this to it. Yeah, I would. Yeah, I would. Is there a way, I'm just asking, is there a way that you could get a lawyer? in order to change that? Yeah, but I'm not sure.

Starting point is 01:55:28 I mean, if you went from 2 to 10 or 2 to 12, okay, you make 10%, you make $1,500, I won't pay the lawyer. So it's not worth it. It's just the stupid law. I mean, it's not even the law. It's just a judge that doesn't know what the crap they're doing. They thought you were, they thought you were going to take it to Vegas and put it on red. Let it run it.

Starting point is 01:55:48 Yeah, run it. That's what they thought. But, you know, no, that's sad. Yeah. You're just going to have some money parked there. kids going to have 15 grand. Well, it's not going to grow much. Hey, George Camel here.

Starting point is 01:56:37 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.

Starting point is 01:56:55 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 ramsysolutions.com slash real estate. That's ramesysolutions.com slash real estate. Proverbs 14, 15 says the simple believe anything, but the prudent give thought to their steps.

Starting point is 01:57:44 Albert Einstein said we cannot solve our problems with the same thinking we use to create them. There we go. Anthony is in Orlando. Hi, Anthony. How are you? Good, how are you? Better than I deserve. What's up? All righty. So I came to ask you about a financial decision I'm going to make.

Starting point is 01:58:03 So me and my fiance are having a baby together, and the baby comes here in two months. And she currently has a car payment that is $26,000. And it's roughly $800 or more a month. And we're deciding whether to try to refinance it. And I looked it up and everything and looked into it a little bit more. And it's that she says she owes around only 17 for the car. And then the rest is mainly like dealership fees and coverages and stuff. and I was wondering if it would be necessarily a good idea to refinance it and then just attack it and pay it off.

Starting point is 01:58:59 Yeah. What do you make, sir? I make roughly 30 grand a year. What does she make, sir? I'd say maybe like 18, 20 a year. Okay. All right. And you guys are 24?

Starting point is 01:59:23 23, yes, sir. 23? Close, okay. All right, can I love you enough to tell you the whole thing? Will you allow me to do that? Yeah. Okay. If I were your age or you were my son, who's older than 23, now, and you were to ask me this question,

Starting point is 01:59:47 here's what I would tell you to do, okay, in detail. And there's a lot of reasons for this, and I'll give you the reasons too, okay? But the first thing I would do is get married by Friday, okay? And because you don't need to be doing financial transactions and babies with people you're not married to. It does not lead to prosperity and does not lead to a wonderful life. The data on this, there's piles of research. that show that this is a really, really good suggestion. Okay?

Starting point is 02:00:26 So I'm meddling in your business. Okay. I want you to get things in the right order from this point forward. So get married by Friday and then sell the car. You can't afford the car. You guys don't have any money. You don't make much money and you have a brand new baby coming and you're so broke you can't see with an $800 payment.

Starting point is 02:00:50 Yeah. It's killing you, isn't it, man? Mm-hmm. Yeah. You've got to sell this car. So call or have her call and get the payoff number on the car, what it takes to pay it off today. And then find out what the Kelly Blue Book value of the car is. And I hope you can sell it for enough to get out of it. I hope she's not upside down in it. And for that matter, since you're her new husband by Friday, hope you're not upside down in it.

Starting point is 02:01:18 hope you're not upside down in it because you're going to be joining this party. But you guys got to, this thing is a weight around your neck during what should be with a baby on the way in a new marriage, the happiest time of your life. This car is a nightmare. And there's refinancing it doesn't get rid of it. It's got to go away. And then get you the cheapest something that you can drive that will run and start your life off like broke people like I did and Sharon did. did and Sam did and most of people listening did um that's where that song we ain't got money honey but we got love that's where that comes from okay and um you know and so you know you start with that

Starting point is 02:02:03 and then you start working on your careers and both of you get your incomes up because both of your job sucks and let's get our incomes moving and then we start talking about buying a little better car a little better car but we're doing this as a couple with a new baby That's a wonderful gift. And let's, let's move forward. And those are the things that will cause you prosperity. There's a whole piece of literature out there, folks. A whole piece of research out there that's done multiple times and multiple different veins

Starting point is 02:02:36 that talks about what's called the marriage advantage. And for instance, males live seven to nine years longer that are married. than unmarried males, just an advantage. Females live, on average, five years longer, that are married. So that's the physical, one of the physical aspects of it. People survive cancer at a 20% higher rate that are married. Isn't that weird? Okay.

Starting point is 02:03:11 There's all kinds of data out there on this stuff. The net worth of someone in their mid-30s at 35 years old, And this is not me talking to you, Anthony. This is me talking to everybody out there. The net worth of someone in their mid-30s right now is 10 to 11 times higher for a married male than an unmarried male at 35 years old. That's at 35 years old. That's crazy, y'all. And it's got to do with a lot of different factors.

Starting point is 02:03:40 But one of them is that we're joined and we're committed. and we're not got one foot in a boat, one foot on the dock. And it changes the dynamic of how you do your career, of how you do relationships, of how you do money, and it changes the whole thing. And so you're always going to get that at Ramsey, by the way. We're always going to be proponents. We're going to tell you every time, because we love you, to get married. Yeah, that makes sense. There's a lot of research out about the quality of your relationships and how they affect your longevity.

Starting point is 02:04:14 how they affect your mental health. It only makes sense that it would affect your money in a similar way. Absolutely. It affects it dramatically. It affects your income. Absolutely. Oh, man. The amount of money that a lady makes more that is married in her 30s than an unmarried lady, really wild.

Starting point is 02:04:34 That's very interesting. And the interesting dynamic of that is that sometimes the unmarried lady is saying, I want to be independent. Isn't it? Yeah, sure. And yet the, and it ends up on average making considerably less on average. So I don't, I don't know exactly what that is. And the guys make more too, by the way. It's not, it's not, but it's just, it's a dynamic in our culture and the way people's,

Starting point is 02:04:58 neurosystems work and where our relationships work, and then it plays out in the math. That's what it comes down to. So that would be my advice to you, sir. since you allowed me to love you and be direct, I'd be married by Friday, I'd get this car on the market and get it sold, and both of you look for better jobs. And let's get you up there where you're making a little bit more than $40,000 or $50,000 a year between the two of you, below average household income and a baby on the way. So let's get this thing moving, buddy. You can do this. You're not a dumb guy.

Starting point is 02:05:34 You can do it. And you're not afraid of hard work either. So you can do this. And you called a show like this. So I know you can do it. I mean, they're just getting started. There's, they got, they can do it. Yeah, absolutely they can do this.

Starting point is 02:05:45 And so there's great hope. And guess what? If you've, if you've done anything out there that you wished you hadn't done, bought a house, bought a car, you know, whatever it is, you wish you hadn't done. You know, a lot of it can be undone. Yeah. Or a lot of it can be survived. Just don't keep repeating it. So I've about decided at my age, since I'm old now, that people say, well, you're wise.

Starting point is 02:06:09 I'm saying, yeah, you know where wisdom comes from, bad judgment. Yes. And doing stupid butt stuff. And the only thing I have done right is I seldom do the same stupid thing. I find new ones to do. But I seldom do the same stupid thing. And if you get a whole bunch of stupid things in your past that you never do again, then people start calling you wise.

Starting point is 02:06:29 Yeah. And so that's really what it comes down to. A whole bunch of things I avoid doing now that all of a sudden it makes you look like you're smart. It's a success thing. You're standing on a pile of failures. Exactly. It's exactly what it is. Good point. 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.

The Ramsey Show - The Only Hack To Paying Off Debt Is Doing The Hard Work

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