The Ramsey Show - The Real Reason You’re Broke May Not Be What You Think

Episode Date: May 6, 2024

💵 Sign-up for EveryDollar today - The simplest way to budget for your life! ☎️ Share your thoughts on The Ramsey Show & more! Dave Ramsey & Jade Warshaw answer your questions and discuss: "Should I lie about how much I'm selling my car for?" "How do we stop living paycheck to paycheck?" "Am I the exception to credit cards?" "My daughter wants me to move out of our house..." "We are struggling to pull the trigger on a house," "How can I pay off debt and save money?" Support Our Sponsors: Churchill Mortgage Zander Insurance Yrefy Next Steps 📞 Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET or click here! 🏦 Take Your 3-Minute Money Assessment - Get a personalized money plan! 💰 Enter the $3,000 Ramsey Cash Giveaway today! Enter daily to increase your chances of winning weekly $500 prizes or the $3,000 grand prize.  📚Get 20% off bestsellers! Whether you’re ready to kick debt to the curb, want to live a less-anxious life, or looking for growth in your job—there’s hope. 🎟️ It's game on! Get your ticket for Total Money Makeover Weekend.  Listen to more from Ramsey Network 🎙️ The Ramsey Show   🧠 The Dr. John Delony Show 🍸 Smart Money Happy Hour 💡 The Rachel Cruze Show 💸 The Ramsey Show Highlights 💰 George Kamel 💼 The Ken Coleman Show 📈 EntreLeadership Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. Open phones this hour. I'm Dave Ramsey, your host. Thank you for joining us. Jade Walsh, our Ramsey personality, number one best-selling author, is my co-host today. The phone number here is 888-825-5225. Billy is with us in St. Louis.

Hi, Billy. Welcome to the Ramsey Show. Morning, Dave. Hey, what's up? Well, my situation is I own a homestead of about 70 acres. I paid $275,000 for it in 2020. Two weeks ago, I had a solar company approach me wanting to buy it um i entertained their offer and they offered me 1.3 million dollars wow nice and i i can't i

fell into a pile of crap and came out smelling like a rose there you go man so so the uh wow you that's something you're living on the property right yes i am personal residence excellent okay wow what's your question congratulations well i know about annuities and whole life term life. And, but I never really invested in anything like this because I grew up basically poor and I was never good with money until I read your book and started saving. And right now I, I want to set myself up and I want to set my son up to be successful down the road. Phenomenal. Wow. Way to go.

Well, to start with, you will have capital gains taxes on anything over a $500,000 gain married filing jointly. You're married filing jointly, right? I am single. you're single uh you will have capital gains on anything over 250 000 gain so you're going to have capital gains on about a million dollars okay so that's probably going to be about 150 000 bucks give or take how much improvements have you done capital improvements have you done, capital improvements, have you done to the homestead while you've owned it? Basically none. Okay. All right.

I've been trying to add an old house on the property that I live in. I've been trying to save up to build a new house, but it's been a rough couple years farming. I'll put it that way. I'm sorry. Well, the wonderful thing is it turned out, like you said. So the congratulations. So the answer is you feel like you hit the lottery.

Now what do I do with this big old pile of money that I didn't see coming? So emotionally experiencing it is part of the equation, right? And the way that I suggest folks do is they start giving a name to this, because here's the thing. You're going to have – do you have a mortgage on the property? I do. Between farm equipment and my farm, I owe about $300,000. Okay.

So you're going to have, you know, give or take a million dollars in your hand. And if you don't watch, your brain will spend about $3 million of that million. It's been running. So we need to sit down very carefully and give every one of these dollars an assignment, temporarily and long-term, both. And the first thing you would do is see a good tax advisor. Go to RamseySolutions.com and click on ELP for taxes and sit down with someone and properly calculate the amount of tax to hold aside

because I don't want you spending that capital gains tax money and having trouble later. It's probably going to be around $150,000. Go ahead and get ready for that. And then you set that aside. You're going to pay off all the mortgages. And so, you know, we're going to be walking around with somewhere around $850,000 after those two things. Now we've got to decide what we're going to do with that. Now, what do you want to do with it well i've if everything goes correctly i already found another little homestead uh for sale um he's probably going to be asking about 385 000 okay so that let's take 400 if you did that that's a reasonable purchase if you took 400 out of the 850, now we got 450. What are you going to do with that?

Well, I was going to put it back into retirement and maybe some annuity funds to just watch my money grow. Okay. So some mutual fund investing. And I don't think I would do annuities. I think I would just do mutual funds. Just do mutuals? Yes.

Yes. And, again, ramseysolutions.com and click on SmartVestor Pro. But the point being here that even if you want to buy some more real estate with it, whatever you're going to do with it, here's a couple of rules. Number one, decide ahead of time what you plan to do. And so if you said, I'm going to buy that other homestead and I'm going to put $400 aside and $450 aside just in high-yield savings while I think about it. If you want to do that, that's okay. But you don't want to leave it there forever.

That's your short-term play. Then your long-term play is, I might want to buy some other real estate, or I might want to improve the homestead, or I might want to put some money in mutual funds, or I might want to be generous with some of the money, or I might want to take my kid on a trip with some of the money. I don't care what you do with it. All I care is you do it on paper, on purpose, before you get the check. Okay. Because that's when your brain's still working.

When you get the check, your brain needs to go into autopilot and execute the plan that you did before your brain quit working yep you see what i'm talking about because you have that who i mean i don't care who you are you make a million dollars it's sweet yeah it's my my mind's been racing yeah if i were you if i were you there's a big portion of this money i'd treat as though i never like i never saw it like i like that 450 is just going to go straight into investing it's like you never saw it pretend like and then pretend like it's not there yeah like it never existed how old are you yeah I am 32 okay so if you put it in mutual funds as an example and did what Jade said and just forgot it If it averaged 10%, when you're 39, 450 will be 900.

When you're 46, your 900 will be 1.8. Yeah. Yeah. When you're 54, your 1.8 will be 3.6 if you just don't touch it. That's what Jade's talking about, the power of compound interest. So sit down with a good SmartVestor pro, sit down with an ELP for taxes, and just develop you a game plan of exactly what you're going to do with this money. But what you're describing is all very smart. I didn't hear anything unwise, even in your tone. I didn't either. I like that you're thinking ahead of

time. And I think that you kind of know this has the potential to go crazy if you don't sit down and write out what your intentions are ahead of time. Yeah. If you think you can do something today with that money that sets you up for life, you're wrong. It's not enough. But it could be invested into something that could set you up. That's right. If you left it alone, to Jade's earlier point. And that's the thing. So, Billy, I'm going to be doing an advanced investing course, Dave Ramsey's Investing Essentials, something I've never done before. I'm going to open up to the stuff I do and that very wealthy people do with real investments,

not stuff on TikTok, May 21st and 22nd. It's a virtual event. I'm going to give you a free ticket because I want you to watch this event, those two nights, because I'm going to teach you a lot about investing that I didn't have time to in this one-minute discussion or five-minute discussion we just had. Congratulations, sir. Thank you for calling. Buying your first home is a big deal and sets the stage for your financial success. So work with a mortgage advisor you trust, not just some random website. Churchill Mortgage is Ramsey trusted because they help you avoid hidden traps

and expertly guide you through every step. Learn more at churchillmortgage.com. This is a paid advertisement. NMLS ID 1591. NMLS consumeraccess.org. Equal housing lender. 1749 Mallory Lane, Suite 100. Brentwood, Tennessee 37027.

Jade Walsh, our Ramsey personality, is my co-host today. Ken Coleman's book, Get Clear Assessment, has helped thousands, almost 100,000 folks now get a clear picture of the work they do best and that they love the most. And now we're excited to announce Ken's new book, Find the Work You're Wired to Do, which will show you how to use your results to get specific in your job search and find the work you love. Right now, you can pre-order Find the Work You're Wired to Do, and you get the assessment built into the book, and you get a $25 free bonus item. Plus, but hurry right right now today's the last day to pre-order so here's the deal you're going to get the get clear assessment the audio book and

the e-book and the regular book each of them will have a code to take the assessment so you're getting three assessments with this as for one price as you just buy the book. But you've got to do it today, tomorrow's launch day, and the deals are gone. So go to ramseysolutions.com slash store. This assessment will help you figure out who you are, why you're wired that way, what you want to do professionally, and how to get there. Thanks for joining us, folks. We're glad you're there.

Check out ramseysolutions.com slash store. Rachel is with us. Rachel's in Phoenix. Hi, Rachel. there check out ramsey solutions.com slash store rachel is with us rachel's in phoenix hi rachel welcome to the ramsey show hi thank you all so much for having me sure what's up um all right i'm trying to keep my fangirling at bay here so i'm just excited to be talking to y'all okay um here's my situation i am selling a recreational vehicle that I own, a private party, and the interested buyer, she came out, looked at it, loved it, wants to buy it. And in our conversations, she has asked if I would be willing to say on paper a lesser amount than I am actually going to be receiving for the vehicle. So my question is, you know, as the seller, is there a risk to agreeing to this? Why? Why does she want you to do that?

Why? Is she asking? Yeah. For tax purposes. How do you feel about it? Um, does it bother you that someone's asking you to lie for them? Um, yeah, it does. You know, it gives me pause for sure. And I just, you know, I, if, if I were to agree to this, this I just I don't know what the possible ramifications would be so you're more concerned about would you get caught or whether you're more listen it sounds like you're more concerned about whether you would get caught as opposed to whether this is wrong or

right and I think that's what's giving me pause okay you tracking with me yeah yeah so morally no you're lying the no I would say no don't do that that's telling a lie and who cares if you could get away with it or not morally speaking that's a lie yeah okay I mean it sounds like you might do what you want to do on this but since you asked us it's a lie i wouldn't do that and it's weird to me that is this somebody that you know or this is just a stranger it is a stranger yeah i know okay and you know and let me tell you what I would also say, Rachel, is I would look at the person and say, and I won't lie about this, and everything I've told you about the RV is true also. Because I wouldn't lie about it either.

And so you should feel really comfortable buying this. Okay. Because I haven't misled you, and I'm not willing to participate in misleading someone. 100%. I hate taxes. I hate taxes. I hate anyone having to pay taxes.

And I really hate income taxes, but I pay 100% of what I am legally bound to pay in income taxes. Not a dollar more, not a dime more. And I will figure out any way I can that I can legally avoid them. But whatever the law requires, whatever the regulation requires, because I hate income taxes. And I hate the way the federal government operates. And I really don't want to give them money. But more importantly than that, I don't want to be a person who doesn't have integrity.

So I'm going to tell the truth and I'm going to pay 100% of my taxes. And this is just a word to the wise for anyone. Hey, beware of good deeds because this woman wanted to feel like, hey, you're going to give me a tax break if you do this. Beware of people who want to manipulate you to do something out of what seems like it could be a good deed, what seems like, oh, but this is the loving thing to do. But at the end of it is a lie. Okay, just word to the wise. Phillips in Washington, D.C.

Hi, Phillip. How are you? I'm doing good, Dave. Good. How can I help? Hey, Dave. I recently received an inheritance, and some of it was in cash. Some of it was in stocks.

I left the stocks alone. The cash I put into a money market. and I'm able to pay off my mortgage if I wanted to because I have more than double in the money market than I do on my mortgage but my mortgage is two and a quarter percent and my money markets a little over four and a half would it be wise to go ahead and pay off that mortgage or let that money sit in the money market and just do a withdrawal from my bank automatically out of that account? So what you're saying is you're deciding how much you own the mortgage? $125,000. And how much is this whole inheritance? What are we talking about? $310,000 in cash in the money market.

Plus stocks. Not not not plus stocks okay so i would pay off your mortgage tomorrow or maybe today whichever one you want either one's okay today or tomorrow and um and and the reason is very simple as we studied 10 millionaires, the largest study a millionaire has ever done, none of them, precisely zero out of 10,000, said, I became a millionaire because I borrowed on my mortgage and reinvested the money. Not one. Not a single one. So people that do the math equation that you're doing generally don't turn out to be wealthy

and the reason is they add risk to their lives when you don't have a mortgage it puts you in a completely different mindset puts you in a completely different place with your relationships with your career choices with everything when you don't have a single payment in the entire world you have no other debt right no other debt good how. Good. How old are you? Uh, 54. And who left you this money? Uh, my mom. So let me guess about your mom. Okay. Could I, could I make a guess about her? Would that be okay? Yes, please. My guess is the day you pay off your mortgage, she's in heaven smiling because she was that kind of woman. Yeah, I would agree. Okay. I have a 529 that my son never used, and I'm trying to figure out also how to not get killed by withdrawing that out.

The only thing, if you withdraw it out straight out, you're going to hit a penalty on the growth. That's all, just on the to hit a penalty on the growth. That's all, just on the growth and taxes on the growth. And so I don't know how much it has grown versus what you put in it. What you put in it, there's no tax on. But the growth over what you put in it, the gain is taxable. And you can see one of our tax ELPs and get a full picture on that. That's independent from this other decision, though.

Let's pay off the mortgage. Yeah, absolutely. Open phones at 888-825-5225. Thanks for hanging out with us, America. We're really glad you're here. Hey, if you want to help us, you can by subscribing to the show, following the show, sharing the link for the show or clicking the share button. Any of those things are a huge help.

In other words, spread the word that you are a Ramsey Show consumer. It's a big help to us. You're our best advertising. We don't have any football stadiums named after us like SoFi or anybody like that. So instead, it's just like us and you. And you guys are helping us out because well we know that because this is one of the top shows on youtube spotify and apple in the world and it's because of you guys spreading the word thank you so much and thank you for the five star reviews

we really really appreciate you this is the ramsey show are you working the baby steps one of the smartest and most impactful changes you can make is to ditch your cash value life insurance plan, if you have one, and replace it with a term life policy. Listen, the only thing a cash value policy is good for is overcharging you for the life insurance and then paying you a crappy rate of return on your overpayment. Stop wasting your money and really focus on getting out of debt and growing your savings.

For over 25 years, I've trusted and used Zander Insurance to find the best rates on term life insurance from the top-rated companies. They keep the whole thing simple. You can apply online or over the phone, and they even have low-cost plans that don't require an exam. Go to Zander.com or call 800-356-4282. Even if you don't have a cash value policy, if you're one of the 70% of people who have no life insurance or not enough, it's even more important to get this done. 800-356-4282

or zander.com. Thanks for joining us, America. I'm Dave Ramsey. Jade Walshaw, Ramsey Personality, is my co-host today. Brittany is with us in Saginaw, Michigan. Hi, Brittany. Welcome to The Ramsey Show. Hi, Dave. Thanks.

Sure. What's up? So we've been going through a hard time, me and my husband, for the last two years. And I've been watching your show, and I just really need some help on what we should do to kind of get our credit up and get out of this hole. So what's going on? Tell us more. Well, last year in December, we had a house fire. And that was only after an eviction the previous year. So it has killed us. The house fire, was it complete?

Did it take everything? It was not. It was a double Y that we had on land contract. So it ended up in just a bunch of messy paperwork and us not getting, you know, our house or any of the money we put into it. So what's going on right now? You had the eviction, you had the house fire. Well, right now, since then, we have been trying to just save money, you know, and get, so we moved to Ohio and we got a good job down there. And that was a rental ending in disaster.

Okay. Why? Well, the landlord had hooked up the gas wrong. Some children came through and smashed out all my front windows, and she wouldn't get them replaced for over a month. So we ended up leaving that, lost our security on that. You know, so it's just been one thing after another. And I'm just trying, you know, I watch you guys, and I'm trying to figure out you know live below your

means. So you're in Saginaw Michigan now? Yes. So from Ohio back to Michigan then what's in Michigan family? Yeah yep we're both were born and raised here. Okay all right what kind of work are you guys doing what's causing this kind of bouncing around? So my husband does concrete and so in the spring you know in the winter we kind of have a slowdown, too, every year. Sometimes he can stay on depending on how big the contractor is, you know, but most of the time it's a layoff in the winter, and so that kind of slowed us down. Okay, but he's been in concrete for a while? Yeah, about 20 years.

Okay, so then we know that when winter comes, it gets slow, right? So what have you guys determined that during those winter months is a good move for him? Yeah, so he actually has like a handyman that we run. Okay, so what does he make a year, and what do you make a year? So he makes about $750 a week, you know, depending on how slow the winter is, you know. Yearly, it's a little bit fluctuating, but that's what we're getting right now. I'll call it $45,000 to be conservative. What do you make? Yeah, so what I was actually going to ask you about i had a catering

business i was running out of our kitchen that burned along with it so i haven't the business didn't burn the kitchen did that's right so i haven't been working why all my stuff's in storage i'm paying for a storage you have a kitchen kitchen now, don't you? I do not. That's why I'm calling in today. Where are you living now? Our credit got destroyed, and we have been bouncing around. Where are you living now? We are living in an RV rent-to-own.

Why would you rent-to-own an RV? Well, we couldn't get approved for a rental apartment. Because your credit, is that the whole discussion around credit? Yeah, we maxed out our credit cards after the fire, and it's just been hard because our credit score went down so quickly. And you didn't have renter's insurance? No, ma'am. Okay. So what I'm hearing here, and Dave will jump in,

it's just a series of very, very bad decisions. And they keep catching up with you. But here's the thing. I'm not convinced that you guys are learning from these mistakes. I kind of feel like you keep doing the same thing over and over again. And it's to no avail. Right. That's why I'm kind of calling Dave.

I was like, you've got to know more than i do because something's going on well quit trying to uh jump in one jump out of the hole so you went from eviction to i felt trapped into a bad deal on a trailer and with a with and and it burned then you take off running to oh Ohio for some ungodly reason. Nobody knows why. But then the place you move into there was a piece of crap, and you get in the same exact thing. And then you come back, and your answer to all of that was to rent an RV. None of these four things work.

None of them work. After I tried to get the apartment that we kept. Yeah, I know. Well, some apartment somewhere. I don't know what or where or who but somebody without trying to you don't need to own anything you just need to get a rental and you need to pile up cash and you need to get on a rutting budget and and get your pans back out and start cooking again or doing anything at this point or or work and doing anything anything you can do to add some money to this equation because if it if we can double your income a lot of this starts to smooth

out very very quickly if we can just increase your income it starts to smooth out very quickly and then slow down and quit a lot of these decisions sound like you were very afraid and desperate when you made them i would say yeah and i because i can smell it because i used to do that a lot i have found that the that when i'm desperate right after i get desperate when i get stupid yeah and and that kind of shows up in a pattern here and it's not saying you're stupid i'm just saying you did some stuff that's cost you and admittedly you told us that and so what i want you to do is go find some very solid predictable rental situation and you don't have to do it by the weekend but i do want you to do it this month and move into that out of an rv get your family settled in get your stuff out of storage quit paying storage to store

stuff you should be making money with. And I'm not convinced that you guys are steadily making three to four thousand dollars a month. I think that that's on a good month. So I want to make sure that both of you, him and the off times, has something steady because I think the handyman thing is there. But it can be steady if you fill it up yeah but you got to fill it up well he's had 20 years it can't be I don't do anything and I call that being a handyman yeah it's handy to not do much you can't do that okay so you gotta be you gotta be handyman in like 15 hours a day uh and you make really good money doing that by the way better than you're making in country you could grow that business and get out of the concrete business completely you gotta get handyman a lot of them are making 100k right now uh so you set that

business up and fill yourself up with taking care of rich people doing little tiny stuff they don't want to screw with and uh going there dressed nice and bathed and clean tools and clean shoes and take care of business and charge yeah good money for a tiny little job. And you can really make a good living doing that if you build the business out. Now, if you don't want to do that, that's fine if you want to stay in concrete. But let's build it out enough that it's handy that you're making $2,000 when you're not doing concrete. I want wifey working, too. Wifey needs to get in.

She needs to get those pots and pans out, baby. I don't think it's the pots and pans. I think that because there's only so much catering you're going to be able to do out of a double wide i think no no it's an rv you're not doing any that's what i'm saying you gotta get out of there into something where there's a kitchen and either get a job or get that kitchen fired up one of the two or both or both go make a bunch of money and slow down on your big decisions. And when your heart rate's up and there's a little bit of sweat on your upper lip and in the palms of your hands, it indicates fear. Don't make a decision because you're getting ready to do something dumb.

All of you, everybody listening, including me, fear does not lead to good decisions. And desperation does not lead to good decisions and desperation does not lead to good decisions and scared and stuck and forced to and these kinds of words come out of your mouth right before you do something dumb and i've done a bunch of it britney so i'm not picking on you honey i know where you are and we'll put you we'll put you guys into financial peace university right now and get you started on learning how to handle money we got to get the income side of the equation and the housing both stabilized for you to be able to prosper and move forward. The instability of your housing situation and your income is what has caused you to be sitting in this crisis. Those two things combined. And you

get those two things fixed, you're going to find this thing stabilized pretty quick. This is the Ramsey Show. You know, it doesn't take a degree in statistics to realize this one stinks. 93% of undergraduate private student loans are co-signed. So when you're delinquent and drowning, mom or papa or uncle Joe is stuck in that financial stress along with you. But there is a way out. YRefi. YRefi offers a custom refinancing option with a fixed rate loan based on your ability to pay. And the average interest rate Y-Refi offers is 3.9%,

which can significantly reduce your monthly payment and decrease your total cost. Contact Y-Refi at 844-2-RAMSI or go to Y-Refi.com slash Ramsey. That's 844-2-RAMSI or the letter Y, then R-E-F-Y.com slash Ramsey. Y-Refi is not licensed by the California Department of Financial Protection and Innovation. Y-Refi is not authorized by the New York State Department of Financial Services to service any New York loans. Funding may not be available in all states. Jade Walsh, our Ramsey personality, is my co-host today. Thank you for joining us. Mark is in Nashville. Hey, Mark, welcome to The Ramsey Show. Yes, sir. Thank you for taking my call. Sure. How can I help? My profile's a little bit different than your usual profile. Okay. I am 69 and a half years old. I am single, unexpected divorce.

10 years ago, I went for a career change from full-time ministry to being a registered nurse. And I want to know how to plan for my retirement. Okay. All right. So now you're a nurse these days? Yes, sir. Okay, cool. When did you make that transition? Finished nurse school four years ago. Wow. Cool. Interesting. Good for you. Okay. So what's your financial situation? What's the kind of money you got saved? Okay. Through divorce, lost all our saved assets. I was married to someone a little bit younger, and our plan was to, you know, I retire first, she keeps working, and we can be generous and give and take care of our children, build a nest egg, buy a mortgage. Anyway, that's all off the rails. So I earned roughly $70,000. I have $20000 a year in a I took an early pension from

my previous career so my income is basically 90,000 my child support of about 18,000 a year will be ending in the at the end of June. You have an 18-year-old. Yes. Okay. And a 24-year-old. And then I have a $10,000 college loan from the U.S. government. Do you have any money saved? Yes, $5,000.

Well, I had $100,000 before the divorce. No, I know now. Do you have any money now? No. $5,000 in mutual fund and $5,000 in cash. Okay. All right. And the divorce was final when?

Back in 2013. So over a decade ago. Over 10 years ago, and yet you still save no money i've had child support and i had nursing school and related expenses okay all right but now you're ready to save money okay all right so that's been my plan so the answer the answer is to pile up as much money as fast as you can obviously you already knew that you didn't need me for that. How can I help? Well, I have a question. What's your living situation? How are you living? Are you renting? Do you own a home? I am Airbnb. I'm paying basically $1,000 a month.

You live in an Airbnb and you're paying $1,000 a month. Okay. Correct. Okay. Well, for you, it's the baby steps like anybody else. I mean, the first step is you've got to pay off this $10,000 loan that you have. You've got $10,000, and let's knock that out instantly. You're making $90,000 a year. You're single. You have a very low, I'm going to call it rent, compared to everybody else out there who would be looking for a rent today. That's my choice. How quickly could you pay off the ten thousand dollar loan in two months

um haven't done all the math on that well i'm only paying like 140 a month well let me start well let me start you off right a month for two months well you've already got five thousand cash so you could put four thousand on it now and then have the rest paid off within the next two months. So that puts you down to a $1,000 emergency fund. You've now paid off your debt in two months. Now, the key after that is we've got to save up some emergency funds. six months in your case, I might start with three to four months and then move on and start baby step four and get to retiring. Yeah, I want to start saving money by Christmas. Yeah. I want you to have $10,000 in the bank and be rid of the $10,000 before Christmas

and then start investing like crazy. Sit down with a smart investor pro and dump as much money as you can towards retirement and build up. And then once you get that going i'm going to start thinking about you sound like you're in very good health um i must start thinking about buying something to live in because you can stabilize because at some point out in the future 10 years from now let's say that rent's going to double yeah triple whatever it it does. And when you can buy something, you lock in the most expensive line item in your personal budget, which is your home budget, your cost of housing, whether it's rental or mortgage or whatever it is. And let's get in that as fast as we can. Something very inexpensive. And it sounds like you're living in something

modest now. So a modest one-bed bedroom condo that you pay cash for, or that you almost pay cash for and pay off very quickly. That kind of a thing is out there, depending on where you're doing your nursing work and how, you know, what, what the proximity around town is and all those kinds of things. But yeah, I'm sorry, Mark, you've obviously been through a lot of pain and heartache and heartbreak with that divorce. I'm very sorry for you. It does sound like you've painted yourself into a new future. And I like that painting. It looks good. Let's lean towards that. And it's easy to look back and talk about what once was. And it hurts. But it's very important that you lean into the future right now and clean up this debt, put an emergency fund in place,

and then start stacking cash in an investment and then start thinking about buying a home at some point in the process. So good questions. Hey, thanks a bunch. Very cool. Yeah, that's crazy. Steven is in Knoxville. Hi, Steven.

How are you? I'm doing wonderful. How's it going, Dave and Jade?. Hi, Steven. How are you? I'm doing wonderful. How's it going, Dave and Jade? Better than we deserve. What's up? Hey, so my wife and I, we are ministers, and right now we're bringing in about, I don't know, $47,000 or so a year. The question I have is, and we have no debt, and we have a fully funded emergency fund of about $10,000. The question I have is, she has an old 401k, and it's about $65,000.

And I was wondering, this is from her previous job, is it a good idea to roll that over into a Roth IRA, pay the taxes on it now, and then continue to fund that Roth? If you're 100% debt-free and you have extra money, that's house and everything, then I would consider doing that. Otherwise, I wouldn't. You wouldn't roll that into a Roth? No, I would not. Okay.

Now, the other thing is— Do you have a house mortgage? No, no, we rent. We travel a lot as ministers. Okay. Now, the other thing is... Do you have a house mortgage? No, no, we rent. We travel a lot as ministers. Okay. Do you have the extra money to pay the taxes that that will create, $15,000, $20,000 if you did that? Would the taxes just come out of what's been... No, I don't want you to do that. I want you to roll the whole thing or don't do it yeah so we do have 25 000 in a in a taxable brokerage account as well in

addition to your emergency fund exactly and you're 100 debt free 100 okay then if you want to roll that to a roth and you want to use that brokerage fund to pay the taxes you're going to come out ahead it has the mathematical effect of having invested an extra 20 000 into your roth that's what the math effect of it but if you take the 60 and you drain it down to 40 just to pay the taxes that 20 you took out to pay taxes would have grown to enough to pay the taxes so all you do is break even how important is it that they do it now versus waiting several years the better because from this point forward it's 100 growth tax free so yeah but if you want to use the 20,000 out of your brokerage to do that it's an extra way to invest into retirement how old are you guys

steven i'm 29 and my wife is 35 okay it's It's going to hugely benefit you, but you've got to have the rest of your life figured out. Not the whole rest of your life, but I mean the other parts of your life today figured out, like cars and whatever else that brokerage money was. You were sniffing around that brokerage account to do something else because now I just spent it. Yeah, I think that's the thing because we have a 20 year old car and we do want to have kids there so yeah pay cash for whatever no debt no future debt because of this move but if you can pay the taxes with outside money rolling to a roth with zero debt house and everything of course you don't have a house that's easy uh but then then yeah the roth makes mathematical sense to do that and as

you become very wealthy later that having all of it in roth is really handy from a retirement standpoint and from an inheritance standpoint in particular so really good move to get it to a roth but not does no good at all to use the roth or to use the money out of the ira to pay the taxes it just nets out the same. So hope that helps you, man. Thank you for your call. This is the Ramsey Show. Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. Jade Walshaw, Ramsey Personality, bestselling author, is my co-host today. Open phones at 888-825-5225.

Thank you for joining us, America. Jade, did you know that it's producer James Childs' birthday? I was not informed. Should we sing happy birthday? Probably not. Maybe not you. Oh! Says the singer who's heard me apparently sing in church.

I've never heard it. Heard me singing a joyful noise in church. I'm just saying. Only time I'll be caught dead singing. Happy birthday, James. Happy birthday, James. Thanks, guys. I appreciate it.

Sammy is in Philadelphia. Hey, Sammy, how are you Happy birthday, James. Thanks, guys. I appreciate it. Sammy is in Philadelphia. Hey, Sammy, how are you? Hey, Dave. Thanks for taking my call. Sure. What's up? So, my question is in regards to funding inventory for my small business. So, currently, this is going to be my third year in business.

We're expecting to hit $2 million this year. Great. Yeah, so I don't have any employees. It's just me and my wife helping me on the side. So about 70% of all my business expenses is just in cost of goods. So you netted $2 million or you grossed $2 million? That was my revenue. So you should be netting about $400 this year.

Your gross profit on that would be about $600, yeah, $400, and then you'd have some other miscellaneous expenses. What other expenses do you have other than cost of goods? It's just basically uh rent among some other things that we do it's consumer electronics so each of them have to be inspected and tested um and cleaned all that what does it what does it cost you um what are your expenses ron you you said you had a you said you're 70 or 30% gross margin, right? It's about, it's about 25%. Okay. So 25% gross margin. So on 2 million, that'd be $5 million gross profit after cost of

goods sold before operating expenses. What would your operating expenses be? It would be about $50,000. Okay. So you netted taxable income about $450,000. Correct. That's what we're expecting this year. Phenomenal. Cool. Good for you. Well done.

How can I help? So my question is, till now I've been funding my purchase orders. You're not going to like this, but with a credit card. I've been paying them off within a 30-day mark. The card I use doesn't actually allow me to carry a balance, but I've basically been spending about $80,000 on the card every month on average. I make sure not to spend above... Why are you doing that? You have the cash. So I don't have the cash because every single dollar is reinvested back into new skew um i'm trying to since we just started a

couple years ago i'm trying to expand my skew every single month i'm trying to get new lines you spent 450 000 on personal living expenses this year? All that profit was put back. I don't pay myself a dime. All that profit was put back into the business. And it was all on expanding schemes. Then why would you need to use a credit card? Because you have put $450,000 back into inventory.

Because, well, that's the numbers we're expecting this year last year the number we made in profit was about 300 000 okay so you put 300 000 back in why would you need to use a credit card you should make that cash machine run off of 300k organically correct correct currently right now at the moment i have over 400 000 an inventory that's paid for. However, if I want to expand into new SKU, which I do. So it's not actually to cash flow the operation of the business. It's to expand the growth. Correct. Or to fund the growth is with a credit card.

Correct. Okay. If you want to stay open, you're going to quit doing that. Why do you say that? Because most people that do that crap go broke i coach over 10 000 businesses in entree leadership people that run small businesses off a credit card inventory control system go broke they don't make it instead of actually running your business on cash which you have the ability to do you're smart enough to do it you just didn't

have the appetite to slow down enough to do it. You're going to slow your growth rate temporarily until you get weaned off this credit card and get 100% cash on your inventory reinvestment business. But it's going to cause you to buy different inventory too. What are you currently spending on the credit card to fund your new inventory your new your new inventory your new SKUs so I I it's not exactly just on new SKU it's just it's just I just spend as soon as I I make an order every week um and that ranges like currently for example

on my card I have 15,000 but I just got another order today which which was $55,000. But I have about $40,000 coming in a week, so that's easily going to get paid off. If it's easily paid off, it's easily fundable with cash. It's the same thing, dude. One of these is not true. Either it's not easily paid off off or it is easily paid off. And if it is easily paid off, it is easily run with cash. You just got to have a one or two week hiccup here and get weaned off these credit cards.

You can do what you want to do. You call me and ask me what I think you ought to do. Yeah. Because ultimately it won't take him much time to adapt that cash system. He's just going to have to get basically get ahead a couple of months so that he can have that reserve to do. Yeah, because ultimately it won't take him much time to adapt that cash system. He's just going to have to basically get ahead a couple of months so that he can have that reserve to do it. What I would tell you to do is to sit down with one of our CPAs or our tax people, go to Ramsey Solutions, click ELP, and have one of them help you set up a bookkeeping system.

You need to learn accrual accounting. Accrual accounting is when you buy an item, you book it as sold, okay? Instead of right now, you're booking it as cash. And every time you sell an item, you set aside a percentage of that item, like 70% or 75% to buy the next one. That's accrual accounting. With cash, you're just throwing cash up in the air and hope it all lands. And you're not managing cash well. You're selling the crap out of stuff and you've grown a good, strong business in terms of revenue growth, but you're not managing it well. You're not managing the accounting and the numbers well, and it's going to bite you in the butt. So what a proper business function would be with accrual accounting is every time you sell an item, you set aside 75% for a replacement item.

If you want to grow, you set aside 85%, 10% for new SKUs and 75% for replacing the old SKU. And then you can stay ahead of the cash. You'll always have the cash. If you set that back, set that back for the next purchase, and then you don't purchase or make sales beyond your cash position. And you can run this business forever this way. The way it is right now, if the music stops and you you know you can run this business forever this way the way it is right now if the music stops and you don't have a chair you're screwed because you're playing musical chairs that's what you're doing you're playing hide the p under the shell this is the ramsey show jade washaw ramsey personality is my co-host today. Thank you for joining us. I'm Dave Ramsey.

The phone number is 888-825-5225. CJ is with us in Hickory, North Carolina. Hi, CJ. How are you? Good afternoon, Dave and Jade. How are you? Better than we deserve. What's up? So I'm going to jump right in. Me and my wife have about $57,000 in outstanding debt. About $27,000 of that is a student loan. Then we have two cars. One is

$12,000 and the other is $16,000. And then there's a small amount of credit card debt in there as well. So I've been listening to you for about three weeks, and we decided to sit down, make a budget, and figure out and decide, you know, get debt-free. Cool. We were living comfortably because we're making the payments, but... What's your household income? Household take-home is $ three hundred dollars a month and how much that is you versus her um i i don't know stop my head okay um i just not we did it we did everything

as a whole okay okay so your question is what um so my question is this so we were starting to pay everything down we have sixteen thousand in the back um we were starting to pay everything down. We have $16,000 in the bank. We were going to dump that into paying things, right? However, we were also trying for a baby and we're pregnant. Great news. But I'm wondering what I should do with that $16,000. Should I save it for the baby? Should I use it to pay down debts? What should I do with it for now? If the situation were different and you weren't yet pregnant, I would say, yeah, like I'd skim that down to 1,000 and I'd take the other 15 and I would throw it, I'd knock out the one car and I'd start on the $16,000 car. But because you have the baby, I would say for us to pause all of this for right now and let's see how much cash we can stack up. That's kind of I had a I had a feeling you were going in that direction.

That was also why I wanted to know how the income broke down, because, you know, there might be a portion of time where she's not working and I'm not sure what the maternity leave is. So for that reason, it's good to have as much money saved up as possible until the baby comes. The baby's healthy and then you can crank this thing back up and you'll have a big pile of cash sitting there hopefully by then i mean she just got pregnant so hopefully by the time this is all said and done you might have enough to knock out both vehicles hcj if you if you weren't doing this and you really tighten the budget down how much a month were you planning to throw at the debt? So our total after we tightened everything down was about between $1,200 and $1,500 a month. Okay. All right.

So let's call that in nine months $12,000 for a fund. Okay. So I want you to save the $1,500 a month. I want you to get to $12,000. Added to the $16,000 is $28,000 in a big old pile of money doing nothing but sitting there making sure you have a peaceful pregnancy and delivery. Mommy and baby come home and everything's okay. Now we push play on the total money makeover baby steps, and that means you're going to take of the $28,000, $27,000, and you're going to pay off both cars.

Okay. The day that she comes home and the baby's okay. Now you're debt-free, accept your student loan, and then you get in. Now you get into beans and rice, rice and beans mode, and as fast as you possibly can and you don't spend this twenty eight thousand to build a twenty thousand dollar nursery for a newborn that weighs eight pounds listen if i were you if i were you i'd be calling up the the hospital where she's

going to deliver and i'd ask outright you know how much is it going to cost to have this baby the natural way if she has to do another way what find out what it's going to cost find out if you're going to hit your deductible then you'll kind of already be able to kind of put some guardrails around this money you'll kind of be able to look at it and go okay this much is the deductible then we'll have this coming out and you'll be able to see all the things that you can do and accomplish to dave's point if you have reasonable insurance you should be able to bring the baby home and have almost no effect to your cash flow and have the whole $28,000 clear to throw at the debt. Excellent. But if there's a hiccup, we got $28,000 worth apiece to help us with a hiccup.

Okay, awesome. Sounds great. Yeah, and then you get, so you're not going to miss a step. You're not going to miss any any uh progress to amount to anything here as long as you don't sidetrack some of that money with something silly as you go along and that can happen so be careful you have to guard against silly silly is how we got here by the way so we want to get out my not using silly jonathan's in murray kentucky hi jonathan welcome to the ramsey show hey thanks for having me sure what's up? Our student loans

are currently on pause right now. We're on the safe plan, so we don't have a payment. We're not getting any interest. Wait a minute. Can I call it? I've thrown a flag on that play. There's not a student loan pause. Now you could be on the one-year ramp. No, I'm on the safe plan. So it's on, like our payments are on pause right now. We have zero payment right now. Because you have no income or because you're back in school? Our income is low, and we have two kids. So they're just letting the interest pile up? No, it had no interest on the safe plan.

The interest doesn't pile up. Okay. Keep going. So I'm on that right now. We want to save for a house. We had a house and we got in some debt issue. It was a really hard decision, but we had sold our house. So we're currently saving money, but we do have the student loan debt.

So I'm just trying to, and we have money going elsewhere. We're just trying to make sure we're in a good train of thought with our budget and everything to make sure that we're setting ourselves up. How much student loan debt do you have, honey? We have 62. Okay. Until you clear that, you're not going to prosper. Trying to monkey around and find some way to twist and turn

and do a double backflip and act like that's not there and some kind of mathematical denial is not going to work. The sooner you clear that, the sooner you're going to prosper. It's hanging over your head. It's always in the background. It's always in the closet, the monster ready to come out at midnight. Clean up your freaking debt. Quit screwing around with intellectual exercises while, meanwhile, you're hovering with this

thing over your head. It's not going anywhere until you take it out pay it off now what's your income whoops that's all right well here's what i want to say the screen said should we save for a house if we have student loans but i'm like you just told me no you just told me your income is low enough that they gave you a zero dollar payment so there's your there's your answer you shouldn't be safe you shouldn't be if you can't pay a payment on a student loan you don't have any money to save to start with and if you did what are you going to buy exactly i mean a one bedroom house i

mean what are you going to do here so no no right now you need to clean up your student loans as fast as you possibly can and quit trying to use some governmental stupidity as an excuse to not do it. Knock it out as fast as you can, get it out of your life, then build an emergency fund, you're 100% debt free, then save for a down payment on a house. It's the slower version of getting back into a house, but it is the proper way to do it. And by the way, hopefully your income won't be so stinking low as you go along this process. And you can actually make some better progress than trying to sidestep this stuff. Open phones at 888-825-5225. Um, the things that we teach you here on the air are never pleasant in the present. They're always the best thing long-term though.

And most things that are good with money long-term are a bit painful in the present. The ability to delay pleasure, the emotional maturity that allows you to delay pleasure is a real indicator of building wealth. No discipline seems pleasant at the time, but it yields a harvest of righteousness. And so we're always going to tell you hard stuff and stuff that makes you frustrated and give you some reason to, you know, do a whole Instagram post about how stupid Dave

Ramsey is and all that. And let me help you with this. Dave Ramsey doesn't care. I'm not taking a poll. You know, I'm not asking you what truth is. You were asking me. And there's a reason. It's because for 30 years, I've been showing people the real way to build wealth,

and it's called common sense. Get yourself out of debt. Get on a written plan. Build an emergency fund. Then start your saving for a house and start your investing. This is common freaking sense. It's what old rich people did.

It's how they got to be old rich people that you make fun of. This is The Ramsey Show. Jade Walshaw, Ramsey personality, is my co-host. She's the best-selling author of the book, Money's Not a Math Problem. It is a Ramsey quick read, and what that means is it's about 74 pages long, give or take a page. And that means you can read it in one setting. Money's not a math problem. The real reason you're broke and what to do about it. Check it out at RamseySolutions.com. Today's question is from Donna in New Mexico. Yeah. Donna says, I sold my home two years ago because my son was co-borrower and wanted to purchase his own home

with his new wife. Good. After the sale, I purchased a new home with my daughter. Oh, you didn't learn. I used over $140,000 from the house sale for the down payment and other expenses for the home. Now my daughter and I are having relationship issues and she has told the rest of our family that I need to be in assisted living. All the money I had went on the new home and I have no savings. I want to buy a home you buy it on your own um i'm not sure how old she is but um i would say if you're on this together the only way to get somebody off is to refinance to get out of it but um yeah if she needs to buy you out or we need to sell the house and i would tell her she has 30 days to decide your daughter tell your daughter, because you're trying to get me put away in a nursing home, we are selling this house. I don't want to live here anymore and I'm not going to leave my 140,000 in here. And so if you want to

buy out the other, buy me out with my 140,000 by going and getting a mortgage, um, you can do that. Otherwise we're putting the home on the market and we're going to sell it so that I can get my hundred and forty thousand out and I'm going to go get me a place of my own. Now, which one do you want to do? You got ten days to decide because at the end of the month, I'm putting a sign in the yard and see if you can stop me. If she tries to stop you, then you're down to a court action. And the circuit court will have to issue an order to sell the assets of the partnership to settle the partnership. Now this is going to get nasty. And it's going to cost you about $10,000 to get out of this ridiculous stupidity you signed up for.

So, folks, don't do this stuff. If you, if your daughter wants to live with you, that's up to you. If you want to do something else, that's fine. But when you do these deals together, then you're, you know, the only, you had a pleasant one where you got out of it. My son was co-borrower, wanted to purchase his own home with his new wife, which is perfectly natural and healthy. Thank you. And the way we fix that is we sold the house. Good.

So now my daughter's being a butt. And the way we fix that is we sell the house. Ta-da. Just like that. So you don't want me to live here. That's a problem. You're going to have to buy me out or we're going to sell it. Up to you, your choice.

And then I'll decide where I want to live, assisted or otherwise, because that's what I do. I'm like a grown person and stuff. So there we go. You're not getting rid of me that easy. It's not good. Wow. Open phones at 888-825-5225.

Zach is in Cleveland, Ohio. Hi, Zach. How are you? Hey there. I'm great. How are you? Thanks for taking my call. Sure.

What's up? So I just had a question around house buying strategy and how much kind of house we can afford. I've always kind of hated debt, hated interest, uh, just as a, you know, a personal belief. Um, but that said, uh, 29, no kids, uh, getting married soon. Uh, I take home, uh, 160 K a year, uh, between two full-time jobs and then another 20 K with a side hustle. Um, the fiance has 50 K salary. Um, and we have some investments as as well so basically we're just looking into this starting out and we were shocked by interest right so we were you know looking at around

350 000 home and then looking at interest over 30 years how much do you you're not gonna be at 30 years how much do you have saved um so currently uh and this we kind of rolled a lot of stuff over into an investment account now. So we have like half of it in a money market account that gets about 500, 5% back. And then the rest of it is in like S&P 500. How much is it? How much is the cash on hand? 125,000. Okay. When are you getting married? This September. Okay. Well, don't do anything before September. Yeah. We're not in any rush. We're just trying to lay the framework. Okay. Well, don't do anything before September. Yeah. We're not in any rush.

We're just trying to lay the framework. Yeah. You don't buy a house before then, before you're married. For sure. Don't buy a house with somebody you're not married to ever, people, ever. And then we've got, you know, what I would do is take the whole $120,000 minus an emergency fund. Do you have any other money saved other than that? We do have, or I do have a 401k through work that I'm looking to roll over into a Roth soon for tax benefits,

but then that's about $70,000. Okay. Do you have any other money in miscellaneous savings other than this $120,000? That's about it. Okay. All right. You need to set aside somewhere around $20,000, $25,000 of that as your emergency fund.

Don't touch it. So you're going to have somewhere around $100,000 down payment, plus whatever you can save with your fabulous income. You ought to be able to save like crazy. Y'all are making a quarter of a million between the two of you. Way to go. I heard you say that you were concerned about the interest rates, but I also heard you say on a 30-year.

Have you looked into the 15-year fixed rate? So I understand just by reading kind of your guys' Reddit page, actually, and your general information, that seems to be i don't have a reddit page fair enough fair enough just general there are some morons on reddit that have an opinion about me but i don't have a reddit page can't stand the format so just to be clear so let me tell you what we really believe regardless of of what Reddit told you, all right? What we really believe is the number one and two reason that people become millionaires, and we have data to prove it with 10,000 millionaires studied,

is they're investing into their retirement and they're paid off home. These are the two elements of the first one to five million of net worth. So to that end, we're going to move you towards a paid-for home as quickly as we possibly can. Great news is you make a quarter of a million dollars, and you're smart people, so you're going to be able to do this fairly quickly. We would tell you to put the $100 down, hold $25 back, put as much as you can down, at least $100 in your case, and then put the balance on a 15-year fixed rate where the payments no more than a fourth of your take-home pay and the data tells us that the typical millionaire pays off

their home in 11.2 years because they hate interest i think i heard a guy say that once yep you yeah so um yeah and so we're going to take out a 15-year fixed. It's a lower interest rate than the 30-year is, and it's going to be a more conservative home than they will qualify you for, but you can get in and get it paid off, and then with the kind of money you're going to be making, you can move into anything you want to move into later. But you get in there and get started and get your fun little house,

starter house, and get going and gets get your fun little house starter house and get going with the plan that in five years we're probably going to move and we may have it paid off in five years because i got a feeling in five years your income will be a lot more than 250 don't you ideally sure yeah it would be normal if it was most people's most people's household income goes up yeah you're only 29 great you're doing really good i think we're doing okay you're asking all the right questions you're sourcing them sourcing the answers in the wrong place with reddit but other than that um but yeah i'm kidding not much but the um success pool um the uh but anyway, thanks for hanging out with us today.

You're a sharp young man. You're going to do really good. I think you're amazing. And, you know, with the kind of money you're making, you're going to be in a great situation. So I'd take out a conservative 15-year fixed and pay it off as fast as you possibly can. That's what I would do. Good question. Thanks for joining us.

Open phones at 888-825-5225. But, Jade, I can't buy the house with the racquetball court, the jacuzzi, and the skylight if I do that. Well, you better get your expectations settled. Get them straight. Oh, expectations. Sorry. You know.

The secret to happiness. The secret to happiness. Lower expectations. That's right. You're not going to move into your parents' house at 29 and 28. Yeah, because it took them 35 years to get there, boys and girls. And they had two baskets of strawberries. That's what they paid to buy that house for.

Two baskets. This is The Ramsey Show. Jade Walsh, our Ramsey personality, is my co-host today. Vera is with us in New York City. Hi, Vera. How are you? I'm good. How are you?

I'm actually okay. Good. How can we help? So I am working. I started listening to you about two weeks ago, I would say, as I was trying to work out how to pay off my debt. And I have been working at that, and today my car broke. And I have a really old car, 2002 Dodge Stratos, and it's been heavy repairs every couple of months, like $600 to $1,200 every couple of months, which has been putting a string on trying to pay off my debt.

And I need to buy a car now, and I don't know what to do with what I'm working with, so I kind of need advice. What do you make? I make $52,000. And where do you live in New York City? I live more in Bergen County, New Jersey. Okay.

All right. And so this car, if you were to get rid of it, it'd bring nothing, right? Yes. I looked on trying to junk it, and the most I'll get is probably $400. It looks like it's the head gasket today. Okay. Yikes. Okay.

Do you have any money at all? Yes. the gasket today okay thanks okay you have any money at all yes i have 7500 um saved in my savings account and then i have uh about 900 in crypto slash stocks that i've invested long time ago but it's not going anywhere okay that's the good news cash Cash those two out today. Okay. And now we've got $8,400, and I want you to buy a $5,000 car. Okay. For cash. What car do you recommend? Not a Dodge.

Yeah. Let me ask you this. Have you got family in the area? My mom, yes. Okay. Are you in a good church by chance? Yes. Okay. my mom yes okay uh are you in a good church by chance yes okay um call your pastor and ask him if there is um one of the elders one of the men in the church that will walk with you while you buy this car okay that's for two reasons not because you're inept but because some people

selling cars are sexist and they think they can take advantage of a young sweet lady and they won't think that about an old ugly man okay and so they shouldn't be that way but they are so that's thing one thing two you may actually get some good advice now let me teach you what you're looking for when you're buying a five thousand dollar car because we don't want to drive this car forever it's till we get out of debt and we have some money and then we get a better car. Okay? Okay. So it's just a stopgap just to get you out of debt and not go into debt.

Now, what you're looking for is something that's possibly very ugly. I don't mind that. I don't. Good, because that's what you need. Okay? It could be really ugly. It could be, and it certainly has zero sex appeal. It's probably a land yacht.

You don't hear it coming, okay? Okay. It might not. It definitely won't have all the bells and whistles and cool stuff on it. We're just trying to get to work so we can get a better car later. That's all we're doing. Okay? So what you need is something that's very reliable and has low miles,

but it could be old. It could be a Camry from the year 2000, a 25-year-old Camry. But it's been sitting in a grandma's garage, and she only drove it to church on Sunday and all that stuff. So it's got very low miles on it. She died. Now her kids are cleaning out the house, and they're selling the car at a garage sale. This is a goldmine car right here for you because it'll have 20,000 miles on it,

although it's 20 years old and ugly and is not up on the technology. Certainly doesn't have Apple CarPlay, I can promise you. Okay? But that car will go another 10 years. You only need it to go about another two while you get out of debt. And the fun thing is if you buy that car for $5,000, three years from now you can still sell it for $5,000. Yeah, my only concern is that the past, I would say, 15 years of my life, I'm 34,

but the past 15 years of my life would have been having those type of cars. But are you cleaning up your debt now? Now I'm cleaning up my debt, yes. Okay, are you going to stay in debt and keep being like it was the last 15 years? No, you told me you weren't. Yeah, because those cars aren't. I'm not concerned about the last 15 years. I'm concerned about the next 15 years.

Okay. You're not going to do it again, are you? No, sir. Okay, then get out of debt and get you a better car. Yes, sir. It's very doable. Hey, I drove a piece of crap while we were getting out of debt after we filed bankruptcy. It was a horrible car.

I don't mind the bad car. It's more I'm afraid of the spending because in the past I would pay six bucks. I'm telling you to buy something that has a lot of life left in it. You won't have a lot of spending on it, but it's not very pretty. And that's why I want someone to walk with you and help you investigate the car and give it a good hard look. You can get a lot of car for 5k right now, but it's a garage sale car. It's an estate sale car. That's what you're looking for. You're not looking for anything fancy. You're looking for something that has low miles and a lot of life left in it. And you're right.

It's probably not a Dodge. It's not a Dodge Stratus. Or Dodge. Period. But, yeah, I mean, you're looking for a – yeah, there's a lot of great vehicles out there. That are ugly and have a lot of life left in them and they're not stylish the paint job is faded that old red is kind of looking a little pink so big red might be a little pinky i don't know but um but you know that's that give it a name but this is your last time you're going

to drive crap because you're going to go get your life straightened out and pile up some money you're going to live like no one else so that later you can live and give like no one else. That simple. Yeah. I think the problem with her is she's been driving those cars for the last 15 years. That's what she said. But there's a reason. It's not supposed to be like that.

She never addressed the reason she was in the car. That's right. If you address the reason you're in the car, the reason you're broke is all the other crap. The not handling money well, the building up all the payments and all the debt. You get all that cleaned up and you're living on an every dollar budget, you can save some money and get a better car. Our car had what I call special features.

Like what? Well, the motor in the windows was out. And so, you know, when the motor goes out- Oh, the electric windows. Yeah, they just fall down. So we used shoelaces. They were actually old like dog leashes on the inside of the the wall

to keep them up oh you had to you had to strap them up because otherwise they'd fall down yeah you open up the door and you can go in there and kind of jerry-rig it so we had that you know smoke came out of the top of the car i don't know why it just came out that kind of it ate the cds when you put cds in there it just hung on to hung on them. That tells you right there what you're dealing with. Mine ain't cassettes. What's a cassette, Dave? What's a CD, Jade? Special features, that's what you're looking for.

Special features, special features. So we had a guy here that bought a car that was a $10,000 car on Kelly Blue Book. Really nice. 20,000 miles, Kelly Blue Book. Okay. Really nice. 20,000 miles. Perfect condition. Wow. Except the people left it outside in a hailstorm. Oh.

So it looked like it had been shot in a gang war. I mean, it had pot marks all over. It was the most horrible. And they basically kept the money from the insurance claim. Yeah. And then sold the car to him. And he bought the car for nothing i mean he bought it for like 1500 bucks and it's a ten thousand dollar car but you talk about ugly it looked like it had been it looked like it came out of beirut or something you know i mean it's like crazy like they like it had been shot at or

shelled or something and he drove he drove that with great pride for a little while while he got out of debt we had another guy had a 1994 ford granada that's a definite land yacht right there but it had it had um he paid 500 bucks for it the red was pink it had all turned pink and uh it had i think it had like 8 000 actual miles it had it had no miles on it. The woman had never driven it. They had to put a battery in it because it wouldn't start. That's crazy. And he drove Big Red for, he picked me up one day and took me to my shop to pick up my car,

and we drove up in Big Red. It was great. So, hey, that's pride right there, man. It is. And you know what? That guy today, he still works for us. He can drive anything he wants to drive now. Look at that.

Live like no one else so that later you can live and give like no one else. Drive like no one else. Later you can drive like anything you want shut up. That's how that works. Love it. Problem with this stuff we teach is it works. It'll bother you. It'll keep you up nights.

This is The Ramsey Show. Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. Jade Walshaw, Ramsey personality, is my co-host today. open phones at 888-825-5225 her best-selling book is money's not a math problem check it out at ramsey solutions.com brandon starts this hour in san antonio hi brandon how are you i'm doing good sir i appreciate it sure what's up uh well first off i want to say thank you for everything that you and your team do. I listen to the podcast, and I love all the advice.

Thank you. How can we help? So I have a question about a couple of loans that I have. I have one loan that's an SBA loan. It's about $43,000. It's $908 a month, but I figure there's nothing I can do about it because it's already a veteran loan and it's at 3.4%. You said it's an SBA loan? Yes, sir. And it's a veteran SBA loan? Yes, sir. Okay. All right. Go ahead. Go ahead. And your question is what? And the other one is a stupid Citibank loan that I got that the APR jumped to 21%

and is now at a point where no matter how much we chunk at it, the interest just overrides it. How much is it? No, that's not true. I'm sorry? I said that's not true. If you chunk $20,000 out at it, the interest wouldn't override it. So how much do you owe? So it's at $8,000 right now.

Okay. All right. So you just hadn't. If you pay minimum payments, you'll be in debt 43 and a half years. Their calculation was 19 years, and we would pay $19,000. Oh, my gosh. You're not doing that. Joyful.

Yeah. Okay. So what's your household income? I'm sorry, my question for the Citibank loan was, would it be wise to take out a personal loan at a 6%, 7% to pay it out and then just chunk that off? It's $8,000. I don't even think you need to go through all that. What's your income?

$75 a year for me and my wife. Does your wife work? Or is that just you? That's combined. Split it out for me. I want to know who's doing what and what are your careers? It's about half and half. My wife does scheduling for a pediatric dentist. She makes about $36 a year. Okay. And I have a job doing telecommunications and correctional facilities for 45 a year. Okay. All right, cool. So you're both working 40 hours? Yes, sir.

Yeah, and what's your car's worth? So we have a 2016 Ford Escape. I don't know what the blue book on it is, but it's paid off. What about the other one? And, uh, I actually get, I actually have a work vehicle. So my personal vehicle, we, I had a Kia Rio and we just sold it off for the cash. Where's the cash? Uh, it, we put it into, into the loan, into the, uh, Citibank loan. Oh, good. Okay. You have any money laying around of any

kind uh no sir uh the reason that i have the sba loan is because i actually had my own store um i had a retail store for a couple years and that just ate up all of our savings okay well the 900 is eating your savings eating your lunch too but we got to get rid of the 21 first so i'm with jade um i mean if you made an extra uh let's see 1500 a month you'd be out of debt in six months on the card and that would mean working extra can you pick up ot or what's kind of great side job great paying side job could you do uh well my my job is salary where both of us are salaried okay um the only thing extra is i could i could do some uber on the weekend or go sell blood or something 100 i don't want your own blood but uber is fine and i mean i think you could do a lot of stuff out there there's a lot of different things i mean you obviously are good with your hands right well i'm okay yeah so i mean you probably

could wire stuff for people i suspect couldn't you uh i don't know i've never looked into it yeah well i mean it's what you do all day right yeah okay okay all right i don't know just whatever pays you the most for a short period of time to knock this 8 000 out so here's the thing okay 21 on 8 000 for one year is 1600 bucks okay 1600 is not your problem your problem is you need 8 000 so if you if you got a zero percent it doesn't solve your problem is my point right if you rolled the card to a zero percent card and you still don't and you still don't address it you haven't solved the problem so sixteen hundred dollars is a year which is a

little over 100 bucks a month is not your problem on this it's okay if you want to move it down to a lower interest rate if you have that ability. But the problem with it is when you do that, you're going to feel like you did something and you really didn't do anything. You made a $70, $80 a month move, okay, which is nice. If you send it to me, I'll take it, okay?

But the $70, $80 is not going to fix this situation. You need to clear up the $8,000 as fast as possible so you can lean in and knock out the $43,000, right? Correct. Because if you didn't have either one of these payments, your life would be pretty sweet right now. Correct. Yeah. So that's where we're headed to. So I want to turn up the intensity.

Let's get you into EveryDollar, our EveryDollar app, and help you start putting together a budget on that. And Jade and I will give you the premium version as our gift. And you sit down with your wife, and you all start laying out a budget where every one of your dollars goes every month. And then let's figure out how we can add dollars to it, both of you. Yeah, if I were both of you, I would make it individual. She has a goal to bring in an additional $1,000, and you have a goal to bring in an additional $1,000. And then in four months, you'd be done. If you just put $2,000 a month on it, you'd be done in four months with that $8,000. And without that hanging over your head, then you can get aggressive on the $43,000. It'll take you

longer on that one. But the trick is the actual dollars saved by you moving down an interest rate it's you know you can go out to eat on it that's about it it's not it's not really going to change this situation so it's okay to do it if you want to brandon as long as that's not all you do that's about five percent of the problem 95 of the problem is eight thousand dollars i need to go find me in my budget living on beans and rice not going out to eat working extra selling so much stuff the kids think they're next i need to go find me eight thousand dollars that's what changes the game you were exactly right jade yeah 100 i'd be looking around the house to see what i can sell what's the weirdest thing you and Sam sold it's so funny you asked me that I just wrote a article about this I had some bath mats that I have yeah like you know like in the bathroom the

mat that goes used bath mats used bath mats I bought them at Ikea so they were already cheap as dirt and I sold them for like four or five dollars and somebody bought them people will buy anything Facebook marketplace you could find a chewed up piece of gum and somebody bought them people will buy anything wow facebook marketplace you could find a chewed up piece of gum and somebody would buy it and want to chew it again yeah nate nate margatze talks about his wife is inviting serial killers over to their house to sell something for five dollars that's a great great line he does but yeah now bath mats listen where there's a will there's a way and that money adds up where there's a will, there's a way. And that money adds up. Where there's a will, there's a back. Some folks need to sell their TV so that they can go to work and quit watching Netflix. Oh, throw a brick through it.

This productivity killer. This is The Ramsey Show. Jade Walsh, all Ramsey personalities. My co-host jade there's still time if somebody wants to join you and me and george camel and rachel cruz and dr john deloney and ken coleman this coming friday and saturday for our total money makeover weekend event it's a friday afternoon all day saturday in nashville if you want to come in a little early, you can watch the show. We do it here on the glass. And then, of course, we'll be doing all kinds of stuff at the

Ramsey Event Center on the Hill shortly after that. This is a weekend long event. It's the ultimate motivator, not only to get out of debt, not only to get on a budget, not only to communicate better with your spouse about finances, but show you how to become wealthy and show you how to become outrageously generous. And there's going to be a live taping of the hit podcast, Smart Money Happy Hour. We have a lot of interactive Q&A. There are tickets still available. These events usually sell out. This one's not.

So we'd love to have you. It's at ramseysolutions.com slash events. It's this coming Friday, May the 10th, Saturday, May the 11th, here in Nashville on the Ramsey campus, ramseysolutions.com. Come on out. There's still time to get you here. John's with us. John's in Toronto.

Hi, John. Welcome to the Ramsey Show. Hi. Thanks for having me, and I hope you guys are all doing well. We are. How are you? I'm doing okay. I'm calling because I guess I needed some advice just because everything is getting a little bit more difficult up here

and I'm looking at solutions and I wanted your input on it. Tell us more. So me and my wife currently work two jobs each. So I'm a part-time soldier. I work full-time. Now I'm part-time. And now I work in construction. I make about $80,000 a year.

My wife makes about $20,000. We're on baby step one. We're working towards baby step two, which is our car. And that's the only expense we have. And it's a 2022 Toyota Corolla. And it's going to be paid off in October. Great. But the issue is, is that the houses here, the housing situation in Toronto is absolutely insane.

Yes, it is. The 20% down that they need is, it is. a half weeks. John, I would guess that if you googled the 10 most expensive cities in the world to live in, including real estate prices, Toronto's probably on the list. Tokyo, London, Manhattan, downtown New York, LA, certainly San Jose, San Francisco market will be on that list. And I'm guessing that Toronto would probably be on that list. You live in one of the most expensive cities in the world. What's keeping you there? So the reason why we moved from New Brunswick when I was in the military up there

was there was a lack of doctors. So my wife is disabled. She still works, but the average wait time for a family doctor in New Brunswick was seven years. Oh, my gosh. Yeah. That's like free Canadian health care. Yeah.

So we had to move from New Brunswick to Toronto because she has a heart valve replacement. So we had a specialist in New Brunswick that would deal with it, but there was another specialist she had to see in Toronto. So every six months she had to fly halfway across the country to go and see a doctor. That's cheaper than living there. Yeah. I wanted to really stay in New Brunswick.

It was a, it's a fantastic province. People are really friendly. And then we come back here and thank God, I'm living with my grandmother. We're living in her basement. She's charging us a thousand dollars a month, included so she's really helping us out um so you think that better it's it's better you're saying you think it's better to live there full time as opposed

to have her fly when she needs the care is that i just want to make sure i understand i'd rather her i'd rather us live in new brunswick because it's cheaper just for her to fly because every six months it's like $500 for a two-way ticket, right? Yeah, which you save more than that in a week in groceries. So what keeps you from moving back then? It's because of my occupation in the military. I'm a tanker, so I was a qualified tank driver, gunner, loader. There's no more tanks

in new brunswick so they're all in edmonton now so if we have to move we go to edmonton so that's another reason i was talking to my wife we had uh basically two options uh three options one we stay in the situation and we just embrace the suck which is not my favorite solution. Second option is move to Edmonton. I'd reenlist and go full-time again. Or three, we move to the United States, which is very, very enticing to me. We were thinking like Indiana or Wisconsin because my sister lives in Chicago, and I would join the military in the States. So that way we cover the health care issue, right?

That way we have coverage. Or you can change careers and move back to New Brunswick. That's another option. There's no real careers in New Brunswick unless you work for, like, oil and gas companies, and even then it's not really an – So here's – I don't care which one of these you do. It's up to you guys. If I were in your shoes, I would want a path that gave me hope.

Right. Long-term sustainability and hope. Mathematically, you're probably not going to do that unless you have a giant change in your personal incomes staying in Toronto. This is a very difficult city to live in unless you make a lot of money mathematically. And I didn't invent that. That's just the way it works. I mean, it's tough to live in Manhattan if you make 80 grand.

You can do it, but it's tough. And your long-term prospects of prosperity, it's hard to buy real estate. It's more expensive to do everything. Same thing if you move to London, same thing. So, um, and those aren't, they're not bad cities necessarily. Some of them are, but, but the, but the, but I'm just talking about the math of living in an expensive place. You have to make a lot of money to have mathematical hope about the future if you're going to live in an expensive place. So that's what you're aiming at. So you need to figure that out and say, okay, my cost of living, including my real estate

purchase that is a part of my good future that I want to have, best lines up with my career, my income, and her health care where? And that's where I want to lay it out and pick out which way that is. And I don't know, I don't know enough about Edmonton to tell you anything intelligent about it. And I don't know enough about immigrating to the States legally if you're Canadian. I don't know how to do that. Or, or joining the military. You obviously know more about it than I do based on how sure you were when you said that, but I guess that's a possibility. I've got no issue with that at all.

Um, but, but for sure you want to, uh, uh, be somewhere where the path that you're on is leading you to a hopeful place. And the math indicates that, not just a wing and a prayer, not just a wish. Yeah, absolutely. I should have asked him the thing in Edmonton where he becomes a full-time in the military. That might be better for him. He might earn more money and therefore them get to their goal quicker. They've got some options, though they're not in a corner which is good yeah but i i think they figured out that if

the income doesn't change then their their current situation is gonna you know embracing the suck is not a life plan that's a that's a temporary thing you do to get to a life plan you know to get to a good long-term strategy um i mean you i can embrace the suck for a short period of time to get to a life plan you know to get to a good long-term strategy um i mean you i can embrace the suck for a short period of time to get through something that's hard but i'm getting through it i'm not staying in it yeah that's the trick so yeah that i think that's what you know and those of you that are living in expensive places you don't get a pass as john has discovered nor did he indicate he wasn't whining about no he wasn't but i places you don't get a pass as john has discovered nor did he indicate he wasn't whining about no he wasn't but i mean you don't get a pass on math it just it costs more to

live there so you got to make more to have the same life there wherever there is that's expensive and you can fill in that blank and you know that's the same i've had people ask me that question for 35 years how do you buy a house in los angeles 35 years ago people ask me that question for 35 years how do you buy a house in los angeles 35 years ago people asked me that question i don't know i guess you make enough money to live in los angeles that's how that works it's freaking expensive so that's how it works man i mean it's twice what it is a lot of other places it's not it's not evil It's just a reality. This is The Ramsey Show. Jade Walsh, our Ramsey personality, is my co-host today. Thank you for joining us.

We invite you to stop by our studios here south of Nashville in Franklin, Tennessee, anytime you'd like. We do this show live on the glass in our fabulous lobby with free coffee, free homemade cookies. Smells like mama's kitchen in here. Come on in. Yeah, we'd love to have you come by and see us. And we do the show from 1 to 4 Central Time, Monday through Friday. So there's at least two of us Ramsey personalities sitting here.

And some of them are much more entertaining than me. But I serve a purpose still so we're still here we're glad you're here and speaking of what happens in the lobby one of the things that's there is the debt-free stage right here in the lobby of ramsey solutions and kirk and julie are on the stage hey guys how are you good how are you good dave jade how are you good good to have you guys where do you live We live in a suburb of Cleveland, Ohio. Ah, fun. Well, welcome to Nashville. Good to have you. And came here to do a debt-free scream. How much have you paid off? We've paid off $110,437. Love it. Nice. How long did that take?

Four and a half years. Good for you. And your range of income during that time? So we started at about $120,000 and then right in the midst of COVID, I lost my job of nine years. And so we kind of had to regroup after that. But then I was very grateful to get a new job a few months later. And now we're up at $148,000. You got a better job. Well, that was more him than me, but still it was good. Still worked out. Very good. Good for you guys. What kind of debt was the $110,000 you got a better job well that was more him than me but okay still it was good still worked out good very good good for you guys what kind of debt was the 110,000 Dave Jade you name it we had it all um 22 different credit cards uh it was probably the height of the insanity um just you name it and and we had it car leases uh we had it all okay house uh house is not paid off not not that's that so this is debt free except the house good for you yes for you okay good very good

congratulations you guys oh okay what happened four and a half years ago that's before covid yeah you started this process before the fauci, and then you tore into this, right? That's right. Okay. I think the thing that happened at that point, Dave, was you talk a lot in your videos and your books about being sick and tired of being sick and tired. And I think the moment for us came when we were doing crazy things like I would tell Julie, you know, this credit card is not maxed out, and that's what you can use to buy some presents.

Or we would go to a department store and say we had some space available on a card. Let's use that to buy gift cards at a store like that for others. You were normal. We were. Yeah. We were. And it was about that time. It was a God thing, and it pointed me in the direction of Total Money Makeover.

It was the book I found with a guy from Tennessee that I'd never heard of, read the book cover to cover. And right about that time, I started talking nonstop to Julie about you and your book and your principles. And then right at that time, our church was offering a class. And so we took it and we got into it, but it, and we knew we wanted our kids not to make the same mistakes we had. So while we were starting to pay off debt, it wasn't with the gazelle intensity

that you talk about, but then they asked us to teach the generation change course. So we taught that twice and all our kids took it and and rachel is married to john and they paid off their their debt with you a few months ago um but then it wasn't until we took we did that and then we started teaching the adult class we've taught it five times that financial peace university yeah and that's what really made us get gazelle intensity

you don't have a choice if you're teaching it we need to be the example and that's what's done it that got it going hard absolutely that was the accountability thing it was like you're teaching the class and you're making good friends in your church and you're leading by example it's no longer just uh you know we're going to try a little bit to this we're we're going full go and and this is a testament to those people that have been in the class that if you stay with it you stay with the program you do all aspects of it 100 you're going to get there yeah way to go gosh way to go i'm proud of you how's it feel to be completely free it's it's still new but we're we're thrilled because it's we've we've worked really hard and we're just glad we're finally there and it's a long four and a half years yeah and we don't want to see our kids make the same mistakes so Julie when Kurt came home and

he said hey I heard of this guy Dave Ramsey what was your first thought like was this were you 100% in on it or did you have a moment where you're like hold on a second I I just didn't know sometimes he comes home with things that I'm like what is this and I just didn't know about him and then it was truly a God thing because it was right after that, that our church said they were having the class and we took it. And I was like, this truly was what we were meant to do. So once you got in the class,

it was okay though. Oh gosh. Yes. And then teaching it, we've loved it. We just taught our fifth one. This wrapped up a couple months ago and we hope to keep on teaching. Thank you. Thank you for doing that. Absolutely. That's awesome. So you said before, you said, you know, our fifth one um this wrapped up a couple months ago and we hope to keep on teaching thank you

thank you for doing that absolutely that's awesome so you said before you said you know you're whatever available balance you know we'll use that did you have one straw that kind of broke the camel's back was it usually people have that one moment that's like that what happened that made you go this has got to change well we knew that our oldest was getting ready to go to college and um and we did not want to have credit card debt we did our student loan debt and we didn't want them to have that and it was just it we realized when you know our kids needed things for school like clothes and we didn't have money to get them except it's like oh what's left on this store's card and what's on this you can't live like that you make too much money to feel that broke absolutely yeah and then we were trying to sell our home out this was like 11 years ago but we were trying to sell our home and we we put

granite countertops on the credit card that then we never got to enjoy those granite countertops because they went on the house that we sold so those were the things i think that we were yeah that was really the tipping point for something so those were the things i think that we were yeah that was really the tipping point for something like that you know with home improvements that you'd never enjoy and we just said never for um for our kids and for their families it's it's time to stop and and get out of this and uh and and go game on full go your change for sure way to go you guys all right when you're teaching these classes you paid off a hundred and ten thousand dollars and they say how'd you do that what do you tell them the

key to getting out of debt and getting control of your money is i i think i think the thing with it you know is is the principle dave of of giving first you know we we talked about that with our our fellow church members that we needed to set up our budget that way where giving was the first thing we did, you know, the tithe to the church. And then we felt like with that, then you just, you just think started to snowball after that. I mean, just like with the debt snowball, where we could go and say, every month we're going to sit down, do our budget, you know, come up with our plan. And it's just, it's, it's being on the same page. It's, it's working together. It's having that intensity that, you know, like you've said in your books and your videos, you know, you,

you need to sacrifice now and, and you're going to benefit in the long run. And we feel like that's where we've benefited now with, you know, we have our oldest daughter is married and she's married to John who works here at Ramsey and they did their debt-free screen back in October and our middle daughter, she's engaged now. And when her boyfriend came to me and asked for permission to ask her to be married, I said, sure, you need to be the second person that takes FPU as well. So he was the second one that did that. And I feel like that's where we now have given that that same kind of passion toward our kids and how they're going to live their own lives

with money. Very cool. I like his dad style. I know that's right. Good stuff. Good stuff. You know, I've never I've been doing this 30 plus 35 plus years now, and I've never met a person of faith who started tithing off the top before they did anything else that regretted it. I've never had one say, Dave, that's the stupidest idea. It doesn't work. Now, I've had people that don't do it say it's stupid, but I've never had somebody who actually is a giver as a part of their faith walk before they do anything that says it's wrong.

And oftentimes we hear someone standing here on the debt-free stage saying it was the key it was the breakthrough for us to put generosity first but god first and trust him and then move forward how that opened up everything for him so congratulations you guys we're proud of you well done well done you guys are heroes kirk and julie cleveland ohio area making 110 or i'm sorry paid off 110 in four and a half years making 120 to 148 count it down let's hear a debt-free scream three two one we're debt free yeah Yeah! Yeah! Absolutely!

That's how it's done, ladies and gentlemen. That's how it's done. You change the family tree by making sure the new son-in-law goes. I know, that's right. This is The Ramsey Show. Our scripture of the day, Proverbs 27, 27 17 is iron sharpens iron so one person sharpens another bernard melzer says a true friend is someone that thinks you are a good egg even though he knows you are slightly cracked i love it hey guys the best way to make the most of your money is by creating

and sticking to a monthly game plan. It's called a budget where you tell your money what to do. If you don't like the budget, it's your fault because you're telling it what to do. We call it EveryDollar because you give every dollar a name. It is the world's best budgeting app, one of the most popular budgeting apps on the planet as well, and you can keep the pulse on your spending and make progress on your money goals with EveryDollar. Download EveryDollar for free in the App Store or Google Play, and you can do it online at EveryDollar.com as well. Mark is in

Buffalo. Hi, Mark. Welcome to the Ramsey Show. Hi, Dave and Jade. Thank you so much for taking my call. Sure. What's up? So a little background. I'm 24 years old. I have a little over $39,000 in savings, about $23,000 to $24,000 in my 401k. I owe about $123,000 on my house that's worth roughly $170,000, I would say. Wow, good for you. Thank you, I appreciate it. So I've been with my girlfriend for a little over three and a half years, and there's no question that she's the one for me. So I'm getting ready to ask the big question here soon. Good for you, fun.

So she's finishing up her master's degree. I'm actually going to her graduation this Thursday. So we've talked many times about our future together and how once we're married, we become one. And that being said, I know she's bringing about $61,000 in student loans. So my question is, is it better to just wait until after we're married and then I can use what I have in savings to go towards that student loan? Or should I currently take what's above my emergency fund and put that towards paying off the house like right now. And then depending on the answer to that question,

if I could ask a follow-up question, that'd be great. What's your follow-up question? Go ahead. So if I do wait until we're married and, you know, I go to put a chunk towards the student loans. Should I completely go down to the baby's have won $1,000 in the bank account and put it all towards that just so we can pay it off as soon as possible? Yes. Yes, yes, and yes. Yes on all of the above.

No, don't pay it down on your house. No, do not pay any of her debt until you are married. When do you think the wedding will be? Well, I'm getting ready to ask here soon, so I would say probably about a year and a half. I mean, both of her sisters and my sisters were about a year and a half from engagement to wedding planned and married. Well, there's also the price of the wedding to think about, too,

to throw into the mix. It's not just her debt and her... Who's paying for it? We haven't had those discussions yet. I know her family and mine have both, you know, said that they are going to help out. She knows she's dating a spreadsheet nerd, so she knows i'm not going into debt for a wedding so what is the uh what is the uh what's her master's in uh she's going to be a school counselor so i'm making about 70 000 alone and then once she's working those starting positions are typically anywhere from like the mid to high 40s. Okay. All right. So, well, I want her to save as much or pay down her debt as much as she can prior to the wedding,

and then I'd love for you to have enough saved up to write a check after the honeymoon and pay it off. Yeah, me too. That's the goal. Down to $1,000. If you can't, still down to $1,000, and then the two of you with $110,000 income attack the student loan debt. Do you see anything else, Jade? No, that was it.

My only thought was just make sure you guys get clear really quickly on the budget for the wedding. Find out what families are contributing, if they are at all. And then you guys fill in reasonably with your budgets what you can, what's next, what's left. And you've been dating three and a half years. A one and a half year planning for a wedding is pretty lengthy. It's not necessary. I mean, we've had pretty big weddings at the Ramsey place, and they were all done in a year or less. Yeah.

And so it does not take that long, and you don't have to stretch this stuff out. There's no purpose in that. Um, when it's time to get married, let's get married. You're not, you know, it's not, it's not, it's not a Royal wedding. Okay. It's just not. And so you just, yeah, the, uh, the sooner the better as far as I'm concerned. Yeah. The longer that length is, is the more time you have to add things to the wedding that are more expensive. Oh, is that the problem? That's what it is, Dave. Okay.

All right. Adrian is in Chattanooga. Hi, Adrian. Welcome to the Ramsey Show. Hi, everyone. Thank you for taking my call. Sure. So we ended up in a situation.

We've never been in debt up to this point except for a car that we had to get. And then about six months ago, we had to move out of Seattle, Washington. We had about $40,000 saved, no debt at all. We decided to buy a fixer-upper since I'm in construction. I was hoping to get it done for the cash we had and kind of move in right away. Didn't work as planned. get it done for the cash we had, and kind of move in right away. Didn't work as planned, so we ended up spending all the money and going $35,000 in debt and credit card debt. Well, you suck at estimating.

Well, the house had way more issues than we thought, and since we were out of state, we pretty much bought the house side on scene, and the inspector didn't really do a good job. So you asked for it. Okay. You asked for this mess. guess so yeah um and then my wife uh the stay-at-home model we live in an rv at the moment parked on the property so um she stays with her two little children and i work full-time and then i come home and work on the house um and i make about well i make 25 an hour before taxes so when will the house be completed where you can live in it most of the stuff that we had

to purchase is purchased and it's all about um just time wise i'm hoping to get it done sometime this summer um you know the hardest parts of it was done, and then, you know, it was just finishing stuff, but I can only manage, you know, I drive an hour to work and an hour from work. You may need to sell this mess and move on with your life. Well, there's one more thing I didn't mention. So, we do own a piece of land here in Tennessee that we bought outright for cash, and we did put it on in the market but my wife really doesn't want to sell it um so we put a higher price than this woman lives in an rv why doesn't she want to sell sell it and get moved into your house that's exactly my uh position but she thinks it's going to keep going up in price well all land goes up in price that doesn't mean i'm going to

live in an r RV to own it. What will you make if you sell it? Well, we bought it for $20,000, and we posted it for $45,000, but it would probably sell for closer to $30,000. Okay, so you can make some money, and you have $30,000 to hire some labor and get this stupid house finished and move into it.

And then you've still got an hour commute, which I do not understand in Chattanooga tennessee why you did that but um if you want to do it that's okay so what how can we best help you today right quick well the the kind of the you know we're trying to figure out the best plan to kind of pay off the debt faster we'll first sell the land okay well it's on the market, so I guess we'll lower the price. We'll put it for the right price so it sells. A fair price.

I'm not suggesting you undercut it, but sell it for a fair price. Okay, and then we were thinking about getting a credit card with a 0% interest for a year. Please stop borrowing money. Stop it. It would be just transferring the balance so we don't pay the interest for a year and just focus on spending on paying it all you think interest is your problem your problem has been dumb butt decisions

piled on top of each other bad decision after bad decision after bad decision now you're getting ready to add another one to it don't do that adrian i mean you bought a house that was a mess you missed your estimate by double double you bought a piece of land with money you should have used to finish this house and now you've got your family with two little kids living in an rv and the way to be sure that that happens forever is keep borrowing money on credit cards, 0% or otherwise. Please stop. Stop. Sell the land. Probably sell the whole thing. And just get fresh start. Move over closer to where you're working so you don't spend your whole life on the road every day. That puts us out 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, Dave here. You want to hear even more life-changing content from Ramsey? Download the Ramsey Network app so you can catch all your favorite shows all in one place, like The Ramsey Show, Smart Money Happy Hour, and the Dr. John Deloney Show. You'll get real talk about life, relationships, money, and your career. Plus, the app lets you browse by topic like debt, business, or selling your home. Get the content you want whenever and wherever you want to listen. Download the Ramsey Network app today.