The Ramsey Show - There Is Hope When Debt and Life Feel Overwhelming

Starting point is 00:00:00 Brought to you by the Every Dollar app. Start budgeting for free today. Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network and the Fairwinds Credit Union Studio, this is the Ramsey Show. I'm George Camel, joined by best-selling author, Dr. John Deloney, and we're taking your calls at AAA 825-5-225. Jeff is going to kick us off in Jacksonville, Florida.

Starting point is 00:00:35 What's going on, Jeff? How are y'all? What can we help me with today? What's happening? Well, my wife over the last eight to ten years has taken on a series of, I guess the term is predatory loans, now totaling right around $300,000, all without my knowledge, of course. Goodness gracious. Yes.

Starting point is 00:01:03 What kind of, when you say predatory loans, what type of life? loans are these exactly? You broke up on us, Jeff. I'm sorry. It's the ones where they send you a check in the mail, and they say, cash this, and you fill out some paperwork online, and they deposit the money straight into your account. Okay. So I'm trying to figure out the actual, was this one company that she just kept falling for this over and over? No, it was multiple.

Starting point is 00:01:38 Wow. And so they basically say cash this check, aka it's a loan as soon as you cash it. Correct. It says you're pre-qualified for X number of dollars. What did she use the money for? She blew it. But you're telling me for a decade, you had no inkling that this was happening. That is correct.

Starting point is 00:02:01 That's the most shocking part of all of this. It is. Wow. What did she say she spent it on when she said she blew it? Was there an addiction involved here? No, no, just blew it. Amazon. Who knows? And you never thought, hey, where is she getting all this stuff? Because I know what's coming out of our account. I'm guessing there is no our account. Is it your money and her money? Well, it is, yes. And it's always been that way? No, it wasn't when we were first married. We separated for a few months back in the 2010 time frame, and of course, obviously separated our finances. And then when we reconciled, we never, we just never really got around to it.

Starting point is 00:02:52 and everything was fine until she retired this past January. And everything was fine until she retired, obviously took a pay cut and didn't have the money. Feels like a bad time to retire when you're $300,000 in debt. That is correct. Do you guys have other debts? No, well, our house. Okay. And what's your household income?

Starting point is 00:03:22 About 125. And that's just you? No, no. That's her retirement and me. Okay. Woo. And you're willing to go, hey, this is us. She made the mess, but it's our mess to clean up.

Starting point is 00:03:38 I don't know that I have a choice at this point. Hmm. I mean, you've always got a choice. Yeah, but that's not a choice I'm willing to make. That's what I was hoping. I was hoping for some ownership there, not some victim, but some owner. And I love that. No.

Starting point is 00:03:58 I love you said that. Yeah, I definitely take part of the responsibility. But no, I would never leave her over something like that. So is she committed to not doing this, playing this game anymore? She is. And we're in the process of recombining finances. is that way I can, if something like that were to happen again, I would know about it. I'm going to pass this to George to let him walk you through just the process.

Starting point is 00:04:32 But if I were you, I don't know the help I get from leading with these were predatory loans. They were. They are. But I think it helps, it kind of takes the edge off. my wife did a thing repeatedly and hit it from me for a decade. We need to deal with that part of this. And then together, we're going to heal both the trust in our marriage and be, like you said, we're going to do some things very tangibly. We're going to combine income. We're going to be very diligent on a budget. We're going to tackle this debt together. She retired. She's going

Starting point is 00:05:09 have to go back and get a job because all are 300 plus in the hole now, plus all the interest that's erect upon this madness. Like, we're going to tackle this problem together. But I would I would yes there's bad people out in the world yes they took advantage but also this is something this is a daily practice that happened over a daily deception that happened over a decade blaming it in any shape form or fashion on the lenders right now is just a distraction from the problem that you all two have together you get what I'm saying yeah I agree 100% I just I just didn't know a better term no I mean you're right it's I hate it I wish it was outlawed it's a predatory practice yeah but when you get bit by the a snake once and you go back for eight more bites. At some point, you got to go, I guess I was, I was a part of that. And then you hide the bites from the person that you're supposed to be doing life, like, side by side with, right? So that, that to me is the bigger issue than these deceptive people. How much does she have in retirement? Well, she dropped Social Security and she's got a pension that I don't know exactly what's in her pension. Between the two,

Starting point is 00:06:15 she brings in roughly 70, between 70 and 75,000 a year. Okay. And how much of that do you guys actually need to cover your bills? Do you guys have any margin right now? Oh, yeah, yeah. We've got a house payment. That's it. What's the house payment?

Starting point is 00:06:36 How much? 27. And then what's your total take-home pay for the month between the two of you? About, it's roughly $4,500. Okay. That doesn't leave a whole lot of wiggle room after insurance, taxes, utilities, food. It does not. But here's the napkin math.

Starting point is 00:07:02 If you can put 50 grand a year towards these loans, they're done in six years. Correct. And so I don't know that you could scrape together. We're talking over four grand of money. month needs to be going towards these loans. Otherwise, the interest alone is going to keep ballooning the balance to where you'll never make progress. So you've got to get angry at these things. Right. But what I've actually done is I've contacted each lender individually and negotiated with them. And hopefully I'm going to be down in 150 to 170 neighborhood is what I've been

Starting point is 00:07:39 able to negotiate so far. Are they requiring lump sums for each of those? And that's the hitch. Is it, I would have to pay a lump sum. Do you have any money you could use? I don't have that kind of money. Well, I do. I mean, I do have that in my retirement fund. And how old are you? Mutual fund. I'm 57. Okay. So we're not going to touch those. This might be, hey, in three years, when I have access to retirement, if you have the funds, then we write the checks. I was considering taking a second mortgage on my house. No. Jeff, then you're just adding to the mess.

Starting point is 00:08:17 Now you're really putting your house on the block. Going further into debt is not the solution to get out of debt. So I would not do that. I would go for that settlement that you've been already going after and then do everything you can. She's going to have to work for the foreseeable future. You're going to have to work for the foreseeable future to clean this mess up. Wish you the best. It's a brand new year.

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Starting point is 00:10:19 Andy, welcome to the Ramsey Show. Hey, guys. Hey, how can we help? I've been trying to talk to my wife about some stuff about trying to help out around the house, getting a job. But it seems like every time I bring something up, and how I need her to contribute to the family.

Starting point is 00:10:39 She tells me that I'm starting when I'm honestly not. She tells me I should be doing, and then she just turns around and just runs away from everything. We've been married for about four years, almost five. She came from an abusive childhood. I bring home 35 a year, but after child support, it's about 27. I have a $420 car payment.

Starting point is 00:11:16 It's just been me, and I'm really struggling. I didn't know if you guys could help out. Yeah, it sounds like you're asking two different questions. One is a question about your money. What you bring home, the payments you have built into your life, that's a scary way to live. And you live in a very expensive part of the country, right? Like, that's a lot.

Starting point is 00:11:43 And doing this alone, and it sounds like you're telling your wife, hey, here's what I want, here's what we need, and she's like, yeah, I don't care. That's got to be super frustrating and lonely and maddening and all those things all in one, right? But it sounds like you've got two different challenges here. Where would you like us to focus? Um, on us.

Starting point is 00:12:08 Yeah. So when you say she doesn't help out around the house, she's not working, how does she spend her day currently? Sitting, playing games. How old is she? She's 32. Do you guys have any children together? No. Okay. So it's not like she's staying at home with the kids.

Starting point is 00:12:31 No. You're saying she's literally just playing video games all day. You go to work, you come home, you're doing all the house chores. cooking, the cleaning? Yeah, she cooks for the most part, but I have to do all the cleaning and everything else, pretty much. And you feel like she's not pulling her weight in this marriage? Has it ever been different, or has this been the case since day one?

Starting point is 00:12:52 No, it was different back when we first started. What shifted? Gone downhill. Does something happen in her life? Is she, I mean, I'm guessing there's some anxiety, depression behind all of this? Yeah, I have no Have you dug into that? Have you approached it from a place of empathy

Starting point is 00:13:13 Of hey, what's going on? I feel like you've been real down lately And just kind of vegine out playing games And there's this disconnection And you know what? Tell me about that Versus I need you to help out around the house And go get a job, you know

Starting point is 00:13:28 It sounds like you're her parent Instead of a spouse No, I've tried it And it's just, oh, you're starting. You're starting. You're starting when I'm just trying to have an honest general conversation about helping out. Has she sought out help professionally? Yeah, she sees a counselor once a week.

Starting point is 00:13:51 Would she be willing to invite you or would she be willing to have you come with her? That could be an option. And here's the way I would approach that. This is you submitting, this is you taking a knee, and there's going to be people in the internet sphere that think this is bad and this is weak it's not it's loving it's connecting there's someone who's clearly hurting

Starting point is 00:14:12 and is not experiencing the world in a real way right because you have a big math problem you have a marriage problem you have a life joy and passion problem you've got all the problems right so she's clearly not experiencing the world as it is

Starting point is 00:14:29 but she is experiencing the world as she feels it to be right if you approached her and said I don't feel like I'm doing a good job connecting with you and loving you in a way that you can feel it. I'd love to come to one of your counseling sessions so your counselor could give me some insights on how I could be a better support system for you. And that might be an invitation that she would extend to you that you could come to her session. And from there, maybe get some context on what she's telling this counselor, what the counselor's telling her, what kind of world you. you're inhabiting because here's the here's the deal you need to come up with on your own an or what

Starting point is 00:15:10 statement and what I mean by that is are you going to leave because if the answer is no if the answer is till death duo's part I said I'll be here then your energy is spent complaining your energy spent yelling your energy spent fighting is wasted energy I'm not going to leave so all of my energy is going to be towards finding some avenues some shape form or fashion some way that I can connect or deal with the reality that I've got a partner who's just going to scroll her life away and we have a math problem and I'm going to have to go get a different job or two jobs or three jobs. Or if you're or what statement is, if this doesn't change, I'm going to choose to go elsewhere. You need to be open and bold and put that on the table.

Starting point is 00:15:56 But you just continually fighting without an anchor point is it's just it's not getting y'all anywhere, right? In fact, it's making everything worse. Yeah. And now you're in a place where you can't even say hi, I love you, because then she goes, well, you're starting up again, and then it's over. Yeah. If she was to call into this show, what would she tell us about you, how she experiences you? How much I care about her and how much I try and do everything for her. She'll say that too, but like, so just have her moments where she, where I just try and have a general,

Starting point is 00:16:33 honest conversation. Yeah, it sounds like she's struggling with something bigger than just connectivity issues. And so, yeah, if there's a possibility that she would allow you to join her in a counseling session, or two or three, I think that would be really beneficial for everybody. Okay. Let's talk about your money for a second. George. Yeah, how much debt do you currently have?

Starting point is 00:16:53 What's the total balance of your consumer debt? By consumer debt, back in 2021, We filed for bankruptcy because I had to. Why do you have to? I was knee deep in the swamp. I couldn't keep up with any payments. I had a broken scaffold at the time. Everybody was going to take me to court.

Starting point is 00:17:25 So did they wipe it clean, or did you get put on a payment plan? Nope, they wiped it clean. And where are you today? Now today, I had a car that broke down. So you had to get a payment. So I went and got a car payment, yep, even though I told my wife that I didn't want to. So she forced you. None of this has happened on your own volition, is what I'm hearing.

Starting point is 00:17:52 Everybody forced you into every decision you made that puts you in this terrible place. Nope, nope. I went out, nope, I went out and I got the car payment even though I didn't. want to. That's what I was telling my wife. So we went out and got the car payment and then she also goes to school

Starting point is 00:18:14 or nursing. You left that part out. I thought she was at home all day playing video games. She is for the most part. Except when she's going to become a medical professional? What was that? Except when she's going to university to become a medical

Starting point is 00:18:34 professional? Even classes are at home some days, but yes. Okay. So what is the total balance today? Today it's about 90,000. Goodness gracious. Yep. And you make 30 grand a year?

Starting point is 00:18:51 Yep, and I make 30 grand a year. Why do you make 30 grand a year? Because I can't find a better job that fits my schedule that I need. What's the schedule that you need? need. What does that mean? So I have a daughter who lives about an hour and a half away from me that I have to go see every Tuesdays that I pick up about 5 o'clock. I think we need to readjust the schedule to go, hey, this, based on my work schedule, I can't

Starting point is 00:19:26 make this happen. You're not going to be able to afford child support at this point. So you need to make some serious changes, Andy, I mean, all the way around. And yes, there's people involved, but all I've heard so far is I had to, I have to, I had no choice, she made me, I think we just need to control what we can control, and that's the guy in the mirror, and then we can work on the stuff around it. I wish you the best. If you missed open enrollment, don't panic. Most health plans lock you out for the year if you didn't sign up by December, but Christian healthcare ministries lets you join anytime. CHM offers a simple, flexible, and budget-friendly alternative to health insurance, and you can join anytime. That's right, no open enrollment deadlines.

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Starting point is 00:21:17 slash budget. Alicia's in Chicago up next. Alicia, what's going on? Hi. So I, so basically, long story short, I had a manic episode and put myself into a little bit of debt, and I want to know where to start with the baby steps to get myself out of the situation I put myself into. Very cool.

Starting point is 00:21:53 So when you say a manic episode, are you diagnosed bipolar? Yes, I am. Okay, one or two? I believe it is two. It's the genetic one. Okay. Different conversation. But so have you had manic episodes before?

Starting point is 00:22:10 Yes, they have, but they were not as extreme as this one. Tell me about it. So basically I was having a lot of family trouble, and then I had health problems, too. So I also had endometriosis, so I had a flare up and had to have emergency surgery, and it was just a complication of everything altogether that I think what made it a really bad episode for me. So tell me about the payday loans you took out. How bad is it? So the original total amount was like 2,300 in something.

Starting point is 00:22:40 And with all that interest, it is approximately $5,800 with all that interest. Gosh, I don't know how those people sleep, to be honest with you. I just don't, but. I'm not very happy about it. I know, I know, I know. Okay, so question number one is do you have your, are you, I've seen, I've seen friends, I've seen colleagues, I've seen countless students of mine over the years who are diagnosed of bipolar disorder and you know it's on a spectrum, various levels of it,

Starting point is 00:23:12 who when they commit to med management, when they actually take their meds, and when they feel great and when they don't feel great, and when they put in some, what I would call, for lack of better terms, some hurdles. when I feel myself beginning to start down a path where I'm going down to the basement or when I'm starting on a path where I'm about to go to the mountaintop, I know I'm going to give my debit card to a trusted friend. I am going to turn my internet off for seven days, right? So they put some really big hurdles to protect themselves from themselves in those seasons.

Starting point is 00:23:50 Do you have, are you taking care of your medications? Are you seeing a professional? Are you managing this thing in a healthy way? Yes. So we were in the process of figuring out what dose worked for me last year, like what medications. And that's when I had the episode. So it wasn't the correct medication. Now I'm actually on the correct one.

Starting point is 00:24:10 So I don't know if it's okay for me to disclose the type. Well, it doesn't matter for this conversation, but I just want to tell you, I'm proud of you. Thank you. And I want you to commit to me and George and everyone listening. You're going to stay on the plan. Okay. Okay. And that's awesome. Now when it comes to getting this paid off, George will walk you through it. It's a, it's a, it's a math problem, but we fully believe you can get there. And you don't believe in yourself. We probably believe in you more than you do right now, but hear us say, we believe in you. Okay. Okay. Same team. Awesome. Awesome. I'm really glad that you called. So give me some more details about your financial picture. Are you working full time, right? now? No, so I'm actually going back to school for human resource management and business management

Starting point is 00:25:02 because I want to get a better career right now. I'm really just working as a waitress, so my income isn't like, what's the proper term I'm looking for? It's not like a set in stone thing. It's always floppy and it's really typical. So you're working part-time as a waitress and then part-time school? Yeah. Okay. What other debts do you have right now? I have a student loan debt that is only $3,000, but that's on deferment right now because I'm in school. Okay. And then there's one dental debt that I'm still paying back because I had to get my teeth fixed. And then the last one was a previous collection from a credit card when I was like really

Starting point is 00:25:41 young that I just had to open it in me. No, it's getting taken care. Have you ever been debt free in your adult life? Um, I guess technically not because like I opened my first credit card at 18. it was a student credit card. Didn't we all? So I want you to just picture Alicia for the first time in her adult life, completely debt-free with savings in the bank to cover any emergency that would come up.

Starting point is 00:26:05 How good would that feel? No, it would feel really great. It's a thing you don't have right now, which is peace. Yeah. Right? And trust in when I'm having a good day, I'm having a bad day, I'm having a really, really wild week or really low week, I'm okay. It's a magic feeling for somebody in your situation.

Starting point is 00:26:27 It's a magic feeling for all of those, but especially for somebody whose inner world can be as volatile as yours is, right? Yeah. Yeah, it's beautiful. Do you have any money in your checking account or savings account right now? In my savings, I only have like $10 right now, unfortunately. I do have $200 in cash savings, but that I was saving for like emergencies for my pet if something happens with her. Okay. Well, let me want you to the baby steps, because this is the first.

Starting point is 00:26:53 framework that will help you actually have a very tactical plan instead of just trying to do a few good things at once. And so baby step one is get $1,000 saved. So you have $200 now. That's awesome. We're on the path to getting $1,000. So right now, can you make minimum payments on your debts while working part-time, or do we need to up the income? It's most, if I do minimum payments and everything, it is doable with the income right now. Okay. Now, minimum payments on that payday loan, that balance grew since we've been on the phone. Yeah. That's the scary part.

Starting point is 00:27:26 And so I want you to get angry at this thing. And that might mean we need to take a semester off and go really hard and work 50 hours a week to at least knock out the payday loan. What's the trajectory for this program that you're in? How much longer and how much money? So luckily, financial aid covers everything and I've been doing scholarships, so I haven't had to pay for a penny for school, luckily. Great.

Starting point is 00:27:50 And how much longer do you have? I believe it is two years. So here's the bad news. We can't go two more years working part-time as a waitress and make any financial progress. Would you agree? Probably, yeah. And so we need to figure out a different path. Maybe it's a pause.

Starting point is 00:28:07 Maybe you do less school right now, less credits, and it takes you longer. But you could go work full-time and clean this up, get some money and savings, and then go back to school with a whole lot more piece. Because right now it's probably hard to focus on your school work when you're going. you see that interest accruing on that loan. Yeah, definitely. So once you get a thousand bucks saved, which I hope happened, what do you make in a week? So just to average it out, probably like 300, there are some weeks where I can get up to like 500,700, but, you know, it's not always guaranteed.

Starting point is 00:28:43 So you're living off of like $1,200 a month? Yes. Are you able to do that without going further into debt right now? Yes, so luckily, just because of my low income, you know, I have food stamps and I'm able to get food and everything. My living situation is basically just pay what you can so I have no rent. So so far it's actually been really doable and I have like a really cheap phone plan where it's only like 25 bucks a month. Wow. Well, I don't want you to stay there.

Starting point is 00:29:12 This is not like a, well, I can make it all work. You're in survival mode. This is literal poverty. And that's the exact thing. target demo, these payday lenders go after because they're the most vulnerable, the most desperate. And so this is going to take a lot of work, literal work. And that might mean we get two waitress jobs and, you know, we ratchet down on school, ramp up on income just for even a season so that we can get her head above the water. Okay. Because once you have that $1,000

Starting point is 00:29:44 save, now we can start tackling these debts and just list them out from smallest to largest. So today, this is going to really help you get it out of your brain. Put them all the debts on paper and put the balances and list them in order from the smallest balance to the largest balance. So your next goal after getting $1,000 is throw as much as you can on that smallest debt. Okay. That might be the dental debt. I don't know.

Starting point is 00:30:06 And maybe, I'm guessing your credit is shot at this point. No one's going to go give you a personal loan, correct? Yeah, no. I know my score is like $6.25, but I don't think anybody's going to give me a loan or anything. Yeah. I was trying to get you out of this payday loan cycle because if this is going to be another year before you can attack this payday loan, the balance is going to be 10 grand. Yeah. Yeah. That is pretty scary. And so we have to stop the bleeding. And if that means the dream of the HR job is on pause, I'm okay with that because I don't want you to look up. And now it feels hopeless because this loan just keeps doubling and doubling because it's three or 400 percent APR. I'm so sorry you're going through this, Alicia. Hang on the line. We're going to hook you up with our budgeting app every dollar to help you make a plan for every one of those dollars coming in.

Starting point is 00:30:53 And hopefully you'll see some light at the end of this tunnel soon. The calendar might have flipped, but the way to win with money hasn't changed. Living on a budget, staying out of debt and building wealth intentionally. Now, here's the deal. Most banks make their money when you don't do that. They're fine if you stay broke and afford. frustrated. And that's why I recommend Fair Wins Credit Union. They actually want you to win with money. Their smart bundle gives you a no-fee checking account, a high-yield savings account, and the new Ramsey, Be Weird debit card that says, dead as normal, be weird, right on the front. It's not just a card, it's a statement. Because every time you use it, it says you control your money. Your money doesn't control you. So this year, stick to your plan.

Starting point is 00:32:09 Don't chase gimmicks or points and partner with a credit union that helps you make progress in the baby steps. Visit fair wins.org slash Ramsey to take control of your money and stay weird. Fairwinds is federally insured by the NCUA. Buying or selling your home is a huge deal and you want an expert in your corner fighting for you to find the best deal for the right price. And the Ramsey trusted program is the only way to find a top agent you can trust who will help make your home a blessing instead of a burden. It's super easy. You can compare agent profiles, interview them, and choose the right one to work with, and you can do that at ramsysolutions.com slash agent or click the link in the description if you're listening on YouTube or podcast. Karen is in Denver up next. Karen, welcome to the show. Thank you. How can John and I help? So this year, my husband and I would like to start saving for retirement. But in our budget, we only have about $1,000.

Starting point is 00:33:22 500 a month to put towards that. So my question is, is it better for us to open one Roth IRA and put the full 500 in each month or for each of us to get one and split it in half? Or if that makes a difference at all. Well, as far as growth goes, it'll be the exact same. Okay. Now, are you guys in a financial place to invest? Do you have any debt right now outside of a mortgage? No, we don't have debt. We have an emergency fund. And the reason our budget is lower for retirement is we're trying to save for a house this year. So we're pretty much putting everything we can towards saving for down payment and closing costs and all that. Got it. So you're in what we would call Babysept 3B, where you can sort of split the difference here. You can choose your own adventure and invest anywhere from

Starting point is 00:34:22 zero to 15% while saving up for that down payment. So how long is the down payment going to take? We're hoping we can do it in the next 12 months. Awesome. And so after that 12 months is over, you guys get into a home. Would you then ramp that up to 15% of your household income? And could you? We live in a pretty expensive place. So I don't know if we could do the full 15%. but I think we would like to increase it over time as we can. Okay. How expensive are we talking? Because when you say we're going to save up a down payment, we're going to buy a home,

Starting point is 00:34:58 how much is this mortgage going to be in comparison to your take home pay? So for the area we live in, pretty much the cheapest houses we can get is between $400 and $450. So that's our goal. Okay. And my husband, a lot of his work is commissioned, but the goal would be to make about 150 this year before taxes. Okay. Are you working outside the home as well? I'm just bringing in between like $5,500 and $1,500 a month. Okay. So let's add another 10 or 12 to that, $150?

Starting point is 00:35:46 Yeah. Okay. So here's the good news is you guys have a great income and I hope you're able to get that house within 12 months. My fear is that if you, if it's too tight to invest 15%, it's always going to feel too tight. And that's going to leave you guys with, you know, probably needing to work later in life in order to catch up on retirement. So that's something I would consider. You can plug some numbers into an investment calculator to get a better picture of what that's going to look like. But, you know, you guys are young, you got time, just make it a goal to get to that 15% mark.

Starting point is 00:36:21 And that might mean we need to cut other expenses. That might mean we can't afford to live in the area we wanted to. It might mean you need to be working part-time or full-time in order to make the numbers work. And so whatever you guys do, make peace with that decision. And hopefully you'll get to that babysat four mark in no time. Silas is in Des Moines up next. What's going on, Silas? Hey, I appreciate you guys taking my call.

Starting point is 00:36:48 It was actually your book, George, that got me to take financial situations a lot more seriously, so I appreciate that. Awesome. Love to hear it, man. So what's serious now? What did you get serious about? Well, we've been trying to, me and my wife's been trying to be better about budgeting. I haven't had the best time with that. But recently, we found out that we have, we have, some settling going on underneath our house, and our foundation is dropping a little bit. And we've only got a couple of quotes on it so far. The first one was 12,000. Second one was like 24,000. And we don't have that kind of money, and so just not sure what the best way is to handle this,

Starting point is 00:37:35 knowing that it could get worse, but not knowing how fast it could get worse. and... Yeah. How much money do you have saved? $1,000. Okay. And you still have some debt to pay off? Yeah, we've got just a little over $9,000 of debt.

Starting point is 00:37:50 Okay. And what's your household income? $60,000. $60,000. Is that both of you working? No, just me. Just you. Okay.

Starting point is 00:38:01 Is she home with the kids? Yeah, she's home with our son. Okay. So I imagine money's already tight as it stands, let alone thinking of it. about, you know, because if you need to, you know, solve this problem within six months, let's say, well, you need to save two grand for six months straight to get 12 grand to make the repair. You tracking with me? Yeah. And that feels like it's going to be a lot from your take-home pay. So this might be a season where we say, hey, we're going to pause the baby steps if this is a

Starting point is 00:38:31 really urgent matter. And within six months, we need to scrape together 12 grand. Mm-hmm. Okay. Yeah, we've been spending today with the first day we've been trying to find extra work. I'm trying to find extra work. She applied that at a place, and so we're trying to find that. I just don't know. Would, I don't, because the other issue I have is I don't, I'm not certain if we can afford the house even without the issues. Oh, wow. Like the mortgage itself? Yeah, because our mortgage payment with escrow is like $1,400, and I bring home about $3,000 a month. You bring home $3,000? I'm already concerned about that, but I don't know if she's as concerned about that. How do you make $60, but you take home $36,000? $60 is something with bonuses. I get a couple bonuses a year.

Starting point is 00:39:27 Okay. And then in the past, I've had a lot more overtime work. not as much this last year. I think we're going to need some in the present and the future until we get to a better spot financially. And so I would have her working if she's able to. I think you're going to need to ratchet up the overtime and maybe a part-time job on top of that. Because right now, I don't think the mortgage is the big problem here. I think long term, you get your income a little higher.

Starting point is 00:39:52 We can make this work. If you're making five or six grand a month, now these numbers aren't that scary. It's not like you have a $4,000 mortgage payment. that's a reasonable, you know, you're going to pay $1,400 bucks in rent somewhere. And so this is, I would, do you have a professional that's looked at it who said, hey, this, you need to deal with this within this time frame? That's what we're working on. Mostly the two companies that you've had come out, they kind of are just like, you know,

Starting point is 00:40:19 they don't know how fast it's necessarily progressing or how bad it actually is. So we thought about, we've been thinking about trying to find a maybe just a local inspector or something like that, that can come and maybe try to get a good. A hundred percent do that because a foundation repair company has a job, and that is to they put all those little sensors out, and they say it's not perfectly level, and we can fix it for this much money. But get an inspector out, it's worth the four or five hundred bucks you're going to pay to bring him out and say, is this the thing I have to do right now, or is this the thing I need to do in five years?

Starting point is 00:40:55 And let them tell you. That would be money well spent just for your peace of mind. Mm-hmm. And then maybe you track it and go, hey, here's how it's progressing based on what he said. And if he gets to this point, we got to make this happen. But I would act like you need to make this happen next month in the fire that's under you guys to get to work and get this money saved. Mm-hmm. Okay.

Starting point is 00:41:20 And so if that means pausing the baby steps right now because you're in store mode because it is an emergency, great. Maybe the inspector says, hey, I wouldn't worry about this right now. I'd check back in a year. Well, that gives you some breathing room to go, okay, we can knock out our debt and get this foundation repair money saved up. So we need a few more facts here to give us some peace about the next steps. But I think you're well on your way. The income is really the glaring issue here, and the good news is that's fully in your control. It's not going to be fun.

Starting point is 00:41:49 But for six months or a year, you can do just about anything and suffer through it and live to tell the tale. So I wish you guys the best on the journey to debt freedom and a. smooth, stable foundation, literally and figuratively. I love entrepreneurs. Don't forget, guys, I started my company on a card table myself, so I know what it's like to have people counting on you, your team, your family, not to mention your customers. And when you're the one signing the paychecks, you can't afford to fly blind. But I'll be honest, early on, one thing that nearly sunk us was wasting time with spreadsheets that didn't add up because business units didn't talk to each other.

Starting point is 00:42:52 I finally told my team, just fix it. And they did. We got NetSuite. That was years ago, and we've never looked back. See, NetSuite isn't just for tech giants. It's built for growing businesses like yours. Over 43,000 businesses already run on NetSuite, including a lot that started just like you. And now with built-in AI, NetSuite is helping them even more.

Starting point is 00:43:17 It's one system connected to every part of your business for real-time insights, not guesswork. NetSuite AI flags inventory issues, cash flow risks, even supplier delays before they become problems. So you can trust the data. Stop wasting time and make the right decisions faster. Take a free product tour today at netsuite.com slash Ramsey. That's netsuite.com slash Ramsey. Welcome back to the Ramsey show in the Fairwinds Credit Union Studio. I'm George Camel, joined by Dr. John Deloney, and we're taking your calls at AAA 18. 25-5-2-2-25. You call us up. We'll help you take the right next step for your money, your relationships, and your life. Ryan is in Flint, Michigan up next. Ryan, what's your question

Starting point is 00:44:15 today? How are you doing, gentlemen? God bless. I have a few questions, but the main one I'm trying to get through is that we've been listening to me in the web of the list, and sent to Dave Ramsey's Total Money Makeover. I listened to one of his seminars about baby steps. And we're trying to dial in a few things. Now, I don't know if you want me to go into how much we make and how much debt or not to help with these questions. Well, you tell me the question, and then we'll dig in with some follow-ups. All right. Thank you, sir. First one is that I know you guys said something about a savings should be around 1,000. We have about 9,000 in our savings, and we have a car, the one car that we have, it's debt that we want to pay off, and that's roughly around 10 to 11,000.

Starting point is 00:45:02 Okay. And we're just kind of not used to not having some kind of, I guess, old crap money to fall back into. Is that your only debt? No, we have the car. And as I've been listening to the books and what you guys say, I've been lied to, so you must excuse me about this. But we have the car, we have two lease trucks. Our biggest is our house and our mortgage.

Starting point is 00:45:25 and then from what I understand we have two loans that we took out on our 401 our Roth. But we pay ourselves back on those ones. Well, yeah. But you unplugged all the growth and paying interest. Yes, sir. Okay. I'm less concerned about your oh, crap emergency fund and more of your oh, crap debt that you guys have racked up. How much do you guys make?

Starting point is 00:45:47 Between me and my wife, total probably around 200. Wow. That's a great income. Yeah, we're just not great. So, I mean, we ran into some issues. We moved in and we outlived. Let's just say we outlived what we had and when we had coming in until we got to the point where we were just about underwater. The wife had $34,000, I think, on her cards.

Starting point is 00:46:09 I took the loan out of my 401 to pay her card off. She took another loan out to pay the credit card off. So once the credit card was paid off, I thought, well, man, we should be getting an extra $1,500 a month. And it just didn't start equating to that. It just disappeared. to more spending lifestyle cream. You got it 100%. That's the American dream right there.

Starting point is 00:46:28 You summed it up. Okay, so you've been robin Peter to pay Paul, playing whack-a-mole, taking out one debt to pay off the other debt. What is your question today specifically that we can help with? Okay, so once we pay off the car with the savings that we have now, do we just keep a thousand in there or because of our expenses, say, our mortgage and whatnot, should we keep a little bit more money than a thousand in there? The $1,000 does not change based on expenses or income. It's a flat $1,000 and it's not meant to cover everything. And so if something did occur where you needed more than $1,000 to cover an emergency, you would simply pause the baby steps and that next check that comes in, you would use toward the emergency. You'd sell stuff. You'd work extra. You'd cut your lifestyle down to nothing until you got through the emergency. Now we're back to the baby step two, paying off our

Starting point is 00:47:20 consumer debts. Excellent. And now the next one would be, obviously from what you said, we should not be borrowing from our 401 because of the interest we'd be messing out on the accumulated interest. Yeah. There's like 14 reasons why it's a bad idea, but we won't get into that today. Just are you committing live in front of America that you are done borrowing money? That's the big question I have for you. No more leases, no more zero percent cards, no more borrowing from retirement. Are you guys done with debt? Yeah, we're done. That's. That's kind of where 100%. I'm more committed than, I would say, my wife's committed to, and I'm very committed on it

Starting point is 00:47:56 because I'm tired of living the paycheck to paycheck life. That's just for what we make and what we do, we should be able to be fine and live way better, at least have more money in the savings. So I'm 100% committed. It's just these few of these questions that I'm having. I'm trying to rationalize in my head to get my head around, wrap around how you guys want us to do this. Have you guys ever created a budget together where you actually sat down and said,

Starting point is 00:48:18 All right, here's the paychecks coming in. Here's all of our expenses for the month. We're going to track our transactions. Sir, we just had, we've been married. We've been together almost 20 years and about maybe two, two and a half years ago. We just put our accounts together. Wow. Congrats.

Starting point is 00:48:32 Welcome to the big leagues. Yeah, I know, right. That's when we paid off the debt and that's when we started, you know, okay, we need to accumulate. So primarily what we do right now is most of our stuff comes out of our savings account slash checking account, and then we, like for groceries and other things that we have to buy, for the most part, goes to the credit card, and then we just pay the credit card off every pretty much every week. There's a new character has entered the scene here, the credit cards.

Starting point is 00:48:58 Tell me about those. Yes, sir. How many do you have, and is there a balance? It's just one, and there's usually there's only the balance for the week prior, which is gas if we get groceries, and that's pretty much about it. So we put gas, groceries. There may be a few other bills. I've had to look to see that goes on, but we pay it off.

Starting point is 00:49:14 pretty much every week with every check. We don't occur a balance and let the balance hold on it, so we just paid off $34,000. So we're not trying to get a balance on us. We pretty much pay it off every week regardless. Wow. So you're just, you told me you're not going to borrow money, but you're okay temporarily borrowing someone else's money

Starting point is 00:49:30 with the promise of paying it back within the week. It's like, hey, bro, bro, bro, I got you. I got you at the end of the week. Essentially, right? And so here's my challenge to you, and I put this in my book, Breaking Free from Broke. It's a 30-day, no credit card challenge, where you put the thing in a block of ice, you put it in a drawer you don't have access to,

Starting point is 00:49:46 and just for 30 days, only use a debit card or even cash envelopes. And the goal is, let's see, if you didn't have more peace in your life, if you didn't create more margin to throw at the debt, if you didn't miss the credit card rewards you thought you were getting. And what I found is most people go, oh my gosh, instead of the 2% cash back, I spent 10% less than I was spending. Yeah, that sounds about right. And we only did this because of my financial, my 401k guy said to do this. And the main question. What is a 401k guy?

Starting point is 00:50:19 You have a financial advisor told you to open the credit card? That's exactly what he said. He said we should have everything going on to the credit card that we pay and then just pay that off. Is that the same dude that gave you the 401K loan? No, that was from, I did that from Fidelity for my work because I get work and matching and I'm able to just go on there myself and take out. But that was he told me that's what I should. do in order to pay the credit card off. I say this with all due respect.

Starting point is 00:50:45 You've got to fire that guy before the day is over and get a new guy. I've been feeling like that. I just told my way. Today. Today. Just the other day I told him. I go, some just not right with what this guy is doing. And I'm just not feeling right about it.

Starting point is 00:50:59 You've been following his advice for years and you're broker than ever. Yeah, yeah. I can't. Are you guys still investing as well? My guess is you're still putting some money into retirement. I am at 8%. I think I get a 3.5 to 4% match from work, and my wife is roughly around the same. I rolled over a previous 401 to this Roth with this guy.

Starting point is 00:51:21 Correct me if I'm wrong, but I didn't know you could contribute to your retirement once you take a loan against it until it's paid back. I can contribute. Yeah, the contribute, no, mine is it takes a certain portion out on top of my percentage that I'm putting in. Okay. Well, here's another thing I would encourage you to do, is to stop. all investing until this mess is cleaned up. Because right now you're doing 17 things at once and you're not seeing progress on any of it. I gotcha. With the debit card, you're saying just go to a debit card and just don't even worry about credit cards on. Exactly. I've been living that life for like 13 years. I'm going to send

Starting point is 00:51:58 you a copy of Breaking Free from Broke. I cover the whole debit card credit card thing in the credit card chapter. So read that and I'm going to hook you up with every dollar. This is going to be like John and I in your pocket coaching you 24-7 with new recommendations. recommendations based on where you're at financially and educating you along the way. So hang on the line. We'll get you the book and every dollar. I'm rooting for you, Ryan. This is a solvable problem. You make $200,000. There's no reason to be this broke. When you've saved up and paid cash for a reliable used car, you want that thing to last. And the best way to keep it running for the long haul is to take care of it with people you trust.

Starting point is 00:52:55 That's why I'm proud to welcome Christian Brothers Automotive is the official auto repair partner of the Ramsey Show. At Christian Brothers, they treat you like family. You'll get digital vehicle inspections so you can see exactly what your technician sees, a complementary shuttle to keep you moving, and every repair is backed by their nationwide nice difference warranty. They've even been ranked number one by J.D. Power for customer satisfaction among aftermarket, full-service maintenance and repair providers six years in a row. Visit jdpower.com slash awards for the details.

Starting point is 00:53:36 So if you want your paid-for car to keep going and going, trust Christian Brothers Automotive. Visit cbac.com slash ramsay to find your local shop and get an exclusive Ramsey discount of 10% off your visit. 10% off up to a $250 value. See store for details. Jamie is in Chicago up next. Jamie, welcome to the show. Hey, George. Hi, John. How are you? We're doing great. How can we help today? I've been following the plan for quite a while. I got rid of my car. I paid down on my debt.

Starting point is 00:54:27 The only two things I had left are my student loan debt and my mortgage. Awesome. My mortgage, I owe $98,000 on. And unfortunately, on my student loans, I owe today $142,000. Last Wednesday, I learned that my position at my job is going to be eliminated, and I will be without a job on February 1st or on second. And I am kind of freaked out. Yeah. I feel like I don't have – I only have about 25 in 401K, and obviously I'd want to get that student loan debt out of the way, but what? With my separation, I'll get a substance package, but it's only going to be about 16,000, and that's before, taxes.

Starting point is 00:55:18 So I am not sure. So that floats you three months? What do you think? Yes. Yes, three months. Okay. What do you do? I am a facility planner.

Starting point is 00:55:32 For a guy who's not very smart. Basically, I manage, for a large health care company, I manage the plans before plans and where people sit. and departmental allocations, things like that. What is your chance of getting a new job quickly? I hope. Well, good, but it took me a couple of years to get that job. Okay. So, John, I'm glad you're on this call.

Starting point is 00:55:58 You'll understand that. I was on disability for some years and was able to get back into the job market. And this was the position I landed, and it's been a really good position for me. I work from home. Yeah. So I'm kind of nervous about, you know, kind of the things that go around with social anxiety and those kinds of things. So I'm going to give you a word.

Starting point is 00:56:22 I don't see a problem. I'm going to give you a word, it will be, but I'm going to give you a word that most, it might cause some people listening to inhale sharply, okay? Okay. But I'm telling you this word because I believe in you and I trust in you, okay? you have an absolute emergency on your hand. Yes. Agreed.

Starting point is 00:56:48 And you have proven to yourself, you have documented evidence over the last few years that you are not who you once were. Exactly. And these kind of big events, a job loss, somebody passing away who we care about, our body wants to dress. our body wants to drag us right back into this is how we always handle things. Right. And you have a bona fide emergency and you've got a tiny little runway to land the plane, right? Right. And so what we're not going to do is turtle up.

Starting point is 00:57:28 We're going to grieve the heck out of this thing, but I'm going to say this and it's going to sound crazy. We're going to grieve it later. what we're going to do is start applying for jobs like mad and we're not looking for careers we're not looking for exact replicas we're not looking for perfect work from home situations we're looking for two jobs that we're going to go to in the morning and in the evening and we're going to feel the social anxiousness we're going to feel it and then we're going to go through it because we have an emergency on our hands and on the other side of this you're going to be so freaking strong that the landscape of jobs available to you will double or triple in scope. Do you get what I'm

Starting point is 00:58:09 saying? Yes, I do. It's going to be hard. It's going to be scary and your body's going to want to go back to what it has done in the past, which is turtle up and just and wave the white flag. And we're not doing that this time. You've come too far. Exactly. And that's exactly why I'm calling because I felt like I was my instinct was to go back to that old thinking and it's like, no, I've come so far why would I do that? We're going to apply for coffee shop jobs.

Starting point is 00:58:35 We're going to apply for maintenance jobs. We're going to apply for waitress jobs. Everything. Everything. Okay. Everything. Because what you need right now is A, a reason to get up in the morning and B, you need money. Think about this.

Starting point is 00:58:50 If you could work so hard that you didn't need to touch the 16K and you could throw that whole thing at the debt once you get some stability. That's the goal. You're going to be on cloud nine. Yeah, exactly. That's what I was thinking. Make that the goal. Make sure that I'm doing the right thing.

Starting point is 00:59:04 Now, you're not a bad person if you touch the 16 grand. I'm not mad if you use the severance, but how cool would it be if you didn't? And it really propelled your baby steps. Instead of waiting three months, the money runs out and you go, well, I guess I need to find a job now. That's not going to help anything. I'm not going to do that. We're going to apply for fancy jobs. And you know the difference what I'm saying.

Starting point is 00:59:24 I'm not trying to be a jerk. But we're going to go get waitress jobs, Home Depot jobs, whatever. and we're going to apply for the facility management jobs, these bigger picture things, they're going to take longer, they have longer processes. We're going to apply for those in the evenings and at night. Okay. Sounds good. We're going to send you Ken Coleman's find the work you're wired to do.

Starting point is 00:59:42 It has the get clear career assessment in there. And what it's really going to help you do is figure out, hey, what are the skills behind the work I've been doing that I really love and enjoy and I'm good at? And what other roles can I apply that to? Because right now you're thinking, I'm going to type in these keywords. and I think there's so many underlying skills, you can take a logistical nightmare and clean it up and organize it. Sure.

Starting point is 01:00:04 That's an amazing skill to have that you can apply into anything, project management. That would be a great field for you. What is your degree in? I have a degree in interior design and a degree in psychology. I love it.

Starting point is 01:00:18 Have you pursued interior design at all as a career? I did, and that's kind of why it took me so long to find this job because I felt like I wanted a very specific commercial job, and it just wasn't happening. So then I found this job, a recruiter reach out. Well, on top of your job shopping,

Starting point is 01:00:38 I'd contact 10 interior design companies in your area and say, hey, I have a degree in interior design. I'm ready to start tomorrow. Okay. I will do that. I mean, you got the degree in it. You spent a pretty penny to get it. Might as well give it your best shot.

Starting point is 01:00:52 This might be the on-ramp you needed to go. I needed to get laid off in order to go pursue the thing that I really wanted to do. But here's your key word. Okay. We're going to go. Go. We're going to act. There will be no hours left unspent twiddling our thumbs.

Starting point is 01:01:08 Yeah, you're going to close your computer screen and go for a quick walk around your neighborhood, and you're going to put your head on your pillow exhausted because you've been working so hard. The energy has to go somewhere, right? It can paralyze you or you can do it to solve this present emergency. Exciting? She's paralyzed in a... excitement right now. That's so great, Jamie. Thank you for the call. John, let's talk about this because a lot of people, we talked about this on the show that it's, it's like losing a loved one, like the grief of

Starting point is 01:01:39 losing a job. Yes. And the shame, the guilt, the fear. It's like all the emotions. And in her situation, having a diagnosed anxiety condition, the thing about anxiety that's the worst is the only way through it is through it. And so you're going to have all of this, these feelings, you're going to have all these emotions. She has an emergency. And millions of Americans have an emergency. And what many people do when there's an emergency is either they run around bananas or is creating more mess or they just take their foot off the gas, put the car and park and exhale. And she doesn't have that luxury. She owes a couple hundred thousand dollars in various things, right? So we're going to have some direction. We're going to go get a job, get some money, get some connections. We're going to apply for some jobs. We're going to read a

Starting point is 01:02:23 book, we're going to have coffee with somebody who's in a job adjacent. We're going to go do a bunch of stuff. And the weight of this, dude, I got fired. They took my job away. That grief will be there, but we're going to, we don't have the luxury of just stopping for a season. We've got to go get a job. And we're going to go, go, go, go. I love that. An object at rest stays at rest. Once you stop, it is so hard to get moving again. Yes. You get comfy, you get your favorite Blinky, you're watching your favorite Netflix show and you go, well, that's a problem for tomorrow me. Yeah, it's hard, George.

Starting point is 01:02:56 If it's like 9 o'clock, I go to bed early because I'm a nerd and I sit on the couch and just say, I'm going to watch one show. It is so hard to get up from the couch and just go to my room to bed, right? I should have just stayed up and gone to bed and got the extra 30 minutes or 45 minutes of sleep. Similar here, man, if you exhale and be like, well, I've got this 16 grand, that 16 grand will be gone

Starting point is 01:03:18 before you can sneeze, and now you're going to be in a real mess. So you've got a job. You're taking your job away in a month. Tiny little severance. It's time to hit the gas and go. Everyone is at risk of identity theft. I don't care if you're a hermit living off the grid listening to the show on a battery-powered radio.

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Starting point is 01:04:38 victim. It's the most thorough and affordable plan out there. I even have it for my family and our entire team at Ramsey. Visit Zander.com or call 800-3564282. One of our favorite things is hearing people share their stories of how they're winning with money. And we just heard this from Claren Winson. This is me and my husband's third month budgeting with the every dollar app. And I'm amazed how much money we've found. We went from feeling like we were living paycheck to paycheck to finding $3,500 of extra margin each month to put toward our debt. We each had four credit cards and have been able to pay them all off, never going back.

Starting point is 01:05:28 We love to hear stories like that. And the truth is, you can do this too. That's not just a Claren Winston thing. That's an anyone thing. You can take control of your money. You can change your family tree and live like no one else. And it starts by downloading the every dollar budgeting app for free in the app store or Google Play. Go see how much extra margin you can find with a little bit of that coaching and encouragement.

Starting point is 01:05:50 Lee is in San Antonio up next. What's going on, Lee? Hey, how can we help? Well, so my question, I'm a little unique. So I went through a divorce in 2024. and by the grace of God, as of the holiday season of this year, we are reconciling and God's restoring our marriage. Wow. Yeah, it's really beautiful.

Starting point is 01:06:14 My question, however, has to do with, so when we were married before, I was not great in the financial department. My husband was with the same company for almost 20 years, hard worker always provided. I kind of jumped from job to job, wasn't the best with the same company. the money, racked up a $10,000 credit card, all of that. So over the past year, while we were apart, I graduated from FPU and have followed Dave Ramsey. And I'm working with a company right now to pay off my credit card. So I'm hopeful that within the next couple months that will be paid off. So I will myself be debt-free.

Starting point is 01:06:55 My question really is, I know that Dave is pretty vocal about his opinion that when a couple is married, that there is no my money, it's our money. So understandably, given my past behavior, my husband is a little hesitant to go back to commingling our funds. So I'm just kind of looking for some guidance on how he and I can navigate that this time, just, you know, as we, that trust is built back up and maybe just some guidance on how to navigate this season. What other trust was broke in your previous time together? Well, there was no infidelity or anything like that.

Starting point is 01:07:38 I honestly, my story is that I really just was in a really bad place. I believed a lot of lies about myself and my marriage. And the enemy convinced me that it was right to leave. And so I just did. I just picked up one day and I left. I didn't. There was no seeking God in any of that. So really the trust that was broken was just me giving up on us.

Starting point is 01:08:02 Okay. So I want you to hear his hesitancy as not about money. It's deeper than that. If it was a surprise to him, not that y'all were in a tough season, not that, you know, you were struggling or anything like that. But if it shocked him when you walked in and said, I'm out, I want you to see that for what it was, which is you pulled a pin on a grenade and rolled it into his life and it. exploded it. Yeah. Right. Now, every couple co-creates their relationship. That is what it is, right?

Starting point is 01:08:41 So I'm sure he would sit here and tell me he's not perfect. I get all that. But if you're going to truly say we're reconciling, you can't, there is no reconciliation. There is no, I mean, you can get remarried. You can do whatever you want, but there's not a true remarriage if both of you don't have your feet in the boat. And at the same time, he's still living. he still has fresh scars from

Starting point is 01:09:06 when this person he's getting back into the boat with shot a hole in the middle of the boat and then swim to another shore. You get what I'm saying? Of course. And so here's the path back. The path back is will you give me being him to you

Starting point is 01:09:22 a very clear roadmap that I can follow to reestablish trust because trust will not be re-earned in huge grandiose moments. It will be earned in a thousand tiny little ways over time. And the commitment here is we're going to do this every 30 days, every 60 days.

Starting point is 01:09:44 And it's not you groveling. It's not like, how am I doing? Do I get an A on trust this month? It's not that. It is, I want a clear path back. If we're going to really get remarried, we're going to go all in on this thing again, both of us have to put our feet in the boat, and you'd be crazy to do that all the way. I get that.

Starting point is 01:10:00 So I'm going to ride in your boat for a while. I'm going to ride shotgun with you. What is a path to reestablish trust to look like? And he's going to lay that path out. And then you get to decide whether I'm going to follow that or not. Yeah. Right. And here's the other thing.

Starting point is 01:10:16 If he says I'm in, he's got to be all in too, which means he has to risk that the person he's marrying does this to him again. That's the risk of any great marriage and any great relationship at all, right? Is that you could get hurt. So he needs to give you a path. You need to ask him, not, hey, why aren't you sharing our money? You don't trust me. And not you hanging your head in shame saying, I'm not trustworthy. We're past that. We're going to start establishing this. What does a path look like for me to reestablish trust? And let's take infidelity. Sometimes people say, I want to see your phone every night. I want us to get new phone plans. I want to change our numbers. I want you to cancel all your social media. And here's the thing. The person, who got cheated on can lay out whatever path they want and then the other person gets to decide whether I'm going to follow that path or not whether I want to be a part of this relationship or not and when that when you start walking that path they can't weaponize the past because they have said

Starting point is 01:11:18 I'm in this too yeah and reestablishing money like sharing your money together is part of me and my wife share a single account George and his wife do Dave and Sharon like the people that I know are that are successful and the data bears it out, couples who share finances do better because, not just because of the money, but that means they share a picture on what they value, where they want to go with their life, what their shared vision is, like all that stuff gets wrapped up in. We all know where the money is and all that. So it's just you humbly asking for a clear roadmap and we're going to do one at 30 days. We're going to do one at 60 days. We're going to do one at 90 days. And we're going to continue to work down this path together until both of you feel safe enough in

Starting point is 01:12:01 your guts that both you're in this boat and we are row in the same direction. Can I give you some ideas, Lee, some tactical things you could do that might, it might make him go, who are you? Number one, cut up all of your credit cards and close all the accounts. Okay. And then, all of them. Here's the baller move. You freeze your credit. And you give him the pass code so that you can't open any type of account. You can't take on any type of debt if your account is frozen, if your credit's frozen. And then on top of that, say, hey, you know what, we're going to have a joint account, but I don't want the debit card right now. And we're going to turn on transaction alerts so that anytime anything comes out of the account, we both get

Starting point is 01:12:42 a text message of what happened. Or to celebrate your guys getting back together, we're going to give you a year of every dollar premium. It will alert each of you if somebody spends something with a debit card. Okay. Okay. But these are some things you can put on the table when he's like, what are you talking about a roadmap to trust? I'm going to do this thing and this thing and this thing. I want to know a path so that we can reestablish trust in this marriage all in both feet and the boat,

Starting point is 01:13:07 both of us. Here's what I've already done. Here's what I'm doing now. Here's what I plan on doing. I'd like to check back in. And then maybe you guys agree on our timeline. Hey, we're going to check back in. And six months from now,

Starting point is 01:13:17 if all is good, then we're going to open the floodgates. And it's going to be, you know, we're just going to fly and build wealth together. And I, you know, I think that will prove to you more than to him. That's exactly right. changed. Because I don't know that you trust you right now, Lee.

Starting point is 01:13:32 You probably have some shame and guilt and baggage. Yeah, for sure. And by the way, you have to have the courage to say, I don't want to re-engage in this marriage if only one of your feet is going to be in the boat. And so you get to say one of my bedrocks, one of the thing that's going to be important for us moving forward is that we get back to trusting each other enough to share money, to share whatever. And so, but I also know that's a tough. scary thing right now, so I need a path. But you get to say this is a big deal to me, not just I'm going to put my head down and go along with whatever he says, because I screwed up and I'm just

Starting point is 01:14:10 a whipping post. It won't work that way. Right. You know what I'm saying? I'm proud of you. Thank you. This is a big step, Lee, and I'm so just inspired by the reconciliation, and I hope that you guys are fully reconciled soon, full unity, building wealth together like never before with an amazing marriage. So hang on the line. We're going to send you every dollar. I'll impress him. Go, hey, I'm working on my budget this month. You want to take a look? Like, who is this person? Or our budget? Now we're talking. With interest rates finally dropping, now could be the window you've been waiting for to buy a home or refinance. But don't just rush and blind. Sit down with someone at Churchill Mortgage who will tell you the truth

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Starting point is 01:15:57 This is a paid advertisement, NMLSID 1591, NMLS Consumer Access.org, Equal Housing Lender. Today's question of the day is brought to you by WRIFI. If defaulted private student loans have taken over your life, YRefi can help you breathe again with a low fixed rate plan that fits your budget. visit yerefi.com slash Ramsey to learn more. That's the letter Y, refy.com slash Ramsey. Not available in all states. Today's question comes from Wyatt in Montana. Dude, Wyatt sounds like he's from Montana. I love that name.

Starting point is 01:16:43 We recently started the baby steps and me and my family are on step two. We've been snowballing pretty successfully. He sounds like a Wyatt. We've been snowballing pretty successfully by selling stuff and we're making good progress. Our question is that with all the stuff that's going on around, around the world, how is it rational to stick to this? My instinct is to use extra cash right now to cash flow stocking up on food, ammo, and water. Should we really stick to the baby steps or make sure our family is ready for any unexpected disaster? Wow. This could have been a question from John Deloney in Nashville. You wish you were Wyatt in Montana. I do. I do. Okay, so there's a part of

Starting point is 01:17:25 this that I understand, which is, hey, there's some crazy stuff going on. Should we just stockpile some cash in case? Because we got debt. If he's on Baby Step 2, it means he has $1,000 to his name and savings. The rest is going towards consumer debt? So is this a storm mode where you go, we got to batten down the hatches and just save up money? I'm going to say no. Should you stick to the steps? Yes. Should you make sure your family's ready for unexpected disaster? That's the part we need definition on. Right, right. And so if you're unexpected disaster is the air conditioner going out, the, you losing your job, the stock market crashing, not owing anybody any money is a really great place to find yourself. Having no other payments other than we have to scratch and claw our way to,

Starting point is 01:18:10 right, to pay our bills. There's a real disaster in front of you, which is the debt, the mess that you made. And so I'm not going to focus on what could be and is there going to be. And is there going to be, you know, World War III and it's all going to come down and that, therefore, I'm going to hang on to my debts forever. That's a terrible way to live. Yeah. And the, I just, again, I quote my friend who told me this years ago, but I don't have a meteorite plan. I do. I have a lot of meat in the freezer. Hunting season just wrapped up here. So, like, I do, right? Am I going to Deloney's house? If something goes down, absolutely. He would never make it. But, like, do we have unrealistic six stockpiles of water, et cetera? No, because if the water, local municipal water gets cut off,

Starting point is 01:18:57 we're going to have a whole different issue going on, right? And so I think people like to think our family's life is going to be like this, just minus these things. It will not be. It will be such utter wild apocalyptic chaos that, right? So it is easy to get distracted when you're doing, when you get past the energy stage, George, like the, it's like the January 15th at a gym, like already, it's starting to fall off because everyone got excited. They started their first workouts. They even got sore the first couple of ones. They feel like they're doing something. And then about January 15th, you're like, oh, I just have to do this forever. And it just goes, want, want. And so it's real easy when you're in Baby Step 2, you're selling stuff,

Starting point is 01:19:39 you're feeling it, paying debts off, that you look up and you're like, oh, we have two more years of this, four more years of this. What about water and ammo? Right? Stay the Stay on the path. The other thing is, dude, you live in Montana, not Gaza. Like, let's not act like it's all coming down in Montana. Like, there's some scary places. There's some scary things happening. Montana's fine right now.

Starting point is 01:20:04 And so unless there's imminent danger in your area, I would stick to the plan. And if something really did happen, sure, you can pause the baby step, stack up cash. I don't think the apocalypse is on the list right now. And Montana's probably one of the places where you'd want to find yourself. That's where I'd want to be. If it all went down, I would love to be in Montana. Don't tell the zombies. They'll go there first. They'll never make it.

Starting point is 01:20:24 Tim is in Los Angeles up next. What's going on, Tim? Hey, I was curious. Me and my wife are getting ready to pay, we'll pay off our $148,000 worth of debt. Woo! And yeah, I know, right? And I was trying to see what's next, because we do have, like, you know, a three-month, like, quote, emergency fund. But, you know, we're trying to wonder, too, like, with these Trump accounts, should we? We just installed, like, if they happen great, but, you know, we're trying to figure out, like, should we start investing, like, in a high-yield savings or something like that for our kid now who's doing April. So you're in Baby Step 2. You've already done Baby Step 3, and you want to skip to Baby Step 5.

Starting point is 01:21:08 Did I hear that? I suppose, yes. Okay. I would do them in order, which is take your emergency fund, and let's focus on the emergency at hand, which is the debt. Could you clear your debts with the amount you have in savings? Yes, we could do it honestly within probably the next 30 to 60 days, even without the emergency fund. And that's kind of like where I'm at. All right, then pay off your debt today and spend the next 30 days restocking the emergency fund. Okay.

Starting point is 01:21:39 In Vegas, we call that I call. So that's one idea. Number two, once you are through Baby Step 3, you're now a Baby Step 4, which is a to put your own mask on and invest 15% in your own retirement? The other problem is we don't actually own a house at this time, especially here in California. It's a little more difficult these days. And so that's kind of like the underlying question is like, do we just pay off the debt and then say, you know, do that because it'll intensity towards like a house or, you know,

Starting point is 01:22:15 put our child's future ahead of our own? Well, I don't think any of those are the options. I think you should invest 15%. And if it's going to take you a long time to save the down payment, that's okay. If you're going to stay in California long term, it might take you eight years to save a down payment instead of two. And so that's the math of it. But I would not put any money towards – and here's the thing with the Trump accounts. The government is – did you have a child in 2025 through 2028?

Starting point is 01:22:44 Is that the plan? Yes. Okay. So I'm going to open one, and here's why. I would love the free $1,000 from the government. After all the money I've given them, it's time they give a little back. You don't have to put any money into it. And I personally wouldn't.

Starting point is 01:23:00 I did a whole video on this. It's really not super impressive other than the $3,000 that will grow from age zero to, you know, 65 into a few hundred grand. That's awesome. Not mad about that. But I would invest for your kids in a $529 plan, which has tax advantages of tax-free growth. and if you want to invest outside of that, you could just open up a brokerage account in your name and you can use that to save up for their wedding

Starting point is 01:23:24 or, you know, a down payment on a house for them one day. Right. So I love the motive behind it all. And the 529 plan, how exactly would you go about that? That's the first time I've even never heard of it. Yeah, well, there's a blog about it on our website, and so I'll make sure we get to that link and we'll put it in the show notes as well for anyone who's interested.

Starting point is 01:23:47 But a 529 plan is just a plan to save for college where you use after tax money and that money then grows tax free for education purposes. You can withdraw it tax free to use for your kids college and they've even expanded it now. It could be for trade schools and training and supplies and all kinds of things. So it's a great way to save for college with compound growth and some tax advantages. So that's what I'm currently doing for both of my kids. I put money in there every single month. If they get birthday money from grandma and grandpa, it goes into the 529 account.

Starting point is 01:24:17 But here's the bad news. If you don't invest for retirement, your kids are going to have to fund it. And so that's why we tell people to put their mask on first. There's a 100% chance you need to retire one day. 50-50 chance your kids even go to college and graduate. Right. So you're doing a lot of good things, Tim. You've got a great heart and you're so close.

Starting point is 01:24:39 You're on the cusp of this amazing financial foundation. But I would just do the plan in order. It works, man. It works. Pay off the debt today. And if that scares you, that tells you. me that you probably should do it because you'll stack up that cash in no time. If you put, you know, 20 grand towards the debt and now we need 20 grand in the emergency fund, well, now we're

Starting point is 01:25:00 just paying ourselves instead of a lender. I would rather do that any day. It's hard, John. There's so much you could do. There's so many things that are good things. We want to pay off debt. We want to save. We want to save for the kids. We want to save for retirement. And that's why I love the baby steps. It just takes out all the ambiguity and gives you just a clear, nope, do that first. Nope, do that next And that's what I do It's what I've done for my family It's what John does for his

Starting point is 01:25:25 It's just I get it though It feels so hard When the world's all screaming at you From every different angle It's hard to just stay the course Just stay on the path And now there's a new one The Trump accounts

Starting point is 01:25:39 So now we're distract It's like squirrel It's like look over here Look over here look over it It's like just The folks that win Unhooked from the system completely And just follow a different path

Starting point is 01:25:47 And we've laid it out for you Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. I'm George Camel here with Dr. John Deloney. Open phones at AAA 825-5-2-2-25. Teresa is in Indianapolis up next. Teresa, what's going on? Hi, how are you? Doing great.

Starting point is 01:26:32 How can John and I help? Well, so my mom's 82 years old, and she just got hearing aids for $2,000. and she is asking me and my sisters to help pay the money back that she charged to her credit cards. And, you know, she doesn't, she lives on our Social Security. She never really saved for retirement. And I feel like even every time we go out, she, you know, expects us to pay for the dinners or lunches or whatever we do. And most of the time, I do, but not all the time. And I've helped her before with her budget.

Starting point is 01:27:18 And I know she can save to pay for this purchase. But how do I approach her about asking for money and the entitlement she obviously feels that we owe her? Oh, what would you do? I'm on Baby Step 2 right now and really don't have the money to give her. Well, I think you just answered your own question. I think the part that sounds like it's weighing you down is the story. you're telling yourself about her requests. And so if you've offered to pay for dinner a bunch of times,

Starting point is 01:27:50 I don't fault her for just assuming you're going to always pay for it. If you think that's a move on her part and she's done that before and she's always trying to, like your whole childhood, she was trying to get people to pay for food or whatever, that's another story. But if you're, if you don't have the money, you can just say, hey, mom, I can't, I'm working on my own finances. I can't kick in on this time. That's it. and you can't control what questions she asked you. You can't control her temper tantrums.

Starting point is 01:28:15 You can't control the guilt you would feel because you want to be able to do it. You just can't right now. You can't control any of that stuff. What you can control is what you do, the next right move you make. Your feelings are going to happen regardless. What's the next right thing? The next right thing is I can't afford it. I can't help right now.

Starting point is 01:28:32 Have you ever pushed back on her and just said, hey, mom, I love you, I want to be honest. I'm not able to give you money anymore. I got to focus on my own financial responsibilities. I have. I've said to her before, you know, she asked me, you know, why haven't we been doing some stuff as much as we used to? And I said, well, mom, I can't afford you. Like, every time we go to lunch, you expect me to pay. And then even when I pay, you know, you don't say thank you. And, you know, I just, I don't have the funds. Like, I have to, when I think of going out, you know, I have to watch my pennies because I'm trying to, you know, get out of debt. But can you all do other things? Can you

Starting point is 01:29:08 go for a walk? Can you take some dominoes over to her house and play? Like, is it have to be things that we spend money on? No, it doesn't. And I've tried to curve it that way as well, too. It's just, sometimes it's just really hard because I know she's, you know, she's never really been ahead of the eight ball with money. And, you know, I just wish I was in a better financial position to help her with these things. But, you know, some of it, I feel like, you know, she set herself up for this too. Yeah. But, you know, You just nailed it, and that's what I didn't want to say it out loud, but you said it, so I want to pull that string a little bit. A lot of this sounds like she's making requests that you as her daughter wish you could just give her the world.

Starting point is 01:29:52 And you can't. And so if you feel guilty, if you feel bummed out, if you feel sad about your own financial situation, man, don't compound that frustration and pain and guilt and yada yada by blaming her. it would be cool if we all had enough money to give our parents whatever we wanted, but most of us don't. And it just stinks. And so we can either just cut off contact, which is a whole bunch of people do, which I think is insane. Or we can say, hey, I'm going to start coming over to your house on Tuesdays. I'm going to make a coffee at the house and bring over a pitcher of coffee.

Starting point is 01:30:27 Or mom, you make the coffee. I'm bringing the dominoes. We're going to play. And I can control that part. And it's not as cool as a hip diner in whatever town and yada. But it'll still be valuable time with your mom. that you'll be glad that you spent. What do your siblings feel about this?

Starting point is 01:30:46 Are they also wanting to stop the sort of forced giving? Absolutely, yeah. And we're all in different positions, and we all don't have the money right now. Like, I have one sister has kids in college, the other sister just lost a dog and had to pay for her heater in her house, and my other sister just had a surgery, and I had a surgery last year. Here's the better part. You don't have to have a reason.

Starting point is 01:31:15 Yeah. You can just say, Mom, I can't help out right now. Thanks for thinking of me. And that's it. And then hang up the phone. And if she chooses not to pay the credit card bill because she won't or can't, then she deals with the consequences of that.

Starting point is 01:31:30 It might go to collections. Someone might be harassing her on the phone telling her she needs to pay or else. I don't know if you can repo hearing aids. I don't think you can, but maybe. I don't know. Yeah. But that's the hard part of setting the boundary is it makes you feel bad, but you need to just repeat the boundary and make it clear.

Starting point is 01:31:48 Because otherwise, if she knows that boundary is flexible, she's going to get over it every time. Every time. So just hold the line, and about four times in, she's going to go, oh, this is a dead end. I'll try another sibling. And if she chooses to opt out of the relationship because of that, the sad part is it was transactional for the, you know, who knows how long before that. Does she reach out without money being involved? Oh yeah

Starting point is 01:32:15 Okay So there's a relationship Outside of this There is Okay good And maybe one day You guys are all in a better place And you go hey we're gonna take mom

Starting point is 01:32:25 On this amazing trip But it needs to be on your terms And right now all of it has been Entitlement and guilt Instead of Man it would be really cool to just cover mom's hearing aids That'd be a cool gift to her But if you like her

Starting point is 01:32:38 I want to spend time with her Go over to her house With some dominoes And some coffee and some homemade cookies or whatever. And when she asks the question that she's inevitably going to ask, which is, can I have some money? You say, no, I don't have it, mom right now.

Starting point is 01:32:52 All right, your turn. And maybe choose to deal with a couple of awkward questions or annoying questions or guilt-inducing questions for the greater sake of the relationship. But you and your siblings don't need a whole bunch of, well, this, I got college and I got a sick dog. You don't need all those excuses. You can just together or individually say,

Starting point is 01:33:14 as for me in my house, right now we're not going to participate. But we love you. We're still going to hang out with you. And she's not going to be on the street. I mean, she's not in dire straits here, right? Does she have other financial problems that are pretty intense? Or is it just, hey, she owes a little bit on a credit card? No, she just constantly, like something happens.

Starting point is 01:33:37 She puts it on the credit card. She's just in a cycle. And I've tried, like I've worked on her budget before when she let me. And, you know, I even bumped it up a little. little bit so that she didn't realize she was actually saving money. And, but now she won't let me, it's been a couple years and she won't let me redo her budget so that I can help her. She doesn't want you involved on that side.

Starting point is 01:34:01 Yeah. That's a sign. If she doesn't want your help getting better with money, she just wants the money, then that's a sign that you need to stop. And maybe one day she opens up again and says, hey, listen, I'm struggling. I got collections people calling me. Can you help me figure out a way out of this? And you go, yeah, here's a way out. And it's not going to be you giving her money.

Starting point is 01:34:22 It's you showing her how to get out of this once and for all. And maybe that'll get her to stop using a credit card. The hard part is the credit card companies are insane for giving an 82-year-old, the line of credit who's living on Social Security. Well, they're not insane if their kids are going to pay it back. You know what I mean? It'll get paid out of her estate or collections or it'll be a tax write-off one day. Madness.

Starting point is 01:35:02 How many times have you started January saying, this is the year I'm finally going to get my money under control. But then months go by and you still feel broke. You work too hard to keep living like that. Look, there's only one way to move the needle on your finances this year. You've got to have a plan. So start by downloading every dollar. Every dollar is way more than our world-class budgeting app.

Starting point is 01:35:26 In 15 minutes, we'll build you a personalized plan to free up extra margin in your budget and use it to beat debt and build wealth. You'll find thousands of dollars on average just the first day. And you'll get new steps and new lessons every day that help you stay on track and create unstoppable momentum. Don't waste one more day feeling broke and stressed. Get your plan in just 15 minutes by downloading every dollar for free today. John is in Fort Worth, Texas.

Starting point is 01:36:13 John, welcome to the Ramsey Show. Hello, good afternoon. doing? I'm doing pretty good. I got a good spot to be at, but I still have the question of what do I do. So I'm wondering, where do I go from here, me and my wife with our investments and, like, in the future. We just completed. We're basically baby, well, not, we are baby step seven now just this month paid off the house. That's amazing. Congrats. What's the house worth? About 300,000. Awesome. And what do you guys have in a retirement? Right now, because we did put basically just like 10% at the time.

Starting point is 01:36:47 We just stepped that up or she stepped hers up for a 401K. We're sitting around 155, I think, counting hers and mine together. Okay. But where I currently work, I only have a Roth IRA option. They don't have 401K. They don't have a retirement plan through your employer. Correct. Okay.

Starting point is 01:37:05 So we're doing that. Like, we started that last month. I started funding mine for last year. year, and now this year I'm going to end up funding mine and one for her. That way it gets me to the 15% or actually above it just max it out. Yeah, what's your household income? What's the gross income you guys will bring in this year? Um, 2026. It should be about 150. We were beyond that before because I used to get a lot of overtime by change jobs this year. Pay went up a little bit, but no overtime. Okay. Cool. So what's your question?

Starting point is 01:37:41 Well, where we go with the investments from here. So after the IRA, after the 401K, we're going to have the house payment, plus we were putting up to $17,000, actually a little more than $17 a year, extra on the house to get the house paid off in 10 years. We actually beat 10 years. We're at nine years and a couple of months is what we ended up with. That's awesome. So we were still able to live our lives off of that.

Starting point is 01:38:04 So it's like, okay, do I just put the rest of it into a brokerage account for a, like, S&P 500. You said your wife has a retirement plan through her employer? Yes. What is that? Hers is currently a traditional, and she said that they were changing that to a Roth. Okay. But right now we're trying to figure out where we have to do, what percentage we have to do out of her pace.

Starting point is 01:38:30 That way we can max that out, which is, I believe, 18,000. Well, the 401K is closer to 23,000 or 235. So here's the good news. 15%, which you can invest more, of 150 grand, is 225. So you still have the tax advantage options. If you both do a Roth IRA this year, I think they just upped it to $7,500 is the cap for each Roth IRA. So that puts you guys at $15 grand there, leaving $7 grand to invest. You can do $7 grand in her 401K on the Roth 401K.

Starting point is 01:39:03 Yeah. But then after that, like the way I look at it doing the finances, we're going to eclipse that. We're going to have more than that. You'll have more. Yeah. So you could fully, let's try to max out the 401K and max out two Roth IRAs. That would be my goal for 2026 if I'm in your shoes. All right.

Starting point is 01:39:21 But then what do I do with the extra after that? So you're saying you're going to invest the 23 plus the 15 that puts you at 38,000, and you're still going to have more to invest. Correct? Yeah. We looked at our budget and we were sitting around 47 that was like, okay. Wow, that's awesome. Do you guys have a high deductible health care plan?

Starting point is 01:39:43 No, unfortunately we don't. Okay. Unfortunately, we don't, I guess. Because if you have an HSA, you can invest through that, and it sort of becomes a loophole retirement account. So if you don't have that, so I'm kind of going through in my mind, what are all of the tax-advantaged options? And that's going to be your 401K, your IRAs, your HSA. If you run out of those options, then you can be investing into a brokerage account in the market. which is not tax-advantaged.

Starting point is 01:40:12 And that's where my question came in, because it's like, do we still follow the investment recommendation, growth, grossing income, or do we just do S&P 500? Yeah, you could do either. I mean, S&P 500 is simple and outside of retirement. That's a great option. That's what Dave would do. If Dave gets a big royalty check for total money makeover, he's just going to throw it into an index fund into a brokerage account.

Starting point is 01:40:34 Okay. So I would just go that route. And how old are you guys? I just turned 40 and she's 41. Oh, amazing. Think about that. You're in Baby Step 7, no payments in the world investing 40, 50 grand a year. Go pop that into an investment calculator.

Starting point is 01:40:52 We're trying to figure out what to do next. That's what you do next and you keep doing it year after year. And it's not exciting and people are going to tell you, dude, you need to be more sophisticated and you should put your money here and crypto is going to take off and you should buy real estate. stick to the plan. Stick to what you know, what you understand, and you will be multi-multi-millionaires in retirement. That sounds good. Congratulations, man.

Starting point is 01:41:18 Never go back into debt. Keep investing as much as you can. And also, enjoy your life. You know, we always talk about, John, there's three things you can do with money. Give, save, spend. And it's easy to have too much muscle in one area. We're like, I'm so good at saving and investing.

Starting point is 01:41:34 And you realize it's like hoarding. Yeah. And you're giving muscles atrophied. And your spending muscle, your wife is like, dude, we haven't been on vacation in 12 years. And we've been paid four house. That may have been my house. That's John. And also mine right now with a toddler and a newborn. I'm like, I'm not going anywhere. But that's a good reminder. And congratulations on baby step seven with the pay four house. Matthew is in Columbus up next. What's going on, Matthew? You with us? We were so close to a great call with Matthew. It was going to be gangbusters. All right. We'll try again. Oh, there we are. Well, there he is. Hey, Matthew. Took him a second. Hi. How are you guys doing? Great. What's your question today? Yeah, because I'm trying to refinance the house that I got and got a lower rate, obviously. But now when I pay over, you know, I want to pay over my mortgage rate, I was sold, maybe invest that money instead.

Starting point is 01:42:29 Who told you that? A family number. But I was under the impression if I could pay off my mortgage faster, I can pay off my mortgage faster. just opens up a lot more money in the future. Yeah, you're right. And that's what we teach in the Baby Steps, and it's what I've done in my personal life. Me too. And so you can trust the family member. You're going to be, you're not, you're still going to go to heaven. You know, so like, it's not like this is a, but the Ramsey plan says, hey, if you're in Baby Step 6, which you are, put any extra money toward the mortgage while investing 15%. So are you investing 15% of your household

Starting point is 01:43:05 income right now? Yes, mandatory. Okay. my job. Cool. And then how much extra can you throw with the mortgage? Like, how fast is this thing going to get paid off if you follow our plan? Well, it's going to hopefully refinance, and I'm hoping to get an extra two payments in a year. Okay. Have you done the mortgage pay off calculator on our website to see what that does? I have not. I only get to listen to the show for like 20 minutes on my commute home. Oh, thank you for hanging with us today. I would, tonight when you get home, I would just pop onto our mortgage pay off calculator, see what those extra payments would do, and then have a game plan and go, all right, six years, we're going to have this mortgage paid off.

Starting point is 01:43:42 And the good news is the mortgage gets freed up and then you have the rest of your life to invest that payment. And nobody can come take your house away. Which for all of the people who are like, this is what you need to do, this is what you need to do. I'm telling you, man, there's something about having a house that is yours, that even if your local city jacks up your tax rate on it, it's super annoying. But you don't have a house payment. Like, nobody can take your house. something so profound about that safety and security for you and for your family. Yeah, it's more than math. And I've seen the argument, well, I have a 3% rate. Why would I not

Starting point is 01:44:17 invest or even put it in a high yield savings account? I get it. You could make the argument on paper, but those people, they're forgetting about the psychological component and you truly can't explain it to someone unless you do it and live it, that it just is a more peaceful life. I sleep better because I don't have a mortgage payment. And I never think about, man, what could I have made if I invested that money instead of putting it toward the mortgage, I never have thought that once. I just got, cool, I got a freed up mortgage payment. I'm on track to be a multimillionaire in retirement. Life is good. All right. Excellent. Yeah. Your house off. Thank you so very much. I appreciate it. Absolutely. Hey, what's your mortgage payment, by the way?

Starting point is 01:44:56 I'm hoping to get it down to $1, $1,250 a month. 12.50. Okay, that's fantastic. Is that principal, interest, taxes, insurance, all of that? Is that just principal and interest? interest? It's all tax. Everything is all wrapped into one. I would also do some fun math using our investment calculator and go, all right, six years from now, I'm 46. If I invest that $1,000 principal in interest from 46 to 65, what does that turn into?

Starting point is 01:45:24 That's some pretty cool math, too, on top of not having a payment for the next several decades. And nobody's ever said the words, Pretty Cool Math. Except for you, George. Thank you. I like Pretty Cool Math. You spend hours researching before making it. searching before making a major purchase like a home or car, but it's also a good idea to put in the work searching for the right insurance coverage. To protect your biggest assets, I recommend

Starting point is 01:46:07 using Ramsey trusted pros. Whether you're looking for car, home, or any other type of insurance, Ramsey trusted providers have been coached and vetted to serve you like we would. Find what you need at ramsysolutions.com slash insurance. Everyone needs insurance, but it can be hard trying to find pros who aren't just looking to make a buck and agents who actually know their stuff. Well, Ramsey trusted insurance pros, they're vetted, their coach to make sure they're market experts who have your best interests at heart, aka they're not going to sell you crappy products that we would never recommend. So if you want to learn more, go to ramsysolutions.com slash coverage to find the type of insurance you're looking for and connect with a Ramsey trusted agent. Silas is in Tampa up next.

Starting point is 01:47:08 Silas, welcome to the show. Thank you for having me. Sure. How can we help? So I have a Chevy Colorado and I owe $36,000 on it and my wife's car, she has a Toyota CHR. Excuse me, a Toyota CHR and she just had a transmission. It didn't go out, but the dealership told her that it's bad. And they don't know how long it will last. So it's about $13,000 to fix. And we're 22. Both of us are, and we're just trying to get our finances in order. And I want to get rid of the truck.

Starting point is 01:47:43 I want to do something with the truck. I'm just looking for advice, what I can do with it. Okay. What's your household income? I make, we work at the same job. I make $16.50 every paycheck, which I get paid twice a month, and she makes around $11 or $1,200. I'd have to look at it like exactly, but it's rough. I think it's like 1150. She makes about 1150, and I make about 1650 every paycheck, and we get paid twice a month.

Starting point is 01:48:12 Got it. So we're talking like 3,200 and 2200. Let's call it 5,400, 5,500? Correct. Yes, sir. So how much is her car worth? I just took it. I looked at up on Kelly Blue Book, and they said it's worth about 13. to 15,000. It's like they have that fair price, poor price. Is that the private party value or trade in? That would be the private party value. Okay. And is that with the repair needed? Or is that saying, if we got the repair done, it's worth $13,000? Oh, no, that's just, that didn't include the repair. That's just it by itself. Like, if it was right now, because it's a, it's a 2021.

Starting point is 01:48:57 Dang. Well, hold on, hey, before you do anything, go to a local mechanic that you trust. That's not the dealer. I don't trust them. Okay. Yeah, they were kind of bull crap enough. You go to a local mechanic. If it's a transmission on a Toyota and it's a 21, my guess is it's covered somewhere in the power train warranty. Right. So I'm not sure because her grandparents bought her the car. There was a whole situation with her mom. That doesn't matter. That doesn't matter. Okay. Like go to a local mechanic and get the skinny on it, okay? And maybe a third mechanic.

Starting point is 01:49:31 You get another opinion? Because then you look at it and say, yeah, this happens all the time with this car, or, yeah, this is under warranty, or, dude, you don't have a problem at all. All these cars do this. Have you checked to see if they warranty the transmission because it's newer? They didn't say, they didn't, I asked them, like, I asked them a ton of questions when I was there at the dealership, and they didn't give me like a straight up answer. asking, I was like, is there a warranty on this? And they didn't. They were just, like, beating around the bush with me talking about how I need to get a new transmission. I would do your own homework on that and figure it out. Because here's the truth. If it's going to take

Starting point is 01:50:05 $13,000 to repair, and the car's only worth $13,000, I wouldn't do this. I would sell it for what it's worth, save up some money, and then get a different car. Now, what's your truck worth? My truck, I took it in yesterday while her car was getting worked on, and they said the appraisal, the raise the value for selling it outright is 19,000, and to trade it in is 22 to 25,000. How is it possible that trade in is higher than what it's worth? What's because they're giving you a cash number? Don't do this kind of business with dealerships. Don't ask the dealership what your car is worth. They'll lie through their teeth.

Starting point is 01:50:41 Go private sale. Yeah, go to the Kelly Blue Book, back to where you were. What is the private party value for that truck? Because that'll tell you the exact difference you're underwater. You owe 36. If the truck is worth, Let's say 25. Well, now we know. We have a number. We're 11 grand underwater. That's the guy. What would they tell you the trade-in was?

Starting point is 01:50:59 It told me the trade-in was 22 to 25, and then selling it was 19. Okay, that means you can probably get 27 to 30 private value. So you might be six grand underwater. So how quickly could you guys save up the difference in order to sell it? And have a little bit more to get you a different car. Right. And could you share a car for a few months? Or go down to Fairwater.

Starting point is 01:51:22 wins credit union, get a $10,000 loan, pay this thing the difference off, sell this thing private party, use a couple of grand to get yourself a car that's going to get you from A to B, and pay that loan off. And you've just taken a $36,000 problem down to 10. Right. Yeah. Do you guys have any other debts? I do. I have, it's a few small debts. It's like, from like a, it's from synchrony bank. It's like a $1,000 debt and a $2,000 debt. And then I have like a one of my credit, my credit card got shut down. And it was really my works fault.

Starting point is 01:52:00 So I filed a complaint with the capital one, which is who I have the car loan and the credit card through. So what's your total debt balance between the two of you? She has zero debt. I have, I would say, probably close to $40,000, including the car and those few things with the, the synchrony bank and my credit card. Okay. So the good news is if we clear this truck, you guys can be debt-free within 30 to 60 days. Right. So that's the new goal.

Starting point is 01:52:30 Now, the thing is we've got to save up the money to cover the difference or like John said, go to your local credit union and get the difference in a loan so that we can reduce 36 grand down to 10. So that's the game. So you have two pieces of homework. We've got to work on your wife's car, figure out what it's really going to cost from a few mechanics. And then we need to either save up for the repair cost if it's going to be worth it or we need to just. just sell it for what we can get for it and get a different car. Yes, sir. So you got plenty of work to do, man, and it's very doable.

Starting point is 01:53:02 I feel very hopeful about your situation, but it sucks. And I'm glad you're learning this lesson at 22 instead of 42. That car loans, here's the best news. When you pay cash for a car, you can never be underwater. And so never go into car loan debt again. Never lease a car. You never go to a dealership and let them convince you into a payment. you go in there with a check.

Starting point is 01:53:23 And John has done this. When he goes in, he's got a check for a certain amount. And he goes, this is how much I have. If you guys want to do business, I'm here. If not, I'll peace out. And I've had them say, hey, appreciate you. We shake hands and I walk out. And I had somebody take $9,000 off of a car price.

Starting point is 01:53:42 Because I had a check. And I said, hey, this is what me and my wife agreed on before I left the house. And I'm not going to call her and switch the deal up on me. This is a big check. I would like that car. Let me go talk to my manager, come back. Let me go talk to my manager. They play the games.

Starting point is 01:53:57 And they said, just take this car and get out of here. And I was like, cool. Right. Right. But here's the deal. I wasn't tied to the car. It wasn't like, this is my dream. It's just, it's a car, man.

Starting point is 01:54:08 It's awesome. It's nice. I love it, but it's not my identity. It's not my end-all be all. And if that one didn't work out, I was going to find another one. That's cool. Yeah. That's what I think my wife's situation, her car is, it's got 80,000 miles on it.

Starting point is 01:54:20 and Toyota, they can go for a pretty good long time, but her grandparents bought it for us, so I guess she's a little emotionally tied to it, but she's also understanding that the more practical aspect is, I'm willing to pay the price, you know, maybe sometime down the road, then, you know, if they wanted to help us on another car or whatever, but she's just, I guess, emotionally attached to it

Starting point is 01:54:40 because I don't know, I have no idea to be honest with you. Well, it doesn't sound like it's smart to sell it until you know your situation. Right. Right. And if you can fix it for three grand, Great, let's fix it. Right.

Starting point is 01:54:53 Yeah, because they told me, like I looked it up and it said that there was a, it could be a wheelbaring or it could be the transmission. And then they go in there, they give me the highest bid possible, which I kind of expected them to give me the most expensive time. Well, here's the thing. Dealerships make money two ways, financing and the service. They don't make money when you walk in with a check and buy a car. Right. And so they have a vested interest in getting you to do all of their service. That's why you get a million emails every day.

Starting point is 01:55:22 like, you didn't do this or you need to do this or come to see them in. Time for your checkup. And so take it to a local mechanic. And by the way, when you go to the local mechanic, look him in the eye or her in the eye and say, I'm coming here because you're somebody has a reputation that is trustworthy. I got this information from a dealer and I want you to check their work because I trust you. And let that be their guide. Really quick question.

Starting point is 01:55:48 What do you recommend? How would I private sell? What's the best way to private sell? You list it on Facebook Marketplace. You pay a little bit, put it on an auto trader, take really nice photos. I actually did a video on this on my YouTube channel. Just search how to sell car for top dollar. Camel, it'll pop right up.

Starting point is 01:56:03 We'll also put it in the show notes. And remember, don't let cars be more than half your annual income. Total, all things with wheels and motors. You do that, you're going to build some serious wealth. When you're tired of feeling stuck with money, there's just one solution. To get different results, you have to do something different. No one accidentally wins with money. You have to have a game plan, and that begins with our get started assessment.

Starting point is 01:56:43 Go to ramsysolutions.com slash start, answer some questions, and we'll show you what steps to take next. Don't stay stuck. Take control of your money starting today. Go with ramsysolutions.com slash start. Our scripture of the day, Hebrews 1214, make every effort to live in peace with everyone and to be holy. Without holiness, no one will see the Lord. Jordan Peterson said, face the demands of life voluntarily, respond to a challenge instead of bracing for catastrophe.

Starting point is 01:57:28 Oh, that's good. I think most of us are bracing for catastrophe these days. We're just tightened up, just waiting for life to happen to us instead of responding to the challenge and being a little more proactive. That's good. Maria is in San Jose. What's going on, Maria? Hi there, John and George. It's a pleasure speaking with you today.

Starting point is 01:57:50 You too. I have a question. Should I continue paying off my house with the same intensity if I want to retire in the next five to ten years? And so I was paying off the debt. I'm completely debt free aside from the house now. Cool. Are you single, married? I am married, but I am the sole breadwinner. Okay. So at the rate that you're currently... paying down the mortgage, how quickly will it be paid off? Well, the way that I've calculated, it would be three and a half years.

Starting point is 01:58:24 Wow. And this is like with serious intensity. Is this like overtime, no vacations, we're not living, or what? No, I do take vacations maybe twice a year. Okay. And I worked a lot of more times. Okay. Well, that just helps me because I go, Gazelle intensity is rice and beans.

Starting point is 01:58:44 We're not eating out. No vacations. we say move from intensity to intentionality once you hit baby step six. So as long as you know, you have a happy life, you're going on vacation, you're enjoying your money, you're giving money, you're investing 15%. It's up to you how fast you go. Now, John and I are, we're crazy people. We're like you.

Starting point is 01:59:03 We're like, let's get rid of this debt as fast as possible. Yeah, so I went pretty scorched earth and I'll tell you, three and a half years is right at the outer limit for how long your body can take. Okay. What does your husband think? Well, currently he is not here with me. That's why I'm kind of wanting to get this done over with so I can retire and go out of state with him. Well, out of the country because he's not here.

Starting point is 01:59:32 Oh, literally not here. Like, you guys don't live near each other right now. Correct. So my vacations are to go see him. Wow. Okay, so let me throw a complete wrench in this deal. why not sell your house and just move there to be with him? Because my whole family is here.

Starting point is 01:59:50 Ah, okay, fair, fair. Wow. Okay, so how old are you now? I'm 45. And when do you want to retire? At the latest, I would say 55. And you're able to do that as far as actual nest egg, retirement accounts, all of that? Well, currently, I do have about 50K in my high school.

Starting point is 02:00:14 yield savings, 40K in my high year savings. I have total retirement accounts and brokerage like HSA and Roth. I have 256, I believe, and I also have a pension plan with my current employer. Okay. And so you're saying between all of that and me investing for the next decade, I should be able to make this whole plan work. And not having a house payment. Yeah. And then you can invest a portion of whatever that house payment was. I mean, there's nothing wrong with that plan. The only encouragement I would give you is to retire to something instead of from something. Right now it feels like you're running. And it's a great goal because you want to be closer to your husband. But I wouldn't also like work a job that I hate and toil over it for the next decade or whatever.

Starting point is 02:01:04 Do you enjoy what you do? I do. Okay. So that's another thing. It's like when I retire, I don't know if I'll be able to not you want to go away you're too valuable to the world we want we need you we need you out there well likely will happen you'll take them on the vacation and then be bored and be like i need to do something with some meaning and purpose i'm going to go start an encore career or your own business or consult or something or go down to half time with your current employer retire and have them bring you on as a 1099 like there's a million different things and who knows what the world will look like in five years or 10 years or whatever but i i personally george tell me if i'm wrong i love

Starting point is 02:01:41 Maria not having a house note in three years. I'm a big fan of that. I love it. We paid ours in like 26 months. And now it was a very modest townhome. We had a huge down payment. So it wasn't like, I mean, we went hard, but we were young, no kids. And we went, huh, what's stopping us? We were aligned on the goal.

Starting point is 02:02:01 And I look back with no regrets. So I don't think you will either. We were just kind of gut checking to make sure that you weren't going to burn out and fizzle out because your life was unsustainable. Okay. Do you think with my numbers and what I have so far in retirement that would be sustainable for me to be able to do that? I wouldn't be able to tell you on a radio call. I would sit down with a SmartVestor Pro and you can lay out all the numbers and what your current investment rate is, and they have the most high-tech software where they can plug it all in and show you exactly what will be true and what kind of life you can live and when. And so jump on a Ramsey Solutions.com, click on SmartVestor Pro, and lay it out with a pro. And you can use our investment calculator and ballpark some of this, but there's so many variables that you forget about, like healthcare.

Starting point is 02:02:48 Well, that's going to cost a pretty penny when it's not through your employer, especially before you can access Medicare at 65. So that's a whole other range in the plan. That's going to be $36,000 a year. We've got to cover for health care as one example. And then what kind of lifestyle you want to have in retirement? Are you going to live real simple or do you want to go crazy? And, you know, they found what happens in retirement is it's kind of a smile shape. And so at first, your spending actually goes up.

Starting point is 02:03:14 It's a little dimple there. And then what happens is over time, your spending actually goes down. As you kind of settle in, you travel less, less vacations, less excitement. And then as you near the end of your life, the expenses ramp back up as you enter, you know, health care, long-term care costs and all of that. And so it's not a straight line where you go, well, can I live off five grand a year for the rest of my life? I wish it were that simple. But life is more complicated. And that's where a pro can really help you unpack all of those variables.

Starting point is 02:03:43 Thank you so much for the call. It's exciting. To be debt-free in California before you're 50? That's a miracle. J.R. is in Atlanta. J.R., how can we help you? It's a sad ending, J.R. Are you here? Yes, I'm here.

Starting point is 02:04:00 There we go. Okay. Get right to your question. We're up against the clock. Yeah, so I'm 24. I'm going through college, and I'm trying to earn a degree that will make me the most amount of money in the quickest time frame. I don't enjoy the field I'm currently in, but my goal is to chase money

Starting point is 02:04:17 and then figure out what I want to do after. Is this the right mentality? Yikes. No, it's backwards. Okay, so. Now, here's the thing. We don't need to conflate the two. I think you can hustle and work really hard

Starting point is 02:04:33 at something you love, and that is the recipe. Because you'll never get bored of that. So I would not do something I hate and get a degree just because I think it will pay well. you meet a lot of those people. They're not happy. Miserable billionaires.

Starting point is 02:04:47 And they never go, well, at least now I can do whatever I want. I've never met someone who said that. Okay, so here's my counter to that, right? So my counter to that is that, let's say, let's have a passion in, you know, art creation. I like to paint or whatever, right? You know, to be honest, you know, that's not starting the most, you know, paying field. So my mentality and honestly, my advice that I give most other people is that, you know, screw, you know, what you enjoy per se if it's not making money and just, you know,

Starting point is 02:05:20 go to school for something that's paying. Like, for example, I'm about to get my degree in December for software engineering. Right now I'm a software engineer team lead. And, you know, I don't per se enjoy the job, but, you know, in terms of financial, like I'm I'm happy. So I'm going to use the money later on, you know, to then fund, you know, whatever I enjoy. My pushback would just be this, simply this. A, you're right.

Starting point is 02:05:51 There's a reality. And I tell everyone in their 20s, just be quiet and grind it. Go grind it, right? But grind it towards the person you want to become. And so there is a big difference between I just want to be a painter and I don't make any money. And I'm a person who's creative. I help create beauty in the world. I help people create homes.

Starting point is 02:06:13 I'm an architect. I don't love... Like, architect isn't my first love, but it allows me to be creative. And when I get home, I get my easel out and I paint. Do you what I'm saying? There's a big difference.

Starting point is 02:06:24 Work really hard, grinding it out. Of course, that's part of it. I'm glad you have that ethos. But become the person you want to become, because, man, I know a lot of miserable, lonely, wealthy people, and I wouldn't trade places with them for anything. I'd reverse it if I were you, man.

Starting point is 02:06:38 That puts this hour of the Ramsey show in the books. Remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.

The Ramsey Show - There Is Hope When Debt and Life Feel Overwhelming

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