The Ramsey Show - What Is Your Relationship With Money?

Episode Date: May 27, 2024

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Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where debt is done, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. We help people actually build wealth, actually do work that they love, and actually create amazing relationships. Rachel Cruz, number one best-selling author and Ramsey personality, and my daughter is with me today as a co-host. We'll be taking your questions about your life

and your money. The phone number is free. Some say the advice is worth what you pay for it. 888-825-5225. That's 888-825-5225. Looks like Mario's going to start us off this hour, and he is in Atlanta. Hey, Mario, how are you? I'm doing better than I deserve, as you would say, Dave. I'm doing great. Glad to be on the show. We're honored to have you, sir. How can we help? So the big point is I'm fairly new. I'm not new to you, but fairly new to the show. And I'm really on fire and on board about just becoming financially free, debt free. The teachings that you and your team teach are phenomenal. And my big question is, I want to know the best way to get my wife on board with implementing some of the drastic changes that we would need to make in order to get to that point. Um, I make a pretty good, um, I have a strong income.

Um, the, the, I know all of our debt areas. I know the areas where I feel like we're spending too much or overindulging, but I know that I'm going to get some resistance with the changes that we're going to need to make in order to get to where I know that we can get to. You mean an example of one of the changes that you think you need to make that you think you're going to get resistance on. Some areas of convenience, like going out to eat a lot or ordering food. How much debt have you got? A lot of, including house. No, not including house. Okay. um including house no not so okay uh credit card debt i met about fifteen thousand dollars

credit card debt uh student loans total um around seventy five thousand um and i have one car that's not i have one car that's not completely paid off and And I think we owe 12,000 on that car. And what's your household income? 175. Okay. That's a great income. So Mario, what's your, what,

what's causing you to believe that she's going to have a hard time with all of this? Is it comments she's made? Is it something that in your head you just know her and you're, you know, you know what's going to be coming? Has she given you clues on it? Like, I want know oh oh yeah so yeah yeah absolutely a comment she's made there's other things that i've so why implement it so then for her in these conversations what's the

what what are her hesitations um a lot of it has to do with our kids okay okay um so like for instance um i'll say okay hey we've completely paid off this particular credit card we're not going to use it we're going to put it up interest rate is high on this thing it doesn't make sense and paying somebody to borrow from my future self you know i do all of that and she, great. Sounds good. But then time will go on and how she charges on a credit card. And then when I say, hey, what happened here? Why did this take place? And it was like, oh, I had to do this. I had to make this decision and do this.

Yeah. And so it's just kind of like, you know, these things, you know, a lot of times it's with the girls. Yes. You know, my kids. Sure. And and it's with the girls. Yes. You know, my kids. Sure. And it's life, right? Because you guys have not put systems in place for life to look different. So you're still keeping the credit card.

We're going to put this credit card over here. We shouldn't touch it, but it's still there. Get rid of it. Get rid of it. Do you guys have a written budget that you have together sharing an account saying, hey, here's the line item for the kids. This is what we're going to account saying, hey, here's the line item for the kids. This is what we're going to spend on the kids. Here's the line item for you, me, food,

out to eat, clothes. Here's where every single dollar this month is going. I've done all of that. No, have you guys together? No, no, no. Mario, have you guys together done that? We. Have we done that or have you done that? So, I have done it and I've shared it and it's communicated.

This looks good. I'm on board. Let's do it. Let's run this plan and we'll start running the plan. And OK, totally. So, Mario, I also think I'm sure Ramsey has become a cuss word in your house because a little bit of me I'm fearful that you're using this against her because I don't believe your wife is malicious I think she's a great mom probably a great wife and so so these things life is just happening to her and she's

reacting obviously not in the way that you prefer or that even what we would teach right she's going charging the credit card but it's not malicious and. And so I think that there needs to be a higher level conversation to say, okay, you and I together as a couple, where do we want to be? What do we want life to look like in five years? What do we want? What is our why?

Does she have any level of pain or stress around money? Is she worried in any way? Not at all. Yeah. Me, for the most part, I am. The weight's on you. I don't want to have to work until I retire. 100%.

Totally. And right now, I'm the... Listen, listen. She's a homemaker. You're treating her like she's your teenage daughter. She's not a partner in any of this. You're just bringing the budget and laying it down, giving some instructions about her credit card,

and then you're shocked that she didn't do what you told her to do. She's not a partner. Rachel's right. You need to get above this, and the two of you need to sit down with the kids away or the kids in bed and say, we have $102 thousand dollars in debt we make a hundred and seventy five thousand dollars that makes us stupid people we need to change some stuff here we're broke and we make a hundred and seventy five thousand dollars a year we have got to as a couple

aim at something bigger than kids clothes lord jesus really yeah okay and so we've got to have a big plan that we're going at now honey he feel it and i know i know i know but this is him and his wife talking okay yes we have to get on the same page i do not want to be your daddy i don't want to be your daddy i i i want to be your husband i need i need like a grown woman beside me helping me make decisions about our future. And she needs an input in all of that, too. And then she gets input. That she gets to say. And then, by God, when she gives input, it's a contract.

Yes. Yes. But she has no reason. She has no contract with you now because you dictated it to her and walked away. And then we're shocked that she went and bought kids clothes on a credit card. Because she had no buy-in. She had no buy-in she had no buy-in none whatsoever she didn't have a voice in this and she has no belief in the overall vision she was just going along with you yes and i would say this too just as an encouragement mario that the conversations that i feel like winston and i the

best conversations we have around money is not really even about money. It's more like, hey, let's just dream. And in five years, what do we want our lives to look like? How old are the girls going to be? What kind of car do we want to drive? What vacations do we take? What do we want to be giving to? Allow your numbers then to motivate you to your goals together as a couple, where you guys both want to go. And then the day-to-day plays into that.

I'm looking at her and I'm going, I make $175,000 a year. I'm really not okay with us being broke. I think that's fair. It's just crazy. But also, there's a level... Yes, I know. But there's also a level marriage-wise to get above it to have a conversation as a couple. I think it's all of that.

I think it's every bit of that. But I think you've got to say, look, we're sloppy. We're disorganized. We're fat. And what can we do to help you for the life? What can we do together to fix this? These days, it's not if your identity gets stolen, it's when. And the only ID theft protection plan I have ever recommended is from Zander Insurance.

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and they even include up to $2 million in stolen funds protection. In the end, though, you need an ally, someone on your side to take over the work and fix the problem. That's what Zander is all about. Go to Zander.com to learn more or call 800-356-4282. Rachel Cruz, Ramsey Personality, is my co-host today. Parents, if you've got school-age kids, the last thing you want is for them to be normal adults, broke. You want them to be weird, not broke, like you.

And that's why you've already got them listening to the Ramsey Show in the backseat of your car, all that kind of stuff. We're 100% on board with that. We've got tons of stuff to help you and your kids' teachers packed into our back-to-school sale. One of the biggest challenges teachers face is getting students to actually engage in classroom conversations. Dr. John Deloney created classroom editions of his questions for human cards. They're made for elementary, middle, and high school kids. Help them build lifelong friendships and real conversations. At home, you can keep the fun and the learning going with our popular children's books and tools, the Adventure Pack, family favorite that includes a new story time collection.

And if there's a teacher in your life or your kid's life, pick them up at Questions for Humans Classroom Editions. Good icebreaker. Gets conversations going among the kiddos. Grab one of our family favorite children's products. Help out with all this. We're all there to help you at RamseySolutions.com. Evan's with us in Winston-Salem.

Hi, Evan. Welcome to the Ramsey Show. Hi, Dave. How are you? Better than I deserve. What's up? Well, me and my wife, we're on baby step 3B trying to save for a house, and we've got a chance to buy a house from a family member.

She's my wife's cousin, and not really like a close family member, but they're offering it to us at 3.5% interest on a 15-year fixed rate owner financing. And I've called around to the bank. The best that I can do is probably around four or a little over four. And so me and my wife, we're longtime listeners, and we just wasn't sure about owner finance center if that was a safe thing to do. Owner financing is as safe as anything else. If you have a good attorney, draft the documents. It's not a land contract.

It's an actual mortgage, and the deed of the house goes into your name. Yes. Okay. No land contracts at all. into your name. Yes. Okay. No land contracts at all. We don't do those. Okay. Now, the downside of the whole scenario you're giving, the other upside is you're going to have a lot less costs involved,

closing costs, other things that you're going to not have with owner financing. So that part's all wonderful. How often do you have dinner with this cousin? This is the first time that we've spoken to them, and probably at their wedding about 10 years ago, maybe. Okay, so you never see them. You're not mad at them, but it's not a relationship you have. No, it's just not one that we have.

Okay, because here's the thing. It's going to affect whatever relationship you have. The borrower is slave to the lender. When you borrow money from someone, you change your relationship from cousin to master. Yep. Okay. And so if your father-in-law loans you this money, I would tell you no. Because Thanksgiving dinner tastes different when you eat with your master

it will change the tone the relationship of your between you and your wife your her dad all that kind of stuff never do that one but this one is really there's not much of a relationship here this is almost like a stranger yes and so I'm probably doing it. Okay. I agree. It's another one, Evan, in most of the calls, though, when it comes to borrowing money from family, it's just an absolute no. But there's these exceptions like this. This is so distant. Yeah, where it's so distant and it's like you're not going to be with them.

You're not seeing them every day. You guys aren't chatting and talking and there's not really much of a relationship to hinder because there's not much of a relationship so so in that makes nobody's mad we're not saying no no but it's just a you know the thing is if it absolutely completely went bad and went sideways and everybody was mad it really wouldn't change your life right yeah and we're not calling that we're not saying it's going to happen but the the point being that you know if you borrow from your father-in-law that that you lose that relationship now you've lost a serious relationship yeah i mean somebody you've been in time with yeah but um like rachel's got cousins that she actually has really tight relationships with right that you would not do this you would not do this deal with

them because it would change yeah not a chance i'm not changing because i'm telling you man the old joke is if you loan your brother-in-law a hundred dollars and he never speaks to you again was it worth it right i mean you know so because it does change the relationship when you loan or borrow money it just does so but the point being here is there's not much relationship to change so that that's i'm doing it because it's a cheaper interest rate, saves money. Make sure you have an attorney close the deal like you would any other professional transaction. Get title insurance. Get an inspection on the house.

Get an appraisal on the house. All of those kinds of things you would do if you were doing a normal transaction to where no one's getting screwed here. It's all very businesslike and buttoned up. All the documents are done. They're properly filed at the courthouse. A title company does the closing. You do everything right here. If you do all that right, you're going to have lowered cost and lowered interest rate,

and it's a good deal. Go get it. There you go. Matthew's with us in Tulsa, Oklahoma. Hi, Matthew. How are you? Great. How are you? Great. How are you guys doing?

Better than we deserve. What's up? I've just got kind of a career question, but I was going to give you a rundown of myself and my wife's financials first. We're both self-employed, no debt other than our home. I make about $120,000. She makes about $60,000. We owe. We owe 160 on our home. It's worth about three, three or five. Um, and I actually sell real estate, really looking forward

to the reality check. Um, and I'm just curious, should I take the chance because I have an opportunity to start my own brokerage, but should I take that chance with a baby on the way with all the risks that we know come with starting your own company? So you're a real estate broker now making $120,000 a year? I'm an agent, yes. I'm not a broker yet. I'm getting my license shortly, yes. Okay. How long have you been selling real estate? A little over a year okay i'm 22 my wife's 22 also okay i was doing the same thing you're doing when i was your age um and i got my real estate license when i was 18 okay so i know what you're facing one of the things you're facing is it's tough to have credibility with people to sell them houses when you're only 22 right yeah you got an uphill battle there and having your own brokerage would probably help with that

a little or it might scare them even more well see i feel like i don't have as much of a problem with customers as i would with people working under me who have been doing it 20 years and think for how young you are right from like a leadership perspective someone respected right yeah and just with a kid doing october it's like do we take this chance when we're sitting pretty good right now yeah and we've got a real estate market that is um twisting and turning in the wind it's very unpredictable right now uh i i i think the market's going to slow down i don't think house prices are going to go down We've already said that out loud

But I think it's going to slow down My only concern would be Matthew You got into the real estate business In the best time ever So like what you made then Not saying you can't make that again by any means But it was probably easier to make what you made then Then it's going to be easier to make that same amount

In the next coming years because of the slowing and softening of the market. What's your wife say? She says do it because it's a pretty good opportunity with a business partner who has a very good in. I'm sorry, a business partner? That's new information. Yeah, I would be opening it with a partner. No, don't do that. Oh, really?

No. You're already married. Yeah. All right. Listen, the only ship on sale is a partnership. The number of small business partnerships that survive one decade is very close to zero. Almost none of them do. We work with entree leadership businesses, tens of thousands of them,

and have for decades all across America. And one of the biggest problems they have is a stinking partnership that's gone sideways. Now, the exception is medical partnerships and law partnerships, but they're structured differently anyway. It's a whole different set up. But two guys opening a real estate company, two guys opening up a heat and air company, two women opening up a nail salon. This is just a, it's just a no, no, no, no, no.

You don't need a partner. Okay, so what I'm going to tell you is scary for me to tell you because I believe in getting after it when you're young and you're an ambitious and smart young guy. And I hate to tell you not to do something, but while you get another 18 months is going to give you a lot of information about life. A lot of perspective, especially if it's your first baby, too. There's just a lot of change that's coming. Let the baby get born. Let's get past some of this rough patch in the real estate.

Let's see what's going on. You save up. You open up with your money. It doesn't cost that much to open up a brokerage firm. If you open it up when you're 25 instead of of your 22, you're going to be just fine. And a little patience. Yeah, I think it's gonna be good for you. You've worked, saved, sacrificed, and been gazelle intense with your financial game plan.

But do you have the right defense in place, like the right health insurance? Look, you can't walk past a doctor's office these days without getting a massive bill. And if you don't have health insurance, a major medical situation can undo all of your hard work. That's where my friends at Health Trust Financial can help. They work for you, not the insurance company. So they find you the right health insurance and they save you money. Ramsey has recommended Health Trust Financial for two decades because they're the experts. And whether you're 19 years old or 90, you can trust them to do two very important things.

Listen to you, then find you health insurance coverage with everything you need and nothing you don't. Health Trust Financial is your one-stop shop for unbiased advice about affordable health insurance options. They could save you hundreds of dollars a month, so make sure you're not overpaying. Go to healthtrustfinancial.com today. healthtrustfinancial.com. Rachel Cruz, Ramsey Personalities, my co-host today. HealthTrustFinancial.com. Rachel Cruz, Ramsey Personalities, my co-host today. Emma is in Pittsburgh. Hi, Emma. Welcome to the Ramsey Show. Hi, Dave. Thanks for taking my call. Sure.

What's up? Okay. So my husband and I used to own a bunch of rental properties. And we ended up going bankrupt because we listened, we had your book and somebody else's book and the other person's book said it was okay to have debt whenever you're renting. We ended up being over $100,000 worth of credit card debt, you know, just because things were breaking in all of the houses. Yeah. And you had no margin because you put nothing down. Yeah. Right. And we have a family of six. So there was a lot of mouths to feed. And I had some health issues and I was homeschooling those four kids. So there was only one income. And y'all lost all that. We did lose all of it. um when was that emma that was 2017 yeah me too it was 1988 yeah okay well we got out of that got to the point where we could

buy another house and now as i speak we've've got $16,500 worth of credit card debt, which I'm trying to pay that down. I've got a spreadsheet where we're down $3,538 in the last six months. But still, the total debt is, with a $5,000 balance on a car is $223,480. That counts your house? Yes. How much is that your house? I mean, that's all your house except for you got the little credit card debt. You got $20,000 plus your house, right?

Yeah, that's about it. And what's your household income? It's right now sitting at $95,000. So what's your household income? It's right now sitting at 95. Okay. So what's your question? So my question is, I'm finding my emotional relationship with money is bad. You know, the love of money is the root of all kinds of evil. I hate money.

You are avoiding evil. It's a spiritual stance on emma's part honestly my i have i have some family issues where my one family member has a lot of money and he is not a really nice person he uses it to manipulate people and yeah so i don't want to be like him well money doesn't money didn't make him that way money exposed the fact that he is that way all money does is all money does is magnify okay if you're a jerk and you get money you're big jerk if you're crazy and you get money big lots of crazy okay if you're if you're kind of compassionate and generous and you get money you're what crazy okay if you're if you're kind of compassionate and generous and you get money you're what we call a philanthropist like you change whole worlds because you give so

much so you know it's not money it's just you just got a jerk in the family well welcome to being in a family okay so you but you've had, you have a negative relationship with money is what you're trying to say. I'm not making fun of that. I'm just laughing with you because you're funny. I like you. Okay. And so it's caused a lot of pain, Emma, is what you're saying. Money is a place, and you don't feel like you have a good handle on it because you guys have this credit card debt, and you just think, oh my gosh, I just feel like I have no control over this part of my life. It doesn't feel safe. I've already proved that by going bankrupt once.

Yeah. Yeah. I did too. And so, yeah, then you've got to decide, am I going to happen to this money subject or is it going to happen to me? And what's going on is it's been happening to you. Yeah, and I think understanding, Emma, it's not just the money part. I mean, I think the money exposes some things,

but I think I wrote a book called Know Yourself, Know Your Money, and I'll give you a copy of that at the end of this call. Yeah, that book is perfect for this. But it's to understand why do I handle money the way I do, and I think for you, Emma, I think it's some good kind of questions to ask yourself, everything from how you were raised, what kind of tension was money in the household, what kind of, you know, tension was money in the household, what kind of value did your parents place on it and kind of walking through

that understanding your tendencies, you know, are you more of a spender or a saver? Are you more scarcity mindset or abundance? What's your biggest fear? A lot of people are driven by fear. They don't want to end up, you know, how they grew up. You know, a lot of people have that fear. So they'll swing the pendulum so far where they save so much because they don't want to you know be poor like they were growing up and they saw the hardship or whatever it is right so everyone has their own their own stuff so that plus emma being married you haven't you have a spouse that has the all different factors of everything we just listed and so working together and all of that can create yeah just a lot of a lot

of tension a lot of stuff that combined with the failure on the other part yeah and with a house full of kids a homeschool all of those things combine to uh take away your confidence and your power your emotional power over money does that sound does that sound right yeah that sounds perfectly are you guys emma um you and your husband do you guys do a monthly budget we look at money we look at the debt together yeah and we're trying to get that number down i'm going to pile you on with some stuff i'm going to give you every dollar a premium okay as well in this call because i think one of the things that can feel so out of control and people do this a lot Emma so I'm not picking on you but they're like oh yeah I just have kind

of all the expenses in my head and it's just it's like it's this imaginary thing that can suddenly become very isolating it can be very scary when you don't see the facts and Dr. John Deloney talks about this all the time that facts are your friends and I think a budget honestly working in that and seeing okay here's our income that's coming in because you guys make a great income I'm 95 grand you're doing great but to be able to say here's the plan for that and then for you over the course of time and I bet you if you guys start that this month I bet by January February there's going to be a level of confidence over this, Emma, because you're going to learn how to live within boundaries

and make different decisions. And you're going to be at the grocery store and be like, okay, we got 200 bucks this week. And I can spend that and I don't have to worry. Yeah. And what do I have to spend to stay within that? And it's this practice of discipline and being in control of what the, that's what the budget does.

And I think that really will give you guys a sense of confidence too. I think the $3,500 in debt that you paid off is absolutely amazing because you've been beating it with a hammer, not slicing it with a sharp knife. And Rachel just gave you a sharp knife. It's going to go a lot easier. You're just beat the heck out of it, man. You just beat the snot out of it.

This $3,500 was heavy lifting. You gutted that out, girl. here you're just beat the heck out of it yeah you just beat the snot out of it this this 3500 was heavy lifting you gutted that out girl because you didn't have it you didn't have a sharp knife you're just wailing on it with a club you guys should also know that most of my children are six foot tall and our food budget is sixteen hundred dollars a. So that's okay. That doesn't mean you can't get control of money. Okay. I know there's other places I can cut spending. Yeah, so I think that's what it is. You don't even know where your spending is because you don't have it all written out.

Right. You get every stinking detail. You will be amazed. You and your husband sit down and look at where every single dollar is going before the month begins and give every dollar an assignment. That's why we call the app EveryDollar. So because you're giving every dollar a mission. Okay.

And when you do that, you're both going to go, where the crap have we been doing? And try this, you know, $1,600. That's before a budget. Try $1,400 for the month, right? You start practicing this ebb and flow and see, okay, where can we get an extra hundred few hundred dollars here or there i mean like it's amazing the the power that that really does give you and to be able to cut stuff but honestly i think for you guys getting some quick wins because i think it's hold i think you said him confident that it took six months to pay off 3,500 that so i want you to do that even faster no you're gonna do it a lot

faster because you're gonna have a sharp knife instead of a club you're gonna have that so i want you to do that even faster oh you're gonna do it a lot faster because you're gonna have a sharp knife instead of a club you're gonna have that so i think that's gonna start to give you guys confidence um but i think it's just rewiring these habits and it takes time but you're not a failure emma and that's the other thing is that this people equate their net worth or their money mistakes to who they are and that's when they talk about shame that shame is your identity so so take those apart that you are not. So take those apart, that you are not the past mistakes that you've made. You are not your net worth. That is not who you are, Emma. And so there's a level there that I want you to release that because that stuff will follow you and those lies will just play a tape in your head that you don't need.

Yeah, you're doing better than you think you are, especially considering how blunt the instrument is you're using. Yeah, but stand by, Emma, because Austin, I want to give her Know Yourself, Know Your Money, and Every Dollar Premium. You're going to love that book, Emma, because it's exactly talking about you. It's the number one bestseller, and you don't want to miss it. It's Know Yourself, Know Your Money by Rachel Cruz. And it's not only family history, but your tendency, scarcity, abundance, all that stuff. It's brilliantly done. You will love it, and we'll put you in the EveryDollar budgeting app, and that will change everything.

You and your husband do that together, and turn off the stupid TV and tell the six-footers to go in the other room. We're working on the budget. This is The Ramsey Show. Buying your first home is a big deal and sets the stage for your financial success. So work with a mortgage advisor you trust, not just some random website. Churchill Mortgage is Ramsey trusted because they help you avoid hidden traps and expertly guide you through every step. Learn more at churchillmortgage.com.

This is a paid advertisement. NMLS ID 1591. NMLS consumerAccess.org. Equal housing lender. 1749 Mallory Lane, Suite 100. Brentwood, Tennessee 37027. Rachel Cruz, Ramsey Personality, is my co-host today. Open phones here at 888-825-5225.

Hey, if you're brand new to this show and a whole bunch of you are based on our ratings increases and our ranking increases and so forth, we appreciate all of you being here. And of course, if you want to, if you were, you know, you're hearing stuff like baby steps and debt snowballs and you don't know what all that means, you want to get plugged in. Go to Ramsey solutions dot com for free and click on the Get Started button. When you click the Get Started button, it'll help you figure out where you are and what your next steps are, and you'll start to learn the lingo of the stuff we're talking about and figure out how you can best apply some of this and start to change your life. So, hey, that's what we're here for. The phone number here, 888-825-5225.

Brian's in New York City. Hey, Brian, how are you? Hey, Dave's what we're here for. The phone number here, 888-825-5225. Brian's in New York City. Hey, Brian, how are you? Hey, Dave, Rachel. Pleasure to speak with you. Thanks for taking the call. Sure. What's up? So my wife and I are out of debt.

We built up our fully funded emergency fund, and we're in Baby Step 3B. We are currently renting. we're about an hour away from the city so um and we commute into the city to work and we're trying to save up for a down payment and we're doing we're trying to cut corners and take every step we can to um increase the amount that we can save each month. And I'm just wondering if I should change my retirement down to zero and what my wife should do with her percentage at work. Currently, I'm working part-time, and I'm also staying at home with the kids, so we're cutting out child care there.

And she works as a nurse manager and full time. And her job has a 4% match at 50%. I mean, I'm sorry, 50% match. And she currently has it at 4%. So I'm just not sure what we should be doing to try to get the most amount possible and just try and figure out ways to. Yeah. Have you guys kind of done a timeline, Brian, to say, hey, if she does pause, because I would encourage you guys to pause for a period of time while you're saving just to increase the cash flow, like what you mentioned. Do you know how long it would take you guys to save up a down payment if you guys paused all retirement and threw all the extra money you guys have per month? It's probably going to be a couple years.

Currently, we have $6,000 down payment and we have $5,000 in a car fund. And I guess if need be, we can combine them. But, yeah, to get a good down payment, especially in this area, it's going to take a couple years at least. How old are you? I am 31, and my wife's birthday is actually today, and she is not going to say. So if you started saving for retirement at 15% of your household income, beginning at age 33, you would retire a multimillionaire.

Okay. And so if you take two years off and save up a down payment and then you start, the trick is don't take two years off and then keep spending like you're in Congress. You don't need to be going out to eat. We're saving for in Congress. You don't need to be going out to eat. We're saving for a house. We don't need to be going on vacation. We're saving for a house. We're saving for a house.

We're sacrificing the match. We're sacrificing the compound interest. We're sacrificing our investments to get a house. So by God, let's get the house. Don't screw around the edges of this you see what i'm saying you got to play through for this to make sense if you if you just stop retirement and then you lollygag along for five years this is not good okay so you're thinking somewhere in the range of one to three years yes

yeah three years will be the max I would be unplugged. And so you've got to set yourself a goal and say, how much have we got to save a month to be there, and what have we got to do to make that happen? And that may be working extra. That may be cutting other things or maybe other things involved. But you've got to set this as a detailed thing because you do – the danger of some of the stuff that we teach is if you don't do it

all, it'll leave you hanging. Because we tell you to stop retirement and, you know, get out of debt. But if you don't go get out of debt, then you never start retirement again. In your case, you've got your emergency fund. I'm trying to I'm going to I'm going to really enhance this 3B because this is an expensive area. I need some down payment money. Yeah. And Brian, too, we, for first-time homebuyers, because you said you're renting, we say anywhere from 5% to 10% for a down payment. So be looking on that side so that you guys can press play back into retirement.

And then you're on baby steps four, five, and six, and then you're throwing extra money that you guys have at the house. We love 20% down because you avoid PMI, but for first-time homebuyer getting out, Rachel's right. Let's get the deal done. Yeah. And, you know, 5%, 10% down, something like that, you're going to have some PMI, but get her done and then get that retirement going and then get that mortgage paid down and get rid of that PMI. That'd be your next thing. Arthur's in Richmond, Virginia. Hey arthur how are you i'm good how are you guys doing better than we deserve what's up um so i had a question i've seen you guys give some career

advice i want to ask you um i i am in a job right now and i don't think my boss is very good at doing his boss job and um so i'm wondering I really have some one main questions. How do I, when do I know how bad it has to get before I leave? And then also, if he's doing things that I know aren't, aren't useful to his, to the people under him, including myself, when do, and things that I just think are wrong, when do I, when would I go to his boss and, um, kind of report things? So I don't want to obviously stir the pot and just like start fights at work with his boss about it or cause problems at work.

But I just don't know, like, when is when is the right time to go to his boss about things that he's doing or lack of or not doing? And when would I know it's just time to move on to go to a different company. Arthur, is it any of it moral issues or is it more just leadership style? Like he's not engaged where he should be and he's not communicating. Is it more of those kind of attributes or is there stuff going on that you're like, that's flat out wrong, borderline immoral? So leadership style, I can get over. But like one is competency in leadership. Like I'm a salesperson i've been

number one in my company for the past five months and uh some of the advice he gives me i'm just like yeah i would never do that like i don't i don't understand where you're getting this advice and i don't believe he has the experience to back up his like his role as also a teaching manager um in sales and then how long have you been there? Five months? I've been there about six months. How old are you? I'm 26. How old is he? Oh gosh, like 50 something. So what do you think the probability that you talking to his boss is going to fix all this? Um, I don't know. I, I i don't know because his boss does ask me questions about him and i'll give him honest feedback i don't know what it's going to change honestly

i really don't well i mean there's two possibilities one is realistic one is not one possibility is they move him on they fire him because he can't do his job and their number one sales guy is talking to leadership about that okay um that that's a possibility that's reasonable the possibility that this 55 year old guy who is not competent suddenly becomes competent because you talk to his boss is precisely zero okay think. Think about it. They can't train him up on the things he's doing in a short period of time. These are long pattern things that have to be fixed. So you're either going to endure him while he's growing,

which is really doubtful, or he's going to be removed, or you're going to be labeled and you'll be gone. Right. That's something I'm worried about. Well, I wouldn't be worried about it. You're going to quit anyway. So what's it matter?

So that's, I guess the other question then in terms of quitting, um, like, so I don't know, like it's good money and I'm making good money and I'm, I'm happy in that sense, but it's just, it's a mess all the time with like, you know, management. So I don't know, I don't know what, what point I should leave is I'm not growing personally except things I learned on my own.

Uh, but I'm not learning from the company anymore. So I don't know when. Oh, I would, I would have, I would have something else in place, Arthur, before you go in and just quit, though, right? Because there's sales jobs everywhere. If you're a great salesperson, you can find a lot of things to sell and find good culture in other companies. It doesn't sound like it's a great culture. I think you've lost faith in the entire organization, not just this one guy. And it's probably time for you to go get something else.

Which, thankfully, your skill set is very broad, right, Arthur? So I think you could kill it a lot of places. go get something else. Which, thankfully, your skill set is very broad, right, Arthur? So I think you could kill it a lot of places. Go get something else. And then be aware that you might be 26, and after six months you don't know it all. That's possible, too. Yes, I thought about that, too, Arthur. A little humility.

Just remember that. This is The Ramsey Show. Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. Rachel Cruz, Ramsey personality, number one best-selling author, co-host of the Smart Money Happy Hour. My daughter is my co-host today.

Open phones at 888-825-5225. Dylan is with us in Miami. Hi, Dylan. Welcome to the Ramsey Show. Hey, guys. Thanks for having me. I am 22 years old, and I just graduated undergrad and got married the next day. My wife and I don't have any debt, but, um, two weeks after our wedding, my mother passed

away. Oh no. Gosh, I'm sorry, Dylan. Was that unexpected? So, uh, yes and no. Yes. And the fact that she declined so quickly, she died at 61. So she left us her IRA, which has about 300,000 in it. And then the main reason I'm calling is because

the house that she left has $60,000 left on it. And I'm just wondering, should I, what I'm planning to do is rent it out and have my renters pay the mortgage. But I also have the life insurance, which is, I got about $90,000 left on that, just kind of sitting in my bank account. Should I just go ahead and pay the mortgage off completely and then have that passive income or what would you guys do? Wow. I'm so sorry. That's completely tough. Two weeks after you're married to make all these decisions. I wish we could, I wish we could slow down. Okay. Here's the thoughts that pop into my head.

Okay. Number one, uh, renting a property as a landlord is not passive income. That's humorous. That's crap from TikTok, okay? Because there's nothing passive about dealing with renters. I've got a bunch of them. I have been. Well, I am planning to hire a property manager. It doesn't matter.

It's not passive. This is very active. You have a hassle factor in your life called renter. Okay. It's just part of it. And they'll be renting your mom's home too. And they're going to be in the home you probably grew up in, right? Right.

Yeah. Yeah. That's weird emotionally. It's hard. Okay. So that's the number one thing. So can this be done? Yes, it can be done.

You're 22. You're brand new married. In my opinion, the last thing you need is the hassle of a rental property. But if you're going to keep this and give that a try, you should pay it off. Okay? Okay. Because that will lower the hassle. You won't have a payment anyway.

And so take the insurance money out of the checking account and pay the mortgage off. I normally wouldn't like to make that decision on that property that quickly, but I will tell you, like, the home Rachel grew up in is now in my rental portfolio. We kept it. It is weird. I haven't lived in that house in 20 years. It is weird to go over to that house with other people's crap in it still emotionally. And I'm, I landlord a bunch of property and I grew up in the real estate business. So I've got a huge advantage over you and I'm old i've done this a lot okay you're 22 this is your first property i'm warning you that the first time

that they screw around with the house you grew up in they being the tenant uh it's going to be emotional for you just be ready for that okay no one it's never going to be the same it's never going to smell the same in there okay uh and so all of that now so if you want to get a professional property manager that's great uh are you local dylan where the house is are you guys close i'm not i'm about i'm in miami the house is in uh central Florida. That's not too bad. I don't like long-distance landlording either. So I'm going to tell you that with all the emotions, if we had a little bit of time to digest all of this, I might just sell it. But that's even a harsher thing than letting a renter be in it.

So it's not an automatic thing that at 22 years old, two weeks after you're married, you ought to be a landlord. it's not an automatic thing that at 22 years old two weeks after you're married you ought to be a landlord that's not an automatic thing okay so it's an automatic thing you probably shouldn't do actually uh just in terms of quality of life for you but it's thrown in your lap and here we are so if you want to try it just be forewarned that this is not it's not passive uh you're going to have some emotions around other people and smells being in your house. No pets. I love pets.

One of my favorite things on the planet is my little dog, but no pets, not in my rental properties. Okay. We call them $10,000 cats. They devalue your house $10,000 when they put the cat in there. Okay. And so, sorry, that's the way that works. So this is an

experienced landlord talking to you dylan for you and your wife where are you guys at financially i know you said you have no debt um you obviously have this three hundred thousand dollar ira from your mom are you do you and your wife do y'all rent do you own a home where are you guys at yeah we're renting we're just kind of getting started financially. Our combined income is probably around $70,000 or $80,000. Okay. I would sell this house and buy you a house. I know.

How much is the house worth? Do you know? Right now, it's probably worth $250,000, maybe $300,000 tops. I would sell this house and buy you a house. And when I say that out loud two weeks after you got married your mom dies that's very harsh for me to say that yeah it's hard for you to even hear that and think about that but five years from today you having this as a rental property versus you and your new wife having a new home to live in that that's a much better, wiser decision.

And I know I'm asking a lot for you to process a lot of emotions. And you don't have to make this decision today, Dylan. And you don't have to do it because I said do it. Give yourself some time and kind of just, you know, maybe you try the renting thing for a year and I would still pay it off. And maybe you look up in a year and you and your wife are like, man, we want to get settled somewhere. You have a great asset that your mom left you, which is such a gift. And you can use that gift to continue her legacy. I mean,

what a beautiful thing that she has for you guys. So maybe it's not right now, but maybe you look up in six months and think, okay, we can make this decision. But for you and your family now going forward, you and your wife, you can really use this to jump start you guys if this house had no emotion tied to it if it was if she had it as a rental property right you would have sold it already in your mind you wouldn't you wouldn't i'm gonna buy me and my bride a new house you wouldn't be going i'm gonna rent and yeah but this is a rental and let me say this this may not be dylan's case real quick but the idea of having real estate it's a big deal it's a big deal people want a rental property i mean the idea of you don't want to have a rental property two hours away and be renting yourself yeah no i agree but i'm just saying i know dylan i mean i if i can get into a 22 year old's head

what the the kind of content that's out there and what people are saying about about for sure tic tac will tell you you got to have the rental house yeah but it's a very appealing thing the kind of content that's out there and what people are saying about personal finance. For sure, Tic Tac will tell you you've got to have a rental house. Yeah, but it's a very appealing thing to have this, quote unquote, active income, not passive. So I get where you're at, Dylan, but I think what you have to realize is when you set you and your wife up really well, then in 10 years you could get into this if you want. You'll have all the rentals you want. Yeah.

Yeah. And you'll be a millionaire. Yeah. And you'll have a paid for home for you and your new bride. The impact on your marriage is positive. The impact on your health is positive. The impact on your finances is positive. I just, man, I'm sorry.

Sorry you're having to make these decisions. But that's what I would do if I woke up in your shoes, sir. This is The Ramsey Show. You know, it doesn't take a degree in statistics to realize this one stinks. 93% of undergraduate private student loans are co-signed. So when you're delinquent and drowning, mom or papa or uncle Joe is stuck in that financial stress along with you. But there is a way out. YRefi. YRefi offers a custom refinancing option with a fixed rate loan based on your ability to pay. And the average interest rate YRefi offers is 3.9%, which can

significantly reduce your monthly payment and decrease your total cost. Contact Y-Refi at 844-2-RAMSI or go to Y-Refi.com slash Ramsey. That's 844-2-RAMSI or the letter Y, then R-E-F-Y dot com slash Ramsey. Y-Refi is not licensed by the California Department of Financial Protection and Innovation. Y-Refi is not authorized by the New York State Department of Financial Services to service any New York loans. Funding may not be available in all states. Rachel Cruz, Ramsey personality, is my co-host today. Thank you for joining us, America.

I'm Dave Ramsey, your host. Ha! Coming up is Jackson, Michigan. Mike's on the line. Hey, Mike, how are you? Good, Dean. How about you? I know your show. Better than we deserve, sir. How can we help? Quick question for you. I am retired. We are retired, and we have no debt. And we're purchasing a new car, and we could pay cash for the new car.

If we could get a financing deal, and we can invest that same amount of money in cds over that same period of time what's your recommendation pay cash for the car or don't buy it okay yeah okay here's the thing okay how much how much what's your net worth about 2.5 million yeah you didn't get that by playing games like this you know well you got this by saving money and investing money right but you didn't borrow on uh a car and invest the difference no when i was talking about it i know what you're talking about but i mean my point is is you steadily invested over a long period of time to get 2.5 million you did not borrow money and invest borrowed money to become a multi-millionaire did you correct correct and and now you're going back on all your old ways don't do it go stick

with the plan that got you here you're incredible man congratulations hero thank you i wish i would have found you a lot earlier would have made the path a little bit easier but i enjoy your. I don't think it's ever easy, but you scored touchdown in the Super Bowl, as far as I'm concerned, my man. Well done. Thank you. Worked hard to get there. Thank you very much. That's so cool.

You know, it's funny that, Rachel, when you start paying attention to money, and obviously that's one of the things that's required to end up with $2.5 million. I kind of thought he was going to tell me that, by the way. Yeah. Kind of felt it you know he's just like but people just you're they're thinking about money not in a negative way not in a greedy way not i'm obsessed with money but instead of just you know it's like people that drive and pay attention when they're driving and the ones that drive and don't pay attention when they're driving and that the ones that drive and don't pay attention when they're driving. And that's what they do with their money.

They don't pay attention, and the ones that do pay attention, if you just think about it, even though he was getting ready to do a dumb thing, but, I mean, he's a guy that thinks about it. That's why he won. Yeah, that's why he won. And I think this is where people can overthink something and take the math of something and think, okay, well, I can kind of beat the system here, because we hear that all the time right paying off your house or even

debt you know people use debt and want to keep debt around because like well if i invested that amount of money instead of paying it off i would make more and you know i mean like they start to they start to overthink it where i'm always like oh my gosh you have to like untangle it and almost in a sense remember what brought you here? Yes. And what is the emotion that you have when you're not attached to debt? How do you feel? And that behavior part, I feel like some people, you know, jump.

But I appreciated his question because, I mean, I think there are people naturally that are like, I want to do well with money. What's the quickest path from point A to point B? Exactly. You're exactly right. And so sometimes what can happen is you try to fix something with the math and you forget the heart. That's right.

You know, use only your brain and not your heart because your heart measures risk and your head does math. And so if you, you know, ooh, I worked so hard to be debt free. And then all of a sudden you forget and go back into debt on a car. So absurd when you think about it. Right. But at least he's on task and he's thinking about it. He's a person that considers these things and is asking questions.

Yeah. Absolutely. Still curious. Yeah. Still curious. Yep. Two and a half million dollars in things and is asking questions. Yeah, absolutely. Still curious. Yep. Still curious. Yep. $2.5 million in. Well done, sir.

Well done. I'm proud of you. Steven is in Cincinnati, Ohio. Hi, Steven. Welcome to the Ramsey Show. Hey, Dave. How are you? Better than we deserve.

What's up? Good. I had a question for you. I'm well-versed in your program. I'm 52, and I've got three boys. One is a junior in college, or he's going to be a junior. The other one is going to be a freshman in college, and the other one's just going into high school, so he's not far off from college either. My wife and I have made the decision to try to pay their tuitions in full. Good.

And we've got good 529 programs, but they're just not going to cover all of it. So we're trying to make up some ground in a fairly short period of time. And I wanted to see what your thoughts are on basically moving the principal that we've paid into our Roth retirement accounts and moving that over to the 529. It's about $110,000. That would basically kind of get the deal done. And we ran the hypotheticals. I'm still going to have about $2.2 million when it comes to retirement time, which is more than enough for our lifestyle.

So I just wanted to get your thoughts on that. How much money is in your retirement now? About $900,000. Okay. And you don't have any other money? I've got our emergency fund. When you're saying pay in full, Stephen, you mean just like semester by semester, right?

Correct. For all three boys for all four years. What's your household income? $150,000. Okay. Go ahead. Well, I just want to make sure, Stephen, that, yeah, I mean, you guys will pay each semester

when the semester comes. You're not looking. How much is in the 5.9? Let's see. There's about $110,000 in there now. Okay. And what's the total budget for the kids to go to school, the tuitions? They're about, let's see, about $45 a year for each kid. That includes dorm and everything?

Yeah, that's everything. So you weren't talking that's everything so you're you weren't talking about just tuition you're covering everything correct okay and so you got 80 a year right now correct and you got 110 in there so you got a year's worth you don't have enough even if you move the roth um well no so we can get out we'll continue to say for our youngest so we will basically you know fund that difference yeah but you don't have enough even if you move the roth because it's you you're you're burning 80 a year uh for the next two years that's 160 and after that you're burning another 80 on him. No, only two are in college. Only two. I know. Two are in college now. 40 each.

Right? Yeah, that's right. Yeah. 40 each? Yeah. So 80K per year and you got a freshman and you got a junior. So for the next two years, that's 160. You only got 210.

Well, we'll cash flow some of it. So yeah, the math isn't apples to apples. You're not going to get there. We'll cash flow what we need to. You're not going to get there. Yeah, yeah, yeah, yeah, yeah, yeah. I'm trying to think. So, your freshman, when your freshman graduates, will you have another,

will you have two in school ever again, or is the one going to leave about the time the other one comes in? The one leaves as soon as the other one comes in, yeah. Okay. So once you get past those two years, you're at a 40-year burn rate, give or take. Correct. And that doesn't count them getting a job, which they need to do, and applying for scholarships, which they need to do, and applying for scholarships, which they

need to do. Right. I just, it just, I, it just goes against everything I am to start cashing out retirement for college. I'm certainly not going to borrow to do it, so I'd do that before I'd borrow. And by the way, you can't roll a Roth into a 529. You can just cash it out. Correct. Yeah, so it's not, you said I'll put it in a 529. You can just cash it out. Correct. Yeah, so it's not, you said I'll put it in the 529.

You can't. But you can just take it out and spend it. And I wouldn't do that until I'd emptied the 529. I'd let it sit there and grow additional growth before you move it tax-free, right? And so you got, I'm going to try to make it two more years and get the first one out of school and then get down to the 40 burn rate. If you got down to the 40 burn rate with this money, that'll get, no, that just makes it one year. Yeah, it's interesting to me.

It rubs me the wrong way because it's kind of against the principle of borrowing. It's against everything, I believe. I'm going to do everything I can to not do it so so here's what i'm gonna do i'm gonna use the 529 i'm gonna cash flow like a bandit and and i'm gonna put kids to work and i'm gonna go for scholarships and try to not touch this if you do touch it make it the last thing you do and you allow it to sit there and grow until then and And so maybe only in the fourth or fifth year or whatever else. What else can we sell? Do we have any other assets?

Do we have anything we can do? Because this $100,000 is worth millions if you'll leave it alone and not take it out of there. What it's going to cost you and miss is just ridiculous because you're getting tax-free growth on it. I hate to touch it.. I hate to touch it. I really hate to touch it. So it'd be the very last thing I'd do.

This is The Ramsey Show. Rachel Cruz, Ramsey personality, number one bestselling author, is my co-host today in the lobby of Ramsey Solutions on the debt-free stage. Ben and Angela are with us. Hey, guys, how are you? Hello, Dave. Hi. Where do you guys live?

We're from Kennewick, Washington. Whoa, that's a bit of a trip. Yeah, that's the sane side of the state. You know what? Most of Washington is sane. There's a few spots, though, that offset it. Yeah, that's so true. A lot of states have that disease nowadays.

Yes. Welcome. Good to have you guys. How much debt have you paid off? So $436,959. Way to go. How long did that take? About six years, one month.

Love it. Wow. And your range of income during that six years and one month? We started at about $140,000 and took a quick dip for when the Lord blessed me with a job loss and then bumped it all the way up to a little over $300,000. Good for you. What do you all do for a living? I'm a registered nurse.

Of course. And I help people get mortgages that are 15-year fixed rates. Very good. I do mortgages for a living. Very good. fixed rates very good new mortgages for a living very good so i'm gonna guess the high amount 437 in six years maybe you paid off your house we did i love it yeah weird people our kids have told us we're weird for years but now we officially are now now it's been declared on national radio yes oh man a mortgage broker with a paid for house that's so crazy i love it way to

go congratulations y'all yeah how does it feel to have no payments um you know it feels really good uh knowing that's one less stress in our life but uh we still live below our means and we have goals, but we're not certain what we're going to spend money on here forward. We're just kind of like, okay, what's the next goal? But yeah, we are very thankful to where we're at. Six years of focus and now we're like, wow, what do we do with all this? And so we started our next thing fund. We have so many things that we want to do, we couldn't decide. So we just started piling it up in every dollar under our next thing fund. And I'm sure we'll figure it out pretty quick. So I like that.

That's so fun, you guys. So you have kids? We have four. Okay. What are their ages? 27 is Kylie. Jacob is 25. Hannah is 22. And Abby is 17. Okay. So most, and they're 20s. And what do they, what do they think of mom and dad? You know, they've been our greatest supporters through all of this. And I think it was our goal all along to make sure our kids knew what that, that journey was like, and hopefully they became smart with their money as well.

So very good good you guys are great examples thank you good modeling good modeling rachel always says more is caught than taught yeah very good so what starts you guys on this journey six years ago doing this ramsey stuff uh so you know april tax time we sat down and we had our probably our biggest tax bill we'd ever seen and we were sitting chatting and we're like we also made more than we had ever made in our working careers uh and we're like wow how do we make so much money owe so much money to the irs and we felt like we were still living paycheck to paycheck yeah We were one expense away from a disaster. I think that's how we could sum it up.

Wow. Yeah. And how long ago was that? Was that six years? That was six years, one month. Yeah. We,

I had heard of Dave, you know, prior to that. And, and, uh, you know, some of it sounded pretty cool,

but I thought I was smarter. So, you know, I'm a mortgage guy. so, uh, you know, but, you know, we just, we'd had our, you know, I had it moment. So, you know, mortgage guy. So, you know, but, you know, we just, we'd had our,

you know, I had it moment. And we also had a situation. How did you get connected with us after that? I had a coworker actually that had turned me on to you. I read the book and listened to the podcast quite a bit. And we chatted about it, you know, probably four or five years earlier than that. And we kind of did, I don't know what't know what you call it Dave-ish but we did Dave a little bit but once we had that you know I had a moment it was it was all game on it was just you know amazing you guys congratulations he decides we're gonna do this stuff Angela what'd you say you know we talked about it initially I was like I don't know if we're ever going to dig out from this mess. But we started and I think what kept us going in the driving force was

paying off the small debts and seeing them go away. And so it just kept us in that momentum. And we knew at that point that we'd get there. Wasn't easy. A lot of struggles along the way, but we made it. And so we're very thankful for that. Wow. So what was all the other debt? Part of it was the mortgage. I guess a big chunk of it. Yeah. So we had two cars and an RV for 61, six credit cards at 39,000, a big honking $78,000 student loan. That was mine. The IRS debt that we chatted about 401k loan and about 190 for the snowball. And then it took us about three and a half years for that. And then we had about a five or six year plan on the mortgage,

but the last two years have been super good for my business. And so we accelerated. Yeah. And now we're sitting with no mortgage payment and my business is extremely slow. So, um, and, and I would probably be freaking out right about now and thinking about, you know, what the future would, uh, would bring for us, but with no mortgage, you know, I can don't have to worry about it. Yeah. Yeah. We talk about a lot on, uh, Dr. John's alone. He talks about it too, that even when you owe debt psychologically, like your mind knows it's not safe because someone else has control over a part of your life. And there is this deep sense of peace when no one has a say over your life. You know, you truly are being able to control that. Did you guys feel that? I know,

I'm sure with the consumer debt, when when that 190 was gone at the consumer debt. And then did you feel it again with the mortgage when you paid it off? I'd say so. Absolutely. I mean, we had refinanced the house and done so many home equity loans that I swear our mortgage probably contained a pizza from college or something like that. Some shoes from Sears, you know, when they were still around. So, you know, I've been in debt since I was 18 years old.

Wow. When I bought my first stereo in college. Wow. At a little mom and pop store where you had to go in and pay cash for your payment once a month, you know. Yeah. Wow. So it's just...

So it's an ultimate feeling for you to feel like, have you never experienced it? I mean, since you were 18. Yeah. Yeah. Yeah. Wow. You ever go back?

Never. Never. Never. That's obvious. Yeah. Not a chance. Not once you've done what you guys have done. No.

This is impressive. Well done. Thank you so much. Thank you. What do you guys tell people the key to getting out of debt is? We have a saying. It's the three C's. Communication, commitment, and compromise.

And it's really the same as keys to being married for 25 years. We celebrated our anniversary three days after we paid off our mortgage. So that was a killer celebration. But communication, the budget meetings that we had, we'd never done anything like that. And it really just opened up a ton. Commitment, you know, commitment to each other, commitment to the plan, you know, just, you know, committing to it. And there's a whole lot of compromise, you know, when it comes to these different things, either wanting to spend money or not wanting to spend money, different priorities,

especially after we hit maybe step four or five, and six, figuring out how fast to go after that mortgage and still live. This is the perfect time for you guys in the mortgage business because it's tough out there. It is. Absolutely. Perfect timing for you all to be free. Congratulations. Thank you. So well done.

Thank you. Hey, we got a copy of Total Money Makeover for you in the Live and Give bundle. You can give that away and help somebody get started the baby steps millionaires book which is the latest number one and that's the next chapter in your story for sure and of course the financial peace university one-year membership and again you can go through it give it away however you want to do with this stuff it's our gift to you to say thank you for making the trip here and to say congratulations. We're proud of you. Thank you so much. Great job, you guys.

Very well done. Ben and Angela from the state of Washington. They did it. House and everything. $437,000 paid off in six years and one month, making $140,000 to $300,000. Count it down. Let's hear a debt-free scream. Three, two, one.

We're debt-free! Yeah! Ha, ha, ha, ha, ha! I love it, I love it, I love it! So fun! Way to go, guys. This is The Ramsey Show. Rachel Cruz, Ramsey personality is my co-host today.

Open phones at 888-825- 5225. Jake's in Canada. Hi, Jake. How are you? Hey, Dave. Pleasure to talk to you. I never thought I'd be able to actually communicate with you, but it's a blessing. Well, we're honored. How can we help you?

So a little bit of a back story. I got married at a pretty young age. So, you know, life was good. You know, we're doing the five baby steps. We managed to pay off a lot of debt. And then got three to six months of an emergency fund sitting. And so a year and a half ago, we were blessed with a little baby boy. And so now, you know, our marriage started getting really rocky.

We had a hard time and so um now my wife uh she's saying how like she doesn't want to be together anymore she doesn't love me anymore um she's talking to somebody else um like in the middle of the night i'll hear her on the phone with another person and uh i just don't know what to do with that. And she wants to basically live at home still, like in the same house, so that she could raise our son. But it's a very difficult place for me to be in, so I just need some advice on that. I'm sorry.

How old are you? 24. Dude, you don't deserve this no it's uh i mean it's i mean it takes two to break a relationship right i'm not blaming her on it all 100 but it's like i i wanted to make things work we were watching a marriage counselor and everything and for a while there i thought things were going good and then about three weeks ago she said she was done like she was completely done and then like a couple days later she was talking to somebody else already so it's a tough situation and how old's the baby uh he's a year and a half year and and a half. Oh, Jake, I'm so sorry. Yeah, I mean, what do you do?

Well, yeah, I mean, in this case, I mean, if she's like, I mean, in a sense, having an emotional affair and she's, you know, talking to people and all that. I'm like, she's breaking her vows that she made with you and choosing not to walk down a path that you guys can have healing and move past this. And so, so sure, no one's perfect in a marriage, but she's making these decisions consciously to, to go against everything that you guys had in your marriage. And so, yeah, I mean, what they've said earlier, but I'm like, at that point, like she doesn't get a lot of votes right now in your life, in my opinion. Yeah. Okay, so let me back up and just address your initial question, okay? If you guys can work this out and be married and with a marriage counselor, walk through this patch,

and she can set the phone down and devote her life to you, you can set your issues down and devote your life to her, that's great, and I hope that's what can happen. If she actually wants a divorce, you can't stop her. It's her. You can't make other people do things. I can't make my wife do anything. Believe me. We've been married 40 years.

I can't make her do anything. Exactly. And she really can't make me do anything either, in all fairness. Okay. We all make decisions as individual adults. Okay. So you can't make people do what you want to do. But what you can decide is what's right for you based on the decisions they're making.

And you know when you say out loud, we're going to get a divorce and live in the same house and be roommates, that that's just strange, weird, and dumb. You know when you say that out loud that it is all of those things, right? Yeah, yeah, exactly. It's heartbreaking. Not not even a possibility okay if we're going to go through a divorce that means we're not going to be married and we're going to have separate lives no we're not living in the same house that's asinine right so she doesn't want to leave jake is that like he said she wants to stay in the house she wants to be in the house with him. She wants to be in the house with you, or she just wants the house?

No, she wants to, because she doesn't have a degree in anything. And for her right now, like the way the market is right now, even renting a home would be super hard for her. So she basically wants to just live there. She does not want to go back to work because she wants to raise our son, which it would be better for him i agree no it wouldn't no no it wouldn't he does not need to be raised by divorced parents living in the same house together that's so freaking weird it's psychologically damaging

to your son no yeah no that's not better for your son. This poor girl, she's so screwed up. I don't want to work and earn money, but I don't want to be married. Well, darling, you get to choose one or the other. That's not the way this is going to work out. So, yeah, I think if we're gonna get a divorce that she's gonna have to go get an apartment you guys are gonna sell the house and you're gonna go get an apartment okay no you're not gonna live together i mean yeah does that does that make i mean that you knew that right yeah i did and i just i just like i didn't want to be the guy to

just like decide something you know and for or to not work out in the end. So that's why I think. Well, if you guys staying in the same house involves healing your marriage, I'm all for it. Yeah. But not work out in the, there is nothing where you divorce and live in the same house together that works out in the end. You're a highly unattractive single guy at this point. Yeah. That you live in a house with your ex because it says it has a big arrow above your head that says stupid okay oh my gosh no really

that would not you don't want to do this you don't want to do this no i know you don't know but oh no no no no and and he seems like such a kind person. He's a sweet guy. He's a sweet guy. So to have the conversation with her, Jake, is that she's doing this. Like, that's my thing. You're not the one putting her out on the street and not letting her be home with her child. She's making decisions about her life that is now choosing to isolate herself because she's chosen to go against her vows to her husband.

So, like, yeah. And you're probably not perfect. I'm not saying that. Because she's chosen to go against her vows to her husband. So like, yeah. And yeah. And you're probably not perfect. I'm not saying that. But like, man, it is. You reap what you sow. And there's a level of consequences that she has to face because she's making big girl decisions. And now she's about to get some big girl results.

And she's got to deal with that. Like, that's it's unfair to you to be the brunt of all of it. And she calls me mean. That was very kind. that was very kind that was very kind but man it's just unfair to you jake like i feel for you where i'm like you don't because you're a kind person even the way you're asking the question you're so nice i'm not sure there's a level we're pretty sure you're not perfect but you are a nice guy and you don't deserve this so no we're going to set up a normal process that says you have a future

away from her if she doesn't want to be with you. She has a future away from you because she doesn't want to be with you. We can't. And then you can move on with your life and she can move on with her life. And we've got this connection with this one and a half year old. And this is all the caveat that for some reason, if there's an issue that she's running from the marriage to all these other relationships that you guys in counseling and therapy can work through and build a stronger marriage. That's our number one.

Right. Number one is that you guys can heal this over time. But divorced and living in the same house is not on the agenda. Yes. Okay. It's not on the agenda. We're just taking that off the table. Just not.

Let's just be real clear. If we hadn't already been. The way you can look at some of these things sometimes when you're in a fog on the decision-making, folks, whether it's something deeply relational like that where your brain just shuts down because the stress level is so high and you really can't see clear. The way you can get clarity when you're overwhelmed with that kind of stuff is just project it out 10 years. Okay, 10 years after moving in with your ex and living in the same house, how's that working out for you? It's not.

And he probably knows that, but following through with that decision means confrontation with her, making her move or he's moving. And like, do you know what I'm saying? Like following through with the repercussions of that decision is messy. And so entering into that probably sounds exhausting for you, Jake. Not his decision, though. It's hers. I mean, she made a mistake. Yeah, yes, yes.

That's what we're fighting for. But his decision of not living in the house with her once they're divorced, which is the right decision, by the way. Instantaneous, yeah. It didn't take you 30 seconds to make that one. Not three seconds to make that one. Not, three seconds to make that one. Sorry you're going through this, young man. I hope it works

out. Doesn't sound like it's going to. That puts us out of the Ramsey Show in the books. Live from the headquarters of Ramsey Solutions, it's the Ramsey Show where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. We help folks build wealth, do work that they love,

and create actual amazing relationships. Rachel Cruz, Ramsey personality, number one best-selling author, and my daughter is my co-host today. Open phones at 888- my co-host today. Open phones at 888-825-5225. That's 888-825-5225. Jeff starts off this hour in Indianapolis. Hi, Jeff. How are you? I'm doing great. Thanks for taking my call today. Sure. What's up? So my wife and I are on baby steps four, five, and six. We have three kids, a senior in high school, a sophomore, and an eighth grader. And we have a pretty good

retirement built up. And we have about $130,000 left on our mortgage. And we were just wondering, you know, what kind of is our next step? You know, how do we split? Do we split our money or do we kind of focus it in one of those three areas over the next six years? College is coming at you like a freight train, huh? Yes, sir. What do you have saved for that, Jeff? So we have about 10 for each kid and probably 20 for our oldest. We think that her college will probably be between 5 and 10 with her guaranteed scholarships to an in-state school. So we could essentially finance that pretty easily.

What's your household income? It's usually around $120,000 this year. It'll probably be up to $160,000. Way to go. Good. Okay. Well, it sounds like you're making good college choices in terms of choosing one that's affordable. That's very wise. I mean, if I woke up in your your shoes the college would be my first concern but it doesn't necessarily mean that that it has to get all the

math i just want to make sure that that box is checked and i've got a way to do it before i move on to something in other words i wouldn't pay extra on the house till i knew i had the kids covered. Okay. That's why it's five instead of six. Yeah, what about throwing more into retirement because the market's on sale? That'd be tempting, but before I did that, I'd want to take care of my kids' college. Fifteen percent of your income going into retirement, and then let's, I would, that's why it's four, and then five is kids' college. And, you know, now if you, if you have said, okay, we make 160 and we can cashflow this, if we do this, this, and this, then a, B,

and C, then go do a, B and C and cashflow it. And that's the kid getting scholarships, college choice, kids going to work while they're in school. None of those are bad things. It's not child abuse. Um, so, but, but I want to know that we have a way mathematically figured out. And it's not child abuse um so but but i want to know that we have a way mathematically figured out and it's not just we hope we can do it we've actually calculated it out projected the budget out and said this is how the math is going to flow for each of the three kids to get through school once you've got that then i would move and start paying off my house yeah then the wiggle room starts to happen once you have mapped it out and i think that that's a powerful thing too Jeff of what he just said though when you put facts on paper like when you and your wife sit down and you guys just plan out

hey in the next five years here's what 22 23 24 25 look like and project out whether it's income but the big chunks and you start to see it then then that kind of gives you more breathing room to be like okay we'll put we'll set that track going and then we're going to take this money over here and we feel good about throwing that extra on the house because we know that that's taken care of but it just gives you kind of that peace of mind and answers the question because you guys may look down and be like oh gosh like you know because of the kids college maybe we pause on paying off the house early yeah you may not be able to pay extra you may not be able to pay extra especially when like like how old's the youngest one uh he's an eighth grader okay so you're you're gonna have two in max at the same time

but you're gonna have several years of two people on the payroll absolutely yeah so you can you can map that cash flow out over the next eight years right and so um you know that that's you like just exactly like rachel's saying there and you can just put the bit it won't take an hour i mean you do you sit down and do it turn tv off and just lay it out on a yellow pad it's not hard but you you're good but in that you're going to make assumptions about where they're going to school and so you can go and start communicating to all three of them, this is where you're going to school. Yeah. Which is exactly what we did.

The boundary conversation. Yeah, that's what we did. Or if you want to go somewhere else, you've got to pay the difference, which was a conversation we had. So the other option is do we try to hammer down on the mortgage and get it paid off in three years and then you'll have kids in school you got a senior right correct but again i think her her cost is going to be around five thousand a year yeah which we have covered okay we have four years of her school covered check number one

box check one box check two box check three and then you can play with the variable of jumping in and knocking off the house and that increases your cash flow which enables you to pay be more able to pay to cash flow college that makes me more nervous though than just having it covered and then reaching over and paying off the house you're going to get to all three you're going to be wealthy you're going to have a paid for house and you're going to get all three paid for but you just need to have a game plan laid out to do it and you decide you you called asking what the priorities are maybe the case like i don't know yeah you may look and be like okay daughter's taken care of 20 000 that's all she. So before the next one gets to college.

Junior is brilliant, and he's going to go to in-state school and have that. He only needs that. Okay, that's covered. We can do that. I mean, yeah, you can kind of map it out. And you may be able to pay off the house in three years. If you want to do that. But I wouldn't put the kid – make sure that you're not rocking over the edge of the cliff on the kid's college.

Because if I'm choosing between paying off my house two years earlier versus paying cash for the kids' college, there's no choice here. You pay off the kids' college first before you pay off the house two years early. You're going to get it paid off. It's just a matter of when. So it's okay, but just make sure you've got that math laid out. I mean, if you told me you had $200,000 in the bank right now and you're just going to write a check and pay off the house,

I'd say, okay, go ahead and do it. Because we know we can get to the college, right? That's the thing. But you don't, and that's not where you are. So map it out, map it out, map it out. All you've got to do is be intentional here. You're going to make good choices. I can tell from talking to you for 10 minutes you're going to figure it out.

It's just a math riddle of sorts, and it's not a complicated one. It's just flow. It's the, you know, here's September, here's October. I mean, here's September, here's January. You know, here's April, three tuition payments or two tuition payments or whatever they are every year, and here's dorm or not dorm, and here's the school cost today today and here's how much we've got and here's what the state scholarships are and and you just map all that in there and it's

there's about six variables and you can pull it together it's not going to be rocket science it's really not it's not it doesn't even require a spreadsheet you can do it with you know the calculator on your phone and your yellow pad uh if you want to so it's not that hard but the good news you're the secret sauce for figuring this out, not some formula or adherence to the baby steps or something like that.

You are the sauce and you've got what it takes to do this. You're going to do it. I'm proud of you. Very, very well done. That's a good call, Rachel. That's a good dad.

Jeff, you're a good dad. He is a good dad. Your kids better say, thanks, dad. Yeah. They're going to look back later and say it. They may not like where he lets them go to school, but oh, well, life goes on. This is The Ramsey Show.

Rachel Cruz, Ramsey Personality, is my co-host today. Open phones at 888-825-5225. You jump in, we'll talk about your life and your money. Thank you for joining us. Joanna is with us in Montana. Hi, Joanna. Welcome to The Ramsey Show. Hi.

Nice to be here. Good to have you. How can we help? Yeah, so I want to build a home on my on my land but i'm wondering if going with the construction loan is a good idea especially since i have no credit because we're debt free okay what's your income yeah it's around 90k and that's my husband. I work at home. What's he do? Software. He's a full stack developer. Okay, great. Do you guys have any money saved, Joanna? So we have three months worth of money saved. We had a rough year last year, so it kind of depleted.

We had six months, and then now we just brought it back up to three after having a rough year. What's a rough year? What happened? He lost his job for a year, for a whole year, which was kind of really unexpected. Does he do contract work? No. no. He has a regular work as a salary. Does he work from home?

He didn't at the time, but now he does. Okay. And where are you all living now? Are you living on the land or what? No, we found a temporary place. So we bought a mobile house, gutted, because renting, it was hard to find rent, and renting was expensive. And so my husband fixed up the whole thing while he wasn't working. And so now that's the reason why we're debt-free, because now we're living in a three-bedroom, two-bath mobile house.

Is that on your farm? Yeah, we're just renting the lot. Nope, we're renting the lot. Okay. And unfortunately, we weren't able to move it to our land. Okay, what are you going to spend on the house you're building? We were thinking around $300,000, and we're thinking about $ 1,500 square feet.

Not a huge house. Mm-hmm. Okay. All right. But, yeah, with materials, everyone's telling us that it'll be more expensive. Okay. In order to get a construction loan, you would need a blueprint that has been appraised by an appraiser. The bank that you're getting the construction loan, mortgage company you're getting construction

loan can help you with that. And you will have to have a contractor building the property, building the house. Okay. They don't loan money to people who just think they might want to build a house and have never done it before. Okay. So a licensed contractor, a blueprint, an appraisal, very detailed financial package. And then you would qualify at your local credit union or bank for a construction loan, even

if you don't have a credit score. If you've got a steady job, you've got this piece of property that's paid for, what's the property worth? More than $100,000. Yeah. score if you've got a steady job you've got this piece of property that's paid for what's the property worth um more than 100k yeah okay so you got effectively a 25 down payment in other words you'd have a 400 000 deal if you put a 300 000 house on a 100 000 piece of ground right yeah and that'd be a 25 equity position from day one so they'll take a lien against your farm and then they will dole out the money to the contractor on a schedule construction draw schedule based on completion points as the house goes up when the house is completed you would get a permanent regular mortgage that pays off the construction loan.

That's called the takeout loan. And you will need to rearrange. Again, the mortgage company or the bank that will help you with this will probably help you get your permanent loan as well because you have to have what's called a takeout letter. How are you going to take out this construction loan? And you're going to take it out with a new permanent regular mortgage all of that lines up as dominoes and you can build now

how long is it going to take you to save 300 000 if you don't quite a few years yeah i mean if you save 50 a year out of 90 it's going to take you six years yeah it's true so that's that's the numbers are running through my head now if you take that out and you get out of permanent construction loan and then you viciously attack that permanent mortgage after you move in and you pay it off in five or six years that'd be wonderful wouldn't it yeah it would as long as he's making 90 or more and if he's in tech world he should be able to continue to do that yeah rachel went through building a house it wasn't using a construction loan a while back but it is a detailed process it's not something you just walk into and go i want to put a house over there yeah no there's there's a work yeah you'll have a part-time job

in the process but it's fun. But it's great, yeah, and I think it's exciting for you guys. And with the numbers and everything, you guys have worked hard to be debt-free and to be in the position you are. And so, yeah, making the step forward I think is great. Okay. So does that mean you guys think it's a good time to build right now? Not now, but you're not ready now.

You don't have a blueprint. You don't have a contractor. You don't have an appraisal. You don't have any of this lined up. I mean, you're going to break ground next spring. Maybe in the fall, but I would probably wait until spring and let some of these lumber prices and other things continue to calm down. Lumber's back down, but some of the other stuff's not.

Labor, there's a serious shortage on still in most areas. Okay. Okay? Yeah, I mean, but you've got a lot of work to do to get ready to break ground in the spring. Yeah. Well, how do you know what order to do all these things? I did call a contractor.

Then they can help you start walking through that. Get in touch with Churchill Mortgage and see if they can do a loan there in Montana. If they can't, find your local credit union. Talk to them about a construction loan and a permanent mortgage. They'll help you get the appraisal. Contractor can help you get the blueprint. But you're going to have to have all of that. You can't just say, I think $1,500 and I think that's $3,000.

That's what I heard it costs. That doesn't work for getting a loan. They're not going to loan that person money that does that. You've got to have like airtight business case for this whole process, whether you've got a credit score or not. You've got to do all of that. And the land helps her in that case because she owns it. But for a lot of people.

And 100% debt-free helps her. Yes. Yeah she owns it but for a lot of people and 100 debt-free helps her yes yeah yeah absolutely but a lot of people that want to build don't have lands right to build on you have to roll the land into the deal yeah and then that becomes harder now you're talking about a down payment issue right when you do all that and that rolls in as well so um that is a question i've been getting quite a well at least on social media okay on instagram is yeah for the new new construction home buying is it a smart time to build a house that's there's a lot of people asking that i'm probably going to build one next spring but i'm not you are yeah but not today yeah i was I was going to ask you where. I won't ask you on the air.

Well, I haven't figured that part out yet. I didn't know. But, well, I mean, you know, we moved out of the big house. Yeah. And we're living in a nice home, but we had planned to build when we moved. Yeah, I knew that. But in the middle of all this craziness, we're not going to. I thought y'all were going to take like three years just to like do nothing.

Of course you're not. I'm just going to announce it to you right here on the air so there you go but the um anyway that's exciting good good for you the point is lumber has stabilized i think labor will smooth out by spring it's still there's still a labor shortage in general on construction so construction's a little bit wacky wonky still and i think it's going to be for a little while longer uh but i think most of the supply chain crap will be behind us and that stuff. And I think we'll have a more normalized environment. And I kind of think the economy is going to be a little slower. And so builders are not going to be quite so snooty about like they're doing you a freaking

favor or something, you know, which is the way they act right now or particularly acted six months ago. Because they can. Yeah. Because they can. Like six months ago, they're doing you a favor or something. And I don't need them doing me a favor. I need them building a house. Oh, we know that, Dave. Because they can. Yeah. Because they can. Like six months ago. They're doing you a favor or something. And I don't need them doing me a favor.

I need them building a house. Oh, we know that, Dave. We know that. Oh, my goodness. This is The Ramsey Show. Rachel Cruz, Ramsey personality, number one bestselling author.

My daughter is my co-host today in the lobby of Ramsey Solutions on the debt-free stage. Amber's with us. Hi, Amber. How are you? Hi. Great to be here. Thank you, guys. Good to have you.

Where do you live? Indianapolis, Indiana. Welcome to Nashville. And how much debt have you paid off? $37,193.59. Phenomenal. How long did this take? 22 months. Good for you. $37,193.59. Phenomenal. How long did this take?

22 months. Good for you. And your range of income during that two years? So started out net 52 and ended at 67. Cool. What do you do for a living? I got promoted and I'm currently a financial analyst manager now. Well, congratulations.

Very cool. But these numbers, you were killing it. I mean, you financial analyst manager now. Well, congratulations. Very cool. But these numbers, you were killing it. I mean, you were living on nothing, nothing, nothing, nothing. What was the $37,000? All student loan. Oh, got rid of old Sally Mae. Yep, kicked her out of the house. Love it.

Yep, she'd been a pet, unfortunately. I started about 12 years ago. I had car debt instant loan debt and uh i i was davis for a while i um went out to eat and sorry my headphone sorry um and uh just didn't i didn't have the hope it just felt like a mountain of debt sorry i'm like you're doing good it's all good okay I'm sorry what is what got you started then 22 months ago what jacked you up um so I finally just it kicked it in gear when um I got accountability for my daughter sorry I am like

yeah it's falling off this back of her head just move it up yeah there you go all right good job good job okay sorry perfect no you're great okay so and um my biggest thing was making my daughter like being accountable to my daughter and I went finally because I had a debt thermometer I kept staring at for like months that like I really wanted to get started but I finally made up that change because I'd seen a bunch of debt-free screams and they did the chains and I was like you know what let me get her involved and as soon as like I we made the chains together the links together and I was looking in those big blue eyes I couldn't let her down so she's pretty tiny for all that big accountability how old is she she's four four okay so a four-year-old whips you into shape. Yep, yep. I didn't want her to ever know what college loans felt like,

the weight of those student loans ever. So it just got really, really old, didn't it? Yeah. I got tired. Amazing. Well, you did incredible. So what did you do to get out of debt? What was your process then?

So trying to think here, what was my process? Just, I mean, just the normal things getting at like uh getting a budget staying on a budget prioritizing because there's so many that's why i want to talk to single moms about there's a million distractions flexing your no muscle and then making that budget and knowing that there's hope like Like you really do have hope. Like it might be a mountain of debt. It really can be, but there's still hope. And you don't, I, my personal story is I want to spend time with Meadow. And so I didn't do a lot of side hustles, but I worked really hard on my career. And I really tapped into Ken Coleman with making my purpose and really working on my career

and just showing excellence in my workplace so that I could add value. And I actually called in to the show asking if I should ask for a raise. Yeah. And you kind of kicked me in the butt, which is great. And so I was... I say yes, of course. Yeah. Yeah. And you were like, well, how are you adding value? Because like, yes, you're getting responsibility, but how are you really adding value? Put yourself in the position of your boss. And that really clicked for me.

I was like, okay, what's my growth plan forward? How can I add value? And my boss is an amazing leader. And I didn't use exactly all that, but I really kind of took some of those principles and added like, okay, how can I grow in this? And how can I add value to where I'm currently at which I've been there for eight years so so how'd you get plugged into doing the Ramsey way of money um I think I had a friend back in college in grad school um that was into it and I just kind of got connected

started listening on YouTube that was what really like clicked for me when i started hearing the debt-free screams john and maddie hearing their story john and maddie's story yeah oh wow okay yeah yeah yep so back then it's been a little bit ago but yeah that i finally got like really serious uh 22 months ago and if i heard the rumor right you ended up in their financial peace class uh close to yes there i'm in indiana and uh so we've been friends like over like virtually oh okay just a virtual connection but it wasn't a class yeah okay all right cool yeah they've been super coordinators obviously all over the of course have uh led people mentor people all over the world so i didn't know exactly how it

happened good very good good for you guys so for me, being the single mom that you are, that's a hard journey in general. And then on top of that, doing a sacrificial work with your money to get out of debt. So talk to all the single moms out there because I know you guys have so much responsibility. And I know you're already exhausted. I can't even imagine. And so what encouragement do you have for single moms out there that you did this? You got yourself out of debt. I mean, it's so impressive. Yeah. I just thank you, Rachel. It's hard, but I wanted to talk to those single moms because I came out of an abusive marriage.

And it was really hard, but I had to work on myself. And when I did that, one thing is I lost about 70 to 80 pounds. Wow. We're at exercise and then getting financially fit too. Wow. And the biggest thing for me was hope. Just hope that you can, you believe in yourself, you work your butt off,

but you believe in yourself that you really in God, obviously he's going to produce and give you favor, but really believe that you can make that income to make it happen, that you can make those sacrifices. And those sacrifices are so worth it. That's so worth it. So, yeah. Yeah.

You are amazing. I mean, 70, 80 pounds and $37,000 in 22 months making 52 to 67. That's living on nothing. I mean, when you set your mind to something, there ain't no stopping you, girl. This is pretty impressive. Yeah. Very impressive. I'm proud of you.

Yep. Very, very good stuff. Yep. I've really just all the vision casting that you and Rachel and Ken and everybody on the personality team has really, and John Deloney have really helped me give that, that juice that I needed to keep making those decisions. I'd hear you guys in my head saying, you know, just pushing me on. I remember a pivotal moment. I was driving back. I was commuting in my car an hour away, and it was one of your leadership, and you were talking about be the thoroughbred among the donkeys and just having that spirit of excellence,

and that's actually what promoted me, like, like 27 000 to like 50 at the time and just hearing that it just really set a fire so every time i just use the youtube and books to really fire me up and and really just make progress wow she's incredible amber for years you're killing it you're killing it though good Hey, we've got the Live and Give bundle for you, the Total Money Makeover book, the Baby Steps Millionaire's book, and a one-year membership to Financial Peace University to use or to give away. So let's bring Meadow up and introduce her to the world. She's four years old, you said, right?

Yes. Are you four years old? Yeah. And has she been practicing her debt-free screen? Have you been practicing? Ready to go. All right. Good good stuff she's beautiful thank you well done very well done all right it's amber and meadow from indianapolis 37 000 paid off in 22 months making 52 to 67. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free!

Woo! Woo! The amount of emotional and spiritual transformation to come out of an abusive situation to go through that much transformation. Amazing. Absolutely amazing. She can, I mean, the confidence, the confidence that she has. Woo! Love it.

It's amazing. Man, this is the Ramsey Show. confidence that she has. Woo! Love it! It's amazing. Man! This is the Ramsey Show. Our Scripture of the Day, Deuteronomy 28, 12. The Lord will open to you His good treasure, the heavens, to give the rain to your land

in its season, and to bless all the work of your hand. You shall lend to many nations, but you shall not borrow. That's the blessings on the house of Israel, on the people of Israel. The promise when they go into the promised land. The curse is you borrow. The blessing is you are having rain on your land in its season jim henson said the only way the magic works is by hard work but hard work can be fun father father of the muppets yes i didn't know that all right step. Stephanie is up. Stephanie is in Minneapolis.

Hi, Stephanie. How are you? Hi, I'm doing great. Thanks so much for taking my call. Sure. What's up? So a little bit of context. My husband and I are three years into marriage.

We did a Ramsey-ish thing for the past two years, but we have gotten really gazelle intense on baby step two. And we are looking to be out of debt within the next eight or so months. Congratulations. Thanks. So as we're doing this, of course, Murphy comes around. And what we're facing right now is that my husband's mom is looking at about $50,000 in dental work that needs to be done. All of her teeth have to be extracted. She needs dentures or implants or something like that. And she is looking to us for help.

So she called and asked my husband to fill out a loan application while she was at the dentist. And he was like, I can't do this right now. I'll call you back later. So, of course, we talked and learned more that she's hoping that maybe we would, if we aren't willing to do that, we take out a home equity line of credit or maybe sell the house. So as a little bit of background, my husband purchased this home for his mom a few years back before we got married. But by purchase, I mean, she paid the down payment and she has been giving him money to pay the mortgage, but he had the credit score. He had just graduated from college. And so they use his credit score, his name for first time home buyer. And this debt has been weighing on him because if anything happens to her at any moment, then we are now responsible for that house as well.

You live in that house? We do not live in that house. Okay, where is that house? That house is in Connecticut. Oh, that's her house? Yes. Okay, so she's going to sell her house? No, it's technically in his name.

Oh, so he could sell the house that she lives in and get rid of the debt, and she would have the money for her dental out of the house that is hers. It's morally hers, but it's in his name. Right. So then we don't understand fully the tax implications of selling the house and then giving her that money. How much money is it? The dental work would be...

No, no, how much is the house worth? Oh, the house is worth about $350,000, $360,000. Okay, what did they pay for it? $235,000. $360,000 and $235, 235 was that the two numbers yes and how long have they had it uh probably about six years now okay all right and he's not been depreciating it as a rental property on his taxes has he nope okay good and um okay there may be a little bit of tax involved but it won't be a ton okay it'll be 15 of the gain the gain would be 360 minus the selling expenses which will probably

be 30 000 so about 330 so you might have $100,000 in gain and it might be $15,000 in taxes. So I would sell the house and pay the taxes and give her the money. Okay. And is there a gift tax on giving her that money? Yeah. You're going to have to manipulate this because this was a dumb, bad deal. It's going to take a little bit of work to get out of it. But no, we're not borrowing money. If she wants to sell her house, by the way, she needs to get a second and third opinion. I've been doing financial coaching a long time. I have never yet heard of a $50,000 dental operation. Not once, unless there was some kind of car accident.

Well, if they're taking all of her teeth out, you're going to put in veneers or something. I don't care. I really want to get a second and maybe a third opinion. Okay. Okay, on this. In other words, if you're going to do a $50,000 remodel, you get three bids. The same thing here, okay, because I'm suspect. Okay.

So, yeah, I think if mom wants to sell the house that's hers, we've got to figure out what the tax implications are, and that money has to be held back, and the rest of the money she can have and use for her dental. Okay. But, no, I'm not going to borrow money, no. And she doesn't, and don't put a HELOC on the house, obviously. No, not in your name.

You already got enough debt in your name. Yeah. Exactly. Yeah, so she's now a renter with good teeth. Okay. Gotcha. Thank you so teeth. Okay, gotcha. Thank you so much. Oh man, I'm sorry. What a mess.

Let me tell you though, this is a really clean break to something that's going to get worse year by year. This is going to go sideways at some point because this lady doesn't handle money well and he's propped her up with this purchase and it's going to go sideways someday so this is the this is a good time for it to go sideways and get it cleaned up and get all get his name off of all of her debt the debt that's associated with her okay so the best thing is to sell this house let her take the money and just keep whatever that this house meaning the one she lives in that's in your husband's name.

Right. Yeah. But get tax. You've got two types of taxes you have to consider. Like you said, gift tax. Is there a way to work around that? And then you also have to consider the capital gains tax on it. Capital gains tax is probably going to be around $10,000 or $15,000 on this,

based on what you told me. Something like that. And you can probably move around some stuff on the gift tax and not have any, but you probably need to do a couple of gyrations. It's ridiculous if you get into it. But what is the thing this year? I can't even remember. Let me get my cheat sheet out.

It's fine. $16,022 okay so it's probably up a little bit from that so it's probably 20,000 so you know that that much of it's not going to be taxable but the rest of it they're going to do something with yeah um and i don't know you're gonna you need tax advice and you need a realtor. But I think this whole story is going to change when you tell mom the house is sold. Because right now, all she's going to do is borrow, and now she's got to move. So I think this is going to change. I bet you the whole thing blows up. But I'm trying to stir up trouble, because trouble needs to be stirred up here, because it's going to come sooner or later.

And we might as well go ahead and get it out of the way because um yeah you don't have a money problem stephanie you got a mother-in-law problem and i'm trying to help you with that so get get her and that's what's hard about good clear boundaries yep and in that situation like she said he graduated college had a good credit score mom needs a house i'll take it out in my name right all the your husband this stuff this stuff happens your husband didn't tell his mother no when he should have but he wouldn't know too though that's what i'm saying is a lot of this stuff though this is where it is it's it's the good intention yeah it makes sense mom can't get the house but i can put it in my name she can pay me like it all sounds good until you're married. True.

And also it's, that's why you have to be careful with money and the good intention with family members and friends. So don't put your name on other people's debt ever. And if you're going to loan, if you want to, if someone's asking for a loan, you either give it or say no,

but this whole like attach your name to my stuff and my money thing that it just gets weird. It gets weird it gets weird so remember clean everything needs to be clean i guess i'm gonna get hate mail from dentists but that's okay i'm trying to get i'm trying to get trying to get more of them i think dental stuff is expensive though well yeah and sometimes and yeah check it get a bid yes get another opinion it's not a bid it's a we're not getting're not doing drywall, but don't get a bid. But yeah, get several opinions and estimates.

And is there other ways to solve this issue? Fix the problem. Yep. Because this sounds like a complete reconstruction. That's what she said. Like a car wreck or something. Yes. Like, oh man, nasty. Extracting everything and a whole new set of teeth.

Young, young, young, young people. You 18-year-olds, 17-year-olds, 22-year-olds. Parents come to you asking you to do stuff like this. Don't. I love you, Mom. No. I love you, Mom. No.

And by the way, no is a complete freaking sentence. There you go. I love you, Dad. No. It's sometimes the dads. Well, this was Mom. I know, I know. Come on. That puts this hour of the Ramsey Show in the books. We'll be back. I love you, dad. Sometimes the dads. Well, this was mom. I know, I know. Come on.

That puts this hour of The Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. Hey, it's Rachel Cruz, co-host on The Ramsey Show. If you want to do your debt-free scream live on the show, visit RamseySolutions.com slash debt-free scream. We'd love for you to come to Nashville and tell Dave your story. That's RamseySolutions.com slash debt-free scream.

Hey, folks, Dave here. You want to hear even more life-changing content from Ramsey? Download the Ramsey Network app so you can catch all your favorite shows all in one place, like the Ramsey Show, Smart Money Happy Hour, and the Dr. John Deloney Show. You'll get real talk about life, relationships, money, and your career. Plus, the app lets you browse by topic like debt, business, or selling your home. Get the content you want whenever and wherever you want to listen. Download the Ramsey Network app today.