The Ramsey Show - When Life Gets Hard, Choose Financial Stability

Episode Date: April 16, 2026

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Brought to you by the Every Dollar app. Start budgeting for free today. Normal is broke and common sense is weird. So we're here to help you transform your life from the Ramsey Network in the Fairwinds Credit Union Studio. This is the Ramsey Show. And I'm Rachel Cruz hosting this hour with my good friend and co-hosts the Smart Money Happy Hour, George Camel. And we are answering your question. So give us a call at AAA 8255-225.

All right, starting us off is Ann in Bend, Oregon. Hi, Ann. Hi, I'm calling because, so I've been very blessed with my family and how much they support me. And so my dad and I have been building this house, bid by bit, and we're hoping to have it finished by fall. But to do this, my parents have a heelock on our house where we've been using it to kind of cash full of the belt. and so I'm at this point where, you know, I went through the baby steps. I started $1,000, paid off the debts that I had, closed my card of cards,

have a $23,000 six-month emergency fund. Oh, good for you. So now I'm sitting at this point where as we're getting closer to finishing the bill, my mom and I are trying to decide what is a better option. I've been paying on the key lock as like as if I have a mortgage, right? but we're deciding if we should be refitif I should refinance it and just have a mortgage. That way, they don't have a key lock and they can, you know, and they're good on their play. They're on their play, right?

Right. But refinancing means that I'm adding the cost of insurance. I'm adding clothing costs and all these other costs. And so we're trying to decide, is it worth it if to do that at a benefit to save like half a percent on the fixed rate versus the current adjustable rate that's on the HELOC right now. Well, it's a great question. So how much would, how much did they take out in the HELOC that would become the mortgage for you? It's sitting at 100, like about 130, $140,000 right now.

Okay. And that'll be the total mortgage for you, right? There's nothing else. Or is there another loan that you would? The total is going to be about $155. We're finishing building an apartment, and so there's some stuff that I still have to buy to finish, you know, walls and stuff like that. And question, do your parents, are they going to own this home, or is this going to be yours? No, it's under my name already.

Okay, so they're just helping pay. Okay. Well, I know what I would do, Ann, if I was in your case, George, I'd be curious if we're on the same team or not, but I would move it to a mortgage. First and foremost, for me, it's the relational aspect. I wouldn't want any level of risk from my parents from a financial. aspect, considering its equity and their permanent, you know, their residents. And so separating it out. And I would push to say if you can't afford the closing costs and all associated with getting a mortgage, then that makes me nervous to be like, okay, can you even afford this house, right? Is this too much? But you have a great emergency fund that you can maybe pull some from to kind of cash flow it. But I would do it out of, out of more the relational aspect of keeping this separate and that, yeah, this is yours. This isn't theirs anymore.

What would you say, George? Okay. This is a gift that is wrapped in a liability. So it just feels icky. Like, I want to get out of it as soon as possible. So what was the balance on the HELOC remaining? Currently, it's 140, but I can't refinance until I have final occupancy. Yes, right, right.

Yeah. We're looking at a couple of months. But have you actually looked into the math to see if you can afford this mortgage on your own? Yes, I can. Once to refinance? Okay. What is your take-com pay every month? Take home is $3,000, but I have a partner who has an additional $2,500.

And are they going to be paying into this as well, the mortgage? Yeah, we're going to be getting married. Okay, okay, perfect. Yeah, so together, it's, so what, it'll end up being, what, probably $1,200 a month? Do you know what the payment will be? I'm thinking it's going to be in the payment being probably about that somewhere between $1,000. $1,12,000. Okay.

Finally right now with the key lock, I'm paying $860. Okay. But it has the adjustable rate attached to it, too. Yeah. Yes. Yeah. I would contact our friends at Churchill Mortgage, Ann, and they can walk you through all the scenarios, the numbers, the refinance, and walk you through.

There might be a third option we're not even thinking of that they can help you with, but I would just get out of this weird relational quagmire first and foremost before any of the math comes into play, whether it's a half percent or I'm going to pay close, closing costs. This is sort of the cost of salvaging this relationship before anything happens. You're sort of getting ahead of it because it is putting them at risk. Yeah, and there's something so true about, you know, when scripture says the borrower, a slave to the lender, there's something about when you owe money to someone and you're, you know, having Thanksgiving dinner together. Like, it just, there's just this money piece in the middle of it that is

there. You go on a honeymoon after you get married and they go, wow, look at that nice vacation. they took while they owe us $140,000. That they could have put toward the keylock. Yeah. And even if it's all goodwill, there's still a, there's a new label on your parents. Like, whether you like it or not, that they are your bank, you know? And so there's just, there's the separation of that. Like, let them just be your parents.

Don't rope them in with all this. So, I mean, it's very generous of them, you know, I probably wouldn't have even, you know, we wouldn't suggest a helot to do this. That's love. But, you know, like it sounds like you guys have a great relationship. You've worked really well. But I, you know, I would. I would have my parents be my parents and not my lender.

All right, let's go to, is it Parisa in Tampa? Did I say that correctly? Yes, you did. Oh, wonderful. Welcome to the show. How can we help? Yeah, so my husband and I just paid off about $70,000 in debt. Awesome.

Congratulations. Amazing. In seven months? Is that what you said? Yeah, seven months. Oh, my gosh. Did you all sell something, or how did you get the $7K per month? He has a good job in finance. He does mortgages. Oh, good. Okay. Good for you guys. That's awesome. Great.

So all things to him. And so we kind of want to know when we can go on vacation. We haven't been since we've been together for four years. Okay. How much more do you have? We have two cars, but other than that, that's how much is it? about it together, probably about 70. Okay. So another seven months, then, yeah, you would get the green light from us. Ideally, you would have some money saved in an emergency fund before you do the vacation. So it may be one more year for you all.

If you're doing the Ramsey plan, that's what we would recommend. No vacations or anything while on babysat two while you're paying off debt. Everything goes to get out of debt. Okay, including the cars. Okay. Yep, including the cars, everything, everything but the house. And then, ideally, again, having some emergency fund, you know, we say three to six months, but that three months, but which you guys may be able to do in, you know, I don't know.

Yeah, if you're saving, if you can sock away $10,000 a month, once all of those payments are gone, even the car payments, you'll save that emergency fund a couple of months, max. So I would plan for next summer. It's a 2027 trip. Make it a big one. A May. Go in May. What's your household income?

Well, I mean, it's obviously varies because it's sales, but before taxes, like 25 to 30K a month. Okay. Fantastic. Yep, that's great. Making a couple hundred grand, you can go on a real nice trip, and so use that. Dangle this carrot of debt freedom.

How do we know it's a budget for that? I mean, if you pay cash, you're not spending 50 grand, and you've got other financial goals, so let's make it reasonable, but also you guys make 360 grand. It's okay to go on a trip. that costs five or ten grand. Yeah. Oh, easily.

Yeah, for sure. Just save up and pay cash for it. And it's kind of the mentality of if you put that money, you know, on a table and burned it and it was just all gone, like, would it emotionally affect you? And with your income, you guys would be able to save that quickly and it shouldn't overly affect you to go on a nice vacation. Hey, you guys, did you know that there are thousands of data brokers whose entire business is collecting and selling personal information?

Things like your home address, your phone, your phone, phone number and even your relatives names. You guys, that is just crazy, but that is why I use Delete Me, because those companies that pull information from public records, social media, and all kinds of other places. Then suddenly, all that information shows up on random websites. And removing it yourself means going site by site, filling out forms, and hoping they actually take it down. It takes hours, and then it can even pop up somewhere else again. But delete Me's team of privacy experts removes your personal information from hundreds of those data broker sites. And within a week, you'll get a report showing what they have found and what they have removed.

And they keep scanning and cleaning up your data year round. So take back control of your privacy. Go to join deleteme.com slash Ramsey and get 20% off your annual plan. That's join deleteme.com slash Ramsey. Next is Brad in Atlanta. Hi, Brad. Welcome to the show. Hello. Thanks for taking my call.

Absolutely. How can we help today? Well, of course, me and my wife and daughter, we live in our home and whatnot. We have a mortgage. We also have 33,000 in secured and uninsured debt. Let's see. I think my wife. is, it looks like this in a, you get a lawsuit, unfortunately, over some medical bills.

Is the lawsuit already happening? No, not yet. It's under the collections, you know, it's under the phone calls and that kind of thing. Okay, when you're done with this call, would you please reach out to our friends at Guardian litigation? Because they help with exact situations like this and fight for you. They know your consumer rights. They'll help you settle the debts. So please go to Guardianlit.com after this.

Reach out to them. I think they can help you through this process. Oh, okay. All right. Thank you so much. Appreciate that. Okay, so walk us through this. You got 33K in debt, and you guys can't make the payments?

We are, everything, you know, between the light bill, the mortgage, we have a second mortgage as well. And in all of the other debt, everything comes, you know, at different times. And it's just they're all scattered. So we're not able to save a dime, basically. it's like we're paycheck to paycheck, but in 13 I was diagnosed for cancer. And so between, I've survived cancer four different types, believe it or not. And so actually I'm having my wife's kidding with me. But nevertheless, that's where they're secured and unsecured debt,

because my wife takes care of the bills every month, blah, blah, blah. but then through 13 through 16 on work off work, on work, back of work, you know, that kind of thing is like... A very variable income. So, Brad, right now, what are you guys bringing in a month? Let's see. A month is for me roughly 4,000. Okay. And hers in a month is roughly, let's just go with 2,000, maybe 2100 a month.

Okay. And did you say you have a son or a child living with you all? I have an 18-year-old daughter. A daughter, okay, and she's 18 living there too. Okay, okay, gotcha. Yeah, and of course she's wanting to move out so bad she can't spend it. Oh, sweet girl. Yes, well, so one thing that you can possibly do, Brad, is when these bills hit,

depending on which part of the month, you may be able to call the companies, even utilities, like that kind of thing and see if you can get a restructured schedule to at least get to this point where when a paycheck hits, you have enough in the account to pay, right? Because if you have nothing, all the bills hit and one paycheck doesn't cover all the bills, then you're stuck, right? So there's one option, yes, to kind of reschedule when those payments hit and see if they can help you do that. And then the other option is for a few months, even just taking a set. side hustle, you or your wife, and putting some money aside, even three, four thousand, if you can, and letting that be the bucket at which you pull money just to get you guys afloat, because, yeah, we don't want you to get behind on anything, obviously.

And so there either has to be a pullback on expenses and or an up on income if you're not able to kind of get to this point of scheduling. But even if they're scheduled the right way, the fact you guys can't save in general tells me when end of the equation has to change. Yeah, it's a good band-aid to get your head above water, but there may be some deeper issues here with these payments. So what is the mortgage payment? The mortgage payment is $8.50.

I think it's $8.50 a month. Then you have the second mortgage, which is another $250 or so, $250, $2.75. Okay. And then on top of that, you've got the $33,000 in consumer debt? Yeah, that is insecure and unsecured. my truck's on it and so forth. What's the truck worth and what do you owe? Oh, shoot.

I haven't really looked to see what the truck is worth. It's probably rubbed $5,000, I guess. Oh, okay, so it's not worth much. What do you owe on it? Nothing. It's just a secure debt. I mean, I did have the title until we had to get a loan to stuff. Oh, you did like a title loan against it.

Almost. It's like a security finance, which they take. titles and things like that for long. I've seen those. They look like old pizza huts. They'll give you a check and they'll still hang on to your title until you pay it back, right? Right, right. Okay, how much is on that deck?

Because I don't want you to lose your truck. That one's is 19,000. That's actually the bulk of the secured debt is 19 grand. Man. I'm not sure what the payoff is. It's probably a little less, but yeah. Yeah, and what's the interest rate on that? Do you know?

I don't. I don't. I'm assuming it's very high. Yeah, usually those. Okay, so what are the total payments just to make the minimum payments on all of the debts in your life right now? What does that cost you a month?

I'm sorry, that one went over my head. That's okay. I'm trying to figure out your $6,000 coming in. You got a little over, about $1,100 going towards these mortgages, and that should still leave a good chunk to pay the minimums on the debts, cover your bills, put food on the table.

So we're trying to figure out where the rest of the money is going. see if there's room or not. Yeah, $4,900. Where is that going, do you think, throughout the month? Right. Yeah, you would think so. I mean, that's what I was thinking. I know, that's what I would think, too. But like I say, it's like paycheck comes and then it's got to go out. It's got to go out to, say, you know, one of the debts and then maybe car insurance or something. I'm just using some, you know, for sure. Yeah, yeah. Life is going to have. but are you guys on a pretty detailed budget, Brad? Do you know exactly where your money's going for?

No, no, unfortunately not. Yeah, I think that may really help you, Brad. If you hang on the line, Christian's going to pick up, because I think the budget could be the silver bullet in this whole situation, because you got $4,900 left, and yes, you will get payments that hit, but also it's amazing how much money can leave if you don't have a plan for it. And so I do wonder if you guys are tightened up and actually say, hey, let's be on a really strict budget and we're like not going out to eat or not spending anything

on anything we don't need. It is just going to go to these things. And I wonder how much will be left in margin at the bottom of that every dollar budget. So. Because I see on the screen here, it says, should I sell my house to pay off the debt? I would not do that until we've tried everything else. We've solved the behaviors. We tried to get out of this debt. The selling the house is like a last ditch effort. The house isn't the problem mortgage-wise. If your mortgage was three grand out of your six, I'd say, yeah, this thing probably needs to get sold. So your homework is to create that budget, sit down with your wife tonight, put down the next paychecks, that's the income, write down all of the expenses, each one should have a line item so you fully understand. And then

every dollar will tell you, hey, you're above, you're below, you're in the red, you're in the clear. That should show you, if you did things this way, here's what would happen. So there's your homework. It also has a paycheck planning tool that's really helpful for what Rachel talked about. You can actually see where the bills fall when you're going to run out of money. And your second piece of homework is to get in touch with Guardian litigation. You're going to Guardian-L-I-T-com slash Ramsey, and they will fight for you because they are huge fans of Ramsey. They want to see our fans win, and they hate seeing people get hassled and harassed by creditors and lawsuits. Well, and being in litigation, yeah, I mean, and not knowing your rights and everything.

And so it is really important. When you're already overwhelmed and so stressed and then you get served from a credit card. company. Totally. Yep. Absolutely. And your medical bill. So it's super stressful. We're hoping the best for you guys to climb out of this thing and keep the house. That's the goal if we can. For sure. Yeah. Because again, the house payment is well within that 25% of your take home pay. So you're good there. And you don't want to lose such a big asset, you know, to $33,000 of basically consumer debt. But you guys, the budget is everything. Like it is, it's amazing me. And Brad's not the only one. But how many people call in and they just don't really know. And you don't feel like you're necessarily being terrible

with money, but you don't realize how much money is leaving. That you don't even... It's encouraging. At first, you think it's scary to put it all down. And then you look at and go, oh, there's the actual facts. Yes. We make $6,000. Let's get control of this thing. Yeah. And if you're not doing a budget, just go back to your bank statement last month, you know, use March as an example and add up how much you spend on restaurants. Oh, yeah. First guess, say how much you think you spent on restaurants, and then actually check the math. And they'll be like, oh, wow. You will be shooketh.

Shooketh. That's what the kids say, I think. If you're looking for a more budget-friendly way to save on medical costs and stay true to your values, Christian health care ministries is a great option to think about. CHM is not health insurance. It's a health cost-sharing ministry, a biblical, community-based way for Christians to share each other's medical bills. That means no enrollment deadlines, and you can choose any doctor or hospital. you want. That kind of freedom is big, especially if you're self-employed between jobs, or you just

need something that fits your budget better. CHM has been around for decades, faithfully serving the Christian community. And many members save hundreds of dollars a month compared to traditional health insurance. And that margin gives you breathing room when you're working the baby steps and trying to steward your money well. And right now, CHM's offering new members a 50% credit towards their first month of membership. Get started at CHministries.org slash budgets and use promo code Ramsey. That's CHministries.org slash budget and promo code Ramsey. All right, if you're still needing to file your taxes, one of the best things you can do is get a good tax pro in your corner and one that you can trust because they would advise you and will advise you on the best moves to make

for your situation, if you have a small business especially, or any big life changes. So go to Ramsey Solutions.com slash tax pro to find CPAs and enrolled agents that have been vetted by the Ramsey team. All right. Let's go to Gary in Dallas, Texas. Hi, Gary. Welcome to the show. Hello.

Hello. Welcome, welcome. How can we help today? Yeah, yeah, just looking for some advice. So for the past 12 months or so, my wife and I, we've kind of had a 24-month plan of moving out of our house here and closer to some family. And we would be buying a house that's probably about twice as expensive as the one we currently have. What has just become an issue with this decision is I'm pretty sure in two to three years

after we make the move, we will not be able to afford it. I don't think we're going to have the income for it in that amount of time. Okay. Is it the area you're moving that's making it more expensive or the type of house that you guys are wanting to move into? It's a little bit of both. You know, we're looking for, you know, under normal circumstances, it would be okay. But, I mean, you know, the reason I don't think we're going to be able to afford it is, you know, the doctors are saying if things continue with her, you know, she should probably be dead in three years. Oh, my goodness.

And she's the sole income, earner. Oh, my gosh, your wife, so she's sick. She's an alcoholic. Oh, wow. Oh, wow. Oh, I'm so sorry. Oh, man. So what's causing the urgency here?

It sounds like we shouldn't be making any big life plans, financial decisions. Well, you're wanting to move close to family because of her? Yeah. Yeah, we live in the middle of the country. We have no family within about 1,500 miles. Okay. I need my son near some stability and some family. I mean, honestly, I got to get him out of the house sometimes away from her.

Wow. Yeah. Can you guys rent out there for a while? Yeah, we could. That solves this problem temporarily until we figure out what's going on with the finances. And it's, you know, Gary, it's really, it's really, really hard to make financial decisions and big moves when you have someone who has a level of addiction that it sounds like she has. And I'm assuming I know the answer to this, but I'm just wondering,

you know, has she been in any level of recovery? Has she gone to any kind of treatment? Years ago that she escaped from as a 20-year-old. We've had multiple interventions. She's been hospitalized for alcohol three times. since we met. Yeah. There's been some, we just got done with cancer treatment that was caused from the drinking and, you know, two months after treatment ended, we're already back to lying and hiding alcohol.

And I, I mean, I'm not stupid. And I know what's going on. I see it. Right. And you're staying in the marriage, correct? I mean, this is. Oh, yeah. Yeah.

Yeah. And your son, you guys are in from like a physical safety. okay? Right. Oh, yeah. Okay. But it's just the instability that she brings and when you say that he needs to get out of the house, because I would understand wanting to have a support system, which I think is

wise for you guys. So we'll try to kind of talk through it to balance not making any unwise, big decisions with money that could be, to your point, disastrous in the future, let alone having to deal with what could be coming for the next couple of years for you all. if she can't stop. So the area you guys would be moving to, it is more expensive because you said you guys are in the country. So it will be, on average,

do you know how much, from a housing perspective, you can sell your home for for where you guys are now? Yeah, you know, we owe 280 on something and we could probably get 375 for. Okay. So you'll have, you know, yeah, You'll walk away with probably 80 grand or so from that. I'm going to say less than 100.

Okay. And the homes in the area that you guys would be wanting to be, do you know on average what those are costing? We've been looking at for the past 12 months, and we've been out there twice viewing homes. We actually had made two offers before the cancer diagnosis, and we put everything on hold to deal with that. So, I mean, we're looking at stuff in the 700s. My wife makes about $250,000 a year. How is she able to keep a job? She works from home.

Okay. And you're not working? Correct. I've never made more than $50,000 in my life. Okay. What are you doing for work? He's not working. What were you doing?

I'm a stay-home father right now. What were you doing before that making around 50? I was in management position with a nonprofit. How old your son? Three. Okay. Okay. Because what I'm worried about, Gary, just in general, not only the housing situation, but if something were to, I mean, if the doctors are correct and everything stays course,

you are going to have to find work and, you know, obviously support you and your son. And I'm just wondering getting some level of experience under your belt. Getting them in flight would help. Yes. And it may be, it may not be obviously tomorrow, but in the next probably 12 months, I would be looking and saying, hey, what could I be doing just to be getting some experience, you know, to move into a position if you need to. I have been looking at some jobs just to get something on my resume. Yeah. Worked in, you know, five years.

Right. You know, the problem is I have to work around. I don't feel comfortable leading my son alone with my wife. Sure. Yeah. Sure. So. Well, I wonder if there's level of family.

support when you guys make this move? I mean, my incredible support. My parents will be an hour away. My sister, three sets of cousins, three sets of aunts and uncle. Now, why are you all moving an hour from your parents? I thought you were moving to be close to family. They live in the mountains in the area that we're looking at, you know, pretty far away from the metropolitan area. So it doesn't really solve the problem then, does it?

If they're still far away, you're not going to have... An hour is better than 22. Yeah. You know, I mean, I have zero problem making an hour dry, you know, not North today. Right. I know I hear you. Totally. Yeah.

So I wouldn't, I, I'm a little bit with George. I don't know if I would make a financial move, a big purchase like a home right now. There's a lot of instability going on. You guys are moving to a new area. And you may get into this, Gary. And there may be a chance. You're like, holy crap, I need to be, I need to be 10 minutes from mom and dad. And so, you know, whatever that looks like, I want the housing not to be.

be a permanent situation for you guys right now. And so I would find a place to be renting. Yeah. And then you guys could look up in a year, year and a half and see where you're at with her health and your job situation, family situation, all of it. But I wouldn't tie myself down to a big purchase like a home right now if I were you guys. I think the move is smart. And I would want that probably if I was in your case. Yeah. Personally, I would not buy a home until she is sober. because it just put, there's too much risk that her income is floating this entire thing. Yeah. If one thing happens, you got a $600,000 mortgage with no income or even a $50,000 income,

and now you're going to be facing foreclosure or a short sale. And so it's just, it's too much stress with the stress you guys already have. I mean, it's, yeah, I mean, I mean, to be clear, you know, my parents, they are going to be putting, you know, either $200, $250,000 towards the down payment. Is that a gift? Is that a gift? Then would they just cover rent for a year in the meantime as you guys kind of find your footing? If I asked, they certainly would.

I might use part of that to say, hey, cover rent, we just got to figure out our life. And then you'll know a whole lot more a year from now if things are going to get better or if they're going to get worse. Yeah, I think the challenge is going to be convincing her to rent as opposed to buy. Well, I don't think she's created that option for her. I mean, I think this is where you really have to step in, Gary. And I hate to say it, she kind of loses a vote when she chooses not to be well for her husband and her son. And so I don't know what that conversation looks like in the midst of your marriage. But I would not, you're putting a boundary up with someone that doesn't have boundaries, but I would not purchase a home if I were you, Gary.

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my call. Yeah, absolutely. How are you doing today? Fantastic, and I hope you are too. Great. We are doing good. How can we help? So I'm wanting to purchase my first luxury watch. And financially, I believe we're in a position to do it. But I grew up with a scarcity mindset, and it's really hard for me even though I have the money allocated in my budget to pull the trigger on it, I just can't get over actually doing it even though I actually want it. And I wanted to kind of get an objective opinion, you know, to see if I really am in a good place to do it. All right.

Any guy who used the word allocated would have a hard time pulling the trigger on a big spend. Yeah. I love it. Well, George loves a good watch, and I'm a spender. So you've called it a good time. I want to know what watch this is. People want to know. Yeah, yeah.

Yeah. What's the watch and how much you're going to spend on it? It's going to be an Omega Planet Ocean, and I'm looking to spend right around $9,000 on an after tax. Okay. All right. Peter, how much do you make a year? So I make – my base is 102, but I normally make closer to $140, and my wife makes $85. Oh, nice.

Okay. Do you guys have any debt? No debt. Baby Step 6. Nice. Okay. And so you guys have been talking about this purchase, and you have the money for it. It's sitting there on the –

watch savings fund is what you're telling me. Correct. It's in a separate pile. It is ready to go. We've been saving for about six months for it. My wife is 100% on board, wants me to get it. It's just, I struggle with the emotional, you know, I know I could use that money. I could pay my mortgage

off quicker. Boo. Boo. But not a whole lot. So I want to... Well, let's play this out. Peter, let's see you got off this call and you hit Ad DeCart and you purchase this watch and it shows up. How are you going to feel? Amazing.

Okay. Will you feel guilty at all when it shows up and you go, oh gosh, what did I do? Probably not. I think once I put it on, it's all going to go away, but it's getting to pulling the trigger on it. Yeah. Can I ask, why do you want the watch? Why 9,000 this versus a car or something? I'm just curious. So I've been scuba diving for about a decade now, and it's a watch that's been famous in the dive community for a long time. I think it looks great in the board room. It looks great, you know, when you're diving. You're talking to a lady who is scuba certified. I am a certified scuba diver, Peter. So she understands that. I understand the luxury watch market.

I need floaties when I go in the pool. I have an eyeball forever. And, you know, it's not like it's an impulse overnight. I probably wanted this watch for probably solid eight years. It's just been dreaming, but I know that I haven't been there yet. Okay. Okay. Okay.

So here's like my categories. Financial, it's a check. And then you go over to the emotional side. And that's why I asked, why the watch, what is it? And there are some green lights for me, Peter. Honestly, the fact that there is a reason for it, like in his mind, right? Like, he's been in a... The motive is not, I want to impress my friends.

Yes. Or I need to, like, prove to myself that I made it. Yes, it's been this thing in this niche part of life that you love. You've been thinking about it for eight years. It's not an impulse purchase. Like, all of those things. Because you can have the money. and then the motivation behind buying a nice, you know, purchase,

that could be a purse for a woman, a watch for a guy, whatever it is, you know, could come out of a place that you're like trying to scratch this itch inside of you and then you get it and then you're not satisfied because it came from the wrong motive and then you're tracing the next thing, the next thing, and it just becomes like this whole world of just consumerism. So that's what we don't want, right, to happen. But I don't feel like that's you, Peter. I feel like there's a reason for it.

And, yeah, and you've had this, And the fact that it's been eight years since he's been wanting it. It's time. I think your wife is sick of you talking about it, honestly. That's why she's like, get it, go for it. I can guarantee you're right. It's really tired of hearing about it. And then play it out.

Is Peter 10 years from now going to go, well, that watch did us in. Shouldn't have done that? What a dumb idea. Or is it going to be something you want to hand down to your kids and grandkids? Wow, you're going legacy, Prince, George. A legacy will help me justify anything. Boom. It'll be a legacy piece.

And I'll tell you this, Peter. I am not a watch guy. but Rachel's saying that because I am wearing a nice watch. And it was handed down to me from my wife's now-decease grandfather. And so truly it is legacy. And it's a Rolex. Yeah, it's a nice night from the 90s. It's an oyster date-just oyster quartz from the 90s.

And it like, it makes me feel like, it makes me feel closer to something bigger than myself, if that makes sense. Wow. And I don't feel like it's a flex, because if you know me, you know I'm like Mr. Frugal. So no one's like, well, look at, oh, smooth-talking camel over there. Doing well. So, Peter, what's your net worth? So we've got, we saw 140 on our house. The house is worth probably 350-ish.

And then we've got 83,000 between our retirement accounts. Okay. And I'm 28, or 29, my wife is 28. So we're towards the beginning of saving, but I think we'll be just fine. Yeah. I mean, you're on your way to Baby Steps Millionaire. I think you'll get there in your 30s without any issue. and this watch is not going to be the make or break.

I would love for you, like, right now, just to get online and buy it, you know? That would be fun. It's always the people who we want to give green lights to have the hardest time. I know. Who should not do it, who are like, I'm going to do it anyways. Oh, we're excited for you, Peter. What a paradox. Enjoy the watch.

Enjoy the watch. All right, let's go to John in Springfield. Hi, John. Welcome to the show. Hi there. Thanks for telling you my call. Absolutely. How can we help?

Real quick. I got an unpaid medical debt, and I wanted your opinion. So in the summer of 2023, they had the necessity to take a trip and an ambulance to the ER. I'm single-live-alone, so I'd rather cut off my leg than do that, but that's where I was. And so, you know, time passes, I get the bill for the ER, and, you know, that's not cheap. I pay it. A little while later, I get a bill for the ambulance. it's $1,695.

Okay. It takes me the two miles over there, and I get that. So, you know, what caught my attention is my health insurer paid nothing. They paid zero dollars of that, and I was confused. So when I called them, what they told me is that the ambulance service is out of my network. Shoot. And so So I think that's ridiculous

Yeah I think you know What am I supposed to do when I call 911 Is I'm going to talk to them about like Process You should take an hour Google for the options that are in network And then hopefully you're still alive

So do you owe the 1600 then still John? Oh yeah so you know I have the money Yeah You know I've never had a bad debt Yeah I just I'm being paid at it about this one So this was you know two years ago

Yeah You know almost three years now. It went to collections. It's not a very aggressive collection agency. They sent me a couple letters. They called me twice and left voicemail. So you're not, you're not paying out of, I haven't heard from them in eight months probably. But you're not paying out of just, you're out of strife. You're just like, I just don't think that this is fair. Exactly. I don't know what to do. If I should just try to settle with them and then come up with a number that makes sense to me. if I should just pay them and get it over with and forget about it.

Well, I think there's an emotional tax that you have been paying because it's been in your mind. And even though it feels unfair or, you know, it's like taking advantage of a situation is, you know what I mean? Like there's a lot of feelings about insurance and how all this works, which we agree. You know, there's parts of it. I'm like, absolutely. But the amount of emotions that you've put into this may not be worth $1,600. And so there is a part of me that says, yeah, see, it'll settle just for the game of it, the fact that it's in collections now. You may be able to pay half of it and just say, thanks for the ambulance ride, and we're done.

You know what I mean? But I would look to move on with my life, especially since you have the money and it's $1,600, you know. Right. Have you fought the insurance company already? Did you play that game? I mean, I talked to the insurance company and they say, well, talk to the ambulance service because maybe they can do something. and I talked to the ambulance service and they're like, oh, well, you need to talk to the insurance people. Yeah, the ambulance service is not going on.

Yeah, because it was dispatched by 911, right? I'm sorry? It was dispatched by 911 when you called? Yes, yes, sir. Okay, it wasn't like you reached out to this specific servicer. And so I would use that, pull your explanation of benefits, and you can try one more time to fight it and have them verify that they processed a claim correctly. There was no billing errors, all of that stuff. But you got to become an expert because a lot of incontalienable.

competent people out there who are just not really wanting to do the most when it comes to solving your problem. For sure. And $1,600. Sometimes it's just worth having the piece. What's your piece cost at this point? That's it. That's it. And so you got to kind of put a price on that too, John. So I'm glad you're, you're okay. That's you know, you made it through and everything. But I understand how frustrating some of that stuff is for sure. Dave, we got a lot of calls on this show where life happens. One day someone's healthy. They're working, providing for their family. And then a curveball hits. You know, we hear it all the time. A car accident, a cancer diagnosis, a heart attack, and suddenly, everything changes. Yeah, and that's why you've always said that having term life insurance from Xander is essential, because it protects your family if the worst happens.

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

then you need to make sure the money still showing up. And that's why Zander is our go-to. They make it super simple to get the right coverage at the best price, no pressure, no upselling. I've trusted Jeff Zander and Zander insurance for over 25 years, and so is my family. So don't wait. It's fast, it's easy, and it could make all the difference. Go to Zander.com or call 800-356-42-82. Protect yourself, protect your income, protect your family. Welcome back to The Ramsey Show in the Fairwinds Credit Union Studio.

I am Rachel Cruz with George Camel, and we are taking your calls at AAA 825-5-2-2-25. All right, up next we have Adrian in Mesa, Arizona. Hey, welcome to the show. Hello, how can we help today? So I'm a little nervous. Sorry, I've been debating the call. I'm not used to this. We won the debate.

That's good. Yeah. So I've been pretty good about my finances for a while. Not saying on the greatest. Obviously, I made bad choices. I have been bankrupted twice. And I made a bad choice. I got a G-N position and I run a restaurant and I just came upon some money and I was making really good money during COVID. And I was bought a house. I got an inheritance. I did some, you know, I had money in the bank about, you know, and so forth. And then I went and wanted to upgrade my truck, which during the time, I was okay. And then, you know, I bought this truck at 52,000, and I make about $65,000 before bonuses. Now, before I was making $75,000, so it was a little more higher. My husband, he makes about 40, but we keep our finances separate. I know that's, you know, but we just don't do it that way. The question I have, the main question is, is I don't know what to do with the truck

because I am living paycheck to paycheck. I literally pay $9.45 for a car payment. I pay $310 for car insurance and probably around in about $200 every four days for gas. I was living a life before my truck. You know, I was not struggling as much. We were able to have food on there and, you know, and now I just don't know what to do.

But I'm upside down in my truck about the car. They sold me. whole mess up deal. They sold it to me for 50 with a rollover from a previous car they gave me that had a bunch of problems. They're like, oh, no, we'll get you out of this, we'll put you in this, and they'll roll over that truck onto this truck. Before I know it, I'm 51,000, and I, they're only going to give me like 30, 31 for the car. And I had a trade in value. For a trade and value. That's correct. On the streets, it will not sell because it is a linen truck. But they'll take it for 31?

They'll take it for, and someone will, but I can't get a loan because I don't have no credit. I'm not good. My credit is great, I mean, but I can't seem to get anyone to qualify me for even a small loan to cover the difference. Because I've tried that with you guys, I've mentioned before, but no one will take me to cover the difference. And I've got to come up with, like, at least probably like 20,000, I would say. Yeah. What other debt do you have? You know, I have 4,500 and just, you know, a credit card and a personal loan to put some concrete down in my backyard.

And that's it. That's all I owe, you know, I don't owe nothing else. No, that's plenty. I don't think we need anymore. You're right. That is plenty enough. What is your, does your husband have dead as well? Yes, that's why we're separate.

He has back child support that he owes. We've been current, you know, we've been up to date on it. He pays every month. We just, he did not grow up. financially smart his train of thought is we're going to die owing people i don't know his train of thought is completely different than mine on that i just he just thinks that you know let's not stress about it you know what happens happens and i'm like uh i don't know what to do you know like we're not going to

have groceries like i'm literally i do the thousand dollars in the month and i at least take two hundred dollars out of it each time we get paid to do what um i to to live on to the groceries in the house house, you know, because I don't have it. Does he contribute? Does he contribute to the household? Yeah, he does. We pretty much split, but he got kind of hooked on for a while. He was hooked on gambling. I got him off of that, thank God. And then he turned around and he got Hussein. He's like, payday things. Like, oh, let's pay in advance. You know, I'm like, groceries on advance. Let's do this on advance. And at first I was like, okay, because at least you're

helping me because I'm not the only one continuing. And now he can't even do keep up the clothes. And I'm like, oh, my God. Yeah, I hear you. I hear you. Okay. So, Yeah, right now I would not recommend putting your money together. I think from a marriage standpoint, you guys are on not only different pages with money, but it sounds like how you view life and so much. So I would just have in the back of your head, like, hey, we need to be doing some marriage work. Like we need to be learning how to create goals together, have a level of synchronization of what we want life to be and all of that because he shouldn't be a deterrent for you in your life, right? He should be. a helpful person and same with you to him. And so healing that end, I think will help with some of the money stuff. But you called for the car. So, yeah, you said your credit's great. I would check a local credit union.

Don't go to a big bank and see if anyone local can help you with this. And if not, Adrian, then you're going to have to work extra. You're going to have to work nights and weekends to save up to get, yeah, to get the difference of this truck. if you can't get the loan. But getting out of this is one part of the equation. But honestly, it all sounds a little chaotic. And so I think having some direction is going to be huge. So doing a monthly budget, stop going into debt, cut up the credit cards,

have this no more debt for the rest of my life policy in your mind, and start working your way out of credit card debt and then attack the card next. And hopefully once you've been paying off this credit cards, you know, that could, I don't know, get you in a different place. Yeah, I don't want to see you go to a third bankruptcy. The third time is not the charm in this case. And so you've got to go, this is it. I'm not going to go through this again.

And, you know, even with your husband, the way he is, you're going to have to climb out of this on your own income at this point. And that is going to take, let's get every bonus we can get. Let's take all the overtime we can get working our tail off to never be in this position again. Yeah, that's what's sometimes difficult. about a chaotic situation, George, is that when they're, when there's such high emotion and high fear and seeing like, oh my gosh, I don't want to fall off this cliff. Sometimes even in that desperation, we make bad money decisions, right? You're not thinking clearly. That's right. That's right.

Yep. So yeah, so if you hold on the line, Adrian, Christian's going to pick up and let's get you George's book, Breaking Free from Broke. That's a great title for the situation. You know what I mean? Yeah, that's why we did it. Let's get out of this. Here's what you're going to, what's going to happen. And we can get you the audiobook version as well if you're busy, you know, managing a restaurant, hard to find time to a quiet place to read. Yes, but yeah, listen to that. And then we'll even throw in every dollar for a year. So we'll get you a code to that.

Love that. To start budgeting your income. And again, I would love to see some synergy with your husband. And I know his mindset is one way. And you can't control him. And I would say, I don't think you're the one that got him out of the gambling. You know what I mean, situation? I think he did it.

Like there's something in him that could be changing too, which is wonderful. Yeah. I mean, looking at these numbers, a $1,000 car payment, over $300 for the insurance, I did the math. She's spending over $1,500 a month just in gas for that truck. So you've got to think through this. She said, honestly, well, at the time I could handle it. And so the whole point of this show is that there's going to be a time where life's going to happen, and you need to get all of the risk out of your life and all of the piece you can get.

And that's why we tell people, be debt-free, even though it's concerned. and not a cool thing to say to save up and pay for the car you can afford. But it's because you don't know what's going to happen. You don't know what's going to happen to your income and to your health and to your spouse. And so living without debt is just going to create a more peaceful environment. This show is sponsored by BetterHelp. Financial stress does not just damage our bank accounts. It can also take a toll on our mental and emotional health and our relationships. Money worries cause anxiety and they're one of the leading sources of conflict for all types of couples. know this. My wife and I have struggled with money conflicts for years. Listen, therapy can help

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Visit betterhelp.com slash Ramsey to get 10% off your first month. That's BetterHelp. H-E-L-P.com slash Ramsey. All right, let's go to New York City and we have Jake on the line. welcome to the show. Hi, thanks for taking my call, guys. Absolutely. So I'm just calling because I'm in a situation where I make about $50,000 a year after taxes, but I took a 401k loan for about $25,000 that I defaulted on when I got laid off. And I currently owe about $12,000 in taxes. So my question is, is how I go about if I should tackle the 401K loan off because that has interest occurring

or tackle the IRS debt. And I owe about $2,000 in credit card debt as well. Okay. So the taxes are 12K. How much did you say the 401k loan was for? 25,000. 25,000. Okay.

What did you take out the 401K loan for? I was currently moving out and when I took it out. So I was just doing it as like a buffer. But I did that when I was about 22 or 23. So I just made bad choices with the money. I spent some of it on a vacation, gambling with friends. And the rest I just spent on bills sadly. Okay.

Did you just stop making payments? on the 401k loan? When I got laid off, that's what happened. I'm in a union, but I was only in the union for about one to two years when I took out the loan, and I didn't realize that if I, how short of a time they were going to default me on the loan. Got us, you were laid off,

and then it came due within 30 days or something, and you couldn't pay it in time? Yeah, about like 90 days, like a couple months. once. Okay, so that became likely an early distribution. So you don't owe money on that now? It's just going to be taxed heavily. Yes, that's what increased my tax bill from about like $6,000 up to the $12,000 now when I just filed my tax. So really we're dealing with $2,000 and credit card debt and another $12 in IRS debt. Yes. Okay. So you would tackle the IRS debt first. You want to get them off your back because they can actually destroy your life versus this cute little credit card company who can just be like, pay us.

So I would work on knocking that out first. The bigger issue to me is getting out of the cycle, because I don't know that you have the money to pay this off in a reasonable amount of time. Yes, no. I would have to call the IRS to make a payment plan. Yeah. And I would just pay it off as aggressively as possible. Can you work extra? My union doesn't really offer that much overtime, but I could pick up like another job.

Side jobs. And you may, Jake, another option with this kind of thing since it's 12 grand is you may be able to go get a loan for it for 12 grand and just pay off the IRS and then deal with the credit union or bank that you get the loan from. Honestly, it sounds crazy, but sometimes they're better to deal with than the IRS and then having a payment plan. And so there's just a lot of power the IRS can have. And so kind of getting them out of your life. Basically unlimited power. Yes. So getting them out of your life, I think, feels more peaceful to me.

So that is an option, depending on how your credit is, to go get a loan and just pay it off and then tackle that loan. Okay. And you guys would say don't focus on paying back to $25,000 to my 401K. Well, that's what I'm saying is there's no longer payback. It's over. was counted as an early distribution. So you took it out and now it just won't be back into your 401K?

Well, the only reason is if I was to pay back the $25,000 and cure the defaulted loan, they would give me the rights to access capital again. But if I don't ever pay that back, let's say for like the next 30 years in my career, I'll never be able to access using my 401K as like a loan option again. Yeah, we don't want to go back into debt, though. So considering it's not an option, it's fine. And you're not with that company anymore, correct? No, I'm just laid off from that specific shop, but the union is all five boroughs in New York City.

Okay, so you could get back once you're completely debt-free and you want to go back and start funding that 401K. It would be the same 401K as what you're saying. Okay. No, I'm asking. Is that right with the union and how it works with the five bureaus that you mentioned? Oh, what's your question? I'm sorry. Sorry, will that be the same 401K?

You're laid off now from a certain shot, but you said you will get back in and start working again within the union. So will that mean that that's the same 401K? Yes, ma'am. Okay, perfect. Okay, because I was going to say usually when you leave a job or you quit or laid off, you would roll your 401K just into a traditional IRA and then you move on with your life. but since you'll be plugging back into it, eventually you can't unlock the ability to invest until it's paid back. I can invest.

I always just think, like you guys said, is maybe it's a bad habit to even consider like borrowing against my 401-day-for-ta. It is because look where we're got you, Jake. Yeah. Never, ever, ever, ever do this again. You don't sound happy about it. Do you want to be back in this position again? No, you guys are right. Yeah.

Yeah, debt is not a tool, Jake. It's not a tool. Peace, solving for peace, our friend Dr. John's alumni says, this is so key with money. You can try to play the games, do X, Y, and Z. But honestly, Jake, to become wealthy and to actually have options in your life that money can provide, it's going to be you. It's going to be you working hard, you staying out of debt. And instead of paying payments, you're investing, you're saving, you're being wise with your money.

That's how you build wealth over time. If you keep trying to play this debt game by I'm going to loan money here and loan money there, you're going to be broke your whole life. and you're going to be paying $12,000 and freaking taxes. So no. Think about it. You've got 14K in debt to pay. If you can scrape together a little over $1,000 a month, you're done in a year.

And then decide, I'm never going to go back into debt again. And the way you do that is with an emergency fund and a budget. That becomes you're never going to debt again, emergency account, so that you're not needing to borrow from other people. Yeah, that's right. Yeah, Jake, what kind of work do you do? I'm in the electricians union, but I'm not an electrician yet. I'm just pretty much, yeah.

Have you looked in the private sector in that? Because a lot of electricians are making a ton of money. You might be making more with the union. I'm not sure. But have you looked into that? Well, right now, yes, I have thought about that. But right now I'm just trying to stay with the union. until I get my journeyman card.

Yeah, right. Yeah, that's the main reason. Will you get a pay bump at that point? Yes, I would get a pay bump. To what? They make about $56 an hour here in New York City. Oh, that's great. All right.

So you'd be clearing six figures a year. That's great. And how long will that take to get the journeyman card? It takes about five years. Right now I make... about $40 an hour, but I haven't started the apprenticeship. I'm just, I was just promised that, like, hey, you stay on the job and we'll upgrade you without the five years of the apprenticeship because that's about making minimum wage in New York City.

Well, you're making over 80 grand right now, so you should be able to clear 14 grand real quick if you just get really focused, which means no spending, no vacations. You're basically like, that was old Jake. New Jake spends nothing on anything unless it's food, shelter, utilities, transportation, insurance, and his debt payments. Yes. If you get laser-focused, you'll be in a very different place a year from now, even six months from now. Yeah, that's right. Yeah, it's amazing what can happen when you don't give debt an option in your mind.

Like, if you really do go as hardcore as we talk about and make it a black or white issue with your money and just say, I'm not borrowing money. What that forces you to do is forces you to look at other options, forces you to take a different route. And it's amazing when you actually start to see it, see that debt as, I don't know, kind of the enemy. A villain in your life. I want this out. The sacrifice that you will do to finally just be done with it is your brain gets creative or gets real patient or gets real sacrificial. That's what happens when you take debt off the table. And I think it's the only way to create a great life. If you're at the point where you think bankruptcy is your only option, stop for a minute. You might have another way out.

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Results may vary and no specific outcome is guaranteed. All right, let's go to Stacey in Billings, Montana. Hi, Stacey. Welcome to the show. Hi. Hello. How can we help today? So hopefully I'm not too long-winded for you guys,

but I'm calling for kind of some relationship help as long as financial advice. My husband, five years, unfortunately, has a history of infidelity where he talks to other women online. Well, I've caught him with his ex-girlfriend, things like that, talking to them. inappropriately. I'm sorry. Yeah. And so things were going well, though. And then, sorry, he also has a little bit history of alcohol, but that has gotten better.

I'm sorry, but things are going well. And we're expecting a baby at the end of the summer. Oh, wow. Okay. Because we're expecting a baby, we bought a bigger home. and we literally just moved into it a couple weeks ago. And I still have the old home that's under my name and my dad's name because I got that prior to marrying my husband.

But unfortunately, on Friday, I found an explicit photo on my husband's computer that he recently received from his ex-girlfriend. Oh, Stacey, I'm so sorry. Yeah. So it opens up old wounds. Oh, of course it does. Did y'all go to marriage? Did y'all go to therapy at all for all of this? Has he done any work on himself? We did some therapy in the past, but it's all online. It's so hard to get like someone a couple therapy together. And he kind of just says, I'm going to get better. I'm going to get better. But unfortunately, yeah, no, he's sick. There's something, yeah, there's something off going on that he needs healing from.

And only he can do that because it's a repeated pattern. And it will continue, you know, like self-will doesn't just get you out of stuff like this. I mean, he has some deep work that he has to do if he chooses to. Has this become physical in person anyway? No, I don't think so. And I believe him and I don't think he would ever physically. cheat on me. It's just the emotional cheating over time. Yeah. I mean, it's still the same pain. The infidelity is still, still feels very real. Okay, so how can we help? What's your main question?

So sorry. So then going to financial advice. We just moved into this new home, higher interest rate, bigger home, bigger loan. The next day, after finding out about this, sorry, this is all kind of new. No, you're fine. Take your time. You're good. The next day, I got an all-cash offer on an old home, but I was sitting there in the big home alone by myself. And I was like, there's no way I could stay in this house. If things don't go well, I'm a single mom. Like, this home is more expensive, a bigger lot to take care of, things like that. So I kind of had like a conference call with my parents because they kind of know about the history.

and my realtor, I said, I don't want to sell the old home. I think I, I guess my question is, and I hope I'm making the right decision, go back into the old home, less interest rate, less monthly payment, less loan, sell the new home. I just have a lot of guilt. Okay. Yes. I obviously spent all this money, like, and I'm going to have realtor fees and things like that.

Sure. Okay, tell me this. Stacey, how much is the new mortgage payment? The new mortgage payment is probably going to be around like $2,500 a month. The new, okay. And how much do you guys bring home a month as a household? Well, with my husband would be around like $200 or so. $200,000 a year?

Yeah. Okay. And then what would you be making if you, you know, down the line? On my own. If I ended up being on my own, I make a, around 140. 140, okay. And an old home is like 1,500 a month with half the interest rate.

$1,500, okay. But you probably clear what, close to $10,000-ish, a little less, a month? Yeah, yeah. Okay. Maybe, yep. Because the mortgage isn't completely... Yeah, worse comes to worse. You could afford this new house mortgage on your own.

and still have cushion. Yeah, how much would your other homes sell for? How much was the cash offer? 420. 420. And what do you owe on that one? Oh, sorry, 410, 410. And I owe probably around 140 left on it.

Okay. And what other debt do you guys have? I probably have 15,000. I could easily pay off. Okay. It's old student loans that I should just pay off. Sorry, a little guilty. I listen to you guys. No, you're good. You're good.

No guilt, no shame, no condemnation. Yeah. But yeah, I can pay that. Well, I'm trying to figure out a way. Do you love the new house? Like, would you want to stay there if it made sense financially? With this baby, it's a big house. And I guess I'm still like, I'm still like, do I want to do this on my own?

I think it would be harder to do that big house on my own. Like, it's just such a... Just the maintenance of it. It's double the house. You're talking, Stacey, very, like, you sound finalized in your, in your conversation with us about him. That your new chapter is solo. Yeah. Is that, where are you?

I mean, I can't imagine. The heartbreak is. Yeah, solo for now, for sure. I need some time to separate because, obviously, whatever I've done in the past has not worked out. Okay. So I need it. I obviously, like, sorry, there's so many things, emotions. and it's kind of all new, but I obviously want to have a family.

I want to raise our son and a good environment with a good dad. But right now I think just I need to take some time, and so I don't have like 100% what will happen in the future. But I would like to be serious and make sure he focuses on himself and gets help. Yes, yep, 100%. And I get that. It's not a healthy situation. and to live with broken trust your whole marriage is not a great marriage. And so the work, yeah, we always, I mean, our prayer for situations always, you know,

is that redemption and reconciliation. And the prayer is that, you know, two people find healing and it stays intact. Like, we want that. But also, also we know the reality and also know that you have to take care of yourself and this new baby too. So, um, I have a option that maybe we haven't thought about. What is the mortgage on the new house? Sorry, the mortgage on the new house would probably be around 2,500. No, I mean the balance of the mortgage? Oh, sorry, the balance of the mortgage would probably be,

it's like around 300. So if I sell my old house, sorry, depending on equity and things like that, then I'd be probably around 300. Oh, got it. So this is all for the loan, sorry. for the loan. So you haven't taken out a mortgage yet on the new house? Oh, no, sorry. Sorry, I'm bad with these finance. 560,000. That's the current balance. Is that? Okay. But no, we put 200 down. That kind of was a gift-black loan with my parents. Oh, so you owe them that money back? No, because I have equity in the other house with my dad. But I'm saying if you sold it, you can't use that money toward the new mortgage. You'd use that money to pay back your parents? Probably the difference. My plan was just to pay them back. The $200 grand? Yeah, because of the equity. I know I for sure have

at least $200 in equity. Yeah, you probably walk away with like $250. That's why I'm trying to get at. If you use that $250 to put onto your new mortgage and then did something called a recast, it would drastically lower your payment. You basically throw a lump sum at the new mortgage and they can take it down. So you're saying sell the smaller home. Yeah. Pay off the parents. Take the remaining. Take the $50,000.

Pay on this new house. It might take your payment down to $2,100, for example, just to give you a little more cushion. But again, it does solve all the problems. I thought you could throw all $250 at it. That would really lower the mortgage and make you sleep better at night. But that feels like the least of your worries at this point. I honestly, Stacey, I would probably just stay put. I don't think I would make any big decisions right now.

And if you need the separation, do the separation, I wouldn't do much right now. And I would look up. From now you need to sell? Yes. Yep, I probably would wait a little bit. So we wish we could get to every call in question here on this show. But if you do have a money question and you want an answer for your situation, head over to ramsysolutions.com and use Ask Ramsey. So this is our free AI tool that is trained on Ramsey principles.

We have dumped every show over the last couple of years, articles, books, everything that we put out into this tool. And so it will answer. you like we would if you had called the show. So it's actually pretty amazing and it's getting some traction George. We're seeing a lot of people use it. Oh yeah. Because it's conversation. And you can go back to, if you sign in, you can go back to your old chats and follow the, keep going with the conversation. And you can put in specific numbers and all of it. Like it really is amazing. And so, yep, if you have a question, go to ramsdy solutions.com or if you're listening on podcasts and YouTube, you can click the link in the description. All right. Let's head to Knoxville. Go Valls. We love.

love to see it. Hey, Michelle, welcome to the show. Hi, guys. Thank you for taking my call. You are welcome. How can we help? Well, I would like to know if I can afford this $25,000 vacation. Ooh, that sounds fun. Where is the vacation to? Okay, I don't know if I'm allowed to say names or anything, but there is a certain cruise line putting out these big huge ships with tin pools and water slides. And I bet it is. I thought you were about to say I'm going to go get a suite on the Live Like No One Else Cruz. I know.

You can name drop that. I thought you, are you going to come cruise with us, Michelle? Because we have a cruise in March. I didn't even know that was a thing, but I'm going to look into that. Ramsey Cruz. And I think it's probably cheaper than this. Yeah. How many people are going?

It's just me and my longtime boyfriend of eight years. And he is side-eyeing me like crazy for the last three weeks since I mentioned this. He thinks I'm nuts. Well, the main question, do you have $25,000 to spare? I mean, it's a yes or no question. It's not a thought. You don't need to think. Is it sitting in savings earmarked as Michelle Vacation Fund?

Not necessarily as vacation fund. I do have an emergency savings, and then I have a separate savings in case I need anything for my house or cars. But just in my checking account, I have $85,000. Woo! Nice. Do you have any debt? My mortgage is paid off. I have no credit cards, and I have two really old Toyotas. Okay. So, Michelle, if $25,000 left your account in like a week or two, would you feel that at all emotionally?

No, not for this or for the Ramsey Cruz. Oh, or both. I think you should do both at this point. I mean, the Ramsey Cruz is a fraction of the cost of this one, so I think you can afford both, honestly, but we'd love to have it either way. You can afford this, Michelle. I love your answer. He said that if I can do it. get you guys to say that I can afford this, he will stop side-eyeing me. So funny. Wait, are you paying his tab or is he chipping into this? Every bit is this. I am a semi-successful small business owner and he is a huge, huge reason why. He works with me two days a week. He does have his own full-time job going on, but he works with me

his two days off and he takes no payment at all. Oh, wow. That's so nice. So this is you repaying him for the unpaid labor. This is a big, huge thank you, and I want to do this, and I want to get out of here for the winter. Our jobs are very seasonal, so we really slow down in December and January, so it wouldn't even be affecting our work. Like, we already have the time. Sure. You got downtime.

And you're able to, if you have to put a little bit of money away, too, between now and then, you could. I mean, I know you probably have to put a deposit down on the trip, but in general. I do. Yeah. Yes. I could actually just go pay it all right now on what's in my checking account, and I wouldn't miss it. I would be so looking forward to it.

Trade that number for an experience. Let's go. Now, I'm curious, eight years you've been dating him, are there plans to get married? Is there a reason you guys don't want to or one of you doesn't want to? Well, we have to discusses, and we both own our own home, and I think we're just kind of neither of us are ready to give up our own homes yet. Got it. So you don't, he doesn't want to move in with you, you don't want to move in with him. Versus an eternal relationship, you know. This is just an eternal relationship of helping and love.

He's married to his house. He's married to his house. Yeah, he values the house. Y'all value the house more than each other. I'm just saying, what better place to propose than this fancy cruise or on the Ramsey cruise? We'd love a proposing. I know. I think he's actually more into the idea of getting married than I am, but I don't know. He would have to ask with something really good.

Not necessarily jewelry, maybe a nice handbag. Oh, you know what? That's the new proposal in 2026. We proposed with a Louis. Oh, my gosh. I'm okay with that. Michelle, you're funny. This is so fun.

I love her spirit. You've done so well, Michelle. You've got green lights from us. This is the way to do it. Your baby step seven, it's your time to live like no one else because you've lived like no one else. You've got no debt. You saved up. This is a drop in the bucket for you.

I think you can afford it, Michelle. And go to Ramsey Solutions.com and check out the Live Like No One Else Cruise. March of 27, we're going to be set in sale. So come hang out with us too because you're on baby steps for and beyond. And you don't have to go with him. If he's going to side-eye you, you come alone. That's right. We'll be your plus one.

Amen. All right. Let's go to Greenville and we have Jenny on the line. Hi, Jenny. Hey, how are you guys? We're doing great. How can we help? Oh, my gosh.

I'm so excited. Well, my husband and I got married like a month ago and we're so excited. Oh, congratulations. We just, thank you. We just went to the bank and joined all our finances because I kind of made him. But we knew it going into our marriage that we were coming from two different places. And I'm hoping you guys can help me kind of get him on the same wavelength as me. He came in with a little more debt than I have.

And I came in with more savings than he has. and I'm hoping that we can pay off all the debt. Yeah. But I think he sees it as like, you know, me coming in and taking over control. So I want him to, like, be on my page, but I want him to think it was his idea. Oh. Wow. Welcome to, welcome to marriage, George.

So how do we manipulate your husband into being okay with this? No. It's not manipulation. It's just taking away guilt because he's kind of apologized. Oh, yeah, and he feels guilty about it. You know, and I don't want to, like, start paying things off yet if he's not on board. Sure. Well, I think the value system needs to be aligned.

And I think you guys can talk about that. And you can speak from your experience, Jenny, of what, how you want to see money going forward. You're creating a life together. You guys are starting off. And just to say, you know, I want a life that is, that I have lots of margin and lots of peace with money. I don't need to live up to the edge and above and beyond what we make. And so I don't want debt to be part of the picture. And just paint a picture, Jenny, of what that does for you.

And then you need to be able to talk to him. And he needs to be able to communicate what he sees, what he thinks. And yeah, it may not happen in the first conversation. But hopefully you guys can get to a point where the goal is to pay off the debt. And realistically, yes, you will be using some of your savings for that. But if he has guilt over that, you know, number one, you can't. fix that. That's going to be his issues to work in. But also, I see that as marriage. I'm like, you take on the other person's stuff. Like, when you get married, you're choosing to combine

lives. The good and the bad, the past mistakes, you know what I mean? Like, all of it. Like, you are choosing to combine the life together. Past, present, future. Yeah, and money is, money is part of that. And so it's kind of this, you know, entreat into marriage, if you will, you know, but it's there with numbers instead of emotions, I guess. Right, right. I just don't want to, like, put a up for on his confidence, you know? Yeah, well, as a man, he has this, like, bow up. I want to provide. I want to, you know, give my wife security. And so this makes him feel a little bit small for him to be in the weaker position and for you to be in the place of strength. And your, your entire vibe here is not giving guilt. Like, I don't know how you could share any of this

with him, the way you're sharing it. And he goes, man, you made me feel so bad. Yeah, because it's all on him. It's his stuff. It's his stuff. And it's a thing, too, like, there's going to be weakness in life. And so, yeah, his ego may be bruised a little bit, but that actually shows a level of humility to say, hey, I'm like surrendering all of this. And like, I hate there's some guilt behind this and some shame. And I hate this. And like, this is what it's doing to me. You know what I mean?

And you guys talk through it. And it's amazing what can happen when you just say those things out loud. And so it is not, it's not weakness, in my opinion, at all. Because it is what it is. And the goal is to move forward and to build wealth as quickly as possible. And so we want to do this together. Don't focus on the debt, focus on the future. And part of that is becoming debt free.

What's the fastest way to get there? Let's look at our resources. Great. We can knock out this debt. We're all one. Let's move forward. Welcome back to The Ramsey Show in the Fairwinds Credit Union Studio. I am Rachel Cruz with George Camel, and we are taking your calls at AAA 825-2-2-25.

All right, let's go to Ken in Little Rock. Hi, Ken. Welcome to the show. Hi, guys. How's it going? Hi, we're doing great. How can we help? I just recently learned about money and I continue to try to learn about it. And I'm trying to figure out how I want to position my income to pay off the debt that I have.

All right. Sounds good. Well, how much debt do you have? I have about 140-ish. Is that consumer debt or does that include your mortgage? It's consumer debt. I don't have a mortgage or rent or anything like that. The job I have, I pretty much just live in my truck. Okay. Are you truck driver?

Yes. Okay. What's the $140,000 of debt? What does that consist of? I have a car that I keep up my dad's house. How much is that? Not really. It's I owe 35, 7 on it.

Okay. It digs into my income, but I don't feel it as much as if I was. was to have like all these other bills, which was kind of the thought process that kind of freaked me out. I was like, if I had these other bills, this would be a problem. Yeah. If you actually had to pay rent, you'd be screwed. Yeah. All right.

So 35 on that car. What else? I have about 65 on a solar loan that I put on my dad's house that I'm going to inherit when he, when his time comes. but then I have about 40 in college loans that I've just been slowly tinkering with to try and get off of them for the last couple months or so. Yeah. Is that one big loan or is that separated out until like 10 or 11 different ones? It's like 16 different loans. It's crazy.

Okay. Good. And the solar is one big loan? Yes. All right. And then the car loan is one loan. All right. That's what we're working with here. Is there anything else? No, but it feels like there should be as much money as I feel is going out the door.

Yeah. What do you make? Sometimes on a short month, it could be around $4,000. On a good month, it could be somewhere upwards around $5,500 take home. That's not bad. So about 50 to 60 is your take home. home pay. I mean, it's bad when you have $140,000 in debt. Yeah, that's true. That would have been a great income if you were debt-free. So let's walk through this as how we're going to tackle

this. Can you work extra? How does that work? When you say a low month, a higher month, what is stopping you for making more? A low month is when I have to go home. Okay. Because I can stay out for a month or two at a time, and I'd probably take home almost 600 for those months. And then if I need to go recharge at the house, I miss out on a week of income. Yeah. Okay. So in your home, you're essentially taking time off. Right. Got it. So we need you on the road constantly. It sounds like. To get out of this debt, for sure. Yeah, I mean, for the car, can the car makes no sense, number one of just how much it is compared to your income. And how little you're using it. And you're not using it a lot. So, um, if you're,

you sold it. Do you know how much you could get for it? Probably somewhere between 17 and 20. Has it gone down that much? Or was there negative equity? It's an EV. It went down immediately. I was like, the second I got the loan, I was looking at it, it's like, this sucks. Yeah. Well, I'd rather have, gosh. 15 in debt than 35. Yeah. Even a few. You know, the difference you're under water on, you're going to either need to save up the difference or get a loan from like a credit union to cover the difference. Yeah, and then go get a crappy car that just sits out at your dad's house that you drive when you come home. You know what I mean?

Which isn't even all the time. So I think justifying getting rid of the car, I think it's going to give you a little bit of breathing room. And then start knocking out these college loans, smallest to largest. And considering there's 16 of them, you know, staying on top of that and making sure they all get paid, obviously. but that you start, you know, chipping. You knock one out every couple months. Yep, chipping those away. Right.

So it'll take you, it's going to take you about probably a good three, maybe three to four years. If your income doesn't change, it will take years. And so the hope is we can get you making more. If you are home, I want you doing side hustles. Yes. Doing something else to create another 1,500 or $2,000 a month to get out of this thing faster. Because just the napkin math says, I can do it for you here, $140,000, over four years, you need to be throwing 35 grand a year at your debt, which is not far off

from how much you're making total. Yeah. So that's, you know, almost three grand a month you need to be throwing just to do it in four years. So this is a mountain of debt, and I feel like you don't have the urgency that I would have, and partially it's because you don't have rent and a lot of bills that the average person has. Yeah. So, I mean, I would have some sacrifices, Ken, so the car would be my first one. I would get rid of it, get a small loan for the difference.

and start tackling this because that car payment that you're paying every month could be going towards paying off this debt. All right, let's go to Milwaukee, and we have Helen on the line. Hi, Helen. Welcome to the show. Hi, there. Hello. How can we help?

Aren't you a ray of sunshine? I am right now, at least. Good, good, good. What's going on? So my husband and I are currently expecting baby number four. Baby number four was not planned, however, it's a pleasant surprise. And I'm doing July. And what baby number four means is we now have to get a larger car.

Our car is currently only fit five. We are going to be a family of six. And as I'm doing July, we have a timeline of 15 more weeks. And we haven't had a car payment in 10 years. We don't want a car payment. but we're exhausting our options to save up in the next 15 weeks to avoid a car loan. We actually went shopping with the $5,000 we had to see if we could find anything because we have $5,000 saved up for a car currently.

And we were actually turned away by a dealership saying that they couldn't get us a family-friendly car that they're comfortable putting us in for $5,000, and that they'd only take us if we like took out the loan. At that price point, it's probably going to be coming from an individual somewhere that you'd have to find. That's a Facebook marketplace situation. How much would your car sell for? Because you have $5,000 saved. How much could you get for the other car?

So when I looked on Kelly Blue Book, Trayton, it's around 900 private sale. It's about 2,000 at the highest. Okay. Perfect. 1,000 lowest, 2,000 high. Okay, great. And how much could you save in the next two to three months per month? Could you put a thousand bucks away? Probably not. That's kind of like the issue we're facing with it. We could see a saving up if we had six months for it, but not the next 15 weeks.

How much can you save per month? Right now we're living paycheck to paycheck because I am a full-time student at UWM. Okay. I gave my degree in biochemistry and come, May. our budget opens up a whole bunch more. Oh, good. To where we can put away, like, maybe 700 a month. Okay, that's great.

So what I would say is, number one, the expectation of a super nice car is not really there because you'd sell yours for 2,000. So that's great. We're not looking for anything boozy. You're not boozy. It's great. I would put that in the 7,000.

And you guys could survive with two separate cars. If you've got to go somewhere, you both get into two cars for six months. I just wouldn't leave the house with everybody. That's the goal here. No vacations, no trips. Says a dad of two. We're not going to go see grandma. When people hear my story of paying off debt, they say things like, dang, that must have been so hard.

I can never do that. And I tell them, sure you can. It's a short-term sacrifice for a long-term gain. But do you know what's really hard? Working your whole life and never having anything to show for it? Never having the long-term gain. Just feeling broke and stressed and maxed all the time. And sadly, that's the hard that most people choose.

Listen, you're capable of transforming your situation and, living a life of freedom, but you need the right tools to do it, like our Every Dollar Budget app. In minutes, it'll build you a step-by-step plan that's tailored to your money situation. And every day, it finds ways you can free up extra money in your budget so you can get rid of your debt and actually build wealth. So make the choice today. Short-term sacrifice, long-term gain. Choose the tool to help you get it done fast. Download the Every Dollar app and start for free today. So we were just talking to Helen about buying a new car. We had to jump off because we had a hard break we had to get to. But George and I were talking in the

break. And, you know, there are options, you guys. If Helen hopes, hopefully she listened to our advice because we get the call of people that get in a dire situation. They're like, well, you know, I couldn't get this. The car dealer told me this. And so we just went and got a $35,000 van just to like make us feel good about it. And then they're trying to pay it off and they're back in debt. And so hopefully it's not what's going to happen to her. But here's the way you have to think When you take debt off the table and you say, okay, we are not going into debt at all. What does life look like? And so for them specifically, they had $5,000 saved.

They could sell theirs for $2,000. It's a $7,000 car. And then she said our income's going to open back up. I think she said May or June-ish. And so- Once she's done with school. Yeah, and they can save $700. And if you do that for five months, you know, you think through, you know,

baby will be three months at that point, October. where, you know, that's, you know, that's some, that's some cash, $3,500 that you could easily save on top of that, and you could go get a $10,000 used car. Like, that's a big upgrade from the $2,000 car she's driving now. And that's just in, you know, five, six, seven months. And so, yeah, will there be three months of it being inconvenient? If we need all travel, we take two cars. Yeah, we take two cars. But again, the reality of how much you are probably, well, you got three other kids. I know that you're toting around too. But, but there is, you know, a way to look at this, and it sounds extreme, but I'm like, if you just are patient for five,

five more months, discomfort for five more months and go get a great $10,000 car, and you were looking up vans online. So, yeah, I like to just go, all right, you walked into, she said, I went to the dealership and they laughed me out of there. Well, don't go to the dealership. Of course they're going to try to get you in a brand new 2026 Honda Odyssey. And most people go, well, I can't afford a $7,000 car. so I'll take on a car payment on a $50,000 car.

Right. Or it had some issues, so we had to get a brand new car. Or I was worried about my family's safety. So I'm like, all right, go Honda Odyssey because you know that thing's going to outlive you. And so I looked up, I went to just Cars.com filtered. She's in the Milwaukee area. So I just looked up a random zip code. I went 50 miles out.

I'm willing to travel to get a deal. And I sorted from lowest to highest. And I found multiple Honda Odysseys. Now, are they the prettiest thing in the block? No. It's got a hundred one has 160,000 miles for four grand. The one that I like, 137,000 miles on it, eight grand for a 2010 Honda Odyssey X. Yeah. And that's fine. It's a, I said, no accidents, clean title. Yeah. So just don't go out there buying a lemon. Get a pre-purchase inspection from an independent

mechanic of your choosing before you go buy a thing. But don't tell me that $7,000 cars don't exist. Right. That's right. And what's wild about that is that's what, $8,000. And if you did our plan, they could almost cash flow that right now with what they could sell their car for and that. And then you save up over time and let's say you save, you know, for another, you know, year, right? And if you're able to put, you know, I don't know...

I mean, 500 bucks a month is six grand a year. Six grand. You can get a 16 grand car by then selling that one and upgrading. Yes. In one year. In one year. Like, that's what's wild.

It's like you just have to have some patience with it and think through the math and the reality and it's doable. It really is, you guys. So, Helen, we're excited for you and baby number four, but don't go get the car loan. You guys can do this. All right. We have our question of the day, George, and it is brought to you by Y-ReFi. And defaulted private student loans can leave you feeling stuck and overwhelmed. But Y-Refi helps you explore refinancing options with a low, fixed rate and payment based on what you can actually afford. So visit Y-refi.com. com slash ramsay that's y r e f y d com slash ramsi may not be available in all states today's question comes from austin in washington dc he says we're baby steps four five and six and contributing the full 15 percent to mutual funds despite these contributions we have lost over six thousand dollars this year our contributions aren't even keeping up with the losses any advice or encouragement for us well lots so much so much

much. Welcome to the market today. By the way, it recovered already. Did you know that? The S&P 500 is back. It's back to what it was. What? 60 days ago? Yeah, it was like a few months, everyone got spooked. It took a dip, which felt like a crash if you zoom in on one day or one week. And we're already back. So, no, you didn't experience $6,000 in losses because you didn't cash out. So you're riding the roller coaster. And right now you're out of dip, and now we're back to level. And soon we'll be climbing back up, my friend. So you got to have a long-term perspective when it comes to investing. Investing is for the long haul. Yes. So keep your savings in a high-year account for short-term goals and know that your investments are five, 10, 15, 20, 30, 40-year

game. And then, you know, he never checks it when it's up. Whenever he's 6,000 up, he's not going to go, hey, I'm 6,000 up. Am I doing this right? Yeah. How well the market did the last two years. We didn't really hear much people talking about it. Like every now and then it'd be like 18% in 2025. Plus 18% of year prior was like 23%. and 25%. These are unheard of numbers. Wild. Wild. And yeah, it's just, it's kind of like, oh, that's good. Good. I'm glad. I'm glad. And then it goes down a little bit. And everyone's like, everything's flashing. And you have a flat year or even a negative year. And that's a normal part of the process. Yes. If you go look at the S&P 500 returns over the last 50 years, you're going to see some down years. You're going to see a whole lot more up years. The market is up way more than it's down. And it has always recovered.

Absolutely. All right. Let's go to Ashley in Houston. Hi, Ashley. Welcome to the show. Hi, how are you guys? We're doing great. How can we help? So my husband and I are new parents, and we're trying to make a wise financial decision for our family. All right. We'd really love for me to be able to stay home with our baby, but on one income, we feel like it's going to be a little tight. We would be decreasing our income if I stay home by 55%. We have a couple options, but we're not sure which path would be the wisest long-term decision for us financially.

Okay. What are your options? So one option would be me staying home with her than working evenings and weekends just to keep our house and our like fixed expenses afloat. Another option would be me just continuing to work and not staying home with her until my husband increases his income. And then the third option would be that we sell our house and we move into a camper on my parents' land until he increases his income.

his income. Woof. Okay, I don't like that option. Can we take that one off the table? We'll take three off the table just because of for a long, you mentioned the word long term. Long term financially, that is not wise because you're selling an asset and you're taking one that's going down in value. So let's take that one off.

Okay. Have you run a mock budget, Ashley, on if you guys just lived on his income, where, what expenses would not get paid? Like, where does the line cut off? Like, are you able to pay mortgage? utilities, insurance, like, where down the line are you like, okay, we are having to draw this line? Is it in the middle? Is it up with the expenses? Like, where is that at? Most of our six expenses would be covered. It would be more so groceries and gas and then taxes

that are up in the air. Okay, well, those are important. So those are our forms. Non-negotiable to eat. Yeah, food, shelter, utilities, and transportation. So you're saying your mortgage would get paid and utilities would get paid, but you may not have enough for gas and food? Yes, so that would be where I would be picking up additional. I hear you. What is the mortgage? Our mortgage is 18, but we put 2,000 at it.

All right, what is his take-home pay? He makes 43 a year. 43,000 a year? Is his take-home? Okay, so we're talking 30,000. $3,500 a month and your mortgage is $1,800. Yeah. That's tight.

Yeah, you may not be able to, yeah. I do think he needs to make more. I don't think this is like on fire. You could try the route of working nights and weekends. I think it's going to be exhausting real quick and get old. So we need a clear path that he's going to make more. Otherwise, this mortgage is too much. Or you're going to need to continue working until we have a different financial scenario.

Yeah. Yeah. You know, I don't mind the idea of moving, Ashley. Maybe it's you guys moving to a smaller condo, maybe in a different part of town. Like, I don't know what that looks like because you could change your housing situation. Maybe a little bit. I mean, $1,800 isn't like crazy. But if you could find something for like $1,000, right?

$1,200 even for a small mortgage, that would be ideal. So you're almost shifting your lifestyle, downgrading it. that you can have the value of staying home or you value staying where you guys are and yes you probably would have to contribute financially a bit until his income comes up. Hey, George Camel here. So you're thinking about buying or selling your home. It's exciting, but there's a lot to think about. And all those decisions can feel overwhelming. Well, here's the good news. You don't have to tackle the process alone. Ramsey's real estate home base is the place to find all of your free tools and resources for help to get prepared to buy or sell

your home with confidence. You'll find calcul. start-to-finish guides, a podcast, and even an in-depth video course hosted by yours truly. What's not to love? So if you're ready to take the next steps toward your home goals, go to Ramsey Solutions.com slash real estate. That's Ramsey Solutions.com slash real estate. Buying or selling your home is a big deal. And with all the clickbait headlines out there and conflicting data, it's really hard to

know what's happening in the housing market. So we're here to make the latest trends easy to understand. So median home prices stayed steady last month. at about $439,450, and the number of homes on sale hit $1 million for the third month in a row. So buyers have more options and negotiating power while sellers face more competition. So the average 15-year fixed rate dipped a bit to 5.86% last month. And if you are debt-free, you have a fully funded emergency fund and a solid down payment. Now is a great time to sell your home, to buy a new home.

Wherever you are in the process, that's where you want to be in the baby steps. So if you want to learn more about housing market trends and get free tools to help you when you buy or sell your home with confidence, go to ramsysolutions.com slash market or click the link in the show notes if you're listening on podcast or YouTube. All right, let's go to Blake in Panama City, Florida. Hi, Blake. Welcome to the show. Hi. Hello. How can we help today?

Hey, look. Okay, so my question is, so me and my wife have our house paid off at 34. Whoa. And I went back to school and got a degree at 30, you know. So we were struggling before, and I was like, I can't even keep doing this. But the thing is now her family is peer pressure on us, and she's falling for it to go out and buy a bigger and better house and new vehicles. But they're all paid for, house is paid for, and she's falling for it. What do you mean falling for it?

You guys haven't done anything yet, right? You're just saying she's in on it. She's like, yeah, I'm ready. Let's go into debt. That's right. Do you guys have the money to upgrade cars and do you want to? No, I don't want to. But do you have the money to?

Yes, I do. Okay. But you're just like, that's not a priority for you. Is there any merit to what she's saying and that you could use an upgrade on the cars or the house? Or is it totally fine? Well, with the house, it's about 1,600 square feet, and we do have three children,

and they're becoming a teenager, so it is getting cramped in there. But in the other hand, about $290,000. Okay, and how much money do you have outside of that? And our bank accounts combined, we have about $15,000. Okay. So that's kind of your emergency fund?

That's right. Okay. Anything above that savings? No, that's all of our savings combined, is with that. Okay. And what do you guys make a year? I make We're at $170

and she does insurance and she makes $70. You make $170 and she makes $70? That's right. Okay, so you guys make $240,000 and you have no more savings? Just $15,000? Well, I just started making this

about four years ago and that's when I started paying our vehicles in our house debt. Okay, so you've been real focused on the house and therefore haven't been adding anything to savings. Is that right? That's correct. And our vehicles are $2018

and I paid them off to focused on them. Okay, got you. Got it. So you've been on a debt payment journey, and now you're at a good spot, and she's already going, let's go back in. And you're like, dude, we just played this game. That's right. Yeah, we were in debt, you know, since we're 20 years old. I can't do it no more. So like, I went to school, got a degree and started paying it off. What you guys are making, say you lived on a hundred grand a year. You could bank 140, right? And go get two nice cars. If you wanted, you don't care about it. But maybe she wants a nice car. You guys make good money. She should get a nice car. What cars are you driving right now? So she has a 2018 Durango, mine's a 2018 RAM, 1,500. Okay, but you're fine. You're content. But she's like, hey, I want to upgrade cars.

All the time looking. What does she want? Give me like a ballpark. What kind of car, what price point is she looking at? Well, she was looking at the Waganeers, and their $90,000. Goodness gracious. Two grand a year, I mean, two grand a month. Yeah, no payments here.

We're not going down that road with her. But you guys could save up, get a, you know, a used one. want to look. I feel like they don't have great reset. Why don't I feel like... Here's the thing. Nobody wants to deal with the maintenance because it's in the shop half the time. Yeah. I don't think they're great. I don't think those are great cars. But, you know, but it would be okay, Blake, if she went and bought a... I mean, you make $240. No debt, no house payment. You can get a $30,000, $50,000 SUV and it's not a big part of your world. You think 70s too much? I mean, just based on your lifestyle right now, it feels like a big jump.

But... Probably. We say no more than half of your income tied up with things with wheels and motors. So technically, if you guys kept up this income, you could have about $100 grand in total vehicles. Yeah, that's fair. So maybe a $50,000 and it needs to be used. You guys don't need to go get a brand new car. You're not at that point yet. Let someone else take the hit on depreciation.

Yeah, she could go get a $50,000 car, but you guys need to save. It's a nice car. Yeah, that is a great car. That's pretty much any vehicle used that she wants. Yes. But you'll need to save up and pay cash for it, okay? That's right. My thing with the house is, though, the kids are teenagers and it is cramped, but they'll be

out the house in five years. I don't just see the point of getting something bigger and just me and her. Okay. Well, true. All of this is, all of this is once at this point. Our needs are taken care of, but Blake, you can spend some money. Okay. I'm not saying go upgrade the house right now, but I don't think she's, I don't feel like she's completely out of control for wanting to up a lifestyle a little bit, especially since you guys are making good money now. What's your household expenses every month? Everything that comes out of your checking account. What would that add up to in a given month? I would say about $2,000.

Goodness gracious. And you guys are clear on what, 15, 16K a month? Yes, sir. Like I said, it just started, because we just got the house and everything paid off in January this month. Okay, but let's play it out. That means you could bank $14,000 a month, $168,000 a year, which means you could go buy our $50,000 car and then save up another $100,000 and upgrade to a $400,000 house all within the next 12 months. Do you hear me?

I just don't know how to, and it's because we came from nothing. That was so hard to save because I didn't have a good job. And then I finally did. And I'm so scared to go back to what it was. You won't go back if you don't go into debt. Yeah, that's the thing is you're moving forward with no risk. So you're purchasing the next house in cash. I just told you save $100 grand up, sell yours, take that $300,000, boom, $400,000 house paid.

I got you. Yeah, that makes sense. Save a $50,000, sell her car. So, Blake, you all need to have a little dreaming because you are, you are, holding back, which I get why. I totally understand. And I know this is all so new because you're like, we've just paid everything off and like, oh my gosh, now we want to go upgrade because we just paid everything off. So she's been in a season of sacrifice and she's been a great teammate, I'm assuming, for you guys to hit these goals, which is awesome. So now you guys need a dream in the future and just

say, hey, in the next 18 months, what do we want our life to look like? And Blake, you may be like, I'm great driving my truck and that's great. And she may say, I would love a newer car. Okay, great. put that on the table. And I would love some more space. All right, let's go look. Let's just see. You know, and you can just pull up Zillow for the heck of it at dinner, just for fun, just for fun, and just see what's out there. In your budget. Yes, but you guys start kind of dreaming and in your budget, yeah. Don't go look at million-dollar homes, because then she's going to only see million-dollar homes. Yeah, yeah. But you guys need to have an agreement. We're not going into debt, but we can spend some money and enjoy some of this too, right? Because otherwise, what's the

point of you working so hard of being this successful if your family can't enjoy it and rape the benefits while they're alive. Well, that was another thing. My daughter's about to be 16. She's going to need a vehicle. And I know you don't go out by a young kid, something super expensive, but then my two boys are right behind her. I'm just scared. So that goes on the list, Blake, when you guys sit down for dinner, okay? Wife wants a new car. The dream would be to upgrade the house. We got three cars we got to pay for. We're going to give each, you know, maybe the kid pays for some. We put some in. I don't know. Maybe you guys set aside 10 or 15 and anything they save up goes on top of that. Yeah, yeah, yeah. So for each kid?

Yeah. That's what you're thinking? Okay. Yeah, that sounds reasonable. I was going to go a little cheaper. But yeah, 10, so 10 grand per kid we got to have. So that's 30,000. This is rare that Rachel goes cheaper than me. I know.

I feel like that's actually getting an award for that. You should. Yeah, I've seen it's a statistic where most young kids wrecked their first car anyway, so I didn't want to go so expensive. Yeah, I get mad when I see kids in my neighborhood driving nicer cars than me. Oh. I go, that's bad parenting. Get off my lawn.

Kid is a brand new Jeep wringler. What a way to be so non-judgmental, George. I'm just saying. Yeah, have that freedom. No, but so, Blake, you guys need to sit down and make a priority list of the goals that you guys have in the next 12 to 24 months. Put dollar amounts next to them. Look at your income and you guys map it out. And this is going to be fun.

Don't stress. Don't, please don't squish her dreams, Blake. You're dreaming too small. She's dreaming too big. Let her meet in the middle. But let her dream. This is part of it. It's fun.

And she may not get what, you know, everything you want. That's not the point. But the point is like, here is what I'm thinking and wanting and seeing and whatever. Like, let it just happen. Let it be a fun conversation. You guys aren't broke anymore and you're not going to be broke again as long as you do this thing slowly in cash. Avoid debt. Let me free you from that scarcity mentality, my friend.

Hey, guys, Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to Ramsey Solutions.com and try Ask Ramsey today. That's ramsysolutions.com.

Our scripture of the day comes from Proverbs 13.4. The soul of the sluggard craves and gets nothing while the soul of the diligence is richly supplied. Leslie Nielsen said, Doing nothing is hard to do. You never know when you're finished. Huh. Something that's you on there.

Did I get it? Doing nothing. Yeah. Doing nothing is hard to do. You never know when you're finished. I don't think anyone's waiting for it to be done. Is that what she means? Just don't do nothing.

I think it's Leslie Nielsen. the famed actor, R-O-P. Yeah, so just keep doing something. Don't think too hard on that one. I think it was meant to be... Who felt like a riddle or something? Humor. He was a comedian, an actor, so, you know, that makes more sense.

Should have none the reference. Airplane, the naked gun. It's before your time, Rachel. Oh, airplane. No, I got that one. Okay. All right, I see. I see.

When did he pass? 2010. Okay. All right. Let's head to... Not recent. Not recent. to Raleigh, and we have Mary Rose on the line. Hi, Mary Rose. Hello. Hello. How can we help today?

So we kind of a little bit of a longer story. We moved from Washington State to North Carolina in October of last year, and we wasted all of our resources doing so. It was a bad situation in Washington. We weren't making it. We were making good money, but we still weren't making it. So the Lord made a way for us to get to North Carolina. And we had an idea of two years to buy a house. Well, we are in process of buying a house right now. The Lord made that happen as well. We don't have to put anything down at all. The mortgage is going to be less than our rent payment. We do have some debt in car.

and some credit cards and stuff that we were planning on paying off. And my question really is, am I thinking about it correctly in, I'd rather pay a mortgage, build equity, than pay someone else's mortgage by renting? I think that's a short-sighted approach because you're not thinking about the full picture because we don't know what the mortgage is compared to your income and what these debt payments have to do with it. So I don't know that the Lord is, you know, in charge of zero-down mortgages, but you're here. I mean, you already did it, right?

Mm-hmm. Yeah, I mean, we close me first. Mortgage payment's going to be right around 1550, and we pay 1615 a month in rent. And what's your income every month? What comes into your bank account? Well, so we make about 98,000 a year. Okay, is that your gross income? Yeah, that's our gross income.

Okay, so, but you don't know what's coming in every month. Well, every month. Mike, I can give you a guess. Is it around $6 grand a month? No. I just got a new job in the town that we're moving to, which is about $5 more an hour than I'm making plus $300 extra in bonuses a month. Okay, so what's your new hourly wage?

My new hourly wage is 20, and he makes 27. Okay. Yeah, that makes sense. You're making about 100 grand gross, but my guess is your take-home pay will be about $6,000. So $1,500 on a mortgage, that's about a quarter of your take-home pay. So you're in line there. Now, how much debt do you have? Well, we pay probably $800 a month in car payments and then probably $400 in credit card payments because, like I said, we exhausted all of our resources getting out of Washington State. What's the balance of the loans, the credit card debt, the car loan? I think the credit cards we've got about 15. Our truck is 16, my car is 9, and the Harley's 3 something. But my husband has, he's listed his truck for sale.

Oh, good. So we're trying to get the truck out so that we can save some money that way. And then we can really, you know, start building a savings so that he can get something that the truck in Washington made sense. It doesn't really make sense down here. His job actually provides transportation for him to get back and forth from work. Plus he can drive his early there. And his is the, yep, and his is the $16,000. Yeah.

Okay. So he can possibly sell it. I told him to list it for 27 and maybe get 25 for it. Oh, great. So you could walk away with some cash. Yeah, yeah. Which could knock out the Harley and maybe close to paying off your car. Right.

And what he wants to do is pay the credit cards off because it's a higher interest rate, and then we just cut the credit cards up and we're done with the credit cards. Because that was kind of just a... You can cut the credit cards up now. You don't need to wait until it's paid off, and I would do that. Right. We recommend the debt snowball method because it's the method that actually causes people to get out of debt, and it's all about momentum and psychology.

So it's smallest balance first instead of the highest interest first. Well, you're talking about as debt avalanche method, on paper, you could maybe save some interest. But right now, we're not trying to save interest, right? If we were playing math, we wouldn't be in all this debt. But Mary Rose, I do want to say, though, when we look at the order at which we buy a home, even if it's a great deal. Even if it's cheaper than rent on paper. Yes, on paper.

I still would not have bought a home until I had this cleared out. you guys have no money. You have $43,000 in that. And if the heating and air goes out, you're 20 grand. Like, what are you going to do? You know what I mean? Like there's, so, but I'm saying this, the rent, listen though, the rent, even though you're paying $1,000 less, that's $12,000 a year you're saving, which is great. And I get building equity and all that. But if something goes wrong, when you rent, things are taken care of. So just know the expense of home ownership, even though you don't see it in the mortgage, you're keeping up with the yard, all of it. So just know that it's still going to feel, it may still feel tight. So really for the last

15 years, we've lived in situations where we take care of everything in the house anyway. Like, if the heating or air goes out, my husband takes care, he does everything. Well, as a traditional renter, though, that would not usually be the case. The landlord should be paying for it, though. Right, right. Okay. So just saying. So we understand the, you know, the, you know, the, taking care of those types of things, you know. Like my husband's a master of all. He does everything. So we haven't, I mean, this is the first time we've rented from a property management company in 15 years.

And so... So when is the lease over? And have you actually closed on the house? So we close on the house May 1st. The lease is over in August, but the sellers agreed to buy us out of our lease. Okay, as part of a concession. What kind of mortgage did you guys get with nothing down? It's a USDA loan.

Hmm. Okay. So I know that you guys don't recommend USDA loans, but my husband got curious. He got on his phone and he put a request out. They approved us up to $250,000. Yeah. Yeah. They approved us up to $250,000.

And by some chance, you know, we took a left and there was a house on the right hand side that was a two-bedroom. and we've only been looking at three bedroom. It was $215,000 for, I mean, you can make it five bedrooms and three parcels and a huge woodworking shop on the back. I'm sure, yeah. No, I bet it's great. I bet it's great. But the issue is if that house goes down in value, you're now underwater in a house because you have no effort. And USDA loans, they include an additional premium.

There's an initial fee of 1% and at 0.35% and. annual fee after that. So it's not as great of a deal as it sounds. It's like saying, I got zero down on a car. Great. You just took on the full loan instead of having anything down. So I want to tell you that you can do this house. I wouldn't personally, if you can back out, I would to kind of clear the deck a little bit more and step into this from a place of strength. Right now you're stepping into it out of more desperation from getting out of a bad situation. But it's not going to tank you if you guys can keep up this income. Yeah.

But I would focus heavily on knocking out these debts. Yeah, yeah. And he's been in his job since December. I will move into my job actually next Tuesday. And we're just... Yeah, I'm excited for you guys. Yeah, I think it's great. I think whatever you know you're choosing to do,

but you guys have to knock out this debt. And, yeah, there's a lot of deals and a banker giving you a loan a 0% down. Is that Jesus? Is that God or not? I don't know. I don't know. But George, thanks for a great show. Thank you. Thanks to everyone in the booth. And remember, there's ultimately one way

to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.