The Ramsey Show - When You Don't Have Payments, You Have More Options

Episode Date: July 17, 2026

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Brought to you by the Every Dollar app. Start budgeting for free today. Normal is broken. Common Sense is weird, so we're here to help you transform your life. From the Ramsey Network and the Fairwinds Credit Union Studio, this is the Ramsey Show. Rachel Cruz, Ramsey Personality, number one best-selling author, co-hosts to Smart Money Happy Hour. My daughter is my co-host today. So, Rachel, we did that post.

That silly thing you wanted to do with acting like we're doing a net. Netflix documentary or something? Oh, yeah, we haven't talked about that. And things gone bananas. Well, and everyone on... You were right. It's a big, big deal. Apparently, it's a trend to sit down in the chair and act like you're doing a documentary, right?

Yeah, exactly. And so we did it, and it went on Instagram. It went crazy. Yeah, the numbers are... Oh, like 1.3 months. And so, yeah, they brought a million or something. Oh, yeah, yeah, over that, yeah. Crazy, yeah.

So the guys, some of them were saying they had read the comments, and a huge number of people didn't realize you were my daughter? Yes. there was a lot of like, well, today, I was today years old before I knew. A ad and a trend. Yes. And they actually think there's going to be a Netflix documentary about being Dave Ramsey's daughter.

On Facebook specifically, there's not. On Facebook specifically, a lot of people are like, oh, no, I just canceled my Netflix membership. I'll miss it. And we had to go ahead and call me like it's a joke. It was just a trend on Instagram, just a trend. It's a funny thing to do. I made Dave do it.

sometimes he, you know, he's the anti-social media guy. He's our boomer. Our resident boomer, who we love. But we will, but we get to rope them in sometimes. Go boomers. Boomer sooner. To some of the trends. And sometimes he says yes, sometimes he says no. But it was a good one. Yeah. It was funny. Well, that one was fairly innocuous. It wasn't like, you know, you have to be a clown or something to do. No. We did one. We are. We are. We are. Years ago, do you remember the, when Twitter was Twitter back in the day? Yeah. The, was it the ice water challenge or whatever? You dump buckets of water on people?

Oh, that was for ALS. For ALS. Yes. It was a, you dump, what was it called? It was ice bucket challenge. Something like that. You dump buckets of ice on people and then you play them doing it on. Yes.

And so we ended up having the fire department come over to the front of our building and our whole team got dumped. Yeah. Yeah. Remember they rained on us with stuff. That was a pretty good post. Then you donate to. That was a trend that I participated in.

That was fair. That was only 30 years ago. I was going to say, I was like 15 years ago, but that's fine. We're roping you in, Dave. We're roping you in. That's it. Yeah, I'm going to make me relevant yet. Nisi is in Minneapolis.

Hi, Nisi. How are you? I'm doing well. How are you? Better than I deserve. What's up? Okay. I'm calling because I am in a position where I don't have to pay any household costs as far as rent goes.

And I'm just wondering if I should use my income in this time that I have living rent-free to use this time to build my business or use this time to give another job and pay off debt as fast as possible. How much debt do you have? About $108,000. What is that consist of? Student loans, stuff in collections, and a tax bill. Okay. And why are, where are you living, how are you living without rent?

So I converted my SUV into a tiny camper and I've been living out of my vehicle to expedite this process. And in the process, when you start working on your debt, everything starts coming into full swing. And the next thing you know, I'm getting garnished. My wages are getting garnished. So now I'm thinking maybe I should just put building the business on hold and get another job. But also, I don't have any rent to pay. So it's kind of like, which road do I take? Who's garnishing your wages?

The state for taxes. Okay. For a business that you own? No, it's not for a business. So it's like income tax. Okay. Yeah. Now, how much in tax do you owe the state?

I owe about $20,000 for state in about $12,000. for federal. Okay, and the state is who's garnishing you, or the federal is not? That's correct. Okay. All right. And what do you make at your current job? About 83,000 years.

And that's being garnished? Yes. Okay. So how quick can you come up with 20,000 making 83 and living in your car? Pretty quick. Pretty quick. Yeah. I mean, like, quickly and get rid of the garnishment.

by paying it off. The thing is, I've been attacking my car loan debt. No, no, no, no, no, no, no, no, no. You need to take care of the tax debt. And when you're doing your debt snowball, you put IRS and income tax with the state at the top of the list because of what you're experiencing. And so we're going to get rid of the state debt as soon as possible.

So $83,000, so $7,000 a month. So you're coming home with $5,000 or $6,000 a month. and you've got very little... I'm coming, I'm down to like about $35,000 or $3,500. Oh, because of the garnishment. Yeah. How much are they taking? It's about $276.

$276? A week. Oh, okay, $1,000 a month. Okay. Well, in 20 months, that'll be gone if you don't do anything. But we need to do something and get rid of it as soon as, possible. So the question is, do I work a side job or a side business? The question is, do I work a side job or continue letting them garnish me, continue paying off my car, and then use this time to start

my business as well? No, you don't start a business right now. No, you need to work as many hours as you can work getting paid money quickly, as much money as you can make morally. And you start with this tax debt and clear it first before you clear the car, and then you clear the IRS, and then you work your debt snowball from there. And when you get back on your feet financially, and you've got the IRS and the state off of you, and the place to live. Then you get a place to live. Yeah. You've been, you were very nonchalant about the fact that you're living in your car, but I don't want you there for long. No.

Yeah, it's not a long-term plan. I definitely plan on saving for down payment for a house. No, no, no, no. You need to go rent one-bedroom, cheap apartment. I'll rent after my car. Yeah. And I would want to be out of that, I mean, I would want you out of that situation in a couple of months. Like if you can go get a part-time job.

We don't need to go into Minneapolis in the winter. Right. You need. In the back. of the SUV. So I want you to clear this debt as soon as possible, working extra, and throw three, four, $5,000 a month because all you do is work at this, at this state debt, and then go after the IRS and then get you, and somewhere in there, get you an apartment. Yeah. And get out of the car. And, yeah, because you're making $83,000 a year. You can live in an apartment and you can

clear this debt and work side jobs. Well, and you have $3,500 left. So if you threw an extra $2,000, lived on 1,500 with food and the car payment, right? And then worked extra. You could technically put $5,000 away per month. Yeah, and that'd be four months you'd be done. Yep. That's the direction. I'm sorry, Niecy.

Wow. You're after it, kiddo. Get after it. I love it. I appreciate your willingness to sacrifice like this, but let's have a plan so that this is definitely in our past, not in our present anymore. Hey, I want to talk to you for a second about love and not love like in Titanic or something. I mean responsible love, the kind of love that moves you to take care of the people closest to you.

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is a way of saying, I love you when you can no longer say it yourself. Go to Zander. or call 1-800-356-4282 to find the coverage that fits your family. Jacob is in Canada. Hi, Jacob. Welcome to The Ramsey Show. Hi, guys. Thank you so much for taking my call. I'm very appreciative of it.

What's up? So my question was, should I let my fiancé's family move into our newly purchased home, even though she's been manipulative her whole life? her her uh the family it's her mom her mom's been manipulative her whole life is that what you said yeah yes so you're not a fan of this no i love my fiance dearly yes and does she see how much it just affect her and does she recognize that yes she does she does recognize it and i think for her right now, it's just kind of grieving that we might lose her family, like we might have to draw a boundary to a point where we don't really see them.

If your family is only going to have relationship with you because of what they can get from you, they've already abandoned you. Yeah, which, you know, I try to let my fiancé know, and it's just we're getting to a point where... If you have to pay for a relationship, it's called prostitution. Okay. Yeah. Yeah, that's a good point.

And so you guys are saying then it does get to a point where, you know, they just got a notice in the mail that they're going to be kicked out tomorrow. You didn't do that. And yeah, no, I know. It's been their decisions. They've been kind of struggling, and I feel like they won't take any help. Yeah, they don't work much. Yeah, yeah. So you would recommend then just, you know, set the boundary and they can react.

however they want to react. You can't control their reaction. You can predict it. Yeah. And Jacob, they've come to you all. They've said, can we move in?

Like they've... They haven't, but we're like 99% sure it's going to come. They got the letter. They've been talking about it. She's been making jokes like, oh, we could just stay in your back there. You know,

not really funny, but tomorrow's the day. Well, I don't think then a boundary has to be set until the question is asked. I wouldn't advance the boundary and just say, you know, thanks for asking. We're going to be cheering for you. We love you. We'll try to do some other stuff to coach you and help you, but moving in with us really isn't something we're able to do. I'm sorry.

And by the way, when you're setting the boundary, the fewer words that you use, the more powerful it is. Okay. Don't go into a lengthy explanation about family dysfunction or anything else. Just go, you know, we talked about this and we're just not able to do it. I'm so sorry. But we love you. Yeah. And we're coaching.

We're cheering for you. We want you to win. And do you have any money? Are you doing well financially? We're doing pretty well financially. Like right now we're in that we're about to finish up the rentals. We'll be a little low on cash. But we both have jobs.

You know, we're good. So you don't have any cash to, like, give them $1,000 to help them with the deposit on the next place or something like that? No, no, I would not be able to help her with first and or last debt or anything like that. Okay, that's what I was asking. All right. Yeah. And Jacob, buying a house with someone you're not married to is really a dumb idea. You guys should get married yesterday.

I would agree. We're getting married in September. Don't argue with me. Just go get married. Can I give you one reason You can totally shut me down Yes, yes, you can We're getting married to September

The venue's all booked And the reason we went with the house earlier Than we would have liked to Is because it was a private sale My cousin had owned the house previously It was a good deal That was kind of the idea behind that But I agree

Except you don't agree But yeah, okay Hey, at least I have a venue and a date Yeah, that's good Yeah And September will be here in the month. Yeah, we're moving. We're moving that way.

The reason I bring that up, too, is it does change the discussion, too, if it's your mother-in-law versus your fiancé's mother. That's a little change there. My girlfriend who lives with me, who I'm planning to marry, parents have trouble. Versus who I am married to. Is different than my in-laws have trouble. Yeah. That's a different thing. It is, but also the result will be the same.

The answer is the same, but how you think about it is different. So, you know, in other words, if you were married, I would suggest that you don't answer the question when it comes that she answers the question. Because if you tell her mother no, you're going to be the bad guy forever and ever, the evil man that stole her daughter and that is selfish and won't share everything with our dysfunctional family. but she needs to handle her blood that's crazy. And she does anyway, probably. But if I'm the boyfriend, I'm just going to be like, what do I care if you're mad? Just be mad. You know, I'm a husband.

I'm a little more worried about the long-term relationship aspects of it. Sure, sure. And I know we're planning to be a husband next week, but we're not a husband yet. And that's one of the hardest parts of the money dysfunction with family. and especially we're seeing more and more grown kids with their with their aging parents you know what I mean and it is a that's such a hard place to be that if you have the relation the relational equity and the means to be able to help and you choose to that's beautiful and wonderful if that's what you want you know but this idea that I have to have to that it's now my responsibility to take care of them when they've not been responsible adults we're seeing that I feel like more and more Oh, we see it all times. And, you know, again, boundaries are a decision, but here's the thing. Henry Cloud talks about that in the famous book that is his bestselling book of all of his bestsellers, called boundaries.

But if you set a boundary with someone that doesn't like boundaries, please expect them to be pissed. A hundred percent chance they're not going to like it. because, you know, you don't have to be mean, but I mean, 100, if they, they don't like the word no because they feel entitled. They feel like you owe them something because of blood that you have to live. I'm going to live in your backyard. No, you're not either. Passive aggressive. Not funny.

I agree with him. Not funny. Throwing that out there. That was pretty funny. Not funny. Not funny. I like it. Trying to be funny, but not funny.

Jake is in Pensacola. Hey, Jake, what's up? Hey guys, thanks for having me on. How are you doing? Better than I deserve. How can I help? So my wife and I just recently started saving for her to go to PA school, and that's about three years out from now, and what we've been doing is stacking cash into a money market account, and I want to know if we're doing the right thing by doing that.

Yeah, that are high-yield savings is fine. What's your rate on it? Yeah, it's 3%. That's what I found through Fidelity. Okay. Yeah, you might do a little better than that with Fairwind's Credit Union. You might check their high-yield savings. It might be a little better, but it's not going to be like 5% better or something. So here's the thing.

How much are we going to save total in the next four years for this? I want to save. We both want to save around $90,000. That's a little bit overshooting for the nearest school, but I just don't know if our expenses are going to be that much. higher. Gotcha. So the reasons that she will have $90,000 and get to go to the school without debt is because you put $90,000 in the account, not because of the rate of return. Okay, yes, sir. Because 3% on $50,000, the middle range of this, which it would be like two years before you

get there. Okay. So three percent of that is $1,500. $1,500 does not mean she gets to go go to school. In other words, if you got zero percent, it'd be real close to getting three. I see what you're saying. That does make sense. Yeah, it's not, it's mathematically not the reason. And it's too short of a time frame to probably put in the market. If you wanted to put some of it in a growth stock mutual fund and maybe an S&P 500 or something, you could. But it could go down. That portion could go down. But again, if $50,000 was in there and it went down 10%, which would be unheard of, very rare, then you would have lost $5,000 and that won't keep her from going to school.

Yeah. So the investment vehicle is not going to make her go to school or keep her from going to school unless you gamble it 100% on something stupid like crypto or a hand of poker or something dumb like that or draft kings, you know, which we're not discussing any of those things without laughing. This show is sponsored by BetterHelp. Somewhere is the time when people escape, whether it's relaxing or going on vacation, we've all been told this lie that if we could just escape from it all, everything will magically work itself out. But here's the thing. A vacation won't fix what you won't face. If you're anxious, if you're burned out or you're struggling, these problems will be waiting for you when you get home. This is why I recommend talking to somebody

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and I have lots of respect for you. Thank you so much. Thank you. So my question to you is, I have a real estate property. It's a townhouse that I bought a few years ago. I paid cash, so there's no mortgage on it. I have credit card debt of 50,000 and a student loan of 40,000. So the real estate is worth about 200 grand. So my question to you is, should I sell that property for 200,000 and then use that to pay my credit card and my student loan? What's your household income? My salary is 70,000, but I rent a couple of the rooms in my house, so it brings me up to like 110,000. Including the rent on the townhouse?

Uh-huh. Okay. All right. So you make $110, you owe 90, and you have this $200,000 paid for investment. Correct. Okay. Number one, I love the investment. I think it's great, and you like it.

I can tell by the way you talk about it. I do. You don't want to sell it. Okay. No. So the tradeoff is that you're going to have to live on beans and rice, rice and beans, no vacations, no eating out. and do anything you can to earn some extra money.

You're already doing a lot of things to earn extra money, but anything you can do to get these debts knocked out fairly quickly to make keeping the investment makes sense. If you're going to be 10 years wandering through this debt, it doesn't make sense. You need to sell it. But if you're going to say, I'm going to knock this out $30,000 a year and be done in three years,

or 45,000. $1,000 a year and be done in two years. Yeah. Which would be like $4,000 a month or $3,000 a month. Okay. Could you do that? Yeah. Yeah, I should be able to.

If you do that, then I'd probably try to hang on to it. Because it sounds like a good piece of property. Yeah. I get $17.50 per month. That's a good return on $200K. That's good. That's a good cash on cash return. Good.

I'm doing bookkeeping. on the side too. So I didn't even count that salary that didn't come there. So what's the most you could throw at this debt per month right now? If you just really tighten down the budget. If you're telling me that I can do $3,000 a month, then I'm going to do that. Well, I'm just asking, have you, have you looked at your budget? I have. I mean, that other than my credit cards, that's it. I have no car payment. I have nothing else. My mortgage, where I live, that's the only thing, which is $2,000 a month. Yeah.

So I'm saying when you get on every dollar and download it tonight and lay it out, you're a bookkeeper, you're smart. I can tell by talking to you that you know your numbers. And so what we're looking for is $3,000 to $4,000 a month. And if you can find that and commit to doing that, then keeping the investment makes sense because you're going to be done in either $4,000 is done in two years, $3,000 is done in three years. Okay. See? 36 times 3 is going to knock your 90 out or 4 times 12 is 48 a year and that's 90 in two years. Okay.

Okay. I've been doing the snowfall effect. Yeah, I would do that. So I've been. I would do that and throw it at this. But you've just got the two debts, right? Yeah, yeah, my credit card and my loan, my student loan. Yeah, and so knock the credit card.

The credit card's a smaller one, right? Well, there's different credit cards. Okay, so the highest that I always search out. Let's list the credit cards out, smallest to largest, and attack them in that order. And that's going to put the student loan at the bottom, which actually ends up mathematically correct as well. So that's good. Got that going for us. But, yeah, I think you're amazing, and I think you can do this.

But the answer to your question is it does not make sense to keep the investment property and drag this debt out a long, long time. It does make sense if you like the investment property and want to sacrifice and do three to four thousand dollars a month on this debt and be done in anywhere from two to three years and keep the investment property. That does make sense. But you would tell someone if they had $200,000 in an index fund to cash it out, cash out part of it to pay off the debt. I would, but that's a lot easier transaction than real estate and less expensive transaction. and this is a known, this piece of real estate's a known factor. Of course, that's a known factor too. But yeah, but that's very liquid is what I'm saying. You just got to push one button and that money shows up in your account. With real estate, you've got to sell it, you're going to pay brokerage fees.

And then later you're going to reinvest. You're going to pay a bunch of other fees. And so there's a lot of gyration that goes on with real estate. And the point is, too, that she enjoys it. Because we do talk to some people and they have an extra property and it's a headache and they don't enjoy it. So you're like, yeah, if you want to take 200, throw 100 at your debt, take the other 100, stick in an index fund and just let it ride and, you know, be more of that passive investor. Yeah, you go that direction, exactly. But if you love real estate, and that's part of how you want your long-term play, keeping that. Good point.

Brett's in Kansas City. Hey, Brett. Hey, Dave, how are you? Good, man. What's up? Hey, yeah, just a question. So recently just went through divorce. finally got all our financial child support, all that stuff kind of figured out.

In the next few months, I'm going to be getting some equity in the house I used to live in. And I'm curious, since she's going to be getting some of my retirement, I'm wondering, should I put that money back into my retirement, or should I use that equity to pay off my bills, some of the loans, lawyer fees, and then that would pretty much put me debt-free. How much is she getting from your 401K? Well, it's capers. I'm in the public school system here in Kansas.

Okay, how much is she getting from that? It's going to be about half. I've worked for 20 years, and we've been married 17 of that. Does it have a dollar amount on it? I have 87,000 in there right now. Okay, so she's getting 43,000. Roughly, yes. Okay, and how much equity are you getting out of the house?

About 60,000. Okay. Why didn't you leave your 401k alone and take less out of the house? That was just part of the deal. I know, why? We came to during mediation. Why? It's a bad idea.

Well, you can't go back now. You could, hypothetically. Brett, how much is all the bills, the lawyers, fees, debt, everything? About, let me see. I got the biggest one's a vehicle that I got in divorce that she basically kind of gave me or that we came to an agreement on 47, right about 50. What's the car worth? The car is probably worth 35.

Okay. And you don't need it, right? I have two vehicles. One's paid off. And that one. It's super old. And it's always in the shop getting repaired. and basically we bought a truck about a month before we separated.

So we don't, I mean, I owe 30,000 on it. And that's part of the 50. That's part of the 50, yes. Yeah. I'd sell the truck. And, yeah, throw some of the... Money at the difference. Yeah.

And if you need to buy a, you know, a $10,000 car with some of the cash, that'll be fine. But I'd get out of that truck debt instead of paying it off and keeping it. What's your income? My main job, I make about 87.5, and then I make about 25,000 and just some other side stuff that I do. Yeah, okay. Well, yeah, I don't think you go back and change it, like I said originally. I think you stay with the deal you got. Take the cash.

You become debt-free by getting rid of the truck, and you're not got enough to do much else with. Build an emergency fund. By the time you pay off everything, there's not much left. And then go back to retirement. Hey guys, health care is one of the biggest stress points in your budget. It's confusing and most of the time it feels completely out of your control. But there is a better way to handle it. Christian health care ministries isn't health insurance. It's a health cost-sharing ministry where Christians share each other's medical bills. And it's not a new idea. THM has been around since 1981. It's predictable and proven. And they've shared over $13 billion in medical bills for their members. plus you get more flexibility. There are no network restrictions and you don't have to wait for open enrollment. Now, let's talk about how CHM helps your budget because programs start at just $115 a month and many families save hundreds of dollars a month compared to traditional options.

So if you are tired of feeling stuck, check out Christian healthcare ministries. Right now, CHM is offering new members a 50% credit towards their first month of membership. Go to CH ministries.org slash budget and use promo code Ramsey. That's chmistries.org slash budget and use promo code Ramsey. Tari is in Charlotte. Hey, Tari, what's up? How are you doing, sir? Better than I deserve. How can I help? Okay, so I'm trying to clean up my debt. I'm trying to clean up my debt. And so a debt collector, they sold it off to another debt collector. So I called them up and

try to basically settle the debt. So they told me they can't collect on it and it's reached the point of some, I can't remember the term he used, but they said that they can't collect on it, and they don't report on it to the credit bureaus, and I'm trying to get it off my credit report. The debt collector that bought the bad debt said he can't collect on it. Yeah, he can't collect on it. And, um, you offered him money and he didn't want the money. Yeah, I'll, I'll try to settle.

I tried to settle the debt. And he said, it's the point of statute of limitation or something he says. Exactly. It's exactly what it is. It's past the statute of limitations. Yeah, past those limitations. That is so unusual. That's true.

Right. But it's so unusual that a debt collector would actually tell you that instead of just take your money. Right. Right. So now my thing is how. do I tackle it and get that off. I'm trying to settle it and get that.

The first thing I would do is call the debt collector back and ask for an email from him saying in writing what he told you on the phone. Okay. I mean, so I did call him back, and what they said was he said, our team to handle it, file the end of dispute. Our team will handle it? Yeah. She was like our team.

I'm asking you to send me an email. I'm asking you to send me an email saying that you cannot collect this debt because it is past the statute of limitations. I'm asking you send me an email saying that. That's what I want him to do. Number one. Then number two, you've got to write to, and there's an email place to do it on each of the websites, all three credit bureaus. Right. Right.

Okay. Okay. And what you do is you say this particular job. debt, I am disputing it as being valid. Don't go into detail, don't mention statute of limitations, just say, I dispute this debt. Now, and according to, and you may want to go back and play this on the podcast later, play it back, according to the Federal Fair Credit Reporting Act, you have, this is your verbiage in the letter, you have 30 days to prove the validity of this debt,

or to completely remove the entry from my bureau. Exactly, exactly. And you send that, I would send that by email if they've got a place on their site, and I also would send it in hard copy letter form, certified mail or FedEx or something where you can get proof of delivery on when the 30 days starts. Okay, because all the other credit, you know what I'm saying, I was able to, you know, settle on or just a one. that they said they couldn't really, they don't report or they don't, they don't report on it,

nor do they, whatever, whatever if they do, they don't. Well, he can't collect on it because it's patched the statute of limitations, and if it found out later that they collected on something that they're not allowed to by law, they could get in trouble. But most of the time, these guys are so scummy, they don't care, they take your money anyway. So I'm a little shocked, but it's okay. It's coming out in your favor. So, yeah, you need to send a certified letter, Federal Fair Debt Collection Practices Act and Federal Fair Credit Reporting Act is the two federal laws that dictate how this is handled.

And when you dispute the validity of a debt on your credit bureau, they have 30 days to prove it or remove it. Now, for the rest of you out there, not for this guy, they will not be able to prove it in the 30 days on any of your debts, even if they're valid, because if they write to Bank of America, Bank of America is not going to get back to them for 30 days. And so you could get that blown off your credit bureau. And there are people that teach that as a way to, quote, clean up your credit. The problem is it doesn't work because it will get removed from your credit bureau report, but Bank of America or whoever downloads in batches to all three credit bureaus at least once a

quarter. And so about 120 days from now, you're going to see the thing pop back up on your credit bureau report again. If it's not a valid, if it's not an invalid debt, it's going to come back. You can knock it off for a minute, but it's going to come back. In this case, it sounds like these guys are not going to report it again. But if you remove it and they re-report that they have this out for collections, it'll show back up on there again. How long does it take for the statute of limitations to. Statute of limitations on a debt is different in every state. But in his state, a lot of them are three, four, five, six, seven years, somewhere in there. They everything comes off of your credit bureau report every seven years from date of last activity. The problem is

if Bank of America in this example re-reports, that's activity and it starts the seven years over again. So even though you didn't pay anything on it, even though you didn't actually have any activity on the account, they can start the seven years over again and keep you in limbo for freaking ever. So you cannot get out of paying these debts unless someone does what this guy's saying is happening with him, which is a very unusual circumstance that he called with today. But most folks out there listening, you're going to have to go get those things settled and you're going to have to get them paid off. You don't get your credit bureau cleaned up and let it until you clean the, up the actual debt because it's just going to pop back on there and you're going to see it and it's

going to hang out seven years. A chapter seven bankruptcy is the only thing that stays longer than seven years. It stays on 10 years. And an interesting fact with that is none of the loan applications or applications that you fill out for other things say, have you filed bankruptcy in the last 10 years? They say, have you ever filed bankruptcy? Yeah. And so even if my Chapter 7 bankruptcy from 1988, no longer shows on my credit bureau report. If I answer, no, I have never filed bankruptcy because you can't see it on my credit bureau report. And someone does business with me due to me answering that question. That's called criminal fraud. I lied to get to do business. So don't do that. It's a bad idea. The honest. So you tell the truth. And so since I filed bankruptcy in 1988,

the year Rachel was born, for the rest of my life, I get to answer that question. Yes, I filed bankruptcy. What were the dates? It's like filling out one of those medical forms. Have you ever had an operation? Yes, in 1982, I had one. But you still got to fill it out because they're still going to find it. And, you know, for your life insurance application or whatever it is.

You still got to put all the stupid medical stuff in there. Anything, any hangnail that's ever happened has to show up. And that's the way this stuff is. And by the way. It's an interesting reason to almost avoid it, so it doesn't, just follow you your whole life. Yeah, hello. Hello.

Well, I know after like a financial. Have you ever been divorced? Financially, you can recover and all of this. Have you ever been divorced? If you have, the answer is yes. Yeah, yeah. Not lately. It's not a not lately.

That's not the answer. You know, not 20 years ago. That's not the answer. The answer is yes. You know, that's it. And it's that simple. So, you know, this stuff, these decisions are big life decisions. Yeah.

And Tari brings up a good point, too. Just to remind everyone, you can check your credit report for free. And you should. Once a year. Yes. With the Equifax TransUnion, you can go to these websites. And you ought to also freeze your credit. Yes, and freeze your children's credit as well.

And that's a pain in the butt. I had to go in and just rip people shred to get it. But I froze all of theirs when they were minors. When they first came out with the law allowing you to freeze it. And what freezing it does is if someone bothers to check your credit before they issue a debt that is like a identity theft, thing as an example, then they would deny the credit because the credit bureau is frozen. And so they would say, oh, this person is not really applying for that. But the problem is about nine out of ten credit cards are issued without checking credit.

So that's why a dead person and dogs get credit cards. And a guy in West Virginia one time sent me in a copy of his credit card, and he had applied for the credit card in the name of Buck Naked. Oh, Lord. And they issued the card. Stop. Visa issued to buck naked. Unbelievable.

Love it. That's a good segment. That's the craziest thing. Craziest things that have ever happened. Fru Foo the Poodle got one too, and he'd been dead three years before he got his. If you've worked hard to keep your car running, the last thing you want is stress when you're running the kids all over to summer activities or loading up the family for a well-earned vacation. That's why I trust Christian Brothers automotive. Listen, most people don't worry about their car just because it's older.

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Hey, how are y'all doing today? Better than we deserve. What's up? Good. So I'll shoot you the quick question here. So basically, I work for a university, and I'm due to be laid off here in about a year due to the school folding into another here in the area. I've got no debt. I've got a year's worth of emergency fund.

then I'm also due to get some severance and retention bonuses of all of the school kind of, you know, goes towards closing here within a year. My question is, should I start really looking hard for a, you know, a new job right now, or should I kind of wait, collect those bonuses and see where I'm at, you know, within about a year? So the bonuses and the severance are going to amount to how much money? About after taxes, I've done the math. It's about 24,000 altogether. Okay. And what do you make? Right now I make $70,000, about $70,000 a year.

Okay. And what do you do? You're a professor? I work as a, yeah, I know I'm actually a compliance coordinator for the financial business office. Okay. All right. And so what will you likely go to, what's your new career going to be, your new job? Same thing?

Well, I've been thinking about that. There's also some different, you know, whether I work for maybe a bank or a financial, like, credit union or something along those lines where I get back into compliance or risk management, I'm kind of on the fence with it. Probably a lot more money there, isn't there? 100% by far. Okay, so let's pretend that you found a new job making 120,000 today, and they wanted you to start today. Well, you would take that because 70 plus 24 is less than 120. Yeah.

Let's pretend you found another job making 70. I would not take that until the last day of my current job because I would want to get all the bonuses. But I think you're probably going to move up in pay as you shift the type of compliance work that you're doing so much that this bonus is not going to be worth sticking around for. I think you're right. I think that's the math. I'm going to let math drive it, but go out there and start poking around. Yeah. Have you talked to anybody, James?

just in that industry and just kind of have a feel out of how easy it could be to get your foot in the door somewhere? Yeah, I've done some poking around. It's definitely going to be a lot harder. I actually used to work in the banking industry. I want to maybe jump back in. And I know you guys say, you know, don't just throw applications out there. So I'm really trying to hit my connections, you know, to see kind of what I can get.

Right now I haven't had a lot of hits, but I know the job market is slow. You ever had any history in the securities side of like working for a broker date? or something on that side of compliance? I have not actually, but it's worth looking into. Okay. It pays better than banks. That's why I was asking. Sure.

But if you've had the history in the bank and you can get your foot in the door, I don't care. But I'm actually thinking you're probably going to go move to six figures. Does that sound right? It does. It does. It takes a lot of, of course, effort, obviously. But why not? Why not work on it now?

And if you could get six figures, start. next month, then we would just go ahead and say goodbye. Yeah, I think that's fair. Yeah, so let's do that. And I'll send you a copy of Coleman's book, Proximity Principle, which is what you're referring to, to use your connections to get in the door on things. For sure. And the wisdom of, I mean, he's at the luxury of just say it gets down to the wire.

He's got three months or so of pay, plus a year big emergency fund. Nothing's on fire right now. You know, you know the end is coming, so you want to start having these conversations. But in a great way is you, you know, if you have two or three options ahead of you, you get to kind of make that decision of what's best for you. You get options. There's no urgency of, oh gosh, we have to start making an income. Because we get some of those calls and it's like, you've got to go, you got to start doing anything. Well, and when you're desperate, you don't interview as well. Yes. You know, your body language is different. Your voice tone is different. You walk in the door different. You feel different. They can feel it in the air that you're scratching and clawing at this. And, you know, you're, you're if you're like, yeah, I'd like to do this, it looks good. If it's a good fit, I'll, you know, let's talk about it. And is this a good partnership? And that's a completely different interview. Yep, for sure. And in this, there's nothing, I mean, there's no moral obligation by any means to stay. But is there any level of loyalty of, hey, I'm going to, I'm going to finish out this?

I'm going to go down with the ship. Roll well, a college that went out of business. Well, I don't know. Because they didn't follow my compliance guidelines and didn't stay financially solvent. Could be that too. Oh, my gosh. Donald is in San Antonio. Hey, Donald, what's up? Hi, good afternoon.

Thanks for taking my call. Sure. How can we help? So me and my wife are retired. We're on Baby Step 7. And we are still doing the envelope system. And my question is, are we better off? Because a lot of the envelopes just build, like the ones we have for car repair and Dr.

Co-Pays and jet bills and all that. they kind of just sit there and would we be better off just living that sitting in our IRAs instead of taking that money out every month? Well, I would at least probably put it Donald in just to a high-yield savings account. I would put it somewhere. So, yeah, to your point that it's kind of growing. If it's building up too much, you've got too much allocated to the category. Okay. So, I mean, if you've got $5,000 in your vet bill envelope, your dog's not been sick.

You know, I mean, you see what I'm saying? You know, you got $5,000 built up in your car repair envelope. You've over-budgeted for car repairs. And so that's, you know, you should not have big build-ups in there anyway. But a lot of people, including both of us, have gone to just very few or no envelopes and instead are just using the every dollar budget and using a sinking fund approach inside, which is a little miniature savings account, like a little miniatures. your envelope per category inside your every dollar budget. And it explains where your money is.

And a lot of people are using that digitally now rather than the actual physical cash in the envelope. My wife still carries a couple of envelopes. She still does that. But everything else we do at the Ramsey's is now done with debit card and with the budget system. And it is at your house too, right? Yeah. I, yeah. Cash has gotten limited in my life. Yeah, but you're right. What ends happening is, is that you've got the money to do stuff and you just do it. And then you look up and go, God, that envelope's got like $6,000 in it. And I'm walking around with this in cash. You know, so no, that you, you, yeah. And I would say the envelope system, the purpose of it is to control your spending, to know what's going on per category and to have a level of

real life accountability that when there's no money in the envelope, we stop spending in this category. So people that are just starting to budget, you know, I think it still is for a two or three months, just test it on groceries, yeah, on a couple of things. Because again, it kind of just gets you back into this rhythm of knowing exactly what you have because it's physical money right there. And so that's really the purpose of the envelope system. But Donald, you guys are maybe step seven. You know, the main reason for it is I think you guys have probably outgrown that main reason. So if you put everything into, you know, a fair wins, credit union high-yield savings account, you would be great. You would be fine. You would not be

doing anything. Yeah, that'll be, that'll work just fine. But the interesting thing is, by the way, for those of you that want to try this or you're just getting started, that the actual research says that when you spend cash, when you hand Uncle Benjamin Franklin over to the cashier at the grocery store, it activates the pain centers of the brain. It hurts to spend cash. It does not activate the pain centers of the brain to hand them a piece of plastic. So you spend more. As your business grows, everything becomes more complex.

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Okay. So I have my... My question is I currently have a truck. I owe $38,800, my payoff. There's a dealer interested in purchasing it for $44,000. My question now is I do have a side hustle that I do. Monthly when I'm off from my work, my side hustle brings me in roughly around.

$1,300 to $2,000 per month. My truck, monthly I'm paying average about $1,000 with entrance. My diesel monthly is about $400. Is the side hustle have something to do with your truck? Yes, sir, because my side hustle, I do pressure washing, so I need to toll my trailer with my water totes, containers, and chemicals. You could do that with a You could tow your trailer with a $10,000 truck.

Right, that was my question now. Should I sell my truck? Yes. Is something cheaper? Yes. Or should I sell my truck and just get a daily where I don't have to do side hustles no more? Oh, because you're sick.

Yeah, I hear what you're saying. Because your side hustle basically paid for your truck for the payments, the insurance and the gas. Do you, I mean, have you got other debt? Um, not really, no. What's your income at your main gig? My, my main job, I'm making an estimate about $62,000 and biweekly after taxes and insurance, I'm making about 1,900.

Yeah. Okay. There's two questions. Should I continue my side hustle and should I sell my truck? The answer is you should sell your truck. And if you want to continue the side hustle, that's fine. Get an inexpensive truck to tow it with. But if you don't.

want to continue it, then sell off the equipment. That's fine. Yep. But if you want to make some extra money and this is a good way to do it, pressure washing is a good way to do it. It's a great side hustle. Really good pay per hour. But you've got some equipment tied up. But you don't need a $40,000 truck to tow a pressure washer. That's kind of, that's backwards. Yeah. And if you don't have any other debt and you have an aggressive way to get a three-month emergency fund in place to keep moving down the baby steps, that's okay. Yeah. You can, yeah, you don't have to do the side hustle.

But if you want to do things faster. I personally would keep the side hustle going by getting an inexpensive truck and pay cash for it and sell the big one. That's definitely what I would do personally. But I've always worked a lot, most of my life. So, Kayla is in Boston. Hey, Kayla, how are you? Hi, I'm good. How are you?

Better than I deserve. What's up? So my family and I have been. on the house hunt in Massachusetts for about a year now. And unfortunately, we keep getting overbid. Good. You shouldn't be buying a house unless you're married. Yeah, my parents, what was that? Sorry, I was clarifying. You should not buy a home together when they're not married. It's not a good idea. Unmarried people can buy homes. Oh, I see. I see. Thank you. My parents' house is in a really great

town in Massachusetts, and we've already went to our attorneys and put the house in an irrevocable trust since I am the only child. Instead of putting 20% down on a $600,000 house, should I consider maybe putting 20% down into this house, my parents' house, because I will be inheriting it one day? No, I would not. No, okay. Because it, because it, because it, because It just locks you in to that home for a really long period of time where you and your husband may get married. And in two years, something may happen, right? And you guys may move and want to do something else. So yeah, it locks your money up into an asset that you can't get it out.

You can't get out. Yeah, it's done versus you guys building a life together and having a home. And then one day when your parents pass, you know, then you can decide, hey, do we want to move in? do we want to sell our current home, take some of the equity to fix up mom and dad's home or sell mom and dad's home? You know, you actually have options. This just locks you into one option for a long period of time, which I would not do. When is the wedding? Sorry? When is your wedding? Next fall.

This, like 18 months from now? Yes. Okay. In 30 years of doing this, almost 40 now. Some of the worst nightmares I have seen are people that buy a home together who are not married. Please do not purchase a home until you're married. It is not together. It is not a good idea. You're going to make a mistake, and it's going to cost you.

You're getting this out of order. Yeah, rents for a little bit, get married, and then you guys go and look for a home. Yeah. And I think you've been protected so far from accidentally making that mistake. by not being able to buy so far. So, and, and, no, I would save up and put as much down as I can put down after we are married. But too many things happen and you're too vulnerable and most people are not going to do the proper documentation and everything else to make sure they're protected and you're not either. So it's just best to wait until you're married.

And if you're going to buy together. Now, if one of you wants to buy a house, that's fine. Or the other one wants to buy house. That's fine. What Rachel's point was. But couples should not buy homes together that are not married. It creates all kinds of relational problems, legal problems, financial problems, and the unseen things that come at you, the unexpected, unintended consequences that come at you create all kinds of issues for you. I'm begging you, don't do this.

Gabriel is in Augusta, Georgia. Hi, Gabriel, what's up? Hi, Mr. Ramsey. I'm doing well. How are you? Better than I deserve. How can I help? So here's the situation.

I'm active duty military. I am married with two daughters, one-year-old and a three-year-old. And we own a home. I put no money down on it. I use the VA loan. No debt other than that. That's a $250,000. mortgage and I owe $243,000 left on it. And besides that, we just have my wife's student loans,

which is about 12,000 700 left. So we're working on Baby Step 2, working on paying it off. But I'm thinking ahead and thinking if we have a third kid, we're going to need a car that can have three car seats, and neither of our cars can do that right now. How old is your youngest? Youngest is one-year-old. Okay. So how far out is this problem do you think? Problem.

Child. No, the problem is the third car seat, not the child. Not the child. How far out? The problem is I need a car. How far out is that? Yeah, so, I mean, not to get, you know, too personal about it, but we're not, we don't believe in using birth control. Oh, okay.

So we're going to try natural family. Any minute. Nine months. We'll just say nine months. Okay. So how much? do you have saved towards the next car? Well, I, zero right now.

Okay, and how much is the current car worth? The, we have two cars. I have a beater. I drive to work. That's probably worth less than 2000. What's the other car worth? And the other car is worth, I could probably sell it for $17,000 right now. Oh, perfect.

So sell it for $17,000 and buy something that holds $3,000. car seats for 17,000. Yeah, go get you a used van, a nine-year-old van. Honda Odyssey is what I'd And if you can save up some cash to put with the 17, maybe you could move all the way up to 20. Hey, what's up guys? It's Jade Warshot. Now, I know a little something about saving money. While my husband and I were paying off over $460,000 in debt, we went over every expense in our budget to find ways to cut back. Nothing got a free pass, including our phones. And you need to be doing the same thing. And now with Boost Mobile, one of the easiest places for you to save money is your phone bill. Their unlimited plan is just $25 a month forever. With a price that nice,

why would you ever go back to your old carrier? And with Boost Mobile, there's no contracts, no hidden fees, and no surprises, which makes this a no-brainer when it comes to saving money. Best part, you can keep your phone and your number when you switch. So it's not like you're making some huge lifestyle change. Listen, you need a phone, but you don't need to be overpaying every month. So whether you're paying off debt or building wealth or you just want to keep more of your money in your pocket, this is a win. Go to boostmobile.com slash Ramsey and make the switch today. That's boostmobile.com slash Ramsey. $25 forever requires customers to remain active on Boost Mobile Unlimited Plan. Today's question of the day is brought to you by why refi. One financial mistake

doesn't have to define the rest of your life. If you've fallen behind on your private student loans in default, Y-R-FI can help you explore low fixed-rate refinancing options and affordable payment plans. Go to Y-re-refi.com slash Ramsey. That's the letter Y-R-E-F-Y dot com slash Ramsey might not be in all states. Today's question comes from Carly in New Mexico. She said, my husband and I are in our 40s and we have a household income of $80,000. We are debt-free except for mortgages on our home and business building. We have a fully funded emergency fund in about $75,000. thousand dollars in retirement. We have a net worth of over one million, but it's almost entirely made up of the equity and real estate investments. Should we be concerned about retirement if we have all of our

eggs in one basket? I mean, over the long term, yes, I would be concerned. I mean, if you see a plan out of this where you start to equalize some of this in the next four to five years, I would be more okay with it because of your age and where you guys are at. But I would be making sure that you're funding 15% of that 80,000 in retirement so that you don't become real estate heavy, again, over the long term. But that 15% will help you kind of balance it out. But yeah, I would, I personally wouldn't want all my net worth purely just in real estate. I would want cash available and real estate investments, or I'm sorry, retirement investments like 401Ks.

The problem is there's a shortage of cash in that situation. And so that lack of cash. of liquidity is going to pinch you, even if you have a high net worth, and it's all in real estate. I don't mind it being very heavy in real estate, but being cash poor is what I mind, no liquidity. And so having some other types of retirement investments to provide the cash is fine. Because these are not. People that love real estate, for some reason, end up cash poor, if you're not careful. Right. Because a lot of the investments, you know, they're not making, they're not providing the cash, right? It's set up in a business building, and unless

the business is paying rent to the building, then you make money that way. But there's no cash coming out of these investments. Nothing to panic, but I would start building a liquidity position, is what we would call it, meaning some cash. And that would, a good way to do, that's exactly what Rachel said. Start putting 15% of your income away into retirement into some good mutual funds. And that, you know, over time, that's going to be plenty. You know, that, that alone will make you another several million. All right. Dennis is in Atlanta. Hi, Dennis. How are you? Hey, Dave and Rachel, it's an honor to speak to you guys. You too. What's up?

So I've got a question for you. I am 32, no kids, not married. I'm going to be finishing baby step two this week and should be done with baby step three in about two months. And then that will put me into baby step seven. So I'm kind of not sure what to do. I know I'm going to max out my Roth IRA, put some money in. my work 401k, but really just don't know what else to do at that point. Is it because your house is paid off, or do you own a home or are you living somewhere else? Yes. Yes, I own a home. It's paid off. Okay. And it's paid off. Okay. Good for you, Dennis. Way to go, man. Yeah, well done. Yeah. So yeah, I would max out all the retirements and then I would

have some other investments going in non-retirement, minimum of something like an S&P 500. But if you wanted to get with your SmartVestor Pro and open up a brokerage and have some after-tax investing going in addition to your maxed-out retirement. That's what I would, that's what I did do with it, by the way. That's not what I would do with. It's what I actually did. And that money, that side money is what I started buying real estate paid for with. And nowadays, many, many, many years later, Dennis, because I'm 65, you're 32, right? And I was probably about 32 when I started that, but now I've got a lot more of my net worth in real estate than I do in mutual funds. Okay, yeah, I was going to plan on opening up a brokerage account and kind of start building

potentially a bridge account or, you know, something to pull from, you know, if I wanted to buy a second home or something like that. Exactly. That's exactly what we did. And, again, you can sit down on the SmartVestor Pro. You can find them at Ramsey Solutions. They can help you put all that together and lay out a game plan and start setting some targets on that that you're aiming for.

And man, that's awesome. Yeah, well done. Very cool. Good stuff. Well done, well done. Brandon is with us in Provo, Utah. Hi, Brandon. How are you?

Better than high to serve. I've wanted to say that to you for such a long time. Well, you pulled it off. One goal down. I know. Amen. All righty. So I'm currently dealing with a problem right now.

Well, in my mind, it's a problem, first world problem. We're going to be in Utah for about three more years, me and my wife. She's going to school for architecture. And then we're headed out to Florida so I could start my own HVAC company out there with my brother-in-law. That's currently what I do. What we're currently looking at right now is we have a lot of good finances available. We're wondering if we should be putting money into purchasing a home in Florida now to kind of beat the market, so to speak. And this is what everyone's been telling us to do.

I don't care what everyone's rents it out. Everyone's broke. I don't listen to everyone on anything. Matter of fact, what everyone says you usually run the other way. No, I wouldn't buy it outside of Florida until you're ready to go. Okay. So you think just keep on building up our nesting pretty big? Yep.

Yeah, the market's not going to move that much, Brandon, in three years. At this rate, right? It's not like it's 2022 again and everything's just. skyrocketing. It's it has slowed down in a good way. But yeah, I think if you guys stack enough cash, you can outbeat the growth there, if you will. Yeah, you can outstack whatever changing values there are. Yeah. But either way, even if it was going up quickly, I still would not go buy a property in another state in anticipation of moving there. I know that's the plan, but three years is a long time. It's also a very short time, but it's a long time. Yeah.

So, no. To make a big purchase like that. No, I wouldn't do it. And being so far, far from it. I wouldn't do it. Nope, nope, not the way out of handle it. David is in Chicago. Hey, David, what's up? Any pleasure to speak with you guys today? Sure. How can we help? I need a little advice. I've been with the company for 15 years, and through mismanagement, they are closing their doors in about four weeks. I have a traditional 401K that the company has been contributing to a big contributing to a flat amount.

And I started a Roth 401K on the side. Also, it's handled through John Hancock. And I was wondering, once the company closes its doors, what would be a good option for me if I were to leave it with John Hancock or move it out

into something separate such as like Cidelity or Charles Schwab, something like that. I would move it to a more traditional mutual fund setting, and I would use a SmartVestor Pro that we recommend to do that, the Ramsey trusted ones. And if you go to Ramsey Solutions, you can find the person that we recommend. I would move the John Hancock account over there, and your old 401K at your old company that's closing is very simple. It's a direct transfer rollover to a number. new traditional IRA and there's zero taxes. Now, be very careful, David. You need to get in touch

with SmartVestor Pro now and get the paperwork filled out, and they need to submit that then to the 401K. If you take a check on the 401K, the government directly to you. The government requires them to withhold 20 percent, and you don't have 100 percent then to roll over. And so that's going to burn you on taxes. So you don't want to do this. that. You want to directly transfer this rollover into the next IRA and you not touch it. It doesn't need to touch your hands because they're going to withhold 20% on you. So go to Ramsey Solutions.com and click on SmartVestor Pro and you can find somebody in your area to sit down and do that and get that opened up. And they'll, you know, and you can roll your John Hancock thing over there too. It'll be

easy. Do both of them. Do both of them. Keep them all in one place with your SmartVistor pro. You'll be in much better shape than both of those situations. So I hope you got the next gig lined up, brother. As a dad of young kids, I'm starting to think a lot more about the world they're growing up in and how I'll help them make sense of it as they get older. And that's why I like World Watch, a video news service for preteens and teens. Because one thing I know for sure, if you don't teach your kids how to understand the world, somebody else will. And these days, that could be TikTok, YouTube, Instagram influencers, or whoever happens to show up in their social media feed. World Watches 10-minute videos help young people understand what's happening in the world through a Christian

worldview without all the outrage, negativity, and noise that is everywhere these days. The reporting is factual, engaging, and designed specifically for pre-teens and teens. And World Watch creates opportunities for something every family needs more of, meaningful conversations. Instead of just reacting to headlines, kids learn how to think about what's happening in the world, and parents get a chance to keep those conversations going at home. Because when my kids are old enough, I want them informed, not overwhelmed. And right now, you can get a 30-day free trial. Just go to worldwatch.com news slash Ramsey or use promo code Ramsey to get started. That's worldwatch. dot news slash Ramsey. Linda is in Houston. Hi, Linda. Welcome to the Ramsey show.

Hello. Thank you for having me. So I am 35 years old. I have two kids. I have a common law husband who's been unemployed for 12 years. I've been with him for 15. I have a a total debt of 45K in student loans on my car. I have a home that was gifted to me that was worth $400,000. And so I am a registered nurse. My father told me, hey, come work for me. I'll pay you what you're making as a nurse. While you go to nurse practitioner school, so that's where I'm at right now. My question to you is, should I pull a HELOC loan on my home to invest in real estate? And with that being said, one that would be helping me with a contracting and building is my father. He wants me to tell my husband to get a job, which my husband has had trouble listening.

Your husband's had trouble. What? Listening to my advice on him getting a job, he did not take it well when I asked him to get a job. For 12 years. What's he been doing? He was taking care of the kids. Well, the kids were during the pandemic doing online schooling, but the kids had been back in school. for going on three years now, and he refuses to find work or help me out. What's he do all day? Oh, he's at home.

Usually at home with the kids right now during the summer, but at home as well whenever they're in school. He keeps up with the home. And he just says, I want to take care of the home and the kids, and I don't want to go get a traditional job and make a living. Yes, I have talked to him and asked them to help me out, because we are still currently living paycheck to paycheck.

You said common law, so you guys are never married. Correct. You're never married. No, we're not legally married, no. Okay. So I'm curious why you've put up with this for 12 years. Oh, yes, I asked myself the same thing, but the fact that we have kids,

and I have tried talking to him about helping me work. I'm tired of living paycheck to paycheck. I want to grow. I'm 35 years old, and I'm already planning retirement. I want my kids to be able to be financially ahead, you know, just like I was, thanks to my father. Yeah, I also don't want to be married to a nod on a log, a lazy guy. Oh, yes, I agree. I mean, aside from all your personal goals, it's just hard to respect a guy that sits on his butt all day.

I agree. I agree. Because that—I wish he had the same. And I'm assuming that attitude of a little bit of laziness and apathy plays into every part of his life, right? Yeah. Yeah. Because I mean. It's who he is. Yeah.

Yes. I make a decent amount of money. You know, I wish I made more. We live comfortable, but like I said, we're paycheck to paycheck, one disaster away from everything crumbling. So the house engine your name, correct? Yes. The house was gifted to me by my father. Everything's under my name.

And in your state, the common law status does not give him any access to ownership in the house, right? No, because it was gifted. She doesn't have anything, but now I worry if I do pull a HELOC loan to invest with my father. I would not pull a HELOC loan to invest with your father under any circumstances. Okay. Period. We don't teach people to borrow money to invest. We teach people not to do that.

But, yeah, so, but, yeah. Basically, you're the owner of the house, and so relationally this comes down to just telling him he has to leave, right? Yes, I don't want to because I believe that, you know, every child deserves both parents in their home, but I don't want my children to be off the family. I don't want my children thinking this is how a man behaves. Exactly, exactly. So this is not, don't tell me we're doing this for the children. The proper thing to do for the children is to not let this model be in front of them. Does he have an abuse problem?

Is he abusing alcohol? He's had a past with substance abuse. You sure it's in the past? Yes, so once in a while currently. Once in a while. That's not in the past, by the way. Now, if you've been an abuser, if you've been an addict and you're drinking again, that's not in the past.

Okay. Okay. Well, I'm not sure exactly what our question is on the table, but what I would tell you to do is, no, I would not take out a home equity loan to invest with your father. Borrow on the home that he gave you that's paid for. That's a little weird. Okay, not even thinking about that one, period. As far as... I think some absolutes that are drawn. Yeah. I mean... know, I think under the direction of a good marriage counselor, and I would go see one, he's not going to go. But if I were you, I would get somebody other than a couple of people on a podcast or your dad to advise you on this. And relationally, what we're hearing, though, is if we were in that situation, we would say, you're going to have a job working 40 hours a week,

sometime in the next 30 days, or you're going to have to leave. And that's what I would have done 11 years ago, not sit on your butt for 12 years. So this is now your fault. It's no longer his fault because you've tolerated it this long. So now you've got to correct your problem that you created by drawing a line in the sand. And I think that's what a good counselor is going to tell you. But you ought to have someone other than us tell you how to do that or other than your dad. Yeah. And I was trying to flip the script in my head if a man called and said, or paycheck to paycheck. My wife refuses to get a job,

X, Y, and Z, you know. Like, does that make a, you know what I mean? I'm playing that out in my head. If there's a difference there, I don't know if there is, but I think the problem is that there's two people. I don't think this guy wants to be, I don't think this guy is asking to be a stay-at-home dad.

I think this guy doesn't want to work. That's what I'm saying. That's the difference. And when one spouse is the only income earner and is struggling and reaching out to the, the other spouse, I mean, I know they're not married, and saying, I need help. We need help to get us out of the situation, to get out of debt. It's kind of all hands on deck. Do you know what I'm saying? Like, that's the attitude approach of a healthy marriage that we look at our situation and say,

okay, what do we have to do? Instead, she has three dependents. She's, yes, and that he's, he's doing nothing. Nothing. Nothing. Nothing drives me bananas. I know, yeah. I can't handle it. And just a dude. I mean, when you said that, I was like, it's so true. It's one of the most, that would be one of the most unattractive things. Just lazy. Do you know what I mean? Just a hound dog in the sun on the front porch. Just lazy. I'm like, oh, man.

That's it. If he had initiative and doing something, like, you don't even mean within another context? I'm like, I'm playing gymnastics in my head a little bit of how I would approach it if it was something else and something different. But I think it's just, I think the end of the day. The problem you're going to have is this. Okay. Very little that you can do in this once this much water's under the bridge is going to work. Mm-hmm.

Because we have 12 years of the same pattern of script. Yep. Yeah. And now to flip the script and go, oh, you've got to get a job of you're out of here. It's just not, it's not going to go. It's not going to happen. It's not going to happen. He's not going to go, oh, you know, I was just thinking the same thing this morning.

No, that's just not going to happen. And help provide for my family. Yeah. You know, no. You wouldn't have anywhere near the fuse on this bomb that you'd have around our place. Man, and then you got Linda who's like killing it, working hard. A nurse. Heading towards a nurse practitioner.

Yeah. Got a paid for a $400,000 house. Yeah. By the way, I think you need to pursue nurse practitioner, not your dad's business, too. You didn't mention that, but I'll throw that in just for the fun of it. Linda, I'm sorry. I love the independence that you can have and that you have, and you're going to need it. Yeah.

And that's where it's going to take you. So, yeah, I don't think this, as they say, leper. is going to change his spots. I got a feeling that as you just go, oh, and I was just thinking, no, that's not going to come up that way. I think the old boy is going to have to find somewhere else to take his naps because he takes a lot of naps after he drinks a lot. And she's not being truthful.

He drinks a lot still. Yeah. Linda, I'm sorry. I appreciate the mom heart, though, of fighting for your family and, you know, all of it, but you got to figure out what's good for you, Linda. And for the kids. And you, yes. And you being in the healthiest situation, safest situation for you is going to be the best thing for your kids.

But I would. I would go get some advice from a counselor. I would sit down with someone a professional and talk it through. Sit down with a good pastor maybe. That's a good idea. Welcome back to the Ramsey show in the Fair Winds Credit Union Studio. I'm Dave Ramsey, your host. Thank you for joining us. Steve is in Rochester, New York. Hi, Steve.

How are you? Hey Dave, I'm great. How are you? Better than I deserve. What's up? I have a business that I've owned for about eight years now. Um, within the last 16 months or so, um, it's taken a hit and it's basically breaking even. Um, and I haven't been paying myself throughout that. Um, so, you know, I'm trying to figure out it's listed for sale. Not probably not going to get anything close. to what would have gotten a few years ago. And I'm just trying to, you know, get some guidance on what I should do next. If I should try and pour some more money into it or go look for a 9 to 5 or start a new company. What kind of business is it, Steve? It's a protein supplement company.

Okay. That you make or that you sell? Can you repeat that, please? Do you make the protein supplements or do you just sell other people's? We make it. We have a contract manufacturer and we sell it. What happened to the sales? Why is it down?

Direct to consumer. We were using a 3PL, 1-3PO, and they changed. They got bought out and then bought out again. And they threw out about $350,000 worth of. inventory. We hired attorneys, went through the whole process, which was expensive, and we were out of stock on pretty much everything for six to eight months. So now you have inventory back? Now we have most of the inventory back. So why can't you sell it? That flywheel momentum. We're trying, but that flywheel momentum hasn't gotten back up to speed as to where it was. Why? To where it was.

I don't know. I don't know if people are spending less on it or spending. They're spending more. Why isn't it you're selling? Probably marketing. Getting the name out there or back out there. How were you? I mean, the other company was doing all the marketing for you.

You've never had any experience selling your own product? No, we have. We used to use influencers, and we stopped using that because stopped using them because we didn't have great experiences with some of them. Okay, because it didn't work. At first it worked. Yeah. But after that, it didn't.

Okay. So it sounds like you know how to make protein supplements, but you don't know how to sell them. That's what it sounds like. Me specifically to go out and... You own the company. Right. I'm not saying you need to go door to door, but you ought to have an idea how you're going to directly get this thing that you created, and you created it with someone in mind, and how are you going to get it to them? That's marketing.

Right, right. How many people work on the team, Steve? It's small. It's about, not about it. It's four people. Okay. So after payroll and expenses and everything, you guys are breaking even. Yes, yeah, I'm not paying myself.

And how is that much product moving? Just on your website? Yeah. Yeah, on our website. And how long has it been since you've had an inventory back? Almost about four months. How long ago did you start this company? Eight years ago.

You told me that, I'm sorry. So eight years ago, if I had talked to Steve, would he have been more excited than he is right now? He sounds down in the dumps. Yeah, very much so. It's been so frustrating. I'm married. I wasn't married when I started the company, and we have a five-month-old. And you've been through a lawsuit and all of it.

It's just taking you out. Yeah. Yeah. It's been listed for sale. Since we got inventory back in stock, there's not been much movement. And so it has been pretty frustrating. Well, it's not really much of an asset to buy because it's not profitable. Right.

I don't know why anybody would want to buy it. Unless they would just want to buy the inventory and then, you know. And the formulas, recipes or whatever. Okay, so Steve, so what next steps for you? You're wondering. Your main question is, do you keep putting money into this? No, not unless you have a reason. to believe it's going to work. And right now I hadn't heard a reason to believe it's going to work.

So, Henry Cloud says in his book, Necessary Endings, that we end something, a relationship, a job, a business, a department, an employment, whatever it is when we lose hope that the situation is going to improve. And if you, and I have not heard a single thing talking to you that you have any hope this is going to improve. I know. It's been four, well, I'm just thinking it's been four months since everything's been back. But there's no light at the end of the tunnel that's not an oncoming train. I'm just wondering, Steve, if you were killing it right now, would you still love the business? Or do you just want out in general? I probably wouldn't.

I visited a company before and was making pretty good money that. Okay, so you just won out in general. Even if it was doing good, owning your own company and doing all of this, it's just, it's not fun right now for you in general. Hello? He's gone. Oh, we lost him. Oh, did I offend? I'm not just kidding.

I doubt it. I doubt it. Yeah, no. That's my job. Yeah, I would just tell him, I just wonder if there's strategies you go back to for 60 more days to see if there's anything. Tell me three things you want to try to keep it open. That's right. And I can't get any of that out of it.

Yeah, no. He seems like he's done. He seems like he's done. So what do you do? Sell off the inventory to another company or something, try to get the cash out? Keep your website open and shovel it out of your basement until you get it. Steve, you there? Wait, press two.

We got him. Okay, good. Steve you there? We got your back. Oh, there. Okay, good. Okay, so do you have three moves you can make to try to salvage this thing and get it profitable that you want to try? Or do you want to close it?

My gut instinct is to close it and or sell it. But, you know, to put money into it in three months, another 50 grand. You don't have anything that gives you hope. That's what I'm hearing. Yeah. Yeah. And I'm also hearing in your voice that you're out of gas. Yes.

Yes. You know, with a five-month-old and staying up until 2 a.m., 3 a.m. to try and make this work, it's my family and faith are more important than the company. What is the value of the inventory? It's about 350,000. Okay. I wonder if you can sell that somewhere. I think you can work that as your side hustle, just running now for your own web,

website with no overhead and get your inventory back out of it, you're probably going to make more that way than you will trying to sell it. So the business, because I don't think the business is a viable purchase because it's not got profit. And businesses that aren't profitable are called a hobby. So, yeah, I'd go get a 9 to 5 and come in out of the coal for a while and heal. You may go back to being an entrepreneur someday, and that's not a sin, but it's not unusual at all for somebody to take five years and go back out into the marketplace, work for someone else,

get their emotions healed, get the lick your wounds, as they say. And, you know, you've got these responsibilities that are weighing heavy on you. So that's what I would do. Took a minute to get there. Sorry about that. You spend hours researching before making a major purchase like a home or car, but it's also a good idea to put in the work searching for the right insurance coverage. To protect your biggest assets, I recommend using Ramsey trusted pros. Whether you're looking for car, home or any other type of insurance, Ramsey trusted providers have been coached and vetted to serve you like we would. Find what you need at Ramsey Solutions.com slash insurance. Tessa is in Pensacola. Hi, Tessa. Welcome to the Ramsey show. Hi, thank you. What's up? I am calling, my husband and I

have been following your principals for the last six years. We just paid off our mortgage. We just paid off our mortgage. Yeah. Really excited. And we've been investing 15% since we hit babysat four. But now that we paid off our mortgage, we've been looking in how to like optimize that investment. Good. We've been investing between Ross and traditional and just like a split there. But now we just, we hit, we just found out that we hit, there's a four Ross. There's an income limit, so we cannot invest in the traditional or the Roth. I know there's the back door, but the question is, is there a recommendation on percentages of the 15% to invest in traditional versus backdoor or other investment? 100% into Roth.

Your 401k ought to be Roth. Everything ought to be Roth if it can be. Is Roth available on your 401 case? It is, but we don't qualify because of our income. That's not true. 401K does not have an income limitation. The traditional, but doesn't the Roth have a... A Roth individual has a $200,000 married filing jointly limit,

and you have to do a back door, but not on the 401K. I do a Roth 401k, and my income is way above that. Okay, so just put the whole 15%... in... No, I'd put everything. I'd max out your 401k. Okay. All Roth, and then I'd do two backdoor Roth IRAs, individuals as well.

And if you've got money, if you have the money to do all of that and still do some of the other things you want to do with your life, then that's what I would do. What's your household income? It's variable because of a commission structure, but anywhere between three to 400,000. Okay. Yeah, you've got the money to have a wonderful life

and max out all your returnments. Okay. Yeah. So 100% Roth and backdoors. Exactly. And then if you wanted to beyond that, Tesla, open up, I mean, it would be like a bridge account, I guess. Or, you know, just a brokerage account.

Put some money in mutual funds that are not in retirement. That you can use. Because if you go down this rabbit hole, there's the mega backdoor for, I mean, there's all these other elements that are so, such high numbers. And I remember we even, we've talked about this on the show, high earners. There is a point that you can max out all. these things, you know, there's all these elements of massive retirement investments, but it's all stuck till you're 59 and a half. So there is a point of maxing out everything from the traditional

sense, but then there's all these other layers that you could do, but I probably wouldn't. At your level of income, I probably would not do megas. Yes. But I would just take your full 401k at Roth and take your backdoor Roth's individuals. At your income, you'll still have plenty of money. You'll do some other investing, some other generosity, some other enjoyment. and you'll have plenty of, you should have plenty of wiggle room and they're making $300,000 or $400,000. So, yeah, sit down with your smart vester pro.

They can walk you through every single bit of that and show you how to do it. Jared is in Chattanooga. Hi, Jared. How are you? Hi, Dave, good. How are you? Better than I deserve. What's up? Well, I just want to say what an honor it is to talk to you.

My question is, so right now I'm 30 years old. I'm in a pretty high-paying career. I would like to make a 10-year plan for myself to transition to a more flexible career path so that I can spend more time with family. I'm just wondering the best way to think about that. It'll be probably, I'll be making about a fourth of what I'm making now. What do you make now? Right now, I make about 194.

after taxes, it's like $1.70 a year. How old are your, how old's your family? I'm 30. My wife is 25. We have a one-year-old, and we have another daughter on the way. And you want to transition your career to make less money so that you have more flexibility. Yeah. How many hours a week do you work?

Right now I work full-time, so 40 hours. You make $200,000 a year working 40 hours a week? Yeah, probably more like 45 to 50 hours right now. Okay. And what will you be making in five years if you stay in this career? Probably slightly over 200. Yeah. And what are you doing?

What's your career? I work in finance and accounting for a manufacturing company. And where did you get the numbers that it's going to be a fourth? Like, were you looking at a specific role at a job that's 20 hours a week or something? Like, give me the reasoning of when you said it's going to be about a fourth. Yeah, I want to be a soccer coach, and we would like to homeschool our kids. So I'd like to transition to that just to be with family more. Okay, but you have a one, so you have the one-year-old who won't be in school for another four.

to five years, right? Right. Okay. So is that when you're thinking when they start kindergarten? But you won't be, will your wife be homeschooling or will you? My wife is going to homeschool. This is, I'm trying to find like a 10-year plan, hopefully. Okay.

So I think I have about 10 years to work my career. Yeah. Work hard. Don't overwork yourself. But work hard, save, get out of debt, pay off the house, get yourself. get yourself in a position that, yeah, if you decide to pull back career-wise at 40 and make a fourth that you'll have enough,

but I just don't, Dave's not going to be a soccer coach at 50K? Where are you going to be a soccer coach for 50,000? I was going to do like youth club teams and probably a local high school around here. Okay. All right. Dave doesn't. Dave doesn't compute with this.

No. And Jared, let me just tell you, I think in 10 years, your life is going to look so different. I think you're 30, you have a one-year-old. I think by the time you guys have another couple kids, they start school, you start your life, things may shift. I think there's a lot of different ways to accomplish similar goals that aren't as destructive as this is. So, I mean, you can soccer coach on the side and make a shift in your career where you've got more flexibility in your current career, and you're still making the same kind of money. I think that's an entire possibility.

This idea that you somehow have to come home and, you know, destroy your earning power so that your children turn out is not a truth. That's not a true story. That's not true, okay? Men have worked 40 hours a week since time began and their children turn out. And so this idea that you have to be at home to nurture. is not true. No.

But what I would say is true at 40 to have the flexibility, just like you're saying, to be able to leave an office at 3.30 to go and coach your kids soccer team on the side. As opposed to leaving the office for good. Yeah. Right. I don't have a problem with that at all. Yeah. That's fine.

Yeah. One of the reasons we work and build up a nest egg and some wealth is to give us some flexibility. And Jared, you may look up in an accounting. You could have your own accounting firm in 10 years. and do the business you want to do, you know what I mean, and create your own destiny. Like it's a lot better idea. Yeah, there's a lot of avenues here. Yeah.

So I would say, and again, money is not everything. We're not saying that. No, I'm not saying that at all. No, but it does give. But this is, it's a false narrative that you need to cut your income to a fourth in order to be a good dad. That's right. And in order to be, have being called flexible. And in order to homeschool your kids.

and in order, I don't know what you're reading, but that's just a false narrative. And so never seeing your children and working 80 hours a week and being an alcoholic is the other end of the spectrum. And we don't endorse that either. We don't endorse that either. The reason we live like no one else is so that later we can live and give like no one else. And that involves some flexibility. But I think you need to be careful what narrative you're buying off on. That's what's bothering me with this.

Hey, guys, Dave Ramsey here. Every day on the 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 any time 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 Ramsey Solutions.com. Until it's summertime in the lobby of Ramsey Solutions, there's a bunch of folk showing up today.

And we do the show from 1 to 4 central time every day, Monday through Friday on the glass. You're more than welcome to come by and get a free homemade chocolate chip cookie and some coffee and visit the store, visit the museum and sit and watch the show. And also, whatever you call that thing back there. The Smithsonian of Ramsey. The Smithsonian of Ramsey. That's it. Our history wall. Yeah, the history wall, the wall of history.

What do you call that if it's not that? I don't know. Anyway, so also in the middle of that lobby is the debt-free stage, which is where Aaron is standing. On the debt-free stage, hey, Aaron, how are you? I'm doing well. How are you guys doing? Better than we deserve. Where do you live?

Doing great. From Columbus, Ohio. Very cool. Welcome to Nashville. And how much debt have you paid off? I paid off $31,000 in 30 months. Good for you. And your range of income during that two and a half?

35,000 up to 38,000. Wow, that's amazing numbers. Thousand bucks a month you were putting away. Oh, you lived on beans, not even beans and rice. I moved into an apartment above the vet clinic that I work at that involved not paying any rent or utilities in exchange for taking care of boarding and hospitalized patients overnight on the weekends. Wow. You went all in. Amazing. What kind of debt was the $31,000? 23,000 of that was a car loan and then the 8,000 were two student loans. Wow, very cool. Did you go to vet school?

No, I'm a vet tech. Vet tech, okay, perfect. Okay, so I was going to say, that's pretty good, 8,000 for a veterinarian degree. You got off the other way. It's good. Yeah, that's good. So how old are you? 28 years old.

Very good for you. So what happened 30 months ago that made you get so radical? I took financial peace university through my church. and just knowing other people who were actively getting out of debt or people who had gotten out of debt who I knew who were able to do that, really inspired me and helped me get a jumpstart on getting out of debt. And what a cool opportunity to be able to get a free apartment for a little while and do what you love anyway. You love animals.

It's been a huge blessing. Yeah. That's very cool. That's a neat. That's a almost like a creative way. It's always fun to hear what people do. You know, and you hear that, you're like, well, there you go. How great for Aaron.

Yeah, you have to pay rent. It's not a forever thing, but for a little while, that was fun. Absolutely, yeah. Yeah, good for you. Okay, so in the 30 months, what was the hardest part, would you say? You're 28, you're like, I'm living on nothing doing this debt-free thing. What was tough about it? I would say staying motivated at first.

There at the beginning, it just seemed like a huge mountain to climb. But as I kept going, as the snowball happened, and I got the student. loans taken care of. That was very motivating just to watch my payments, be able to get bigger, and just to watch my debt just decrease. Yeah, just watch it go down. Yeah. It keeps you motivated. It keeps you moving. Yeah. And it's like, I can see the end. I can see the end. I can do this. I can do this. Yes. That's called hope. Yeah. Very cool. I'm so proud of you. Way to go. Who was cheering you all on this gang over here in the peanut gallery? Yes. Yep, my whole family. All right. Oh, that's awesome. Very good. And they all came down with you to cheer today.

They did, yes. Very good. So mom and dad are proud. Yes. Yeah, you're living in the vet clinic, not their basement. That's good. Yes. I like it.

Very cool. Now that you did all this, how does it feel? Fantastic. Was it worth it? Yes, it feels very freeing. Yeah. Yeah, very cool. So what do you tell people the key to getting out of debt is?

Having and sticking to a budget. It was very helpful. There's freedom within the budget, too. the budgeting just gives you a plan for your money so you can still do the fun things that you want to do and still save for the things that you want to do while also being able to pay your bills. Yeah. Yeah.

Yeah. Were you doing it on the every dollar app or on paper? Yes. I use every dollar. Okay. All right. Very cool. Good for you.

So great. Very proud of it. Aaron, that's awesome. Good work! Okay. So the other 20-something year olds that are listening and they have student loan debt, they got car loans, all the things. What would you tell them?

if they're sitting there thinking, there's no way I can do what Aaron did. Like she just, she killed it. She sacrificed so much and got out of, what, $31,000 a day? I don't know if I can do it. What encouragement would you give someone listening in their 20s? I would say to think outside the box, look for opportunities to decrease your living expenses and find anything you can do to increase your income. And I was able to do this, doing things that I love.

In addition to living above the vet clinic, I've also done a lot. a lot of pet sitting on the side, which I love doing that anyway. Yes, yes. I love that. When people can find a side hustle that they're naturally good at, it's what they're, it's what they can do well, you know, and then you get paid for it, just like what you're saying. That's awesome.

Works out perfectly. Perfectly. Well done, Ms. Aaron. Proud of you. Good work. Good work. And on to everything else in your life from this point forward. You've got everything's wide open now.

Yes. Congratulations. Well, well done. All right. It's Aaron in Columbus, Ohio, 31. thousand dollars paid off in 30 months for those of you slow at math that's a thousand dollars a month making only 35 to 38 she did this it's amazing this is very cool those numbers are unbelievably cool very good work all right aaron from columbus count it down let's hear a debt

free scream three two one i'm debt free yeah it's done ladies and gentlemen That's how it's done. Love it. So we get to meet the Gen Ziers and the millennials that are not victims and that are not entitled and that are actually go-getters. They get up, leave the cave, kill something, and drag at home. She's obviously one of them. And we get to meet them.

And so we have a distinct advantage over a lot of people out there because a lot of people can believe that these two generations are all entitled breaths that live in their mother's basement or something, and they're not. There's a high percentage of them qualify like her. Yes. And we got a bunch of them working here in that age group, too, and they're incredible. Well, when you, and I think what's always impressive is when you choose to do something when you are on the younger side of life, you know what I mean? Like, it's one thing when you're in your 40s or 50s, and you're like, I've got to get my crap together because I've seen retirement coming all of it. but to have people in their 20s

like step into this and be like you know what I'm going to do it early because it's what everyone else wishes they had done you know they're like living out the life I wish I had met you when I was 19 yeah that's so many people that's right yeah and for Aaron to think about at 28 you think 10 years from now 38 48 48 20 like what she can save and put away like she will she'll be she'll be a babysubs millionaire honestly in no time like it's it is wild what your income can do when you have no payments yep yeah And what your career will do. Yes.

Because it opens up. You don't have to sit in a bad situation. You can make different choices on where you work, how you work, who you work with, and because you're not stuck. You're not dependent upon, oh, if I lose one paycheck, I lose my car. If I lose one paycheck, the student loan people are going to come knocking at my door. If I lose one paycheck, we're going to discover that Samuel L. Jackson's actually in my wallet.

You know, it's a master card, right? What's in your wallet? Apparently you. you know and so yeah all that all that's gone and so when you learn to do what she did which is a take a very intentional approach step by step systematic like she did uh follow the process didn't argue didn't try to make up her own thing with some math thing she read on ticot she just said i took this class i'm going to do this yes it's real simple and uh and there's a beauty to that simplicity absolutely well and the consistency and over time

like it's not it's not fast right i mean 30 months like she you know over two and a half years and it's that's a when you're in the grind of that that's long right you can look up and think two and a half years ago from sitting here and you're like oh my gosh that went so fast but when you're in the middle of it like she was saying it can be hard so the the perseverance and the motivation yep i think is great yeah and i think another funny thing is being on this show and you get calls from all generations and i'll say i think we've met as many entitled boomers calling in expecting certain things as we have Gen Ziers, you know?

Oh, definitely. There is a... Definitely. An amazing thing that regardless of your age or generation, the people that went on this stage, I think the consistent thing that we see over and over again, regardless of age, is that they believe they can do it. And she looked up and said, you know what?

I'm going to change some things in my situation and I'm going to do it. And she did it. I'm going to take this. And as a buddy of mine said, he said, it never worked. Your stuff never worked, Dave, until I submitted myself to the program. And just like, yeah, I had to submit myself to something that's different. that's different than I thought, different than my arrogance. That's very good.

Congrats, Aaron. Very cool, Aaron. Proud of you. Awesome. Hey, guys, Rachel Cruz here, and I love summer. There is more fun on the calendar, more time with your people, and way more chances to make memories. But you know what else there's more of?

Spending. Oh, between the extra groceries and gas and camp fees and family trips, it all starts to add up so fast. And before you know it, money stress starts to start. to steal the fun out of everything. And that is why I love the Every Dollar Budget app because it helps you plan your money, track your spending, and find more margin in your budget

so that you can put extra cash towards the goals that matter most. Enjoy your summer without the money stress. Download the Every Dollar app in the App Store or Google Play and start for free today. Our scripture of the day, teach me your way, Lord, that I may rely on your faith. faithfulness. Give me an undivided heart that I may fear your name. B.B. King said the beautiful

thing about learning is nobody can take it away from you. All right. Up next we have Chase in Columbus, Ohio. Hi, Chase. Welcome to the show. Hey, guys. How are you? We're doing great. How can we help? Hey, so first off, I want to say, I'm sorry if I stutter. I stutter when I get nervous. Oh, yeah. It might be a little awkward here. No worries at all. Dave just screwed up his whole in-ear. So he's having issues too. So you're a good company. Don't worry, Chase. Don't worry.

Okay. So my wife and I, we make decent money. I mean, I would say it's okay money. How much is that? So we make $118,000 a year combined. Okay. We just paid off her debt besides her car, which we still owe about $18,000 on it. And now we're transitioning into my debt.

I made a bunch of stupid decisions when I was around $20,000. three and I have three items on my credit that are charge-offs and those charge-offs total up to about $4,000. And then I have about an additional $3,000 that is medical debt. That is not charge-off. So my question is, how do I go by paying these off to be able to boost my credit and be able to buy a house by no later than February? Don't know if you're going to make it about February, but we can help you get to

get it cleaned up and then we'll see how quick it changes your credit score, okay? Of course. So the $3,000 in medical, why has that not been paid? And how long ago was that? So it was about two years ago. Pretty much it came down to, I used to work in law enforcement. I got injured when I wasn't working and ended up having to leave my job. I wasn't able to return just due to the injuries.

and then we just we we lived pretty much penny pinching paycheck to paycheck. I was trying to do odds and then jobs. Okay, so that's an old debt, but it's not been written off or charged off yet, as far as you know. Yeah, so do you have a contact point on all three of these debts? Someone to call? I do, yes. Okay. So call them up and ask them what it takes to clear the debt or what they will accept to clear the debt.

Okay. Okay. They're all bad debts and a bad debt made good even if it's settled is about the same thing as paying it. So that $3,000, they might say, oh, we've added charges and interest and it's $8,000. And you may have to negotiate down and say, okay, I can't give you $8,000, but I can give you $3,000. If you'll take the original amount, I can send you a check today if you send me that in writing that you'll accept that as settlement in full. Okay. Okay. So in all three cases, you're looking for a couple of things. One is you need an email or something in writing that says we, the organization, will accept X amount as settlement in full. And then you keep that piece of paper in hard form, print it off, in a file for the rest of your life. Because these people forget. They screw up.

They call back. They go, oh, we didn't settle that. Oh, that guy didn't have the rights. Oh, sorry, I got it in writing. Okay? So you need to get it in writing. And then the second thing is they will ask, some of them will ask for electronic access to your checking account to pay the bill that once you agreed on the settled amount. Do not allow them to have electronic access to your checking account.

They lie. They will clean you out. Okay. Okay. So instead, you can wire them the money or you can buy a prepaid. one-time use debit card for the exact amount and put it on that and then give them that card number. But don't let them use your regular debit card and don't let them use, don't give them your checking account number, anything like that, okay? Okay.

So in writing, no electronic access to your checking account, and then you've got a deal on all three. The fastest, as soon as you do that, and then, you know, go ahead and put in, then you can, and you can even put in, the in writing that as soon as we receive this, we will enter on the credit bureau that it was paid in, that it was settled or that it was paid in full, whatever. Settled in full is fair. That's fine. But that will remove the damage, the bulk of the damage. So if we were going to put it on a scale of 1 to 10 as an example, a bad charge off is an 8 or a 9, if 10 is the worst, okay, which is where you are today. A paid off. charge off is a three or a four. So it still damages your credit because this really happened and it

shows that you didn't pay a bill, but you went back later and paid it. But it's not nearly as bad as where you are today. And that's what I'm saying. I'm not sure you'll quite be ready by February. Yeah. And do you guys have an emergency fund chase and a down payment? Will you have all that by February? Yeah. So we've actually been looking now to go look at houses. We actually have $40,000 for a down payment. And then we have 7,500 put aside specifically for my debt. Yeah, okay. Meaning we can go pay off everything.

And we're lucky enough that my in-laws, they have like an in-law suite for their house. We're able to live here for free. They offered it to us instead of renting so we could fix everything up and be able to save for a house. So everything can be paid theoretically today. I was going to say, but I'm sorry. Well, no, I was going to say,

it takes usually around six to eight months, six to nine months for the credit score to go undetermined once all the accounts are closed. So yeah, you guys will be right on that line. That's why I keep saying. I don't know February is going to work. It might be May. But you've got to do it anyway. So let's go get it cleaned up. Go get it cleaned up and get everything shut down. And if you have no other active accounts. Yep, making sure everything's closed. Then you may see it go all the way to undetermined, which is the best point on. possible scenario. Because if they pull your credit score, when you're trying to get a mortgage

and it's bad, you know, it's going to hurt you more than having an undetermined credit score at that point. Exactly. When you can do manual underwriting and have two years of back bills that you're showing that you pay, right, cell phone, insurance, electricity, so on. Exactly. Hey, we wish we could get to every call in question, but we can't. So we built a thing called Ask Ramsey. It's our AI tool that's free and it's built and trained only on proven Ramsey principles. The data that AI is accessing is only Ramsey data. So you're only going to get a Ramsey answer.

Ask Ramsey. It's free. Ask your question at Ramsey Solutions.com or click the link in the description. Jada's in Sacramento. Hey, Jada, what's up? Hi, thank you for taking my call. Sure. How can I help?

So my husband and I decided to pay off our $30,000 debt this year and we've made $6,000 progress so far. So we're doing really well. And he's the one working. I stay home with our one-year-old and he works a lot. He can use almost two hours to and from work. He has a side gig. He's really busy.

So he feels like he should have a good, you know, size allotment of fun money if we haven't budgeted up until this month. And so that ends up being $360 for each of us, which I feel like is a lot because I want to, I don't know what he wants to pay off the debt. And so my question is, what do I do with that $360? Do I throw it out the debt? Do I try to save it? Do I, you know, go blow it somewhere? What should I do? Well, have you guys, have you run out? I mean, how much debt do you guys have left?

$27,000. Okay. I mean, if I were you, I think having some level of money, right, for yourself, because you're going to have to be buying, you know, there's things you have to buy throughout the month for yourself, which is fine. But just to blow money for the heck of it while you're getting out of debt feels wasteful to me. because as you look, and running out the numbers, both of you, I mean, the math is, the deeper you sacrifice and the more money that goes at the debt,

the faster you're going to get out and the faster you can get back to a great life without payments. And so I guess that's a decision that you guys have to make because the more you spend and just enjoy, the longer it's going to take you guys to get out of debt. And I know he works hard and all of that. Yeah, we all work hard. So, yeah, that's too much.

You all have too much fun money budgeted. I'd back it down. I'd back it down. Less fun. I mean, it's almost $700 a month. Yeah, less fun. Yes, and so that was the quote-unquote compromise. He wanted 10% at first, which is just crazy. Well, he's not on board then.

You're the only one doing this. Yeah, and so it feels like if I do... Yeah, the problem is not the fund money. The problem is whether or not he's engaged. Yeah. Once he's engaged, then we don't argue about this. He's not engaged in the process. You don't need a timeline and to say,

here's an aggressive way or aggressive time to get out of debt. He needs to believe that this is worth it. And he doesn't yet. That puts us out of The Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.