The Ramsey Show - Why Slow and Steady Always Wins the Race

Episode Date: May 8, 2024

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Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love and create actual amazing relationships. Thank you for joining us, America. Rachel Cruz, Ramsey personality, best-selling author multiple times over, and lately best-selling author of the new book, Children's Book. I'm glad for where I am, the second in a series. She's my co-host today and my daughter. The phone number is 888-825-5225.

That's 888-825-5225. That's 888-825-5225. Adriana is in Dallas, Texas. Hi, Adriana. How are you? Hi, I'm good. Thank you so much for taking my call. Sure. What's up? So my husband passed away about a year ago. Oh, I'm sorry. Thank you. How long were you married?

13 years. Wow. How old long were you married? 13 years. Wow. How old was he? He was only 41. Whoa, what happened? It was a rare presentation of colon cancer, and from diagnosis to his death, it was just under two years. Wow. That's really fast. I'm so sorry.

Thank you. So the biggest issue is that I have life insurance money. Luckily, we have that. And I hired some financial advisors and they're advising that I invest in whole life insurance for the kids because there's a high interest introductory interest rate and there may be a genetic component. The other big thing is that I am intending to take over the mortgage on my house because it's in my parents' name, and I want to take it over. So they have advised some credit, to have some credit in order to build my credit line. I'm not working. I'm homeschooling, and I'm getting Social Security. I'm just wondering, are those the best routes to take?

And it's not what is. Well, you obviously smelled a rat or you wouldn't be asking. Right. Yeah. And so are you sure these are financial advisors and not just insurance agents? They have a financial planning. I mean, that's what they say they are. Okay.

What's the company? Well, they work with, I think the company with The Whole Life is New York. I'm sorry, it's Eagle Strategies. But New York Life. New York Life, yes. Yeah, these are insurance agents. They're not financial advisors. Okay.

Because the insurance people don't know how to do anything but sell insurance. And they're not licensed to sell anything but insurance. But she said Eagle Ridge. There was another event. Yeah, but I mean, you can't write for New York Life unless you're a New York Life agent. So they're captives. So it's not an independent.

So, you know, this is just the name of the local New York Life office. So, no, we're not doing business with them you need to you need to move you're getting bad advice um and um so uh here's the thing you've been through a terrible thing at a very young age and um and and And so there's always a potential genetic component anytime someone gets cancer. That's why when you're doing a life insurance of any kind application, they ask about your parents and if they have died of cancer because they want to see that because there's statistical correlations to that to at least susceptibility if not DNA issue and so on right I'm not a medical person but that's what the insure how the insurance world views it and I do

know that okay so but but that doesn't change what you need to be doing what you need to be doing. What you need to be doing is taking care of your family, what you're doing, and building some wealth for your future and the kids' futures. And then when they face something, if they ever face it, they will, let's say they're 28 and married with two kids, by then they should have term life insurance in place. And then if they had some kind of an occurrence like you guys did, then they would be ready that way. You don't buy whole life life insurance on a child because their parent died of cancer.

That's asinine. Okay. Mathematically. Okay. And it's just insurance age. I mean, if you ask a dog if it's hungry it always says yes if you ask an insurance agent if you should buy insurance they always say yes so i mean it's just especially in the whole life world and so now you and and you do need to get the mortgage into your

name instead of your parents names and that's going to require some other things, but we don't need to go get in debt to cause that to happen. So here's what we're going to do, okay? We don't need anything from you. We're not trying to sell you anything. Quite the opposite. As people of faith, our book tells us to take care of widows and orphans, and people that take advantage of widows and orphans, by the way, really get in a bad place.

You don't want to be there. And so we're going to do quite the opposite here. I'm going to furnish you a Ramsey counselor, a Ramsey coach that's been through our training completely free and let them, let them coach you through, um, how to get your investment structured and how to get this mortgage redone and hands-on rather than trying to give you an insurance agent i mean give you an answer on the radio and certainly not going to give you an insurance agent so i mean you may need some insurance all insurance agents aren't evil that's not what i'm saying i am saying that if you ask a whole life agent if you should buy whole life a hundred percent of the time they say oh yes it's the answer to everything and if you ask me if you

should buy whole life a hundred percent of the time i say it's never the answer to anything yeah and in her situation she has the two kids so you you hit on the so well you hit dirty and he's taking advantage of that emotion yes so that on the health side but but the other component of whole life of what people get sold on to is the investment idea, right? And she was even saying. Yeah, they have a high upfront interest rate. So, but for her to know that there's other options on how to invest for your kids, that you actually will end up, they'll end up with more money. A whole lot more.

Than versus even just this policy. If you put it in a fruit jar, you'll end up with more than screwing around with a whole life insurance policy. Because at least if something happens, you've got the money in the jar these people take it all it's it's the work it's the payday lender of the middle class that's how bad it sucks mathematically it's absolutely a scummy product and to play on a widow's emotions about her children might have, oh, God. That's particularly nasty. Yeah, you should be ashamed of yourself. But they also are convinced, agents are, that it really is the best, right? I'm like, they like. Well, there's only two kinds.

There's ones that are dumb and are convinced it's a good product because it's the only way you could convince yourself is if you can't do math or you're scum. Right. You know, and you're selling something or you're selling something you know is bad so that's but i mean for people listening though that's does it not give you a little bit of a chill to sell a widow her kids stuff based on the death of her their dad i mean does that not just a little bit hello people i mean that's nasty so well and the good

thing is is that there's other avenues for both of these from the insurance routes. There's all kinds of avenues. Yes, totally. A lot of stuff you can do. That's the hopeful side. Almost all of it is better than this. Yeah, and what happens, I could imagine when she's sitting in their office and they're

explaining it, there's not option A, we could do whole life. Option B, you could do term life in this. And option C, it's all one thing, right? It's like this is the only option. And so just to know that there's hope that there's so many, so many things out there for her to do, that she's going to be okay financially

and her kids are going to be okay. Trying to give some hope. Trying to give some hope. Hang on. Christian will pick up, honey. We'll get you taken care of. No cost to you. Zero. This is The Ramsey Show. What does the future hold for business?

Ask nine experts and you'll get ten different answers. Economic growth or a recession. Business taxes will go up or down. AI will help us work or it will replace us all. But there's no such thing as a crystal ball. That's why more than 40,000 businesses have future-proofed themselves with NetSuite by Oracle, the number one cloud enterprise resource planning system. Ramsey Solutions uses NetSuite and you should too. Whether your company's earning millions or even hundreds of millions, NetSuite helps you respond to immediate challenges and seize your biggest opportunities. With one

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there's a cool way to do it we call it the live and give box in the live and give box i'm reaching for it here trying to get my youtube self together uh the total money makeover book the baby steps millionaires book two of my number one best sellers but most importantly you get signed up for financial peace university all in one kit. And boy, wouldn't you love to have started out your life with that? Hello. It's pretty cool. And if you've got a graduate out there, too, Ken Coleman's book came out this week called Find the Work You're Wired to Do. It includes the Get Clear Career Assessment in it, which is really important if you're gonna get started

you know and so again graduation and wedding season not a bad gift particularly graduates right and um now yeah i know you've already got a degree in whatever but yeah i want you to get clear on it and the live and give box check all of this this at RamseySolutions.com in the store. If you want to go straight to the box, just RamseySolutions.com slash box for the live and give box. Bryce is with us in Louisville, Kentucky. Hey Bryce, what's up? Hey, thanks for having me. Sure. How can I help? So I have around $34,000 saved up and I make about $4,200 a month. I spend probably $1,500 after bills and food, and I was just wondering, instead of me putting money into my 401K,

and instead could I just invest in real estate and put rental properties up and so i can have a stay uh an income at all times well you don't have the money to buy a rental property i was going to go and take out a uh fha one yeah which tells me you don't have the money to buy a rental property so um we bryce what we have found is that the people that avoid debt, including rental properties, are the ones that prosper. I own a bunch of real estate. I love real estate. I'd love for you to own some real estate since you want to someday as a part of your life, but I want you to pay cash for it. Do you own the home you're living in?

Yes. Okay. Is it paid off? Yes. Good. Good for for you what's it worth um i got a praise last year it's probably worth 120 000 but it was family out so i got it for 30 wow you got a deal good for you well that's cool so i'll tell you what i did and i would recommend you do something similar okay we recommend that if you're out of debt and you have your emergency fund in place, then we do baby steps four, five, and six. And baby step four is 15% of your income, which is, you know, you're making like $50,000, $60,000 a year.

Okay? And so we're talking about $7,000, $8,000 a year is all. Okay? Going into your 401k Roth, preferably if they have a Roth available and with a match, that'd be wonderful. And some good mutual funds beyond that. I started saving once my house was paid off to buy my first real estate after I had gone broke in real estate by having too much debt. So, um, by the way so anyway i i just took an s&p fund and i started chunking money beyond my 15 into that s&p and when it got to be enough in there to pay cash

for my first little rental that's what i did you're probably not that far from doing that like what price range would you spend for your first rental bryce um so i was going to buy a 10 acre lot for uh 75 000 and then i can get a used uh trailer that was repossessed for 10 000 they redo it and everything and then it cost me 5 000 get it put in and then i already have someone put it in my septic for 2 000 problem is that won't go up in value only the dirt will not the. So I would not invest in that as a rental because I want to invest in a home or a duplex or something that's going to go up in value, not go down in value. And so the only time I would look at trailers is if you bought a whole trailer park and they cash flow like a bandit.

They make so much money, cash on cash return it's unbelievable but you've got the constant problem of taking them out of service because they deteriorate yeah and you don't know you don't want to take a nice subdivision a good piece of dirt and put a trailer on yeah how old are you bryce 19 you're 19 yeah you got plenty of time you got a lot of time yeah and i would say too bryce just to this point it's going to take you and you're you're a smart guy i'm like you're already at 19 you're like thinking of ways how can i wheel and deal and you know make some money which is so great and then this process it's going to take you longer but i think having a goal as you do the math out and say okay what how long will it take me to save up?

Because where you are in Louisville, Kentucky, I'm like, save $150,000 and go find a foreclosure at some point. This may be years down the road. And that be your first. Find the deal on the sale and just say, yeah, this is going to be my first. And you just slowly build. But the frustrating thing about this process, Bryce, is that it's slow. But the great thing about it is that it carries so much peace with it. It carries so much peace.

You're not stressed. And by the way, I've bought over 2000 pieces of property. And Rachel's husband, Winston, does this for a living now. It's what he does. He's in the real estate business. And he was trained here with me running my property. And so we're both doing the exact same things we're telling you to do. But we're just decades past you. We're 20, 30, 40 years beyond your process. But I remember the first time I finally got $150,000 saved up, and oddly enough that's what it was, to buy that first property.

And I had it laying there in that mutual fund and then i looked in around found a bargain and um and there there we go you know and as soon as you get about three of these that you own that are paid for the rents coming off of three paid for properties are pure they're not going to the bank you're not paying payments on them so that pure rent stacks up fast and you can buy another property every so often just off of the rents that and you get a positive snowball and winston and i what we've done too like there was a condo we got our very first rental was a condo um and in foreclosure nasty thing it was like a one bedroom one bath i mean it was it wasn't much it was really it wasn't much but we fixed it nasty. It wasn't much, but we fixed it up, did it. And then eight years later, it doubled. And so we were like, well, we could sell that, go to, you know, find another deal somewhere

else. So you can even step up in property too, as you go through this process, if you don't want to just hold on to it. You got rid of that junkie condo? We did. Wow. We did. That thing was like a family member.

It had been around a while. It was your first one. Winston was attached. I was good. Yeah. Not you. I was fine. I trusted him. him i was like if that's i did not know the junkie condo was gone that's cool although it wasn't junk anymore it wasn't good to it that's how i started out i started out but

it is fun bryce and i think that is i think a lot of people are interested in that like this idea that investing sounds sounds boring but it's a tried and true way to build wealth so do it but then the other the other offshoot of investing and what you're talking about and you're actually going to talk about it at y'all's investing live stream coming up yeah um is real estate and people really are interested and and it is it's a great you love it i mean it's a great it's a great way to kind of diversify even your wealth building when it comes to that i've made a lot more money in real estate than i have in mutual funds. And I've also, but I've also put more money in real estate because I'm a real estate person and the mutual fund. So my personal net worth is

probably 80% real estate, you know, between mutual funds and real estate anyway, not counting this business that I own and that kind of stuff. But yeah, it's very interesting. So Bryce, the key is it's very difficult at any age, but it's really difficult to go slow when you're 19. Please listen to the old people. Go slow. The people who go slow in real estate are the ones that are still doing it 20 years later. The ones that go fast get burned and they get to start over again, which is what I did when I was, I started buying real estate when I was 22. And by the time I was 28, I was broke. And so, um, went from nothing to a millionaire to broke between 22 and 28. And so I'm just don't want that for you. I want you to just go slow. I don't want, I don't want your face on the front of Fast Company magazine. I want your face on the front of Slow Company magazine.

Slow Real Estate. Slow Real Estate magazine. Which is everybody in America right now, let's be honest. You're not going to be a TikTok sensation. I can promise you. Not if you're doing it right. This is the Ramsey Show. One of the questions I get all the time is, which life

insurance company should I use for my term life policy? A valid question since there are hundreds of companies out there with rates all over the place and riders and add-ons that are simply a waste of money. You need to get this done and make the right decision. That's why the only company I use and have recommended for over 25 years is Zander Insurance. Zander is a broker who shops the top term life companies for you and finds the best rates available from the only plans I recommend. They also save you time. Whether you want to work online, over the phone, or via text, their team will cater to your needs and help you make the right decision.

This is an absolute necessity, and Zander has made the process easy and convenient. Call them at 800-356-4282 or visit zander.com for instant online quotes. Rachel Cruz, Ramsey personality, is my co-host today in the lobby of Ramsey Solutions on the debt-free stage. Kevin and Katie are with us. Hey, guys, how are you? Good. How are you? Good.

Better than we deserve. Welcome. Where do you live? We're from Keene, New Hampshire. All right. A little northwest of Keene, New Hampshire. Fine. Welcome to Nashville. How much debt have you paid? $122,836. Good for you. And how long did this take?

It was four years and two months. Four years and two months. Good for you. And your range of income during that time? We started at about $60,000 and ended up at about $130,000. Wow. Nice. Doubled your income in four years. Yes, sir. How'd you do that? I asked my boss to just bury me in work.

And he obliged. Yes, he did. What do you do? I'm an independent insurance adjuster. Oh, very good. Okay. So you can do that? Yes.

Yep. Okay. And what about you, Katie? What do you do? I'm a stay-at-home mom and homeschool mom love it good for you guys well done all right so this is all that income changes all uh all on your boss burying you yeah pretty much good very good very cool what kind of debt was this 123 uh it was a multitude of just about everything uh student loans two cars credit cards cards, medical bills.

I don't think I'm missing anything else. Yeah, about that. Just normal. You were normal? Yeah. How long have y'all been married? Almost 13 years. So nine years into the marriage, give or take,

eight years into the marriage, something happened. What happened? Well, first off, we just want to thank you and thank God for putting that blessing and that call on your heart to help us and help the millions of people that you've helped so far and will continue to help um and that's really where our journey began is is getting into our bible and getting back to those biblical principles that are buried in there that we just needed to go find and you really brought them to light for so many people and including us.

But when about four years ago, almost five years ago, we went in to go get diapers for our middle child at the time. And I went through probably about three or four different cards and I couldn't buy them. And I walked out back to the car and sat down next to katie and said we can't do this anymore yeah i'll break a break a dad's heart yep i couldn't buy diapers for my daughter yeah that that'll that'll put an end to it and so

you go home you're like okay we're selling everything yep yep we uh we pulled the old book off the shelf because the book went through eight different moves with us and never read it no no which one which one total money makeover yeah it was the workbook actually we hear that a lot we hear this a lot this is a very total money makeover america's coaster on your coffee table yeah exactly oh my gosh so katie when that moment happens you're sitting there in the car are you thinking oh thank oh, thank God, let's do something. Or were you like, wait, is it that bad? Oh gosh. Like what was your reaction in that moment? Yeah. I mean, it was just like a feeling of dread. Like everything that we've done, trying to live normal just didn't work like at all for us. It all came crashing

down. Um, and then, yeah, we were pretty much all in we talked to our um our pastor at our church and they were offering fpu oh good yeah we got in a class right away yep um we even we had to travel like an hour for it yeah we drove an hour for it yeah to concord new hampshire wow um and then shortly thereafter the next february 2020, we led our first class ourselves. Wow. Yeah. So literally a couple months after we got out, we decided, yeah, we're going to lead our own class. And then right in the middle is when COVID hit. Yeah. January of 2020. Yeah. Of course. Oh, man. Well, what debt was it for you guys that you were like, oh, it's gone. I'm so glad.

I'm so glad it's gone. Card of hearts. Oh, for you? Yeah. It was student loans for me. Okay. Okay. Okay.

Oh. Yep. It was that last one where it was just over the hump, especially during when you're right in the middle of it all. And the longer that you're doing it, the higher the debt is that you're trying to pay off. Oh, yeah. So that snowball, it works, but we... The mountains to climb.

Yeah. Yep. On the back of it, steep. It was $50,000, so it was almost half of our debt was the student loans at the end. Yep. Yep. And we paid that all off in one year. We were just...

That was our last year. Whoa. We just... So you did half of it in three years and the other half in one year. Yep. Almost. Yeah. We had a baby along the way.

Yep. Okay. So that slowed us down and I had a surgery as well right after I had the baby. Yeah. Oh my gosh. Yeah. Life definitely happened. Then that math is fair.

Yeah. That's good. That's good. Way to go, guys. Thank you. You persevered. You kept with it. You kept with it.

You kept with it. Why didn't you quit? Well, you saw one of them coming up on the stage. I don't ever want to have that feeling again. I've not been able to buy diapers. Yep. I can't wait to buy somebody a pack of diapers that's struggling with their cards that I see at Target or Walmart or whatever. Wow.

I can't wait to go and buy. You may buy a whole bunch of diapers in your life before this is over. God may just keep putting them in line in front of you. Yep. We'll just keep on blessing. line in front of you. Yep. Yep. We'll just keep on blessing. I love it. That's fabulous.

What do you guys say to families out there? Because I have three little ones too. And I just know life is just tiring, right? You're in a really tiring season and you're home all day with the kids while he's working extra, right? So you probably feel like a single mom half the time while he's gone. You're exhausted. So what do you say to families out there listening? And they're like, this is just not the time. This isn't the time to do it we're so tired we're barely getting by like i don't know i don't know what would you say to them

um i would just tell them to continue to communicate with each other because that's been the key to this whole thing um don't give up to keep on going no matter how grueling it gets no matter how long the days are no matter how grueling it gets, no matter how long the days are, no matter how much time that you feel like you don't spend with your kids, they're still going to be there. They're very resilient. They're still licking lollipops and laughing along the way. But just to keep on going, don't give up. Yeah, that's good. It's never too late to start. Never too late. late i mean we were married for years and years and um at one point we had said we're always going to have a car payment always he it

came out of his mouth yep and now we're never gonna have that's not like a statement of principle it's a statement of hopelessness yeah exactly yeah we've been there and you can turn it around you can turn your perspective around so good good, you guys. Oh, amazing. Well, thanks to your pastor for teaching Financial Peace University at his church. And it was there at just the right time. It was. Go figure. I knew it.

So great. Very cool. Good for you guys. I'm so proud of you. Thank you. Well done. You're heroes. Thanks.

You're heroes to those little kids. You changed their whole family tree. So well done, y'all. Thank you. So well done. You're on the opposite of the spectrum from not being able to buy diapers to buying diapers for the rest of your life there you go for other people there we go i like it if you live like no one else later you can live and give like no one else that's how that works all right bring the kiddos up what are their names and ages so we've got Isaiah is nine, Mia is five, and Levi is three.

All right. And we've got matching dresses with mom. That's pretty cool. So cute. I like that. They've been practicing their debt-free scream in the car right here. All the way down. Yep.

From New Hampshire to Tennessee, that's a lot of practice. Yeah. Lots. Wow. Lots of Advil. For you. Yes. yeah wow lots of advil for you yes very good guys i'm so proud of y'all they're heroes you're amazing you've done something that's absolutely not normal be not conformed to this world but be transformed by the renewing of your mind you're amazing thank you so much. Thank you. Well, well done.

Alright, Kevin and Katie, Isaiah, Mia, and Levi, $123,000 paid off in four years and two months, making $60,000 to $130,000 of buried in my work. Count it down. Let's hear a debt-free

scream! Three, two, one. We a debt-free scream three two one very good very cool cute kids and i think i think mia wins the award maybe she got it down and then went right back to the lollipop right after the scream. Very well done. Good stuff, you guys. Very cool. So encouraging.

You can do this at any stage of life, with any income, with any situation. When you decide to change, that's when things change. No external force is going to do it. No matter who's in the White House, you still got to fix you. This is The Ramsey Show. This show is sponsored by BetterHelp. This is the season for Halloween. It's October. We're wearing costumes and we're wearing masks. If you haven't started planning your costume yet, get on it. And while you're thinking about it, I want you to be honest.

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take off the mask with BetterHelp. Visit betterhelp.com slash Diloni to get 10% off your first month. That's betterhelp.com slash Diloni. Rachel Cruz, Ramsey personality, is my co-host today. Clayton is with us in Charleston, South Carolina. Hi, Clayton. How are you? I'm good. How are y'all? Better than we deserve. What's up? So I got a question for y'all. My wife and I just bought our first house. Um, and I'm currently a UPS driver. I make $30 and 78 cents an hour. And my wife is a doctor's assistant. She makes about 23 an hour. So overall we make a little over a hundred thousand dollars a year, uh, which is great. But, uh, I just got recently a job offer. It is a pay cut, but it is a better quality of life. We have no debt other than our house.

We owe $244,000 left on our house. We put about $70,000 down on the house. And I just want to know, what do you think I should do? Should I stay where I'm currently at and work to pay this house off? Or should I take this job and get a better quality of life? When you say... So I'm able to be around with my family and, you know... Give me the...

I'm able to start having kids with my wife and everything. So we don't have any kids right now. So your family is your wife? Yes. Okay. All right. my wife and everything so we don't have any kids right now so your family's your wife yes okay all right and i'm confused how many hours a week are you working as a ups driver anywhere between 55 to 60 hours a week are you able to cut back on just your hours there if you wanted to? Unfortunately, no. The way it works is whenever you start is the start time that they give us, and then whenever you're finished delivering is when you're finished. Okay, so when claiming.

Unfortunately, there's nothing else. Okay, what's the price? What are you going to be making, the difference in income? So currently I'm $30.75, and then the new job will be $25.38 an hour. And have you run the math? It's not a $5 jump. Okay, yeah, and have you guys run the math? It's not a $5 jump because you're going to be doing 40 hours instead of 55. Correct.

So it's a 50% pay cut. Yeah. Because you're not going to be working as many hours, and you're going to be making less per hour. Correct. Have you guys run a budget to see, like, just to see, hey, if I took this new job, and with the pay cut and the hours I'm going to be working, here's what we have left, and, like is this will be our life financially have you guys

run those numbers we have but i just feel like we're missing something and yeah you're running at a 55 you're running it by the hour that's what you're missing right you need to run the actual totals and then you're going to realize that you're taking a 35 000 your pay cut no you don't need to take this job. That's bull crap. You weren't looking for a job. This thing popped up and it's not the answer to your problem. Okay.

Well, I was looking for a job. Okay. Well, C is what you want. You want a job that pays what UPS is paying without working 55 hours. Not by the hour, by the total. So I want you to find a career. You're making about $70,000 a year, right? Yes, sir. Okay. And I also get a pay jump this year too. Good. I want you to find a career that pays 70 to $80,000 a year and start working your way towards that career, working 40 hours or so. Now, I've done work for UPS, speaking to your guys' executives,

and I know a bunch of UPS drivers and retired UPS people. It's a great place. The stock plan is incredible. It's a good. I mean, and I don't know exactly how where you are, what you're doing works, but my feeling would be, Clayton, that you could probably pick another route over time that got your hours down. Yeah, I was going to say. As you move up in seniority, right?

Yes, yeah. Yeah. Is that not how it works? Yeah, as you move up in seniority, you can get a better route and stuff, but at my center, there's over 100 drivers, and I'm currently number 70, so that's going to be like 10, 15 years from now.

No, it's not. No, it's not. No, it's not. They don't stay. You've got turnover in there. They don't all have to die off. And so I think you need to talk to some guys around there and find out how long it's going to take you to get into a more reasonable route situation where you can control the thing,

because you're a low man on the totem pole right now, so you're getting crappy runs that the totem pole right now, so you're getting crappy runs that have long hours. Of course, holidays, you've got crappy runs that have long hours. It just goes with your territory. But UPS is a company of work hard and pays well. That's the company. They have a real work ethic culture. It's one of the reasons that they were attracted to me and vice versa. So it's been many years ago that I did that. But just the same, I came away from my time working with their executive teams and stuff with a respect for your culture.

But, no, I think if you want to work less hours, you need to figure out how long it's going to take you to get there at UPS as a possibility. Also say, okay, what career field can i start moving towards and if it takes me a little while to get towards that career with some of the steps that king coleman outlines i would do that but this presupposing that i'm going to cut my pay in half so i can work 40 hours and so i can be home with the dog. Nah. Nah. Clayton, how old are you?

Can I ask you that? How old are you? Yeah, I'm 26 and my wife is 27. I actually wanted to say something else real quick too. With this new job, my hours will be 40 a week, but I go in at 6 and I clock out at 2. So it gives me the opportunity to pick up a second job. So where's the quality of life increase, dude? Now you're back to 55 hours a week, and you're just making less.

I guess, yeah. Yeah. Now you picked up a side hustle, so you're – unless that side hustle is taking you into something where you want to be when you're 36, no. wouldn't do that um i'm not saying ups is the end all to be all i'm not if you if you want out of there i'll help you get out of there hang on i'm going to send you a copy of ken coleman's book uh this new one find the work you're wired to do to get clear assessment and i want you to take that assessment I want you to start thinking about what you really want to be, not just what you make. What is it you want

to do with your life? And I will tell you folks out there, aside from this, I'm not about workaholism. I'm not about you abandoning your family in the name of work and never knowing your children's names or anything like that. I didn't do that when our kids were growing up. I went through a season where I worked my tail off 16-hour days. But it was a season. It was not a lifestyle. And the children were a little bitty, and, you know, their mother would tell you that she was a single mom during that time. But she and I talked it through.

It's what we were doing to start this place that I operate today. It was the foundation of this place in the 90s I was doing that. And so it was a period of time. I meet almost no one who has a high quality life that has left their mark on their family and on this earth that does it on 40 hours. Just, I'm 40 hours my whole life you're just you know yeah for a period of time if you're training for a marathon you have to sweat now do you have to do that every single day no when you finish you know when you hit the next time you take a little time down okay but you work like no one else so that later you can work like no one else and you know you're just now getting involved and i don't know i guess all your friends are out partying while you're working because

you're 24 um and you know that's gonna show or you're 26 they're gonna show up in their lives there's seasons of sacrifice and and and for Clayton and I don't know I'm just making this up but I'm like yeah there could be a season you're an entry-level guy you got the crappy route and you do that for two years and then you get a better route, better pay. And you know what I mean? But like there's, you don't get to start off and not that he's saying this, but you don't get to start off, you know, at the top necessarily.

And so it was funny. I was doing career day at my third graders little class. And they said, where did you start off? I was like, I started off going to assemblies in high schools all across America. And I did that for like, you know, three years like you know three years staying who knows i didn't get paid yeah i mean who knows where in these small yeah these small towns and all of it but you know again there's just there is that level of sacrifice but then there's a clip going around on you on on on on on the socials and you're like work work 80 hours a week. So everyone does think that you're just like a workaholic.

Well, I know. Everybody that wants to bitch and moan think some of that. If you want something to whine about, you can find a clip of me to whine about. That's not hard. I've done 50,000 hours of radio. There's plenty of me saying something out of context that'll get you where you want to go

for your little TikTok click-through. This is The Ramsey show. Live from the headquarters of Ramsey solutions. It's the Ramsey show where we help people build wealth, do work that they love and create actual amazing relationships. Rachel Cruz, number one, bestselling author,

including her two book series so far on children's books, I'm Glad For Where I Am, just a recent bestseller for your kiddos. It's the second one in that series. Be sure and check it out. She's my co-host today and my daughter. Open phones at 888-825-5225. Katie's in Minneapolis. Hi, Katie. How are you?

Hi. Good. Thank you. How are you? Better than I deserve. What's up? I'm calling because I have a daughter who's going to be graduating college this month. She's going to have about $80,000 in student loan debt. Good Lord. I know. So here's the thing. My husband and I knew inheritance money would be coming our way. So we didn't push back on her going, um, out of state where there's higher tuition. And we didn't really tell her we would pay for her college, but we told her we'd figure it out because we thought we might be able to do that. And, um, that would be money coming from

his side and my side. So my husband and I divorced when she was a sophomore in college, and then after the divorce, I did get my inheritance money, and so I have enough to pay it in full, and I want to do that very much. I want to help my daughter. The only thing I'm just wondering is should i pay it in full or have him ask him he would be willing if he had the money he's just kind of i don't know he hasn't right now to take on half of that burden of helping her does he have even the 40 000 not right now he does not um does the divorce decree demand that you two pay this,

or is this just something you all sort of kind of had a discussion about once way back there and never talked about it again? Correct. There's nothing in the divorce decree on this. Yeah. Your ex-husband's not going to give her any money. Well, yeah, I, I think he wants to, and he would, if he could. Um, so that's where I'm thinking what I could do is just pay it in full and then ask him to pay me later. But I don't think I will ever. Yeah. Yeah. Um, I mean, if you're, if you're on speaking terms with him and you want to pay it in full

say i just paid it off one time we talked about it and you said you'd pay half if you can ever give her the other 40 maybe she could use that towards a house or something okay yeah because it was a quite oh go ahead yeah that's okay so if you mean if you can have that conversation that would be fine but But then forget it. It's over. You know, you don't get to go back later and go, where's that money? Right? Right. You just drop it.

You made a decision, and you made a comment, and you moved on. That's what I would do. Because otherwise, it's going to ride around rent-free in your head. Yeah. And we're quite more friendly.'s quite amicable um situation not relative if he doesn't ever give her money yeah and it bothers you and you lay awake and he doesn't think about it again you'll be the only one thinking about this on the planet. How much did you get from the inheritance, Katie? Well, quite a bit. I was able to buy my own home after the divorce with it.

What's quite a bit? How much did you get? Do you feel comfortable saying it or no? Sorry, just under a million. Okay, yeah. So you have a paid-off off house how are you doing financially because that's almost what i'm want to make sure that you know this money's being because i mean it's 80 grand so i'm like i want to make sure katie you're you're set up well um for your future retirement i mean like looking like we talk about doing that laying that foundation for the parent first before the kids and so yeah making sure that yeah where you are financially is in a good spot. So you bought your house outright, so you have no mortgage.

Correct. And how are you doing with retirement investments and everything? I think I'm okay. I have $700,000 in an IRA. Well, in an IRA, $85,000 and a 401k. And the house is worth what? $500,000.

And you're how old? 55. Cool. So you're a 55-year-old married, I mean, divorced millionaire. Cool. That's neat. Well, thanks to my mom. I know.

And so we want to honor that memory by being wise. If I'm in your shoes, yes, I would write a check based on what you have told me and pay off your daughter's student loans. And yes, I would make a phone call to the ex and say, hey, remember when we said that? I just paid the whole thing. When you get ready to pay her your half like you promised someday, she can use that for her first house or something else and i'm not letting you off the hook i want you to know i had done it though and drop it after that forget it ever happened just walk away and never think a thing about it again can you do that i can do that okay because i don't want this becoming this constant thing like

when's he going to do his part and on all that because you're doing your the only person you can control is you and you can't control him and i'll you know you're you're saying it's amicable and he intends to and you have faith in him um you know i've just been doing this 35 years my faith in the ex following through on a promise is fairly low you know it's just fairly low i just see you know i guess nobody calls this show and says oh my ex followed through that doesn't happen we get only the other ones yeah but but yeah i just wanted to let you know dave no i mean because i guess some of them do but i mean we just don't run into it and thank god for you know that she oh i hate to say that because it was her mom's passing so i didn't mean that but just that she's in the situation she's in because that's another reason why we say

don't take on debt because life happens and they had this plan yeah and then end up getting divorced in the middle of school and if this inheritance hadn't come this daughter you know if it's a parent plus loan i'm like yeah both could be on the hook but also i don't come, this daughter, you know, if it's a parent plus loan, I'm like, yeah, both could be on the hook. But also, I don't know what the daughter signed. I don't know how they did the student loan agreement, but. I don't know what the daughter signed up for. Yeah, she could have been 80. I mean, she would have been 80 grand thinking like, we'll take care of it too. So that's the asterisk too of this story is that you're taking on risk always, always, always, always when you take on this debt. And life rarely plays out exactly how we

have it planned out like never yeah so it's it's just that that word of caution but um katie i'm so sorry that's a hard season katie you know losing your you know your mom the divorce in the middle of of it and it's just that's hard that's really hard but this is a redeeming beautiful thing that you'll be able to do from a financial aspect um to be wise with so i'm glad you called in very good very cool good stuff so yeah the the cool thing about student loans is is they shouldn't be there at all almost all of student loan debt is based on someone choosing to go to a school that they could have gone to a cheaper school and paid cash. Almost every time you're choosing a school you can't afford, just like choosing a car you can't afford. And so I can buy a car to drive around for $5,000. I have $5,000.

Or I can buy a $50,000 car because it's a nicer car and go $45,000 in debt. That's a choice. It wasn't a requirement to have transportation. It was you chose poorly. And you choose to go to a school you freaking can't afford. Moms and dads, you need to learn to a school you freaking can't afford moms and dads you need to teach you need to learn a new word no it's a new word try it no everybody practice with me no this is the ramsey show

rachel cruz ramsey personality is my co-host was going over my notes this morning to get ready to speak this weekend at the total money makeover weekend I am so excited to get to do this I haven't done the classic Total Money Makeover material in a while, and I'm getting to do some stuff I haven't done before. This Total Money Makeover weekend, I'll be speaking, of course, Rachel, Jade, George Camel, Ken Coleman on how to get your income up, John Deloney on how to bring more peace to your life overall, getting out of debt, creating a budget, communicating better with your spouse, easing anxiety, investing and building for retirement.

And it's a whole thing. We start on Friday night this coming weekend and go all through Saturday and a live taping of the hit podcast, smart money, happy hour with Rachel and George. We've got live Q and a all through the thing. It is going to be an absolute blast. And there's still some tickets left. Sadly, I thought it would be sold out by now, but I was wrong. So, we'd love to have you guys.

It's right here on the Ramsey campus this coming Friday, May 10th and 11th. You could come a little early and watch the show be done. We do the show every day from 1 to 4 Central Time on the glass. Following that, grab a bite to eat somewhere and then come on up on top of the hill

to the Ramsey Event Center and we'll be doing the event so you can get your tickets at ramseysolutions.com slash events and a handful handful of tickets left you can still get in and we're we're excited about doing this yeah it's gonna be a fun weekend it's always fun our events are always enjoyable and we'll all be there and I like that it's so money focused the whole weekend which will be great yeah you'll laugh you'll cry you can bring that spouse that needs to be converted or that friend that thinks you're crazy and they will leave being as crazy as you yeah that can happen daniel's with us in tallahassee hi daniel welcome to the ramsey show hey dave rachel how are you guys doing better than than we deserve, sir. What's up?

All right, just a quick question. So basically, after some convincing, I did get my wife on board. We are both on board when it comes to attacking our debt. I want to be gazelle and tan, so if I can borrow the language you guys use, she wants to be more on the intentional side while still taking care of things uh that she thinks are still important so i'm the grumpy guy who says i don't want to do nothing um no more christmas no more gifts no more no more nothing let's just be you say no more christmas well no more yeah i want yes well no wonder you're unpopular grinch yeah i am the grinch i'm not a big on the only because i'm like how can we Well, no wonder you're unpopular, Grinch.

Yeah, I am the Grinch. I'm not a big on the, only because I'm like, how can we strip down to the bare minimum? Oh, I'll go with that. But I mean, you start with Christmas? I mean, I'm cutting some of your stuff before we're getting to Christmas, buddy. Oh my gosh. No wonder she's not enthused about you. So my question, well, I guess I introduced her my question well i guess i introduced her to we both uh i introduced her to sinking funds and now we it seems like we're starting to have a growing amount

of sinking funds so we can stop dealing with things as they come up and it's helped we have the money when we need it but i feel like the sinking fund they're taking a little too much of the margin i would like to attack the debt at a more aggressive speed so i don't know how to compromise with her and we're running at different paces here it seems like what are the sinking funds for um let me pull up every dollar just to give a few examples here but um so every year on board every dollar okay keep going sorry go ahead um for instance the homeschool program every year comes around around August, September. We pay for that. We used to go into debt for that, but we stopped doing that since we stopped this whole thing.

How is that a waste? It's not a waste. No, some of these are not a waste. That's not a waste. Okay, we need a for instance. That's one of these things that's bothering you. Give us a waste. That one's not bothering you.

If it is, you've got an issue. My daughter's birthday is coming up. This is so bad. Now that I realize it, okay, but she wants, we're saving up some of that because. How much are we planning to spend on the daughter's birthday? I have a twin girl, so we're setting aside $100 a month. You're going to spend $1,200 on a birthday party? No, no, no. It's about $500. It's coming in August. So $ 250 a kid

right okay so your argument is that that might be too much no i feel like they're starting to all add up um well they're adding up because they're real i mean that food thing it adds up yeah because i think daniel there could be an instance of like oh my gosh life is expensive where y'all just been charging everything you said the homeschool stuff we just go into debt for it you almost just delayed everything and now when you're paying for stuff so up front it is going to feel like yeah that there that there is more yeah you're actually admitting what's going on now by doing a budget with sinking funds and you weren't before so i i um unless it's a vacation right gazelle intents i would say we don't do vacations let's

let's pause 12 months on the vacation eating out eating out we're gonna pause like a couple of things to do but um yeah but the but the reality of life and what life costs may be the thing that's like oh crap this is this is a lot and when we're cash flowing everything like what we teach you really face oh my gosh our life is eating up so much of our money because life is expensive so there could be stuff that you guys tweak here or there um but yeah so daniel it sounds like that um you're you're i don't think you're on as different a page as you think you are i think your argument's not with her it's with reality you're struggling and And so let's give it a month or two and just kind of see if this, see if the emotions of this iron out. Okay. I appreciate and embrace your enthusiasm.

I appreciate and embrace your passion to get this done. Those are keys to getting it done. And so you keep that part going yeah but just don't blame I don't think she's to blame nothing you gave me here was like that she's acting like she's not intense I mean we're gonna buy clothes and we're gonna buy food and we're gonna pay for the homeschool materials and you know we're gonna have a birthday party might be a little high but it's not it's not you know it's not throwing you off by two years. Not thousands. Yeah, right.

You didn't tell me you spend $12,000 or $12,000. If you just said $1,200, I'd probably say, well, that's a bit much. But, yeah. And it depends on the age of the kid and all that kind of stuff, too. I mean, if you've got twin one-year-olds, they don't even know you're doing this. So you're doing it for you. So then that's a different thing so uh you know but it but if they're twin 10 year olds they definitely know they know everything

about what's happening there and i guess a a visit to the magic mouse mr cheesy what's his name chucky cheesy yeah the magic mouse. I guess that's probably a couple hundred bucks. I was like, Mickey Mouse? No, I'm thinking Chucky's probably a couple hundred bucks to go down there. I mean, per kid. Yeah, I mean, those birthday parties at those places, you're paying per kid. Yeah.

So, I mean, the package, it can be $20. I mean, you've had them down there. I don't know what they cost, but I've been down there when it happened. It's probably $20 a kid, $30 a kid for the unlimited stuff stuff me and the mouse are in there now we've drugged i have to junkie cheese indoor trampoline parks there's been a lot of great birthday parties yeah a lot of great birthday parties there's not enough there's not enough disinfectant in the world oh there are some there are some gross it's full of kids yeah kids little sweaty kids all over all the yeah it's just nasty you know uh but yeah i'm guessing that i mean i've been to those with the grandkids and i'm guessing you guys are shelling out yeah yeah yeah so yeah

i would say if you're getting out of debts the birthday party is probably at home you're ordering some pizza having some friends over and calling it a day i mean like you know what i mean if you're gonna go just like yeah the simple routes yeah and it can be done like it's that's but but the thing here daniel i think is what as we talk through this with you everything you brought to us were things that were not out of bounds and so it didn't sound like your wife with the sinking funds is like destroying your little plan. It's more like reality is destroying your little plan and dampering your enthusiasm. And it's actually a really great point.

I hadn't thought about that. But for a lot of people that are starting this process, when you say no debt so that we can pay off debt, then those expenses are real. It's not this like, oh, we can just worry about that later. It's like real money now. Kick the can down the road. But then that's the power too, though, to his point,

is that's when you can cut some of those things. You're like, oh my gosh, what were we paying for that? Maybe there's a cheaper homeschool program or whatever, right? That's when you actually start caring about the expenses because you're seeing it in real time

and in real life. Rachel Cruz, Ramsey Personality is my co-host today in the lobby of Ramsey Solutions is the debt-free stage. On the debt-free stage is Ruben and Kirsten. Hi guys, how are you? We're awesome. Hey Dave. Welcome. Good to have you. Good to have you. So where do you guys live? Colorado Springs, Colorado. Colorado. All right. Well, welcome to Nashville. Good to have you. And how much debt have you two paid off? We paid off $270,000 in five years. Wow. Good for you. And your range of income during that time? We started at $72,000 and then went up to $112,000.

Very good. Very good. What do you do for a living? We both work in the finance department of a software supply chain management company. Okay. Same place, same company? That's fun. Did you guys meet there?

We actually met at a different location and we worked together the entire time. We've known each other just different places. That's awesome great so how long have you been married um it'll be six years next month so right after marriage boom boom we're getting out of debt yeah five years game on what kind of debt was the 270 this was our house you paid off your house looking at a couple of weirdos i love it you're so weird what's this house worth i'm probably about 425 i love it and how old are you two weirdos 30 30 years old i'm 31 he's 35 close enough close enough trying to get some youth good good move reuben well played yeah i like it hey very good guys early 30s, that's amazing. So you get married, and is this the only debt you've been working on, or did you pay off

others before that? So it started about eight years ago, but we cash flowed my bachelor's degree, our wedding, our honeymoon to Alaska, just saved like crazy. And then during the payoff, we paid off about $50,000 in home renovations. not financed sorry we paid off about 50,000 um and home renovations yeah and paid 270 yes way to go guys what in the world happened to y'all that made you so weird this is wonderful like a year after marriage it's game on on the house yeah basically started for me about eight years ago uh driving home from work in a job that I hated and just really wasn't happy about who I was and where I was at in life. Turned you on. You just happened to be actually

turned on the radio. You just happened to be on the radio and never listened to the radio back then and heard your voice, heard your name before, but had never truly listened to you. And some context, my grandparents, my dad, they've been huge influences on my life. They basically practiced your principles from day one, you know, pay cash for things, live on less than you make, God's and grandma's ways of handling money. And when I heard you, like, that instantly clicked for me. So I was super just intrigued at that moment,

but I also just loved how raw you were with the collars, you know. I don't want to see you in a restaurant without, know unless you're working there you need to sell your truck you know so like I was pumped up just listening to you and uh you know you really started talking about changing your family tree and talking about things that really hit me hard uh changing about who changing who you are changing um uh you know really just owning up to yourself and taking control of your life and that hit me hard because uh yeah just when i heard that i looked at myself in the mirror and i was like if i'm ever gonna have the things that i love and really want my life then i need to i need to i need to do something about it i didn't have a money problem i just had i had a me problem

oh so thank you that's amazing and that's it i I'm like, that's the key for so many people. It's that awakening of like, oh my gosh, I can do this. Like I can wake up tomorrow and make different decisions. It's so empowering. So you guys had babies during this time. How old are the kids? Isaac is two and Ruby is seven months. Okay.

Okay. So you all have little ones, little ones. So what was the hardest part of this? I mean, this is a lot of money, you guys, that you paid off. A lot of, I'm sure, extra work and everything. But yeah, what was what was difficult? I think just stay in the track. You know, it could have been really easy to divert the plan or, you know, just make other decisions. We've had hail damaged cars are pretty much whole lives. We just don't care. But it could have been really easy to move to divert. But we had a better

purpose. And we knew we were bringing kids into the world at some point. Was it worth it? Oh, it was so worth it. Absolutely. Who made fun of you? We got called crazy a lot, but nothing like down-putting. It was just more poking fun, and it encouraged us just in a different way. Yeah.

The jobs and cheerleaders, people that were supporting. Yeah, definitely. Yeah. Good. Good. And another thing that was kind of hard for us, I guess,

is I had had a townhome in like 2015 and it was super cheap and it was not the best part of the Springs and there was a lot of crime activity. Drive-by was across the street.

You know, somebody had gotten killed, shot and killed. So people were like, you need to get out of there. And we're like, no, you know, we got this, we're doing this for a reason. You know, this had gotten killed, shot and killed. So people were like, you need to get out of there. And we're like, no, you know, we got to, we got this, you know, we're doing this for a reason. You know, this is for a purpose.

So that was, yeah. Yeah. The location. And then you got the house though. So you moved out of that. Yeah. We just knew that we wanted to wait until after we were married and do things in the right way. Yeah.

We stayed there longer than we should have, but we didn't. We're still here we weren't shot so there we go oh you guys that's incredible i don't know if i've ever heard anybody say that so pleasantly we're still here and we didn't get shot way to go kirsten i love it good for you guys way to go you guys i'm so proud of you i would imagine your mom and dad are jumping up and down proud aren't they reuben oh man my mom passed away in 2008 so you know part of that was she did have a 30 000 in life insurance that we i was able we were able to put down on the house that we're in now so to honor that or honor her that way has been awesome and you know yeah it's incredible so great you

guys so great so what would you say to people the key of getting out of debt is? For us, we put when we initially got the mortgage, we put the extra principal when we did the paperwork. So there was that gap for us, like the extra payment was automatically coming out. So we just got used to that being our mortgage payment, even though it was more than double. And it put that gap so you couldn't make any real impulse decisions that would take you off of your goal. Yeah, yeah, that's great. That's a smart way of doing it for sure.

Automate your discipline. I like that. Just keep it going. That's a good plan. I used to do that to myself all the time until I had natural discipline. I put stuff on auto everything so it just automatically happened, and I went, oh, now I have to live on what's left because I put all that money in a mutual fund.

You know, it's like, wow, that's very cool. Good for y'all. Well done. Very well done. Congratulations. All right. You want to bring Isaac and Ruby up for the debt-free scream? Isaac.

Isaac, come on. So sweet. Oh, my gosh, she's so cute. Seven months. Seven months're gonna she's gonna get scared to death when her mom and dad yeah i know i hope so the babies yeah they always get a little frightened with the screams so great i love it all right ruben and kirsten isaac and ruby's uh heroes they've changed their family tree early 30ss with a paid-for house in Colorado Springs. Meanwhile, America sits around in some places whining that it can't be done.

These two prove that it is done every day. This is what you call millennials. This is what you call millennials that win. And we see them all the time. Or Gen Z. Ruben and Kirsten, paid-for house. Colorado Springs, 270 paid off in five years making 72 to 172 count it down let's hear a debt-free scream three two one

as predicted scared poor ruby to death i think isaac got a little got a little scared too there's a lot going on there that's so great amazing oh amazing yeah so for every time i hear that you and i on the ramsey show and jade and ge George and we're out of touch and we don't know what the real world is today and you're speaking boomer language and all that kind of stuff all these negative things that are out there then we meet people like them yep Kirsten and Ruben and they not just purchased a home but they paid it off in five years in their 31 years and i think it was making one 112 not 172 72 to 112 i wrote that down it looked like a seven no no but i'm saying you know so it's it's not like they're making 300k right right exactly i mean it's it's amazing and it is it's the

discipline and it's choosing and now it's the the whole idea that now, oh, my gosh, there's no payments. There's no payments. But they did it. Well, Ruben said, y'all could replay that monologue for over and over on loop because it's true. I'm like, you have to take responsibility. Yeah, you take responsibility. And it's amazing. Yeah. He said the guy in my mirror had to change.

Yeah. And he did. I'm so proud of him. What a hero. And he's got changed his kids lives. Yes. And Kirsten just killing it i'm amazing well done well done this is the ramsey show

rachel cruz ramsey personality is my co-host steven is with us in chattanooga hi steven welcome to the ramsey show hello Hello. Hi. Here we go. So I'm about to be divorced. The income disparity between my wife and I is pretty great. So I have a large amount coming my way in a quadro. And alimony coming my way. Three years of bonus money of her coming my way. We're going to be selling a home here soon. and I'll get about $100,000 out of that.

I want to get myself into a house and have it paid for in the next few years. I don't have any retirement or anything set up yet. I'm 46. My income is growing rapidly. I'm a brand-new barber. I'll make about $30,000 this year, but I believe every year probably go up about $10,000. Okay. Where am I going with this?

What do I do with this quadra? I'm going to have about $80,000. Quadra's got to be put into an IRA. You've got to leave it alone. If you cash that out, you're going to get penalized in tax. You've got to leave it alone. Yeah, so just pretend it doesn't exist. Exactly.

You need to get with a SmartVestor Pro at RamseySolutions.com and find somebody to sit down with, and they can help you do the rollover, and you can move that into your own personal IRA and some mutual funds and have no taxes on it. But if you pull it out and screw with it, you're going to have taxes on it, so leave it alone because it's in her – all it is is a section of her 401K being sliced off for you. Yeah.

That's all it is. I had thought about using that for a down payment at home. No, no. You're getting $100 out of the home, and you're getting what other money? You said you're getting a couple of bonuses and other stuff. How much money total? Yes. Not counting the clock.

Four years of alimony, $875 a month. And three years, 25% of her bonus. It'll be about $8,000 to $10,000 each year. Oh, it's not all in a lump sum? No. The only lump sum that we can touch then is the $100,000. You're going to get $8,700 a month? Is that what you said?

I'll be getting about $1,600 a month in alimony and child support. Oh, okay, okay, okay. I got you. Okay. So it's broken up over four years and my income will be increasing over that time as well. So I'm going to be looking at putting $100,000

down on a house. That's what you've got. Yeah, and just ignore that quadro. Yeah, you've got to. Because it'd be like taking the money out at 30% interest. Yeah, because I'll just get taxed. You're going to get taxed and a 10% penalty. You're going to get hammered. So you leave that puppy alone

and just go do your house of some kind with $100 down based on the current income that you've got. And you can count palimony. You can count child. I mean, you can count all of that in terms of as long as it's going to continue. And that'll offset the fact that your income hasn't gone up. Or you can wait a year and let your income come up. And then you've got a story to tell to a mortgage company showing tax returns as a new barber.

I made this, and then I made as a new barber that made this. And then I made this and then I made this. And here's a trend line. And so it's reasonable to qualify you based on those things. You got to have two years tax returns as a new self-employed person. And then you'll be able to move forward on that. But, yeah, just just take your time. There's no reason to, you know, you are getting some money out of the

divorce, but it is, it's not exactly like you hit the lotto. I mean, it's a, it's a nice amount of money, but it's not, it's not going to put you on easy street. You're still going to be doing a bunch of careful things there. Today's question of the day comes from Taylor in Mississippi. Taylor says, I'm currently 12 weeks pregnant with a baby girl from my boyfriend. I recently lost a loved one who left me a large inheritance.

I have $40,000 of debt and my boyfriend is debt free. Do I take this inheritance and put towards my debt and then take what's left and put down 20% on a house? My boyfriend and I plan on getting married,

but for some reason he's really against getting married before I have the baby. That weird okay well I don't know why that would be the case but um yeah I mean that's what I would do yeah I would take the inheritance I'd pay off your debt Taylor I would keep everything so separate if you bought a house I would buy it on what you make your income your life i mean i i would be very very uh hesitant to put him on anything i wouldn't put him on anything not hesitant and i just don't do it and i probably wouldn't do anything until the baby comes i mean honestly i don't think i would make a big decision like well pay off your pay off your dad pay off your dad but i wouldn't buy a house pregnant i

would continue to rent uh maybe rent for the next year or two then then hopefully you guys get married then it's after you have the baby and then you guys together after you're married look and see okay let's let's purchase a house but while you're pregnant i probably i wouldn't take some of this inheritance and put it down payment i would just i would rent be where you are for you know one to two years and then from there see what happens relationally if that changes um and then even just financially at that point yeah I'm old why is he there's a term from my generation okay careful called shotgun wedding oh yeah which um you got a baby on the way buddy you show up or daddy's gonna bring a shotgun and help you show up oh my gosh that's what that means that's where that comes from that's where that comes from i'm gonna bring my shotgun and by god you're gonna marry her i

just thought you meant a fast money okay no that's that this is like disturbing but i agree well i agree that's weird that he's like really really against getting married backwards i it's it's just it's not weird it's just wrong and it just i hear you my warning bells are going off like crazy mine is too but i don't want to force her into a marriage with a terrible guy so i'm like right no i wouldn't know i would not say just go get married right now he's not a great guy for some reason he doesn't you know okay so yeah don't put this guy's name on anything until he is a husband and um period yeah under any circumstances and don't put anybody you're not married to, period, no matter how sweet and wonderful they are,

their name on your freaking house, you get yourself in a disaster. This just, uh. All right, John's in Colorado Springs. Hey, John, how are you? How are you? Good, how are you? Thank you for taking the call.

Sure. So I've got a bet with my wife on what we should do with our side hustle money. So we owe $102,000 left on our house. We have no other debt. We have our rainy day fund, our money and savings. We get 15% to our 401k and our pension. Our interest rate on our house is 2.2%. I make between $30,000 and $60,000 on our side hustle.

So I say that we take the $30,000 to $60,000 every year and put it in mutual funds because the rate of return is greater than the 2.2% on the house. Your wife has been listening to the show and she set you up. Yeah, she said that we need to just pay off the 2.2% on the house. Your wife has been listening to the show, and she set you up. Yeah, she said that we need to just pay off the house. She set you up. I hope you didn't bet much. No. No.

John, what we teach and have the entire time we've been on the air for 30 years is that you pay off your house as fast as possible regardless of the interest rate beyond the 15 because in studying the doing the largest study of millionaires ever done in north america we've talked to 10 167 of them let me tell you how many of those 10 000 said we became a millionaire because we didn't pay off our house and instead made more money by investing the money in mutual funds. Out of 10,167, what number said we are going to go with John's plan? Zero. Zero.

Not one. We've never met a millionaire who really did this. We've met a lot of people who have a theory and discuss it the way you're discussing it because you're a math guy like me and i'm i immediately go to where you're going to um because that's how i my math brain works you're looking at the spread but what your spread doesn't take into consideration is risk and the two elements of a paid for the two elements of someone getting a first their first one to five million is typically their 401k being well funded which is 15 of your income going

in you're doing that and a paid for house and so you're on track if you follow her plan to be a millionaire faster than if we follow your plan based on the data that we've studied of actual millionaires, not with mathematical theory. Because the math theory of what you're bringing up is reasonable. But the actual facts are when you pay off your house, other stuff changes in your life. And you tend to excel in your career and do other things. You can invest the mortgage payment. Yeah, exactly. Once you don't have one.

Yeah, you can invest the mortgage payment like crazy. Yeah, you go into overdrive. This is The Ramsey Show. Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. Rachel Cruz, Ramsey personality, number one bestselling author. My daughter is my co-host today.

Thanks for hanging out with us. Open phones at 888-825-5225. Claire is with us in South Bend, Indiana. Hi, Claire. How are you? Hi, Dave. I'm doing great. How about yourself?

Better than I deserve. What's up? Well, first, I just want to tell you really quick. I met my husband. One of the first dates we had, he told me that his dad raised him with the Bible in one hand and a Dave Ramsey book in the other. That's how I kind of was introduced to you, so I thought that'd be funny to kind of share. That's a little scary, actually. Well, it's led us on some good paths here.

Good. How can we help? Today, I'm calling. I wanted to ask you, as you both know, some good tasks here. Good. How can we help? Today, I'm calling. I wanted to ask you, as you both know, daycare costs are really high. We are expecting our second child in August, which we're really excited about. We both work, my husband and I, full time. And so daycare is our option in life right now. When it comes to trying to figure out in our budget, we're on baby step four, five, six, kind of like how to best budget for the upcoming expense of daycare.

We are kind of at a loss with we can't afford it. And that's not an issue, but it's where does it come out of? You know, we're trying to figure out with our budget, does it maybe impact us putting, right now we're putting 15% each into retirement for a season until my older son can go to a less expensive daycare. Do we put maybe 10% into retirement each? So we have a little bit more room to give to the daycare for our second child when he goes to daycare or, you know, kind of trying to figure that out. What's your household income?

We currently make $121 a year. Okay. So 15% is $20,000. Okay. Yeah. And daycare is how much? Right now we pay $311 a week for our son. So that's roughly, depending on the month, it could be between $1,500 and $1,200, $1,500. But with the second child, we get a small 10% discount and it could be anywhere between $2,100 a month to $2,700 a month at the daycare we're currently at. Yeah. So it'll be three grand a month is what you guys will be paying in daycare. And how much do you make a year? So I currently make $55,000 a year. And my husband makes, I think when I broke it down, it's $65,000 a year. Oh, that's right. You said $121,000 a household. Yep my husband makes, I think when I broke it down, it's $65 a year. Oh, that's right. You said $121 a household. Yep. Sorry. I had that number. Okay. That's great. Yeah. Do you guys have,

Claire, do you guys have margin in your budget when you budget month to month? Do you have money that you're putting away in savings just for other things? Is there, what does your budget look like? Yeah. So typically in a month we put towards retirement and some other savings about $1,300. And then extra we have left over for gas. We donate to our church, groceries, household items, utensils, toilet paper, things like that. So we do have, you know, we budget as close as we can with everything,

but just trying to figure out when before baby comes and everything else, like how much more do we save? And then that only lasts for so long. And again, this is only for a short period of time, because our son could go to a different daycare when he's four, the oldest, and it would be a third of the cost. So it's not going to be forever that we would be in this predicament, but just for a short period of time, we're just going to be at a higher daycare cost. Yeah, yeah. I think in a perfect world, you're finding that margin other places and what that looks like, because that 15 percent is I mean, that's a key part for you guys in the future. And so I don't know what what other lifestyle expenses look like of shoring those up, maybe, you know, saying, hey, we got to find some margin other places in that budget. Because, you know, I think that's the hard thing, too.

The reality of like, oh, my gosh, kids, they do. They cost a lot. And especially when you're talking about something an expense like daycare, it is. It's so pricey. So, yeah, I mean, in a perfect world, you're going to you would find that extra $1,300 elsewhere. But for you guys, you don't, you know, at that at that point though you don't have an option and for me for 30 for 30 000 a year i'm going to start looking at alternatives too i'm not going to just accept that as the only possible method yeah and that's something i started to look into as well

um the one another option we discussed was um not contributing to the 529 plan for a little while for our son because my mom's i'm talking about other daycare options yes that too we have looked at 30 30 000 bucks yeah but 300 311 dollars a week i mean that's pretty standard i mean that's not unreasonable that's not an unreasonable amount when i but it gives me a lot of thoughts when i start talking about 30 000 a000 a year. Yep. I can start thinking about a lot of different things then. So, but yeah, you know, I would look at all that. And I'm with Rachel. Probably one of the last places I would go would be to the retirement. I would do 529 before retirement.

Yeah, I would. I agree. Okay. Thank you so much. I'd pull that off. And then I really would, honestly, look at alternatives on the daycare because it's such an onerous amount as a percentage of your budget that they have priced themselves out of somebody who makes $120,000 a year.

And that's – Yeah, they've priced themselves out of it. And so you're not far from affording a nanny for 30k i mean not far at all so um i mean it can be done so i i these i start thinking about it different it's kind of like you know if you're going to charge me 120 000 a year for nursing home uh for 120000 a year for a nursing home. For $120,000 a year, I can hire a full-time in-house butler. Yeah, you can't do everything. And buy a reclining bed. Yes, I know.

I know. But I know her feel, and I've done the research even locally. Like the moms that work here at Ramsey. I'm like, it is. It is a crazy expense. And then you start, and then you do. You ask, for so many women, you ask the question, is it even worth it? Right?

That's right. Because it's the 20 000 extra is so instead of making 121 we make 100 is that worth right i mean like you you have to you play out all these different scenarios but it does this part though it makes me as a mom with little ones it is it it it sucks because they have trapped us in a sense it can feel like that with the prices they go up as people so they're open they stay open they're paying it and so when price raises to a certain point the volume comes down that's supply demand and so you're they're reaching the top of this because this has been a discussion like 10 times in the last year well yeah and and it's like 37 percent it's risen it's risen since 2020 i'm like it's just it's it's crazy it is crazy so they do they will end

up and that's what we talked to so many women that just end up saying hey i'll just i'll stay home right like if you have three kids right i mean you start to actually i'm working 40 hours and after taxes and daycare i net net five grand. Right. Screw that. Right. You know, no, thank you. That doesn't make sense. Yeah. And she's almost there.

She's almost there. Not quite with her numbers, but. Well, and the four-year-old will go to a less expensive school. Right. So you got to light at the end of the tunnel with that. Yeah, exactly. That's helpful. I know.

But that's so hard, Claire. So hard. I hope that's helpful. Yeah. Thanks for calling. This is The Ramsey Show. Reginald Cruz, Ramsey personality, is my co-host today. The best way to make the most of your money is by creating and sticking to a monthly plan.

People that win plan to win, and that includes money money and it's called a budget your budget should give every dollar an assignment every dollar a mission every dollar a name before the month begins and you and your spouse agree on it if you're married every dollar is our budgeting app the world's best budgeting app one of the largest these days millions of people joining in the last just a little it's crazy y'all thank you so much by the way it's an easy to use app that fits into your busy lifestyle you and your spouse can both have access to it see what's going on you can keep a pulse on your spending make progress on your money goals download every dollar for free in the app store or google play today and you can

even get it at every dollar onlineOnline at EveryDollar.com just for your desktop if you want. Brianna is with us in Columbus, Ohio. Hi, Brianna. How are you? I'm doing well. How are you guys? Better than we deserve.

What's up? So quick question. So I'm going to keep this, try to keep it short and sweet. So my in-laws are on one income and my mother-in-law has not worked in about 18 years around that time. And she's just been making sure that everything's taken care of at the house. And so my father-in-law doesn't bring in all that much. You know, they pretty much, they're okay, but they don't have any term life insurance. I don't believe they have anything for savings. I'm concerned about him with his work because he does have a risk of more.

He's more at risk for injury because of his health. And so my question for you guys is, you know, with us children and daughter-in-laws and such, is there something that we need to be doing in case something happens to our my father-in-law just the handle handling your money i mean if you become wealthy the wealthier you become the more able you are to help right yeah and that's why i'm asking because i am i'm in my mid-20s and i'm trying to get a good handle on my money. You know, I'm starting the baby steps. That's the best thing you can do for them is to get you strong. The weak can't help the weak.

Yeah. So how would you recommend I best do this? Baby steps. Do I do a… No, just baby steps. Do I do a... Baby steps. No, just baby steps. Just go, you go become wealthy. If you've got money, you'll have some money.

You don't have to have a parent account. If you've got a million dollars in a mutual fund and they have a problem, you can help them right yeah it doesn't have to be it doesn't have to have their name on it should i do a high yield savings or no you ought to follow the baby steps okay exactly that's the fastest method to you becoming wealthy and the best thing you can do for them is for you to become wealthy okay but no you should not truncate your retirement savings and say or your kids college and say i'm not doing baby steps four and five instead i'm going to have a father-in-law account no thank you no no no no no no

yeah and brianna have you guys talked to them about their money like do you know all this for a fact is your husband like like you guys know this so we do know that they do not have really anything saved have they talked have they said anything about what their plans are is he just planning on working longer he's kind of just planning to work until he can't okay yeah and so I mean and too I would say this too Brianna I wouldn't be like overly stressed about it because at this point you can't do anything to help they can't help themselves right and nothing has happened yet right it's it's not like oh my gosh my father-in-law is now on workers comp because he got an injury and my my mother-in-law now has to go back to work. How do I help navigate the situation?

There is no situation right now. There could be. So I think, you know, being wise about the people around you, the family unit around you of saying this is our life and this could be coming in the future. But right now today, yeah, I'm with Dave. You just, yeah, you guys, you and your husband, you guys start doing this. You start walking down the baby steps. And if you have the ability to help, if they need help,

then you guys get to choose that at that point. Will is in West Palm Beach, Florida. Hi, Will. Hey, how are you all doing? Better than we deserve. What's up? So, quick question for you. I'll keep it brief.

Long story short, I graduated college last May, and I moved back home in, let's see, July, last July. So I've been home. Got a job in November, so I've been working. I make roughly $75,000 a year, bring home $4,400. I got my master's. I let my mom handle all the finances for that. So in February, it was a little bit of a surprise to me that I was $70,000 in debt, $70,000 student loan.

So I've been paying off those, trying to throw about $3,000 a month towards this. So I paid off roughly roughly sixty four hundred dollars um i've got thirty five thousand dollars saved up and i'm wondering that's in a high yield savings account so i'm wondering would it be wise to put that towards it right now yes or just continue and in the same in the same day that you do that which is today you take control of your own money. You have a master's degree. You're a grown man. Yep.

You need to manage your money, not your mother. And then right after that, when you start talking about where a $75,000 a year college graduate's going to live that's not his mother's house. Correct. So three things. Yeah. Move out, take control of your life, and write a check and pay down the student loans. Ding, ding, ding, ding, ding, ding, ding. And all of a sudden, this stuff's going to start lining up for you like crazy.

What's your master's in, man? Finance, investments. Okay, good. All right, so you can handle this then, right? Oh, of course. Okay, good. I was going to be more wise. Yeah.

Yeah. Pay it towards the debt. Yeah. Let's get the debt cleaned up as fast as you can. For $35,000, I mean, you obviously took advantage of not having the rent to pay, right? Living at your parents. You took advantage of it because you have it saved, which is awesome. I still pay them rent. Oh, you do? Okay. Well, I was going to say, you have $35,000 saved, so you're doing something right. Yeah. You need to take over control of your own money immediately. You need to make plans to move out in the next 30 to 60 days and have yourself a life.

And you need to pay down on student loan as fast and furiously as you can because your number one wealth building tool is not interest rates. Your number one wealth building tool is your income. And when it's not going to someone else in the form of debt payments, building wealth becomes fairly easy, especially, Will, for a guy like you who knows numbers and has done a great job of saving money. You did an amazing job, to Rachel's point. Well, and Will, I mean, at this season of life, yeah, I would do exactly what he said. I'd go get a part-time job.

I would go drive Uber. I would do something four days, four nights a week and just make a crap ton of money right now and pay this off. Yeah. Get this knocked out as fast as you possibly can. And just say for 12 months, I'm just work and get this get this out of here because um because it can be done and you're in the perfect season to do it right i'm like you really are you're um i find you know there i mean i think it does get harder when there's another

spouse involved right because you got you got another person to consider then you have kids and like as you kick the can down the road there there's more elements to your life that you're having the bad news is when you're single there's no one to hold you accountable the good news is is you don't have to mess with anybody else to make a decision to change your life that's right you can just decide to do it today yeah today it's great well just like that let me say this i mean i feel i feel for you will because he had no clue he had the 70 000 he said his mom took care of all the money stuff during college. And then he realized, oh, my gosh, now I have $70,000.

Isn't that what he said? It kind of surprised him. So parents, talk to your kids. Say it out loud. Have the discussion. Because that sucks. That happened to one of my friends. They went to pull a loan for a mortgage.

And on her credit report, there was a student loan that they didn't know about no one no one said anything about it so communicate parents communicate this is the Ramsey show Rachel Cruz Ramsey personality is my co-host Jade is is in ottawa ontario hi jade how are you i'm good how are you better than i deserve what's up yeah so i had um a couple of questions so this year uh kind of fell on a little bit of hard times uh when it comes to finances so um I have roughly $237,000 in debt. 205 of that is in a mortgage. And the rest is car loans, line of credit and credit card. So I'm a single parent, and I am only bringing in roughly $3,500 a month. So the debt is starting to become overwhelming. I'm wondering if I should...

When did you buy the house? I bought the house in 2018. So the house is worth about $630,000 now. Because you don't make a ton of money. The house doesn't sound completely unreasonable, but my guess is... What's your mortgage payment a month? So when I first got in the house, I had a really low rate. Um, but now that I've had to renew, um, my mortgage payment has went from a thousand dollars a month to $1,400 a month. Okay.

Um, yeah, I mean, you're bumping up close to 50% of your income being your mortgage. Yeah, and then I had... Why did you not take a fixed-rate mortgage? So I did take a fixed-rate. I had a fixed-rate before, and then when I renewed, I took a fixed-rate as well. Why would you renew if you had a fixed rate? So here in Canada, you have to renew. It's not like in the U.S.

So the rate adjusts each time you renew? Yes. So there's only variable rate interest rate mortgages in Canada. I did not know that. No. They's fixed. Well, it's not fixed if it goes up every year. No, you got to, when you renew, how often do you have to renew? So you can either choose a three-year fix or a five-year fix. And the five-year is the maximum that you can hold a rate for in Canada. Wow. I just learned something. Yeah, unfortunately.

Well, that sucks. I did know that. Yeah, I knew something around those lines. Okay, Jade, do you see your income going up anytime soon? So the thing is, I have a business and because of all the money that I've been spending, I haven't been able to put much into marketing for my business. So it's kind of been at a standstill. Is that your income? Is your business? Or is that a side hustle? It's my business.

Okay. So here's the straight-on solution, okay? You either sell the house or you get your income up because you cannot keep this house with this income. It's not sustainable. That's where the stress is coming from. Yeah. Because I was in a car payment credit card debt.

I mean, it's a lot. Yeah, well, the car payment credit card came because you couldn't afford the house. And then when you can't afford the house, you don't have any margin left to save, so you rent stuff up on credit cards, right? Exactly, yeah. Yeah, the house squeeze is showing up in the credit cards.

What do you do? What's your business, Jade? So I have a commercial cleaning company. Okay. So we clean offices. Okay, because you're making, I mean, $3,500 a month, right? I mean, you're bringing in $45 a year. I'm just wondering if you can find something that you're making $60, right?

I'm like, just any up of income. Are you fully booked? We're not fully booked. Okay. I don't know why you have to spend money. All you got to do is go knock on doors and get you some clients. Yeah, yeah. So I've been trying to do that i've

been a little bit busy with the work and my son but um that's definitely something that i'm gonna if you if you don't do that you're gonna have to sell your house i was thinking would renting it out be a good idea no you don't need to be a landlord you're broke that's a bad idea yes it's a really bad idea yes either get your income up or sell it uh because you know you and i think you ought to go get your income up that's what i think you ought to do i think you're going to focus on this is a good i mean like you know 1400 bucks a month is not terrible right and now compared to income it is but man if you can get that income up then that i mean you're in a good spot you have so much equity if you could get to four thousand a month it's from 3500 it changes the whole equation automatically yeah and then you can

start working your way out of the credit card debt do away with those and start living on a budget and being in control but no there's turning yourself into a landlord when you're broke makes you broker. Landlords, you need money to be a landlord. You need cash. You need margin. It doesn't make you money. It's a problem at first, especially when you're this tight because this house is not going to rent for much more than your payment. So you're not, no, no, no, no, no, no, no, no.

Don't go that way, please. Stay away from that. Dima is with us in Baltimore. Hi, Dima. How are you? Good. One more time. Let's try it.

I said I'll do it. No, we're going to put you on hold until we can get your phone straightened out. Riley's in Salt Lake City. Hi, Riley. How are you? Good. How are you doing? Better than I deserve.

What's up? Awesome. Thanks for having me. I've just got a question in regards to Baby Step 2, working Baby Step 2. We've got two car loans, and they're both underwater. So I'm looking, we're looking to go down to one car for our family to try and speed this process up. But I just don't really know what to do in this situation where we're,

we're underwater. What are your numbers, Riley? What's what, what do you owe on the cars and how much are they worth? But we have a truck, which was a dumb decision, but it's got $36,000 left on the loan. It's worth $31,000. Okay. And then we have a car. The loan's $8,000, but it's probably worth about $3,500.

Okay. And what's your household income? $90,000. Okay. All right. And what's your household income? $90,000. Okay. All right. And do you have any money? Not too much, really. I mean, we just have the $1,000 saved up from Baby Step 1.

Good. Who said the truck's worth $31,000? I just looked at Kelly Blue Book. Private sale or trade-in? Private sale. Okay. So you need 5k. Who do you owe the 36 to on the truck? Who's the lien holder? It's just a local credit union. Perfect. Go down there, sit down, talk to them, tell them you want to sell the truck and sign a note for the difference. Okay. They'll let you do that because they already don't have fully collateralized loan

meaning that a truck is not worth what you owe so they're already have 5 000 unsecured right and if you just now have a 5 000 unsecured and you drive the old car until you get your mess cleaned up here uh which make a 90 you'll be able to turn the corner pretty quick on this but you've identified where the whole sore spot is and it's this truck it's killing you right right what are the debts you guys have really uh that'll be that'll be the last of the debt oh so eight grand on the car and you'll be done yeah that's amazing that's great i mean that feels good right yeah you can knock that off knock that out and save up like crazy and either move up in the one car family or move into a two-car family again and then move up one hopscotch either one i don't

care what you do but yeah i think you're probably moving back into the car business after you get the other one paid off and this gone and um you know. Yeah, $4,000 sounds a lot better than $36,000. Yeah, yeah. And it's great. And then save up and you can get a used truck later. Yeah, that's what I would do if I was in your shoes. Dump the truck and sign a note for the difference of the credit union. And like you said, that just pushes it on out there.

Open phones at 888-825-5225. Our scripture of the day, John 15, 16. You did not choose me, but I chose you and appointed you so that you might go and bear fruit. Fruit that will last and so that whatever you ask ask in my name the Father will give you. Bill Murray said, whatever you do, always give 100% unless you're donating blood. My gosh. That's funny. That's good.

Ross is in Dallas, Texas. Hi, Ross. Welcome to the Ramsey Show. Hey, Dave. Thanks for taking my call. Sure. What's up? So I have just over $42,000 in student loan debt at a 5.625 interest rate. And I'm wondering if I should take some of the contributions out of my Roth IRA. I currently have about a $60,000 balance and put them towards the student loan debt. No. No.

Simple enough. I never take money out of retirement to pay off debt unless it's to avoid bankruptcy or foreclosure because that money is going to grow tax-free that you've got in there to such a large amount that it would just be disturbing to me that you lost a million dollar tax-free account for doing this and that's what it would be at your age how old are you i'm 32 yeah that's what i thought and so yeah so what's your household income uh a hundred thousand uh i will be getting married next year and i'll make it about 180 oh cool and you know and you only have forty thousand dollars in debt yes sir oh so you'll be debt-free in a year.

Yeah. Good. No, I would not sacrifice my Roth IRA on the altar of a year. Okay. Yeah, I just was looking at the repayment calculator and just trying to consider it as an option because the monthly payments are, I feel like, really holding me back. No, no, no, no, no.

You misunderstand. $40,000 in less than a year. I don't give a crap what your calculator said. I want you to pay off your stinking loan now. You make a hundred, you're getting ready to make 180. I want that gone out of your income, lowered your lifestyle. If you make $180,000 a year, you can't find 40K in 12 months. You know, now that's after you're married. I understand. When's the when's the marriage uh should be next july okay good so i mean between now and i'd love for you uh a year from july a year from this july yes okay all right so you have a year at 100k to work on it if you don't get it knocked out during that time shortly after marriage i want you to knock it out but i'd love for you to knock it out out of your hundred or do you have the ability to work extra

and do i mean anything else you can sell and then trashing your roth but yeah that kind of stuff let's just get in attack mode and say i'm going to live on 60 000 which is just below average household income in america as a single guy for one year and knock this out. Yeah. I mean, after tax, you get 100 after taxes, 80. Right. So you live on 40, put 40. That's two years. And like, but then you're going to be married. So, I mean, it's it's a process for sure. But also, I would say, Ross, to go work extra up your income. Yeah, you're making 100, which is awesome. But it's just that, again, it's that singular focus of saying, what can I do to pay this off earlier?

And run those numbers. Those are numbers you could be running. If I made an extra $2,000 a month doing this or whatever it looks like, yeah, there's power in that. Yeah, and it's kind of a thing. What if you made it into a game and said, okay, as a matter of personal pride, I'm going to walk into this marriage debt-free. Now, game on.

Just kind of make it a game. And so, okay, now what have I got to do? Yeah, lots of work, selling stuff, not going out to eat, da-da-da, and it turns into a game then. It's not life or death, but if you treated it like it was you could make it and that's kind of my point and then for sure for sure when you're making 180 if there's any left if you guys don't knock that out real fast that's pretty lame so now you don't need a payment calculator to figure that out 180 minus 40 or 100 plus overtime and extra jobs minus 40

that that's your calculator that's what you're dealing with and then uh minus lifestyle oh wait i don't have a life because i work all the time because i'm getting out of debt oh that's okay too i like that one that's a plan that you know i would just make it a matter of pride and i think it'd be kind of cool and pausing to ross your your investing no more contributions to that roth so wait so that could free up a couple thousand bucks too right a year depending on what you're putting in your roth so that's that's good to stop all investing temporarily while you attack your dad that's maybe step two okay for those of you that are new to this ramsey game dan is in atlanta hi dan how are you hey dave doing well how are you better than i deserve what's up in your world sir

hey i figured you'd say that um so i wanted to get your thoughts on something i am buying a house which is really exciting now i'm wanting to maximize my down payment. And really when I started the year, I wasn't going to be buying a house. So I bought a new truck that I paid cash for. And so my question to you is, should I liquidate the truck, take that down or take that cash and put that to the down payment of the house just to enhance going beyond that 20% or would you say hey just go in at what you're doing currently what what is the truck worth 39,000 and what's your household income over 100 okay and are you single no married okay and what's her car worth, we actually leased her car for 200 a month. No, nothing down. Oh, okay. Um, well, no, I w I would not worry about putting extra down on

the house until we got her car paid off okay her car needs to be paid off you still have debt on it a car lease is not renting a house a car lease is an alternative form of financing so that is a debt you're in debt on her car and you need to clean that up before we talk about anything else so if you sell your truck or if you don't sell your truck her car debt needs to be going away very quickly and if you need to sell your truck to do that then that's something we can talk about um but that's you know you should be doing that before you start talking about buying a house and certainly before you start talking about putting extra down on a house we should should be clearing her debt or the debt on her car.

And so that's the route to go there. Yeah, and we always say anything with wheels and motors, not to be more than 50% of your take-home pay or of your income. Of your household income. Of your household income, and you're at $40,000. So you're getting up there. I mean, it was a nice truck for what you make, right?

If you include her car. If her car's value is over $10,000, then, yeah, your truck needs to go on that basis. Yeah. You're right. Yeah, you probably have too much truck. And I think you kind of knew that, and that's why you made the call. So, yeah, let's sell the truck, get you a decent truck out of the proceeds, and pay off her car and whatever's left, though, that is extra down payment.

That's what I would do. But, you know, that's what i would do yeah but you know that's a good point right you i didn't didn't keep up with that and part of the math on this but yeah you can really get into a pinch there but that's great though saving 20 percent dan i mean for a down payment that's that's a that's a conversation that again people have been having a lot recently with the housing market so we always applaud and congratulate there's other stuff for you to do before you do that but um but you guys have been saving really well so that's great yeah you're way ahead of the game on that um rachel's right so congrats on that i'm glad you're getting

and you're right you know the way your brain's working is say okay what's more important houses or cars well financially houses by far your personal residence is going to go up in value. Your stupid $40,000 truck is going to be worth $10,000 in about 20 minutes. They go down in value like a rock. That's where Chevy got that, like a rock. And so, oh, wait, I drive a Ford. No way. That's found on the road depreciated, F-O-R-D. So there you go.

It all goes down in value, boys and girls. It all goes down in value. So, yeah, that's, yeah. So your brain's telling you, I'm going to put money in something that's appreciating instead of depreciating. It's like I drove up in my 20s. I had bought a Jaguar.

I thought I was a. Just such a fun. I know that you love Jaguars. I thought I was a BA. But like I never hear of Jaguar. It's not like a Mercedes or a BMW that I feel like is a. That's why I bought it, because I come from a neighborhood where we couldn't spell Jaguar. That's what you were like.

But I drove up and my grandpa was like, what's that? And I'm like, well, it's a Jaguar. And he goes, well, what'd that cost? And it was like the 80s and it was 30 grand, you know. Holy crap. Yeah, it was expensive. And he goes, that was dumb. And I'm like, why is that dumb?

It's a nice car. And he said, it's going to go down in value. And he goes, that was dumb. I'm like, why is that dumb? It's a nice car. And he said, it's going to go down in value. And I said, what's an investment? He said, my investments go up in value, son. There's a grandpa lesson right there. 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. Hey, folks, Dave Ramsey here. You know, budgeting doesn't have to be boring. You just need a budgeting app that's made with you in mind, and that's EveryDollar. The EveryDollar app has helped millions of people work the baby steps and take the stress out of planning and managing their money. Start budgeting with EveryDollar for free right now. Just go to ramseysolutions.com slash EveryDollar and download the app today. That's ramseysolutions.com slash EveryDollar.