The Ramsey Show - You Don’t Need a Raise, You Need a Plan

Starting point is 00:00:00 Hey guys, Dave Ramsey here. Me and Dr. John Delaney are coming to a city near you on the Money and Relationships Tour. It's happening soon, so don't wait. Get your tickets at ramsysolutions.com slash tour. This is the Ramsey Show where America Comes To. Win with your money. Win in your profession and win in your relationships. Thrilled to have you with us. 888-8255-225 is the phone number. Rachel Cruz joins me today.

Starting point is 00:00:42 I'm Ken Coleman and let's get right to it. Are you ready to roll? Let's do it. Can answer these questions. Christy is up first in Kansas City. Christy, how can we help today? So I was just wondering how you guys would handle this. My husband and I are newly married, about six months. We were both previously married. I was married for 26 years and he was married for seven. And both of us through our relationships, it's like we both had financial infidelity by our partners. So I found out that my ex-husband had been lying to me about money for well over 15 years. And then his ex-wife, she left him and then tried, he's a farmer, so they have a large farm, and she tried to take the whole farm. So there's been a

Starting point is 00:01:33 lot of infidelity there on the financial side. So both of us have these deep fears of combining finances from, you know, previous relationship. We don't know how to handle moving forward financially together, biblically speaking. What do you mean biblically speaking? Well, I know from listening to your guys' podcast, you say the two shall become one, and that includes finances. And there is just a lot of fear there with combining and afraid that you're gonna get what you got before, and that you're gonna find out, oh my gosh, this person who I was

Starting point is 00:02:10 supposed to be able to trust was lying to me. And then his side of the fence is, well, if I open up to her and I tell her what's actually going on with finances, she's gonna mess me over and take me to the cleaners again. Yeah. Okay, I get what you're saying. Here's what I would say right out of the gate. I actually think if I were in your shoes, and I understand the trust issues, so what's going on with both of you is very natural. It's very normal. I think you guys got to get with a therapist without question and work through this.

Starting point is 00:02:38 But I would tell you that just practically speaking, I think that the fact that you have your finances merged and shared actually creates greater accountability for both, right? So that the trust at least has some type of transparency. Just because you share accounts doesn't mean that financial infidelity isn't happening. However, one big step going forward to me is, okay, there are no separate accounts, and we both see what's in there, and even just getting into an every dollar budget

Starting point is 00:03:09 and beginning to look where every dollar is being spent, all of that begins to create so much transparency that trust is in some way a byproduct. I'm not in any way saying that therapy doesn't still need to happen, because Rachel, I wanna get your thoughts on this, because I do think this is a, we need a good therapist to help us both heal because they've both been,

Starting point is 00:03:30 they've both had this trauma. Yeah. I mean, you've both been burned. Yeah. By the exact same issue from an, from an ex spouse. So yeah, Christie, I mean, you're not crazy by any means for this to be, um, so heightened and so aware. But I would also just challenge you that the man you chose to marry and that you chose at the altar and said those vowels, you know, what caused you to say yes to him? What were those things? He loves Jesus big. And I respected his walk with Christ and who he was. His character was so good. And he was different than anybody

Starting point is 00:04:17 else I had met. Yeah. So I think what can happen is our emotions and from our past, it's almost like a like a neuro pathway in our brains, right? Has been formed for you that with money, it's like, don't trust, don't trust, don't trust. And over time, you are going to have to build a new way of trusting. And I think even leaning on kind of just those facts of what you just told me, Christy, like this man is not your ex-husband. And I know me just saying that doesn't wipe away all the emotion, but just you have to trust yourself as well. And I think when just saying that doesn't wipe away all the emotion, but just, you have to trust yourself as well, and I think when people get blindsided

Starting point is 00:04:48 by a spouse, whether it's financial infidelity and affair or something, there's almost that fear of I can't even trust myself. How did I miss it, right? You're probably asking yourself, how did I miss it for 15 years, right? So you're thinking about that. And so I would say trust yourself, Christy,

Starting point is 00:05:00 because you chose someone to do life with. And so again, I would talk to a therapist because that trust string isn't going to just be tied to money. It's going to come out in other parts of your marriage where you probably have a level of that wall. And why we say to combine finances, yeah, I would say from a spiritual perspective, I think it's wise, but it's also, again, whether you're spiritual or not, the data shows couples that combine finances not only have a higher level of happiness,

Starting point is 00:05:30 but there's also a depth of complete intimacy that when you say, I said yes to this person and I chose to lock arms with them and take on the world together, when you do that in just this fullness together, you enjoy life together more than trying to keep everything separate and compartmentalized, if you will. So again, from a spiritual aspect, yes,

Starting point is 00:05:53 but I would say it's even bigger than a spiritual aspect. I think people that aren't spiritual find this level of depth in their marriage when they choose to work as a team. Well, because, and you're right, because of, again, the word we've been talking about, which is trust. Christy, I want to dig a little bit. We've kind of told you what we thought. You've been listening.

Starting point is 00:06:07 I'm curious, are you both, would you say you both are at the same level of distrust of each other, even though you're probably happily married in every other area? Describe for us where you are and where he is on the particular issue of trust of each other and money right now. How would you describe that? Well, on his side of the fence he farms with his dad, so that's a family that's generational. And so we also have a mix on his side of the fence of fear from the whole family. Yes. I get that.

Starting point is 00:06:45 That makes us even- Can I jump in here, Kristi? Yeah. Jump in. Kristi, can I jump in? Okay. This is, we never talk about prenups. You know, it's almost a almost never conversation, I feel like, around here with prenups, unless there's a few caveats. One of them is if there is an excessive amount of wealth, you know, there's a level of just

Starting point is 00:07:01 protection there. But then the other one is kind of what you're talking about, Christy, for him at least, if there is some level of a family business, because we've talked to people like this where they get divorced and the ex still has voting stock in the company and then he gets remarried to someone crazy and now all of them are still speaking into the ex's family and it's affecting other people.

Starting point is 00:07:22 So this may be a conversation that you have with him of that specifically, that farm, because it is tied to other people in the family, that domino effect is very real for those, for them to be protected in that sense with a farm, through some level of prenup. So again, we say almost never a prenup, but there are situations that make sense

Starting point is 00:07:43 because it's protecting other people as well, so that may be something on his side, towards you, right? This would be for you to sign. Well, actually we did. We did sign a prenup-should agreement, so I actually volunteered to sign one. Oh, good for you.

Starting point is 00:07:58 I said, when we were dating, I said, I'm feeling like that there's something here, and I said, if you need a piece of paper, then give it to me and I'll sign it because I don't want anything from you except for me. Oh, well that's huge. That had to create a lot of trust for him. That had to be huge.

Starting point is 00:08:15 Well, there's still some walls there. You know, I can sense that he doesn't want to open up to me too much yet. And from my perspective of having that been violated on my side of the fence, I completely understand it. I'm like, as you should be, you should be worried. I got to say, Kristi, I think you guys are on the way. I believe marital counseling here because neither one of you were the bad guys. You're both victims. That's an interesting combination. And a professional will get you were the bad guys. You're both victims. That's an interesting combination,

Starting point is 00:08:46 and a professional will get you guys the tools that you can heal. I think you commit big time to some serious therapy, one time a week maybe, and let's dive into this and come out on the other side, and then I think you guys will get there. Really, really interesting call. Thanks for trusting us.

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Starting point is 00:09:44 Your family will feel your love in every detail you take care of. So start taking care of them at knockbox.com slash Ramsey. A well organized legacy is a gift to your family. That's nokbox.com slash Ramsey. All right, let's go to Shelby in Seattle, Washington. Shelby, how can we help today? Hi there. So I am in a bit of a pickle right now. I'm a stay-at-home mom, a new stay-at-home mom. So I was working previously, but now my husband provides all the income for our

Starting point is 00:10:21 family. We have an eight month old son. but our biggest issue right now is that our vehicles are taking up way too much of our budget. And before we got married, my husband bought this really nice truck that, um, he could afford or he thought he could afford then. Um, and that was before we met before we got married. And now it's costing us almost as much as our mortgage. And we owe about $25,000 more than the car's worth right now. 25 more than it's worth?

Starting point is 00:10:58 Or what is it actually? 25 more than it's worth. Oh my. Okay, how much do you guys owe on it? About 55. 55,000. Okay, how much you guys owe on it? About 55. 55,000. Okay. And you're thinking you can only Kelly Blue book it

Starting point is 00:11:11 for what, 25? About 30. 30. 25, 30, yeah. Yeah, yeah. Is your husband willing to get rid of it? He is. And he's actually making a big chunk of change right now.

Starting point is 00:11:29 He's working up in Alaska. So he's making about four times as much as he normally would. Oh wow. So I've been trying to convince him to throw all this extra income at the truck, but he's saying, no, let's just stick to the snowball plan and go smallest to largest. Well, it's a lot of money that we could be using for other bills if we could get rid of the truck.

Starting point is 00:11:51 Well, why don't you walk us through where you are on the snowball right now? What do you guys want to walk that out for us? Smallest to largest. Yes, we pay off, the mortgage is $1,400. No, no, no. Tell me your current debts, smallest to largest. Oh, I see. Okay. So we have a credit card that's about six hundred dollars left. His credit card,

Starting point is 00:12:14 which is about five thousand. We have, I'm sorry, that wasn't smallest to largest, but my credit card, which is about six hundred. I have a personal loan for $2,000. We have a joint loan together for $3,000. He's got a credit card for $5,000, his own personal loan for $7,000. And then I have student loans for about $8,000. Right up, it's like two, three, four, five, six, seven, eight. It's like stair-step pits. Uh-huh. Okay, so then the $8,000 student loan and then the truck or is there another one? And then my car. Okay. Which is about $22,000.

Starting point is 00:12:54 Okay. Now what's that worth? His truck. What's the $22,000 car worth? About $20,000. Okay. And how much are you guys making a month now that his income is up? What is he bringing in? Right now he's bringing in about 16,000 a month. 16,000 a month. Golly, that's amazing. How much surplus is that? If you do your full budget, sorry Rachel, if you got all your expenses including the minimum payments on debt, how much extra do you have now that he's making this $16,000 a month? Yes, so our expenses right now are about $1,500 a week, so that's about $6,000 a month, so that's about $8,000 or plus.

Starting point is 00:13:40 Okay. And how long has he been doing this? I'm just asking these questions for Rachel because she's running numbers here for you. So how long has he been making that extra money and how much longer will he make that in Alaska? So he's been doing it for about four weeks and he's going to continue to do it for about three more. Oh, three more weeks. So it's very short. Yeah.

Starting point is 00:14:03 Okay. Is that because of his, is that because he's choosing to make it shorter or is it because of what he's doing, there's only like that much contract or whatever it is? It's just seasonal, it's like a contract thing. He's a crane operator. Okay, gotcha, gotcha. Well, what I would say is, yeah, I mean,

Starting point is 00:14:20 I'm on his team with going ahead and just, cause you would not, you guys would knock out one, two, close to three of these debts using the debt snowball with this extra money coming in, being able to knock those out with the surplus. And if he's gonna be working for three more weeks doing that, it's like, yeah. So I would stick to the snowball method.

Starting point is 00:14:41 And then I would challenge you guys and just say, I would stick to the snowball method. And then I would challenge you guys and just say, you know, you guys can keep the cars and keep trucking down the debt snowball, but run the math and just say, what if we did sell them at a loss, right? So you would have to take out a personal loan. So for yours and for you to have a car,

Starting point is 00:15:00 you know, you'll have to take out to probably $7,000 loan for you to get a crappy car and pay the two thousand that you owe on yours that you're underwater. And then for him, you know, what if you guys took a thirty thousand dollar loan versus a fifty five thousand dollar loan? Right. I mean, you're shortening the life of this so significantly because of two cars. You know what I mean?

Starting point is 00:15:24 Like, like it's it hurts so bad to say that it's upside down of this so significantly because of two cars. You know what I mean? Like it hurts so bad to say that it's upside down and it's like, I mean, it's just, it's sickening, right? I mean, how much you guys are paying per month for this stuff, I get it. But I think if you can get a credit union to give you guys two other personal loans, I think that's what I would do.

Starting point is 00:15:40 And then Kelly Blue booked these individually. Because this is an expensive truck. We're talking 55 grand. After he's been driving it for two to three years. I mean, like, yeah. I think I would take the hit too. And just, you know, you're also going to get a real raise here after you start knocking out some of these debts.

Starting point is 00:15:57 So I grew with hubs, but I would, but I want to make sure you hear what we're saying. Work the snowball, okay? And he's right about that with the extra income. However, take the hit and get rid of both cars. Yeah. What were you doing before, Shelby, before you went home as a stay at home mom? Yeah, I was a court clerk. Okay. Okay. Because I'm just trying to think. I just know a family right now personally and she was a stay at home mom for years,

Starting point is 00:16:25 and she's working three days a week now to get them moving and going. So I'm like, I just wonder for a season, if there is something that's, and I don't know what that looks like, I don't know if you, you probably can't do that virtually. I have a photography business on the side too. Oh, you do?

Starting point is 00:16:42 How many hours a week are you spending on that? It's not super regular that way but I'd say it's probably maybe a thousand dollars a month. Okay, that's great. I'm wondering, but I'm with Rachel on this, I wonder if we take that skill set and experience of being a court clerk. So we're talking about details, right? Good listener, you're administrative in nature, is that right? You enjoy that and you're good at it. Dot in the I's, cross in the T's. I wonder if you don't look into maybe doing virtual executive assistant or something like that. Yeah.

Starting point is 00:17:13 Even if it's 20 hours a week, 30 hours a week. Because you can do that in your sleep. Something like that. Yeah, because I'm just thinking how much do you guys make a year when he goes back to his normal salary? How much a year? About a hundred thousand. A hundred thousand a year. And what was your previous salary as a court clerk? About fifty five. Oh I wonder if you can't get forty thousand, fifty thousand as an executive assistant you do it all

Starting point is 00:17:38 virtual. I'm just running really fast math here but I'm like if you guys are using all this extras I'm going down my list and if you go and get that loan for 30 and seven and pay the cars, it's basically right at $50,000 that you guys have left with those cars and then the other student loan and personal loan. So that's kind of what it goes down to, to say after all the smoke clears, we're gonna have about 50 grand left to pay off.

Starting point is 00:17:57 We make 100 grand. That's doable. Yeah, so I'm like, I mean, what if we, yeah, what if there was something for six months? You know, it doesn't have to be long that there's just something to bring in just because the whole goal here, which you know, but it's just to fast forward this process.

Starting point is 00:18:13 Do this as fast as possible. We call it gazelle intensity, but just get through it as fast as possible. And there's gonna be some sacrifices, things you don't wanna do, but it's for such a short amount of time, it's six months to a year and be done with all of this, right? And then save up for the emergency fund

Starting point is 00:18:26 and replacing your cars, because you guys are gonna want new cars after the beaters that you buy that are crappy. But it's just this idea of this progress really fast. So yeah, the photography stuff's great. I mean, a thousand bucks is usually what we see is side hustle people bring in. If they can bring in a thousand dollars a month,

Starting point is 00:18:42 that's great. And that's great by the way, Shelby. I didn't want to sneeze at that, but I do think you're skill set. But if there's something even more, yeah, you have a lot to offer. So I'm just like, man, I wonder for, you know, and I know it's not ideal.

Starting point is 00:18:53 And I know as a mom too, you know, when you decide, cause I even pulled back from work a lot when my third was born and you kind of have this mindset of like, okay, I'm going to be more present as a mom. I'm here. And so to kind of rewind that a little bit and plug work back in Yeah, that's a hard mental

Starting point is 00:19:08 Obstacle Shelby, so I get that but my only hope and all of it is that it's it's for such a short period of time And I really I think I think you guys can do this and work as a team But to answer your original call Shelby, I think we agree with the husband throw it at the debt snowball But it's Ken and I both agree sell those cars take a loan for the difference, and keep on going. Make no mistake. It's going to be painful to drive a piece of crap for a while, but if you've got your mindset on where this gets us, then you can drive anything. And here's the deal.

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Starting point is 00:21:07 Hi, thank you so much for taking my call, you guys. You bet. What's going on? So my question is, I have a studio that I would like to renovate and it's going to cost about 10 grand. And would it be a bad idea to rent it out to my parents? Ugh, I'm going to go ahead without any information and say yes. But I'm going to admit early on, Rachel, that that might be a snap reaction. That was a snap reaction, Ken.

Starting point is 00:21:31 I'm owning this. Tell us more. Okay. Yeah, give us more of the why. Why would we do that? Okay. So I got this idea and I got this sense of urgency because my father shared with me his retirement plan in January and he has very bad spending habits. He did say that his plan is to retire in Mexico,

Starting point is 00:21:54 be a gold miner with $30,000 that he has and basically leave my mom here with his social security checks so she can keep paying their rent. And their rent is $1,200 and that's the same exact amount that he gets for social security. So I'm kind of freaking out here and thinking, my mom won't be able to keep up with that payment on her own.

Starting point is 00:22:20 So I know my dad is going to splurge and spend his money in about one or two years and he's going to come back and want to also move in with my mother in the back studio I have. So in order to maybe not enable his bad spending habits, the master was like, okay, what if I charge them rent? And part of it would be to pay me back for the renovations I've done. But the other part is to secretly fund for their retirement and any future bills that that's gonna fall on me.

Starting point is 00:22:52 But you're not gonna get paid. Do you realize that, Rachel? They're not gonna pay you. They're not gonna have any money. Yeah, this is a disaster. Okay, so Rachel. But you can't stop. I wanna know how are you financially?

Starting point is 00:23:02 How much debt do you have? How much savings do you have? How much savings do you have? Thankfully my husband and I are almost debt-free. We have a paid off mortgage And savings we both have about a hundred thousand. Okay for retirement for retirement Okay, how much five thousand for emergency five thousand for emergencies? How much debt do you have left? $500. Oh Okay, so you'll pay that off this month. I mean, you'll, that'll be done. That's amazing. Okay, so, um, how much do you guys make a year? Uh, we make a hundred and twenty thousand. A hundred and twenty thousand. Okay. So, um, man, okay.

Starting point is 00:23:42 I got, I got. I have so many thoughts. I have lots of thoughts. I have lots of thoughts. I know. Do you wanna go first? You have what? We have two boys that are four and six years from going to college, so we're trying to hurry up

Starting point is 00:23:54 and pay for a college fund. Yeah, so here, okay, so I gotta jump in real quick with the question then. I'm with Rachel. I don't think you can expect any money from them. So for this moment Let's suspend this idea that they're gonna pay you and help pay this thing off and whatever whatever My question is if they live with you in this studio

Starting point is 00:24:14 How much money are they going to cost you? assuming they don't pay you rent is it going to be any kind of a Utility suck or something like is it minimal as to what they'll actually cost you and your husband? Yeah I'll say it's minimal maybe combined with electricity and whatnot it would be like 300. Okay I just wanted to know that I also wanted Rachel to hear that too so it's going to be a minimal increase because we have to assume I think Rachel's right that dad's going to go do something really dumb and boy oh boy.

Starting point is 00:24:48 Is gold mining like a thing in Mexico? Is that like a? That was a question I had. I don't hear a lot about it. So I don't know what video he's watching. Is he being for real Rachel or is he kinda just saying like, I'm just gonna leave?

Starting point is 00:25:00 Well, no, he really wants to be Yosemite Sam because he did it in his teenage years and he has a friend who has a golden son. How old are your parents? Dance, varmint! Sorry, I just had to say that for everybody who knows who Yosemite Sam is. It's an older demographic I gotta point out. All the boomers are laughing.

Starting point is 00:25:20 How old are your parents, Rachel? My dad is 71 and my mother is 61. Oh, geez. Okay. And how old are your parents, Rachel? My dad is 71 and my mother is 61. Oh, geez. Okay. And how old are you guys? We're 35. Oh, man. Okay. This is a... So, I mean, here's the reality,

Starting point is 00:25:35 and this is what's always so difficult about family relationships when the child, when you're the parent. That's what's happening, Rachel. You are flipping, and that's not fair to you. So I just need to say first and foremost, this is not your responsibility. It's not.

Starting point is 00:25:49 Like you can only control you. They are going to dig themselves into whatever hole, finding gold or doing whatever they're gonna do. And it's- Literally gonna dig themselves in a hole. So like, you can't stop that, right? And so there is one side of the coin and some people are like this where they're like

Starting point is 00:26:06 We are putting up a boundary right it would be like if your husband was like we are absolutely not funding your crazy parents No, we're not doing this like some people put a hard boundary and it's like mom and dad Y'all have to grow up at some point and I'm not gonna be the safety and I'm not gonna be the parent So that's one side of the coin can may lean more on that side. I promise you you know me well I know but then there's another part Rachel a human part with a heart. I have a heart. I also have a brain. That does say to a point, like, am I really going to let my parents be on the side of the road? If I have the ability. They're not going to be on the side of the road. You know why? Because Rachel's mom is going to look at, if I went to Stacey, my wife of almost

Starting point is 00:26:44 20 seconds. But you're not her parents. You're of almost 27. But Rachel, your mom at some point is going to tell your dad to wake up and smell the coffee. Is she not? She has and we've had the pastor intervene and family members with those spending habits and that's why they are where they are right now. Does your mom work? She works 12 hours a week. Okay, well if I were her, if she was calling this show Rachel right now, I would tell her as much as we talk about combining finances and being one as a team, he is the most risk possible for her not to retire. So if I were her, I would be working 40 hours a week and I would be creating my own retirement. I mean honestly, because he's a child.

Starting point is 00:27:26 Like, this is crazy. You know what I mean? Like, it's just... But here's something I want to point out. Rachel, please speak up to this, okay? Because I'm... Rachel and Phoenix, Rachel. Rachel and Phoenix.

Starting point is 00:27:35 I believe that this is kinda like a teenager. I think your dad needs to be treated like a teenager, and that's why I agree with my partner here, Rachel's advice on this, have mom take care of mom for a bit, because I don't think anybody's gonna get through to this guy, the only thing that's gonna get through to him is, Davis said this for decades, when you land so hard you bounce.

Starting point is 00:27:56 And I think this guy, I hate this, what I'm about to say. But I think the family, including your mom's gotta go, all right pal, go to Mexico, please for the love of God, be safe, but let the guy go digging and let him go gold mining. And when he doesn't find any gold and he runs out of all money, he's a bit of the prodigal here.

Starting point is 00:28:15 And I think it's the only shot you have. A hitting rock bottom. Is to let this guy get this out of his system. He's 71, I think this is his last hurrah. And I think he probably doesn't even realize it. I think to get his attention, but system. He's 71. I think this is his last hurrah and I think he probably doesn't even realize it. I think to get his attention, but I think mom protects herself. I agree so much with Rachel Cruz on this. Rachel, your thoughts on that? I mean, where's mom at on this deal? Because you're trying to help and I don't think, by the way, I want to make sure we come back to this point.

Starting point is 00:28:38 I don't think this is your problem, even though it feels like it. I don't think it's your problem. even though it feels like it. I don't think it's your problem. So my mom opened up her own secret account but for 20,000 and she's afraid that she has to speak on it when they file their taxes together. He's going to find out. Not for a savings account. No for high yield savings she doesn't need a report to taxes. No just earned income right? Investments, I mean, if you're... I don't think so. I don't think so. I would, here's the deal, I'm not a tax pro.

Starting point is 00:29:09 I was certain about it until you looked at me sideways and I was like, then I started thinking, I don't think that's gonna be an issue. But I would, again, I would have her consult with a tax pro, go to ramsysolutions.com. He'll know what she earned. So that he will see. But again, she's, but listen, that's okay.

Starting point is 00:29:24 I'm okay with that conversation. I'm not suggesting, by the way, that this is a secret. That's right, don't even make it a secret. I think she needs to be bold and go, hey, Yosemite Sam, I gotta take care of me because there's a good chance, this is really gonna be harsh, but I'm gonna say it, there's a chance this guy goes down there

Starting point is 00:29:40 and falls into something bad. I mean, gold mining in Mexico? You might as well get on a roller coaster without the seatbelt. I don't think this is a wise decision. I'm not in any way making light of that. But she's gotta protect herself. And I would say to her, she looks at him and goes,

Starting point is 00:29:56 you're putting us at risk with this crazy venture. So the renting the studio thing. I wouldn't do it. I wouldn't do it. And the only way I would do it is that it's a ministry to mom and dad and we don't need the income as rental and we're gonna fix it up for them and it's there for them if they need a landing.

Starting point is 00:30:09 And you're just gonna be a good daughter. But like I would expect zero, zero money from them. But if you guys need this as rental income for your life to fund your kid's college, sorry mom and dad, we're renting to someone else. Tell you one thing I am gonna do. I am going to see what the gold mining situation is in Mexico.

Starting point is 00:30:27 She's got my intrigue. If Ken doesn't show back up to the show, we know where he's gone. Ken went to Home Depot to get a bunch of pickaxes. Hey guys, I'm Jade Warshaw, and I wanna talk to you for a quick second about student loan refinancing. If your payment and your interest rate are burying you and you feel like you can't dig out, Warshaw and I want to talk to you for a quick second about student loan refinancing.

Starting point is 00:30:45 If your payment and your interest rate are burying you and you feel like you can't dig out, refinancing your student loan debt might make sense. That's because a lower rate could free up more money in your budget and a shorter term could help you pay down your debt faster. So reach out to the student loan refinancing experts today at laurelroad.com slash Ramsey. There you'll find helpful resources like a student loan rate table, a refinancing calculator and other tools.

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Starting point is 00:31:48 refinancing. That's laurelroad.com slash Ramsey. Laurel Road is a brand of Key Bank National Association. All credit products are subject to credit approval. All right. Let's get to our Ramsey Show question of the day. It's brought to you by WhyRefi. If you're feeling stuck with defaulted private student loan payments, WhyRefi can reduce

Starting point is 00:32:10 your payments and help you regain control of your finances. Take the first step towards getting unstuck by visiting whyrefi.com slash Ramsey. That's the letter Y, R-E-F-Y, dot com slash Ramsey. It may not be available in all states. Today's question comes from Antonio in Indiana. I am 22 years old and getting married this year. Once we combine finances, we will have no debt and we'll be making $205,000 a year. While we feel extremely blessed, we just recently started earning this much, so it's a little

Starting point is 00:32:42 intimidating. In the next two years, we could easily save for a 20% down payment in addition to an emergency fund. Do you have any tips on how we should remain content with renting during that time? The longing to reach my goals often clouds the journey it took to get there. And I don't want that to be the case

Starting point is 00:33:03 for the first two years of marriage. Oh, so good. Oh, that's good, very good question. What say you? You're the contentment queen. I don't know. Preaching to myself all the time, Ken. Okay.

Starting point is 00:33:14 I don't know, this may be a little Pollyanna, but I also think when you get married, that's such a newness in life that this whole thing of like, oh gosh, I gotta like do the next thing money-wise, the intensity kind of changes in a sense because your whole life has changed. So you're starting this new life with a new partner and you're like, you're doing all of this.

Starting point is 00:33:33 So there's almost this element of life that changes that's exciting that may kind of help naturally kind of loosen this like discontent that you may feel towards a money goal. It's like when you have a baby, right? Like it's just something just changes and you kind of have like this new thing in life. And then once you kind of get the rhythm of that,

Starting point is 00:33:50 if we ever get the rhythm of marriage, let's be honest, it's like then from there, you guys, I mean, then you'll be like, okay, we have 12 months and we'll be good. So I think being as present as possible, though I've learned this Ken recently with some stuff I've been reading because staying completely present is so difficult

Starting point is 00:34:07 because we're always thinking forward or thinking backwards of like, oh gosh, even at lunch today, da da da. I mean, you're just where our minds go. It's rarely in the present. So it's almost a practice to be present. I mean, it really is because we just were either forward and back all the time.

Starting point is 00:34:24 So I think it's hard for a lot of people. But also, I don't know, Antonio, I think you'll be okay. I think that there's a fun new element of your life that's about to change with marriage, and you're going to enjoy that. And I don't know, there'll be enough distractions, I think. When I was 14, I had an old pastor tell me, looked me in the eye, and I'll never forget, he had his Bible in his hand, and he kind of thumped me on the eye, and I'll never forget, he had his Bible in his hand, and he kinda thumped me on the shoulder. He says, young man, hear me on this. Don't sacrifice the future on the altar of the immediate.

Starting point is 00:34:52 Now that's a lot of old man speak, but what that statement says is, don't risk or sacrifice your future on how you're feeling in the now. And so to Antonio, I would say, how do you stick with renting while you're accumulating that down payment? You start looking towards the future and you say,

Starting point is 00:35:14 if I wait and I get that 20% down payment and I do it the right way and I buy that way when I'm ready, my future is so much better. But if I don't wait right now and I go in and I become house poor, what is that gonna do to my mind, my wife's mind? So just look out to the future and go, what do I want that future to be?

Starting point is 00:35:36 And that's going to require me to sacrifice now. You wanna go lose weight. You wanna lose 30 pounds by summer. Well, now we start to go, I have got to win the now. And I've gotta be disciplined in the now or else I don't get where I wanna be. You can pick any category of life. So that would be my encouragement there.

Starting point is 00:35:57 Two things I wanna get to really quick. I wanna go back, you and I did a little research, you did the research. Oh yes. I wanna cover that tax question. For the interest, yeah. So the interest earned on the high yield savings, if it's over $125 in 2024, it is considered earned income.

Starting point is 00:36:13 So if she, which depending on how long she's had that 20 grand in the high yield. That's right. Yep, there will be taxes on that. But we'll circle back to that call again. Who cares? If he learns about it? It didn't change our advice. He should be learning about it.

Starting point is 00:36:29 He should know about it. Regardless of taxes or not. We wanted to clarify that. By the way, that's what we call a simple tax situation. So if you have a simple tax situation, I want to make you aware of Ramsey Smart Tax. We're really excited about this. This is a 100% accurate tax software

Starting point is 00:36:43 that's going to save you up to 80% compared to what you see on TV and commercials and here's what's cool it's powered by TaxLayer. A lot of you know TaxLayer. So Ramsey partnered with TaxLayer. They've been in the industry for 50 years. We've got it doctored up the Ramsey way. So that's a great simple tax solution. It's called Ramsey Smart Tax. You can get it at ramsesolutions.com slash smart tax. Again that's ramsesolutions.com slash smart tax. Again, that's ramsysolutions.com slash smart tax. All right, I think you call that Wooster.

Starting point is 00:37:10 We'll find out. Is it Worcester or is it Wooster? I have a fun fact about Wooster. I put Jessica on. Oh, you want to get her on it? Okay, so let's go to Jessica. Jessica, is it Wooster, Mass? It's Wooster.

Starting point is 00:37:24 Wooster. Wooster. Oh, It's Woosta. Woosta. Woosta. Oh, I should have known. Jessica, do you know Holy Cross that's there? I know Holy Cross very well. My best friend graduated from Holy Cross. Okay, my brother-in-law played basketball there. Fun connection.

Starting point is 00:37:36 It's very cool. Yes, I know, and I went to an American versus Holy Cross basketball game in D.C. Did you really? And watched it happen. So anyways, that's my fun fact about that. Did you get a funnel cake while you were there? No, I thought you were a troll.

Starting point is 00:37:47 All right, how can we help you, Jessica? Well, first, thank you guys for what you do. I'm really grateful to be speaking with you. And my question is, a little bit of context really quick. My husband and I are currently working Baby Step 2. We've been working it since July of last year. We are on pace to complete Baby Step 2 at the end of April, so next month, and then we will be at Baby Steps, thank you, four and five by this August. So saving for our kids college fund this

Starting point is 00:38:14 August. But at that time our twins will be 15 and heading into their sophomore year of high school. And while I wish we found you guys sooner, we didn't. We will be starting from scratch. And my question is, what is the best way to go approach saving for their college fund knowing that we're going to need to dip into it within three years? Does it still make sense to invest in a 529? Is there something else that you would recommend? That's my question.

Starting point is 00:38:39 Honestly, I would recommend a 529 more to you guys than even others. We always recommend a 529 because to you guys than even others. We always recommend a 529 because it grows tax-free for educational purposes. So the money in there, the big fear around 529s, especially people that have young kids, is that they're gonna overfund it and or college is gonna change so much between now and 18 years,

Starting point is 00:38:59 who knows if that money gets stuck. So there's some caution around it with people with younger kids. But for you guys, I mean, yeah, I would for sure. I would sit down with a SmartVestor Pro because they're gonna be able to look at what the market's doing. They're actually, a lot of these financial advisors

Starting point is 00:39:14 who are great, they're gonna be able to run these numbers to know, okay, should they go in more aggressive funds, more conservative funds, and they're gonna do the best to really work with you guys. But I, yeah, I mean, I were you I would I would I would go ahead and invest into a 529 for them. Are they what's what's expectation of college for them? Is it state school community college? Where where are they are they scholarships in the future? What are you thinking? Great question. So it's a little bit up in the air. There's definitely the possibility

Starting point is 00:39:45 of college. So I've got a boy and a girl. My daughter is considering being a vet. They're in an agricultural high school right now, but they both are also talking about potentially joining the military to help fund their college. Oh, that's smart. So there's so much up in the air. Okay. Love that. The GI bill would be an answer to prayer for you, wouldn't it? Absolutely, and we've learned that, I guess, the Army ROTC pays for vet school as well. Yeah, how much do you guys make a year? Jessica, you and your husband? Combined, we make 240.

Starting point is 00:40:16 Okay. Yeah, okay, so a follow-up. Let's go right where you left us off in the actual question. 10, 11, 12, those high school years, how much do you anticipate that you could sock away in each child's 529? What do you think that would be? So, I'm projecting that once we get into August and we're at that step five, we'll have approximately 5 to 6,000 each month of extra, you know, what was previously our snowball. So split it up, let's say 2,500 each maybe a month? Potentially, but then there's also things, you know,

Starting point is 00:40:54 I'm the nerd in the relationship, so I'm thinking, all right, we're both gonna need new cars in about two years. You can't take all of that surplus and split it to the 529. Right, yeah. So what do you think is more realistic? I was, I don't know if, you know, a thousand each makes sense. So it's like half of it is going to 529 and half of it going towards the other. Yeah, that's what I was thinking. Yeah. And I think too, Jessica, number one, communicating with the kids. You guys all need to be on the same page of what's

Starting point is 00:41:21 happening here. No debt. Debt is just off the table. So what other options do we have besides that? Is it community college? Is it not? And you guys are in the Northeast and they love their education up there. So that may be a humble pill to swallow too, that they may not go to the college they want. I'm going to say this though, if my kids were thinking about the military, what a great growing up experience, not to mention the financial benefit. Rachel, do you ever get these sketchy text messages

Starting point is 00:41:46 that are like, hey, you need to update your address and verify so we can get you the package you didn't order? Yes, I have, George. Sketchy and never trust them. And that's why we recommend Delete Me. They help with that. Yeah, they do. Delete Me actually goes in and removes your information

Starting point is 00:42:00 from data broker websites, and it is an incredible service that everyone needs. And there's a lot of shady companies out there that solely exist to sell your personal data to bad guys and that means your info like your email address, your home address, your kids names, your name, everything is just out there for scammers and spammers to find. That's right and then once they remove your information then they're gonna send you a detailed report telling you where they found your information, when they removed it, how many hours they've saved you.

Starting point is 00:42:27 I mean, it is incredible. So detailed and it's beautiful. I love these reports. So far, get this, they've reviewed 27,000 listings on my behalf, removed me from 240 data broker sites and saved me 77 hours of time. It's incredible. Absolutely amazing.

Starting point is 00:42:42 And Winston and I now get fewer texts, weird emails, spam calls, all of it. I love it. So you got to be sure to check them out. Ramsey fans get 20% off their annual plans. Just go to joindeleteme.com slash Ramsey. That comes out to less than nine bucks a month. Super affordable. It's amazing. So again, that's joindeleteme.com slash Ramsey. Make sure to check it out, you guys. This is the Ramsey Show, where America hangs out to talk about your money, your profession, and your relationships.

Starting point is 00:43:12 Alongside Rachel Cruz, I'm Ken Coleman. Excited that you're with us. The phone number to jump in is 888-825-5225. Billings, Montana is where we're gonna go. Christy is there. Christy, how can we help? So I have been in a relationship for about 10 years and I am very much secure in my assets and my boyfriend is not. And I wanted to know if there's anything that I could do to avoid

Starting point is 00:43:38 or to protect my assets from what could possibly be common law marriage. Well, okay. So when you say could be possibly, Rachel and I are not common law marriage. Well, okay. So when you say could be possibly, Rachel and I are not common law marriage experts. We certainly don't know the law in Montana. So what do you know? Because it sounds like you're uncertain. Well, I don't know.

Starting point is 00:43:54 I think there's a seven, he's not living with me right now. We're talking about it, but I think there's a seven year living together. And you guys have been sharing a residence for seven plus years? No, no, no, we have not as of yet and I don't wanna get there.

Starting point is 00:44:13 I don't want to be put in the position that it becomes a common law marriage. Okay, so what's up with the relationship, Christy? What are you guys doing? Why don't you get married? Do you love him? We've both been married. We're older. But what does that have to do with anything?

Starting point is 00:44:28 Why aren't we married? Because we live in different cities and we didn't see a reason to. Like we've had kids, we've done the whole thing. You still live in separate cities? Yep. How far away? It's great. You should try it. Okay. Wow. That's a little awkward. I think I'm good. I'm very happily married. I'm rolling into 27 years and I actually, this is going to freak you out, Christy. I sleep in the same bed as Stacey. It's wonderful.

Starting point is 00:44:58 You should try that. Now I will tell you, mouth tape has really helped. It's helped. I use the mouth tape now, Rachel. I haven't told you this. You're like an old man. That's an old man move. It's a great marriage move. It's a great move. Stacey's happy about it.

Starting point is 00:45:12 Okay, so how far apart do you all live? A couple hours. Okay, so how often do you get together? Why are you worried about the common law marriage if you guys aren't living together? Yeah. Because we're now looking to, so now my daughter's in college,

Starting point is 00:45:24 so we're now looking to what does the future? How old are you guys? I'm 56. Okay, you're not too old. Okay. So according to what I'm seeing here a common law marriage in Montana Is recognized if the parties are competent to marry. I don't know if you're competent to marry after that comment you made to marry after that one comment you made. Mutually agree to a- You've made me about it before. Hold on, hold on.

Starting point is 00:45:45 You are, you are, Christy. I don't know, Christy. You're a little saucy today and I can be saucy back. You have to mutually agree to the marital relationship and then cohabit. Well, you guys aren't cohabiting. For how long, does it give a time frame? But what do we do?

Starting point is 00:46:00 What? Does it give a time frame at all? No, no, it just says cohabit. We know what cohabiting is. Well, I know, but usually there's a time frame at all? No, it just says cohabit. We know what cohabiting is. Well, I know, but usually there's a time frame with common law marriage if you have been together for, you know, 12 years or whatever. It does, but again, have you guys ever lived in the same house? Well, for what period of time? Just answer the question. Yes, we have. How long? A couple weeks. That's not a common law marriage.

Starting point is 00:46:27 I might as well have a judge's- I know, she's going to though. She's going to. You won't like, listen- You're gonna have to do it for a long period of time on that deal. I'm not sure we can answer your question because I don't think you guys actually-

Starting point is 00:46:40 The definition of it's not gonna happen unless you guys are together for- Okay. Living together for a long period of time. And I, in this case, would say common law marriage, The definition of it's not going to happen once you guys are together for a long period of time. And I in this case would say common law marriage, I don't think under our Ramsey way of thinking, I don't think I'd combine finances. I think you keep your assets separately.

Starting point is 00:46:56 Your question was how do I protect my assets? I don't think you guys are combining them because I don't think this is a real marriage. I think you guys get together for conjugal visits if I can be very blunt. That's what I think this is. Jeez, it's more than that. You don't see it as long as we've been doing for conjugal visits. I'm just saying.

Starting point is 00:47:13 You live two hours apart. For 10 years. How often do you guys see each other in a year? We see each other every weekend. My point exactly. Okay. Just, I'm just saying, this isn't a marriage. My point exactly. OK. I'm just saying it.

Starting point is 00:47:26 This isn't a marriage. I'm not judging her. I'm so sorry you called today. I'm not judging you. I swear I'm not judging you. OK, Christy, our advice would be you are 56. You still have a good 30, 35 years together. You could have a longer marriage than what Ken has today

Starting point is 00:47:41 from when he married Sarah. That's not a marriage. No, what they could have if they got married. They're not going to. That's why I'm telling her, she called our show in my advices that I would get married. Oh, okay, I see what you're saying. And you have another 35 great years.

Starting point is 00:47:56 My Papal's 96, so that's what, 45 years. I love your sweet Papal. You've got a long way to go, Christy. And so all of this would be summed up if you're like, yeah, we want to be in a committed. If not, then don't have a permanent residence together and the common law marriage isn't even an issue. And keep assets separate.

Starting point is 00:48:10 You agree. And keep assets separate, yeah. That was my whole point. But I think some people won't go to court. If they break up though, I think that they can, it can feel like a marriage where it's 50-50, regardless of, I don't know, anyways. Christy, now after all of that,

Starting point is 00:48:23 and I tried to answer your question honestly, I'm having fun with you, but I'm dead serious. Everything I said, I completely stand behind. No judgment, by the way. Zero judgment. You do what you want to with your life. I'm a libertarian on that deal. All right?

Starting point is 00:48:34 What I am saying is, is that I would keep the assets separately because I don't think you guys actually want to even do the common law marriage. Am I missing that or is that what you're saying you're thinking about doing? So that's, well, if we're thinking thinking about marriage possibly we're thinking about moving in together we're thinking about a lot of different options but... Well if you move in together I agree with Rachel you should get married. The statistics are absolutely undeniable that it is better for you and Rachel's right you're gonna have a greater quality of life

Starting point is 00:49:05 If you don't love him and he's not marriage material then then I wouldn't be living with them anyways Do I yeah, I wouldn't be having this conversation if that wasn't the case. Yeah, it's right exactly exactly I don't know. I don't know If you love this guy so much Because I here's why I'll tell you why I'm hesitant, and I'm on your team. He didn't call. So underneath this snappy sweater here, I've got a Team Christy shirt on, okay?

Starting point is 00:49:32 So I'm cheering for you. I mean this, okay? Here's what I'm telling you. And you're better off financially, Christy. Yeah, so what I'm hearing is, if you were my sister, Christy, I'd be like, sis, what are you doing? You don't love this guy that much. If you did, you couldn't stand and be away from him. My wife left town last

Starting point is 00:49:48 week with my daughter for a trip with her sister, and they were gone for four nights. I really, truly missed my wife. I could not do what you're doing, so maybe, and I'm honest about this, maybe it's just me, but I don't see enough evidence that you really want to commit to this guy and truly marry this guy based on one of the first comments you said. You're like, well, I said why and you went, well, we're just older now. And I think you've rationalized it. And I also don't think that you can, I think you can live without this guy. And this is not my opinion. You see this guy once a week and you live a couple hours away. That ain't leaving Cleve, in my opinion. Now I'm old school and I don't mind when you push

Starting point is 00:50:30 back on me, but but Christy that's why I'm a little bit cynical. I think if you would have said, you know what we've done it this way for a long time but now I just can't, I can't live without him and I want us to have our life completely intertwined, for better or for better for worse richer poor Bad Tuesday night great Thursday morning, whatever. I don't hear that from you Is there any fact Christy that there's a level of view that you've handled money well you're successful and he hasn't that's a little bit of a deterrent That's a huge turn. Ah

Starting point is 00:51:01 No, you buried the league. There we go. That would have been nice to know five minutes ago. I definitely stand by what I think. Do not move in with this dude. Do not marry this dude until you guys are on the same page. Don't marry him unless you're on the same page and don't combine your finances. Keep them separate. What are we doing on the weekends, Kristi? What are you doing?

Starting point is 00:51:21 This guy's not like values. I stand by what I said. I wasn't trying to be salty. I like Christie. But this is a, there's a guy in the lobby that agrees with me. This is adult conjugal visits. We're playing house. I got head shaking all throughout the lobby. I stand by what I say, Rachel. Stand firm, Ken. Stand firm.

Starting point is 00:51:40 Oh, it's tough being a Puritan. Statistics show that half of Americans don't have enough life insurance, or they don't have any at all. I don't understand this, John. Why don't people want to take care of their family? They think they're not gonna die or something? Well, I used to be one of those guys, I didn't even think about it, and one of my buddies said, Hey, the only reason to not have life insurance is if you hate your wife and kids. And I immediately went and got term life insurance. That's a gut punch for decades. Dave. I've sat across people who've lost a spouse. They've lost somebody important to them. They don't know what to do next.

Starting point is 00:52:15 Terrifying. You're going to have a crisis here. You know, you got two options while you're sitting and talking to a young widow. She's concerned about how she's going to invest all this money properly and not mess this up. Or she's concerned how she's going to eat tomorrow. That's exactly right. These are the two options. It's saying I love you to your family. Term Life Insurance. Jeff Zander and the team at Zander Insurance makes it easy and affordable. I've used them personally for 25 years. They're the only people I trust. Go to Zander.com or call 800-356-4282. People ask me all the time, George, what's your number one money saving hack?

Starting point is 00:52:48 I'm glad you asked. Nothing makes me happier than helping another frugal friend. So here's the hack. Get on a budget. Seriously, how are you supposed to save money if you don't know how much you're spending in the first place? And that's what makes the Every Dollar Budgeting app a game changer. With Every Dollar, you'll get a clear picture of your spending.

Starting point is 00:53:06 And from there, it's easy to see where you can get more intentional, cut back, and save more money. So how much money are we talking here? Well, the average Every Dollar budgeter frees up $395 in their first budget. That's the hack. And if you ask me, I think you're way above average and you'll save even more. So what are you doing still listening to me? Go download the Every Dollar app for free and start saving more money right now. Let's go to Sue in Sacramento.

Starting point is 00:53:33 Sue, how can we help today? Hi, thanks for taking my call. Yes, we have baby number seven on the way and we are considering a move to Texas. My husband and I have been talking about it and I wanted to bring it by to you guys and see what you thought. We're coming in to some money. We don't have a lot of savings, but we're trying to decide if we want to pay off debt first and stick it out here or move to Texas for lower cost of living and so my kids can

Starting point is 00:54:02 go to school. Wow. Sounds like there's two really good positives. Is this also a good professional move for both of you? It could be. There's definitely jobs in the same price range as what we're earning now, so it's gonna be about the same earning. Just different taxes. But if we combine that with the other two issues, it sounds like this is a real big win. So when somebody calls in this situation and it sounds like there's a lot of positives here,

Starting point is 00:54:29 what are you considering? What are you worried about that you wanna get our take on? What do we not know that's giving you pause? Right, well, the main thing is just that we've outgrown our house here, we've outgrown our car here, we're always falling into the negative and we do still have debt to pay off so it's like when we do come into this money you know are we gonna be spending it on making a move because obviously it's gonna cost a lot to move

Starting point is 00:54:57 seven kids out to Texas or are we going to try to get our situation looking a little better okay so let's go into that so let's paint the picture here for Rachel. All right, so tell us how much money you're going to get, or that you believe you're going to get, and then let's walk through your debt. So how much money are you getting first? About 10,000 is what we got in our tax return, something like that. Okay, and then tell us your debt situation. So we owe 13k on the car, and then we have 23k that we're not currently paying in charge off in collection. From credit cards? Basically, yeah, some medical stuff

Starting point is 00:55:36 and yeah, credit cards. Okay, now what do you think the move is going to cost? Oh, I mean, I was thinking it might take somewhere around $8,000. I mean, the whole... I don't think that's unreasonable. What I would tell you to do is get about three or four quotes, and let's come down to a pretty concrete number. And so let's just play off the $8,000, Rachel. Let's say the move costs about $8,000, but it does lower your cost of living.

Starting point is 00:56:03 I'm curious, do you know, or can you ballpark what your new budget would be with the lower cost of living so that we know how much more we're going to keep if we're going to have the same jobs? And you said similar jobs, so I'm assuming similar pay. So what's the analysis there? How much more money would you have at the end of the month, if you will, that we could put towards the debt if we move. I haven't calculated it exactly, but I know the cost of living is going to be a lot less

Starting point is 00:56:32 in terms of everything across the board. Right now we're about $650 over budget every month, and that's because of how much we pay in California. And I know Texas would probably give us a lot more wiggle room. Yeah. For sure. I would do it based on this because I think what's not mentioned in this is I think you guys are going to have a better quality of life. Is that what you think? Absolutely. Yeah, right now my kids have no religious freedom to go to school, so I'm not able to work. I work per diem because I'm home with them.

Starting point is 00:57:06 Could you work in Texas full time? I do think I could work. Yes. Yeah. What kind of income are we talking about there? Well, I'm a nurse, so I make a good AMLVM, but I make around $40 an hour. That's great. There's some Texas jobs that pay more out there. Rachel, I think it's a no-brainer because it's not that much debt and they can tackle it.

Starting point is 00:57:28 Sue, I'll just encourage you. I feel like we've heard more and more over the last probably three years or so of people making this move. I hate to pick on California, but it's just true. They're leaving California and they're going to Florida, Texas. This is an extreme example, but you and I have a friend, I will not mention his name because he's a public figure. We have a good friend, mutual friend,

Starting point is 00:57:46 who essentially bought a house in Nashville on the savings from his taxes in California. Yes, exactly. Now he's very successful, but that's real. But genuinely, yes. That's crazy, so for that reason, I think that's the only debt you have is- And for the kids' school, I mean, you think about that, right?

Starting point is 00:58:05 You add on all these layers of what life. The kids get to go to school, she can work. Yeah, of what life can look like, and then you may guys get in this situation soon, and you don't have to work in three years, you know? Cause you guys are ahead and you've. I love that. Paid off debt and everything.

Starting point is 00:58:17 Sue, what do you think now? And you think about the housing even. I mean, again, housing is expensive everywhere, but compared to California. I feel like this is a no-brainer. Sue, do you I mean, again, housing is expensive everywhere, but compared to California. I feel like this is a no-brainer. Sue, do you feel better, worse, the same? I feel better, yeah, I'm excited. What does your husband wanna do?

Starting point is 00:58:32 I just need to really hear that. Well, it's hard to talk to money talk with him. He always thinks I'm coming down on him about his income, you know, and it's not that. No. You know, I respect him and I appreciate his hard work. I try to calm him a lot. I appreciate him working hard, but I that, you know, I respect him and I appreciate his hard work. I try to calm a lot. I appreciate him working hard, but I just, you know,

Starting point is 00:58:49 Does he want to do the move? Has the move? That's the question. Has he, have you guys talked about this together as a couple? We have, and he's pondering and he's looking and he's, you know, he has his eyes peeled and he's actually open to it a little bit more these days since things have gotten pretty bad. and he's actually open to it a little bit more these days and things have gotten pretty bad.

Starting point is 00:59:12 So I think he's open to it, but it's hard to talk to money about money. I mean, we end up just walking away from the conversation. And it's him you're saying when you approach it, he gets defensive. Right. Yeah. Like he just doesn't want to be told what to do or, you know, talk about our earnings or. Okay. I got a thought. Why? What is it? What is it? I'm curious. It's just kind of always been that way. I've always been kind of the breadwinner in a way that I've always made more. And now that I'm a stay at home mom and he's doing it, you know,

Starting point is 00:59:41 we cut down so many things that I become honestly a little bitter and I probably have been not the nicest about it. And I'm not yelling at him or anything, but you know, it's probably not nice to hear that, you know, he's really not making enough to provide out here in California. That's exactly what I'm telling you right now. You just self-diagnosed. A man puts so much self-worth in his ability to provide. And with the dynamics you just shared with us,

Starting point is 01:00:07 I think there's some potential healing there. And I think you got to defrost the situation a little bit. I'm not saying it's all on you, but you acknowledge some things. And I think the dynamics have changed. And where you were the breadwinner, now you come home, he's not making enough. This is a tough situation.

Starting point is 01:00:22 I wonder if we don't pivot this move to a non-money conversation. And the move is about life. And I'm curious with that being said, does he agree with you that a move to Texas would be better for the kids school, school lean situation? Um, he didn't, he didn't for the longest. And even a few weeks ago, he didn't agree that Texas has a lower cost of living. I mean, he's completely in denial. It's like a family thing.

Starting point is 01:00:48 Like one needs to stay by family to understand. But there's family in Sacramento. Yes. Yeah. Well, his family, your family, they're all the way in Monterey. So they're all the way, they're far away, but yeah, they're in California. So it's kind of a whole California. We're, you know, we're born away. But yeah, they're in California. So it's kind of a whole California,

Starting point is 01:01:07 we're born and raised here. So it's a mentality. A lot of people deal with this, it's hard to leave here. Sure, sure. But let me get back to where we were. He's opening his eyes. Does he now agree with you that cost of living is significantly less in Texas?

Starting point is 01:01:19 He's on board with that. He does, he now agrees. Yeah, we've done a lot more researching. What about the schooling? The schooling is, you know, it's a hit or miss with him because he does like that we home school. He doesn't love the school year, but I think in Texas he would be okay with them going to school because it's a lot safer. Yeah. So Sue, I think you all need to take a weekend trip. Yeah. Well, and I- And visit and let him see it. You guys need to pick an area. I'm going

Starting point is 01:01:44 to suggest that. Yeah. And I think Sue, you guys need to press into this. I'm just hearing enough of, I understand what Ken said that so much is tied. I mean, so much of America, let's be honest, of our self-worth is tied to our money. What we make, how much is in our account, what kind of car we drive. I mean, so much is attached to that. And so I understand why he can get defensive, but I also, if I'm being the female in the chair, I'm like, I'm sorry your ego hurts a little bit, but the math shows we are $650 behind. Like we-

Starting point is 01:02:18 I agree, he needs to get over it. Yeah, we have to do, something has to change. So that change either Sue is you earning extra money, him earning extra money, you guys moving to a cheaper area. I mean, something has to change. So that change either Sue is you earning extra money, him earning extra money, you guys moving to a cheaper area. I mean, something has to change. So, but you, you're dynamic within marriage. I don't like the tiptoeing or we can't talk about this because there's usually no resolution.

Starting point is 01:02:38 We end up walking away. Like, like that's kind of stuff. We'll follow you guys to Texas as well. And it'll come up, its head will pop up in a different issue as well. So I want you guys to be so unified on this decision. And it doesn't need to come out of strife or fine, Sue just wants to do it.

Starting point is 01:02:55 We're gonna, like, it needs to be, we have run the numbers and we are in full agreement for our life and our money that this is what we're doing. Listen, I know a lot of you would rather watch paint dry in slow motion than file your taxes. that this is what we're doing. Listen, I know a lot of you would rather watch paint dry in slow motion than file your taxes. But thankfully, you don't have to dread filing when you've got Ramsey SmartTax. It comes packed with everything you need to file online

Starting point is 01:03:16 before the big deadline. That means all major federal forms and deductions are covered with no hidden fees. Plus, with Ramsey SmartTax, you can save up to 70% compared to other tax software out there. It's a no brainer. Just go to ramsysolutions.com slash smart tax and see how simple tax filing can be.

Starting point is 01:03:32 That's ramsysolutions.com slash smart tax. Hey, have you heard about the Money and Relationships Tour? Dave Ramsey and Dr. John Delano, you're hitting the road. And this is gonna be a fun, fun night. They're gonna be talking about everything from raising kids to handling money fights to making friends and so much more. Here are the cities, Louisville on April 21, Durham on April 23, Atlanta April 25, Phoenix May 5, Fort Worth May 7, and Kansas City May 9th if you want to get your seats. To see Dave and John live go to RamseySolutions.com

Starting point is 01:04:06 slash tour that's RamseySolutions.com slash tour and is with everything on the show if we mentioned anything and you didn't catch the link You can get the link in the show notes If you're watching on YouTube and podcast, did you know that James Childs are a fearless producer? He tells me all the time the show notes are just chock full of goodness. So much stuff in there. So anything we discuss James wants you to know if you miss it because I garble it or I say it too fast the show notes it's all there. You can find it there. Boy it's the show of Rachel's today. I know it's like our third Rachel. Is it our third Rachel? Oh it's very

Starting point is 01:04:42 exciting. Rachel number three in Lexington. How can we help? Hi, so my husband and I bought an investment property next door about two years ago and we would like to know if we should A move into it and renovate it ourselves or just sell the property and you know Take the money. Give us the reasons why we would do either of those. So go with option A. Why do you think you should do that? So we currently have our home paid off that we live in. The property that is the investment property is actually next door to us. So combined, it's six acres, hillside is really pretty, it shares an easement, and it's the only two houses on the hillside. It's just

Starting point is 01:05:25 a really pretty location. And so we are very attached to it, but the home we live in currently, we have it paid off, and so that's a bonus. So we could either... that's kind of where we're stuck. But why would... so what I'm understanding is... I'm trying to understand is why would you want to move to this other house next door? Okay, so I have four children, there are six of us in the house, and we currently live in a two bedroom single-odd. So it's getting really tight.

Starting point is 01:05:54 Got that. And we are needing a solution. And so that's why we're calling. The only debt that we have is the investment property. And we got it at a really good deal. We got it at 75,000 and we paid it down to around 60,000. And so that is the question of, of the day. Uh, do we, you know, do we sell it because it's worth more? Do we take that money?

Starting point is 01:06:18 And we just, you know, what do we do? Okay. I would sell the current house that you're in. Okay. And what would you make on that? Any idea? We have had people come look at it and then re-intorers and on people who know what they're doing. So a really cool fact is we purchased it nine years ago for $32,000 and it was livable.

Starting point is 01:06:40 It was actually really nice. And we bought our little single-wide trailer on two acres for $32,000. And now we can sell it for at least 120. Oh my gosh. I would sell that. Yeah. And then go ahead and pay off the other house.

Starting point is 01:06:56 Pay off, you got 60 left. And that becomes your primary residence because it's got the space you need and you love the little hill. 100% and take the extra money, the 60 grand, cause you owe 60, you're gonna make 120, pay it off, means you got 60 left and use that for renovations, cash flow the renovations.

Starting point is 01:07:15 Are you guys, do you guys know what you're doing when it comes to renovations or have you ever done that? We have not, we don't know what we're doing. So I probably, I would not recommend doing it yourself. I would get a contractor in there and having someone and they can do what they need to do. And you may have to live in a construction zone for a little bit, but I would do that

Starting point is 01:07:33 just in order to cashflow it, you know? Okay. How much work does it need? Is it terrible? It is not in good shape. I will tell you that. It is an old house. It's a really cute old farmhouse.

Starting point is 01:07:44 However, to give you insight, it doesn't have any doors inside. It doesn't have closet. It's a really old house. We have gotten it looked at by contractors and they say that the bones are good, that we would be losing money if we completely demolished it. But we're kind of just stuck because- Have they given you a number of what it would take? I mean, I'm sure you guys haven't picked this up. I mean, that would be a ballpark, but I'm curious. They said it would take at least 50,000 and we have 40,000 in, in our savings. So we are really stuck. We just don't know.

Starting point is 01:08:18 You've got a great option, Rachel. With that cash set aside, what's the profit that Rachel's talking about after you pay off this little house, you stay on the hill that you love, you got the room for the kids, you make it your own, you don't have to get it all done right away, but you got the cash, it sounds like to do it all. You know what you could do, Rachel? Sell the trailer, pocket the money, and you guys go rent somewhere for six months. It's not going to be a fun six months, but get the house all fixed up and stuff. I like that better. Rent somewhere for six months, and then you guys move in, and months, but to get the house all fixed up and stuff. I like rent somewhere for six months and then you guys move in and you're cash

Starting point is 01:08:48 flowing all of this as you're doing it. Construction zone. Yeah. Okay. It's gonna be a headache. So hear me say that. That's a headache. You're moving twice. But, but in my, I mean all day right to be able to do this next door next door neighbors, the investment property and the home we live in are technically next door neighbors. So we really, do you think we could just live in the home we have or move into the investment property and fix it up? You think we should completely get off of the property, correct? Well in order to get the cash is what I'm saying.

Starting point is 01:09:21 But you guys have 40,000, how much do you guys make a year? So this year on taxes, we're gonna be bringing home about 110. Okay, so, but you have 40 saved. So you could cashflow it without selling the current house you live in. Well cashflow the rent, yeah, but you still got the mortgage on it and stuff.

Starting point is 01:09:39 I don't know, you guys run some numbers and just say, okay, what would our, how would we feel? What would our emotional state be? What gives us the most peace? Is it to sell the current home, pocket the 120, sell off the house, you got 60 left, you guys put 60, 70,000 of cash into it and go rent somewhere?

Starting point is 01:09:58 Or is it less stressful for you guys to say, okay, we're gonna pump the brakes a little bit, we're not in a rush, we're gonna take some of this 40, we're gonna start chucking and paying it off. I don't like that because then you're gonna have to save up all this. Yeah. But it's your option. We're giving you multiple options. Yeah. Yes. Thank you. It's all sounding really good. I think Rachel's option is cleaner. I do too.

Starting point is 01:10:17 You get rid of the current house. You get all the cash. You go rent. You get the whole thing renovated. That's a little easier, it is a pain to move twice, but it feels like it's, it feels like now, but again, I think what I'm hearing you say is, you guys could cash flow the renovations while staying in the existing house. Correct. And then paying the mortgage off later, yeah.

Starting point is 01:10:38 Or at least get it to a point that you can move into it, and then whatever's left is not a complete construction zone. I think they got options. Yeah, that's true. So at this point... I guess one more question I have. I'm so sorry. One more question I have for you is I've heard people say that it's smart to have rental properties. In this situation, would you suggest having both houses and living in one and renting the other? Would that be a good option?

Starting point is 01:11:04 I don't think that's enough money. Yeah, not in your financial situation, I wouldn't. And having renters next door to you, not a fun way of life. And it's just not a lot of money. You guys, I don't even know where you live, by the way. When you're buying a house for $32,000, that's mind blowing to me.

Starting point is 01:11:22 Or the other one for 60. So I just don't think it's gonna spit off enough rental income that it's worth a hassle Okay So we're gonna say no to rent it. That's very not those numbers are not common where we're at But trust me I knew that much I'm no real estate Baron, but it's like But I think y'all go to the house on the hill, Rachel, and whether you guys cashflow renovations, then move in, then sell or sell, and then move in. I think either way you're great,

Starting point is 01:11:51 but cashflow the whole thing, and yeah, go live on six acres. Because how many kids you have? We have four little children, yes. They're just gonna be running. What a dream. You know what I'm picturing? In Kentucky.

Starting point is 01:12:01 I'm picturing wild flowers. Do you have wild flowers on that property? We absolutely do. And that's another thing, we're so attached to the property. I'm picturing wild flowers. Do you have wild flowers on that property? We absolutely do. And that's another thing we're so attached to the property. How do I know these things? How do you? It's the spirit.

Starting point is 01:12:11 I gotta say, I'm also picturing a little, I think you should get the troupe together. How old are the kids? They're ages? So we have a three, four, five, and nine. This is perfect. Good night, Rachel! Have you ever seen, I know.

Starting point is 01:12:24 Three, four, five. Yeah. God bless you. She's a busy Rachel. Have you ever seen, I know. Three, four, five. You know. God bless you. She's a busy lady. Have you ever seen the sound of music? I have, yes. I need to, I put the little kids together and get to that point, the hills are alive

Starting point is 01:12:33 with the sound of music. Von Trapp children. The Von Trapp's, the wild flowers. Get some of the old curtains, you know. I got such a great vibe about this place on the hill. I'm gonna go with my partner's recommendation. Sell the current place, go all in, go rent, go all in and fix the other little place up and then we watch the sound of music and we run through the wildflowers.

Starting point is 01:12:52 I think it's gonna be great. I like everything about it. I hope you're not allergic to pollen. So magical. I talk to people every day who want to know how to do better in two areas, money and relationships. That's why I'm pumped to bring the Money and Relationships Tour to a city near you. Join me and Dr. John Delaney for a night that will challenge the way you think about this stuff and possibly change how you live forever. Starting April 21st will be in Louisville then on to Durham, Atlanta, Phoenix, Fort Worth and Kansas City. Grab your tickets at ramsysolutions.com slash tour before they're gone.

Starting point is 01:13:37 So how you folks doing with the baby steps? Some of you brand new to it, some of your tests driving it, some of you in the middle of it know, we've got a fun little quiz online that will allow you to check your progress in just a few minutes and get a personalized plan. And this is really valuable because you kind of see, okay, this is where I am and now I've got some help, some action steps to keep going. Because remember this about the baby steps, it is about momentum, pure and simple. And there are times where you need that little boost. So if that's you, you can head to the show notes, click on the link titled, Are You On Track with the Baby Steps?

Starting point is 01:14:12 And complete the quiz. It's really encouraging and it'll actually equip you as well. All right, we're going to go to Portland, Oregon now and Karen is there. Karen, how can we help? Hi, I'm 68 years old and I probably put it all together have about $75,000 that I don't know if I could or should invest. About four years ago a financial advisor told me and my situation had totally changed at that point and he just told me I was too old to get 401ks or buy any property or anything like that and to just live as frugally as I could and try to get as much income as I could within that point.

Starting point is 01:14:55 So now fast forward four years and I still have, I may at some point need to live off that money if my income changes, my income stream. So I don't know if I, and I've been doing like little CDs with my bank, you know, three months and six months and that kind of thing and making a little bit of money there. But I'm really a novice on how to invest anything or if I should or if I could. Yeah. How much are you making a year, Karen? Let's see.

Starting point is 01:15:32 I wrote this down. About $53,000 a year. $53,000, okay. And how much per month are your expenses? I'm living under them all the time, because I've been tracking for years now. I track compulsively. I'll sometimes live $1,000 a month underneath what my income is.

Starting point is 01:16:01 So I don't have the exact number, but it's not. But you're not in the red necessarily. Not at all. Not at all. Okay, yeah. So you're coming up even a thousand, okay. And you're how old again? I'm sorry, I know you said that at the beginning of the call. 70? 68. 68. Okay, I'm so sorry. In a critical health situation too. You are. What's going on there? I have to have a very serious surgery that is I'm considered critical but stable. Oh gosh Karen I'm sorry. So I can't work. Okay when is that surgery happening? They don't know for sure yet. Um, it depends on, um, it's very metabolically, um, uh, challenging.

Starting point is 01:16:52 And so metabolically I have to be strong enough to be able to withstand it. Okay. And that's what I, that's basically what I feel like is my job right now is to stay healthy, eat healthy, get healthy. That's right. Absolutely. Yeah, for sure.

Starting point is 01:17:08 Did I understand you're unable to work right now because of this preparation or you would be unable to work after the surgery? I think both. Oh, okay. So how are you living right now? Right now I have since four years ago, I have alimony and see that's unstable. I consider that unstable. Well, has he been consistent on his alimony payments? Relatively. Is that the fifty three thousand a year? What was that number you gave me? Yeah, $53,000.

Starting point is 01:17:45 It's coming all from alimony? Yeah. How long will that go? That's not perpetuity, is it? I don't know. What do you mean you don't know? It doesn't say specifically. Our divorcer doesn't say it specifically. Well, as long as he's working, I guess is what it says.

Starting point is 01:18:04 As long as he's working and making an income he'll be how old is he he's a little bit younger than me will he be you know I mean do you talk to him ever do you know what his plans are well that's one of the reasons for divorce is there yeah yeah I'm with you on it's being unstable because you don't, you never know. He decided not to work next year, you know, and this is done. So you have $75,000 in savings. Do you have any other savings? Yes.

Starting point is 01:18:38 And that I just, I didn't include that in the amount that I, because I didn't know how much you wanted, but just that's for- That in like the CD in my checking account and yeah we need to know your total financial what's your what's like in retired do you have any other money saved in retirement or investments or anything no no so the seventy five thousand is pretty much it that's everything in checking and CDs all of it okay okay right well I think from a mathematical standpoint, I know that you are living below your means, but I wanna know what your means are.

Starting point is 01:19:11 So I would give you homework to say, okay, figuring out, do you rent, own a home? What's your housing situation? Yes, I rent and that's my biggest expense. I rent in the least expensive place where I live I live. Yeah. But of course rents are all high so yeah there's nowhere I could go that's cheaper. Yeah. I hear you. Everything else and I you know I miss hey yeah put my grandkids through your book too. I mean I'm doing all the right things I just feel like there's this

Starting point is 01:19:43 this money there should I be doing something the right things. I just feel like there's this money there. Should I be doing something with it? Okay, my answer is yes, you should be. And what I would do, Karen, I would recommend you sitting down with a SmartVestor Pro. And if you go on ramsysolutions.com and look up SmartVestor Pros, there should be a couple in your area there in Portland.

Starting point is 01:20:02 And talk to a couple of them and sit down with one that you, you know, interview two or three of them, find one that you like, and sit down and lay out the whole situation because some of the 75,000, yes, should be invested. Now, should it be invested within a retirement account, like a Roth IRA? Not necessarily, I mean, you know, a lot of that stuff

Starting point is 01:20:21 is to grow tax-free till you're 59 and a half, and if you start pulling from it, but you can invest into those past 59 and a half, right? So I would sit down with them and honestly let them run some of these numbers because I wanna make sure that you have enough to live off of. And on top of that knowing,

Starting point is 01:20:40 and again, the health thing puts a whole other spin factor to your situation, which is terrible. But to know for yourself of like, okay, And again, the health thing puts a whole other spin factor to your situation, which is just terrible. But to know for yourself of like, okay, this money eventually, if alimony stops, and if this is the only money I have, eventually it will run out. So what do I need to do to kind of safeguard? How much do I need to be living on a month

Starting point is 01:21:00 with the amount of interest that we can be getting? Because that's the crazy thing about the market. In 2023 and four, it was like up at, like the S&P was around 20%. Like we had crazy returns. This year not looking so great, right? So there is a level of this roller coaster ride that we talked to people, Karen, to ride out.

Starting point is 01:21:20 Now, again, at your age, at 68, you are on the latter end, if I'm kind of the ride. No, that's right. So the aggressiveness of it may look different because of your age and situation. And that's why I would want you to sit down with an actual investment professional

Starting point is 01:21:38 for them to look at some of this because they probably will have a good game plan for you on how to get the most out of this money without losing a bunch of it if you need it, right? Because the market game, if you're living off of that, you wanna make sure that there's a level of it that principle-wise is still there making you the money you need,

Starting point is 01:21:56 but yet you're still able to pull money and live off of it, even if you have to pay taxes, if it's a standard investment. So there's kind of a lot there, Karen, but I would, I hate to hand you off to someone else, but I don't think I can answer this and you know, a five minute call. This is tough.

Starting point is 01:22:10 The only thing I would add is if I were you, I would be trying to find another golden girl or two in your area and let's see if we can roommate. I'm not kidding you. I really think you got to slash your expenses as much as you can, because you're in such a this whole health thing is just limiting you and your ability to work and

Starting point is 01:22:32 hoping the alimony payments keep coming in but in the meantime I'm gonna be pinching like I have nothing coming in and I would really truly consider a roommate situation getting yourself in that Let's see if we can cut your rent in half My goodness. Yeah, don't tell me there aren't other ladies out there like you that wouldn't mind having a roommate, somebody around the house. I would at least look into that. I've joked for years about starting the Golden Girl Arms. See, I had no idea. I think it's meant to be. I do think there's some Golden Girls out there that would love to have a Karen in the house, and I would consider that. The good

Starting point is 01:23:03 Karen by the way. That's right. Be careful how you use that. The good Karen, by the way. That's right. Be careful how you use that. She's a great Karen. She's a great Karen. She's a great Karen. Hey, you're still here? What are you doing?

Starting point is 01:23:13 You do know that the rest of today's show is playing right now over on the Ramsey Network app, right? All you gotta do to finish the episode is search Ramsey Network in the App Store, Google Play Store, or just click the link in the show notes to download the app for free. Yep, you heard me right, for free. Then right there on the home screen, you can watch the rest of today's show.

Starting point is 01:23:31 Bada bing, bada boom. All right, I'm getting out of here. Enjoy, we'll see you on the app.

The Ramsey Show - You Don’t Need a Raise, You Need a Plan

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