The Ramsey Show - You Have To Clean Up Your Financial Mess Before Building Wealth

Episode Date: October 1, 2025

🤔 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Think you’re good with money? Take our Money in America quiz!⁠⁠⁠⁠⁠⁠⁠⁠ Dave Ramsey and Jade Warshaw answer your questions and discuss: "My husband is planning to give our land away..." "What should I do with a $60k bonus?" "Should we downsize our house to prepare for a surprise baby?" "My wife passed away last month, how do I invest now that I've lost her income?" "I just left an abusive marriage, what should I do for housing?" "Is my wife a princess or do I just need an attitude change?" "Is it wrong to keep having kids while getting government assistance?" Next Steps: ✔️⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠Help us make the show better. Please take this short survey.⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ 📞 Have a question for the show? Call 888-825-5225 weekdays from 2–5 p.m. ET or⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠send us an email⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. 📱 ⁠⁠⁠Get episodes early in the free Ramsey Network app! ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ 💵 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Start your free budget today. Download the EveryDollar app!⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ 🏠 Get organized and prepared to buy or sell a home. ☮️ ⁠⁠Lead a Financial Peace University class.⁠⁠ 🧠 ⁠⁠For help with investing, get connected with a SmartVestor Pro.⁠⁠ 📈 Free Tools & Resources to Help You With Investing and Retirement Connect With Our Sponsors: Stop paying more and start shopping smarter at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ALDI⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Get 10% off your first month of⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ BetterHelp⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Go to ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Boost Mobile⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ to switch today! Go to⁠ ⁠⁠Casper Sleep⁠ and use promo code RAMSEY to learn more. Learn more about⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Christian Healthcare Ministries⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Get started today with⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Churchill Mortgage⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Get 20% off when you join ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠DeleteMe⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Go to⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ FAIRWINDS Credit Union⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ for an exclusive account bundle! Find top health insurance plans at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Health Trust Financial⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Use code RAMSEY to save 20% at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Mama Bear Legal Forms⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Visit⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ NetSuite⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ today to learn more. For more information, go to ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠SimpliSafe⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Use promo code RAMSEY for 18% off at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠The Nokbox⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Get started with ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠YRefy⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ or call 844-2-RAMSEY. Visit⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Zander Insurance⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ for your free instant quote today!  Explore more from Ramsey Network: 💸 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠The Ramsey Show Highlights⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ 🧠 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠The Dr. John Delony Show⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ 🍸 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Smart Money Happy Hour⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ 💡 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠The Rachel Cruze Show⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ 💰 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠George Kamel⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ 🪑 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Front Row Seat with Ken Coleman⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ 📈 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠EntreLeadership⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ramsey Solutions Privacy Policy⁠⁠⁠⁠ Learn more about your ad choices. Visit megaphone.fm/adchoices

Brought to you by the Every Dollar app. Start budgeting for free today. Normal is broken, common sense is weird, so we're here to help you transform your life. From the Ramsey Network in the Fair Winds Credit Union studio, this is the Ramsey show. Jade Walshaw, Ramsey personality, number one, bestselling author, is my co-host today. The phone number here is 3,8-825-5-2-2-25. Leslie is in Lexington, Kentucky. Hi, Leslie.

How are you? Good. How are you? Better than I deserve. What's up? Thanks for taking my call. I have a dilemma. I'm recently married, and I'm selling my home.

I've moved into his home on his family farms that's been in the family for 100 years. We need to put a new house on the property. We're looking to spend about $150,000 on that. However, I am hesitant to go into debt on a mortgage on a property that is going to be 100% willed to his grandson. I'm sorry. It's likely that he'll... Yeah, so he's going to leave the property to his grandson.

What's that going to leave you in? Nothing. I mean, I can stay there, you know. But I know 100% that I won't want to stay there after he passes. And it's likely that the mortgage will still be in existence because he's like 11 years older than me. And so I'd be paying on a mortgage for a house that I'm giving away to someone else. Yeah.

Well, that doesn't work, does it? It doesn't. What should I do? What should he do? He's in this, too. I mean, he wants to leave this land to his, grandson and that's kind of understandable if it's been in the family for generations I get that but also making your new wife homeless is not understandable yeah or mortgaged up to her eyeballs

how old is he 57 and how old are you 46 okay so 10 year difference there and have you talked to him about the idea of passing to you first and then it then you turning around and willing it to the grandson when you pass? Yes, he would do that. The thing is, I don't want to stay there because I have no family there. You know, it's, I would want to move closer to where, like, my family is. It's, like, out in the country, I wouldn't want to be there by myself. Is he in poor health?

Do you see this happening relatively soon? No, I mean, I hope not, obviously. This could be 30 years. I guess that's what I'm saying. He's 57. They're there 30 years. And all those people that you want to move towards, they might not even be there then. Yeah.

I think you just don't want to live on that land. I kind of think you don't either. I think I'd buy a couple acres across the street and build a house there that is yours and his together. And then the family farm is intact to be left to his grandson. And it's not interfering with you all building a life together. I think the problem is when you. you tried to build a life together on something that is not going to be yours, and that's where it got complicated, so I think you ought to build it somewhere else.

Yeah, the problem is we would have to spend a lot more money if we did that. Well, why? Like closer to double, double the amount of money. Why? No, no, not double, because the land is not, unless you're going to buy a whole bunch of land. I mean, if you bought one acre across the street, it's not anywhere near double. Well, and to put a house on it. Well, you're going to put a house on it anyway?

Yeah, but it would be like $300,000 to $400,000. You're going to build a house anyway. The only difference is the land under it. Right. Remember, we're trying to help you solve the problem. When you called, you said, the problem is, if I live on this land, it's not going to be mine. So that was problem number one, you want something that's yours, and you want to be able to get to your family when the time comes so you want the freedom to be able to sell it do whatever so we're

trying to help you accomplish that because the other option is you move elsewhere closer i don't know closer to your family and buy something there right that's the other option in the complete other direction okay so either way the point is either way you're going to have to spend some money does he live on the property now yeah we live in the old farmhouse that is beyond renovation Yeah, I can tell you what I would do. I would move off of the property to somewhere else. And I would rent out the old house that's beyond renovation until it's beyond rental even. And just let the property sit there and it's going to his grandson.

I would not combine your lives on that property. I'd let that property be what it is. It's legacy generational property. And you're tangling up two things. You're trying to accomplish two goals with one piece of property and it can't do it. You're asking it to do too much. Yeah. It's almost the equivalent of like you marry a guy and he's got like his bachelor pad apartment and he wants you to move into the apartment and you're like, I don't really want to live here.

I'm only doing this to make you happy, right? And then he goes on and he's like, you're not going to still live in the bachelor pad. You want to live where you want to live. You want a foundation that you start together where you both feel like this is our home where we live together. Yeah, the only other thing I could do is you could platt off one acre off of the family property, build the house on that one acre. and that one acre is deeded to you, not to the grandson, period. But it would be tough to get. And then you sell that if you want to offer it to the family when you get ready to sell it before you sold it to the public, that's fine.

But when he dies, you're going to move anyway. By the way, wherever you move to when he dies, you're going to move, according to you. But that's also the assumption that 30 years later, the grandson is going to want to keep up this land and wants the land. Yeah. 30 years later that the family you're going to move next to are still alive. Right. There's a lot there. Yeah. So, you know, we're really, really, really.

But I think you are wise to recognize that this is not a good system. It's not a good plan. So, no, I would not go forward with a plan. I would do something different. So, you know, carve off an acre. That way you could sell that acre in that house when you got ready to leave after he passes. And the family loses one acre of the family farm. If the family farms two acres, then I guess that's a big deal.

But if it's 200 acres, it's not a big deal. So, you know, decide how that's going to work. And then, or literally go across the street off the family farm and build something. I don't care what you do. And be smart about where you plot it out. If you pull it out smack dab in the middle, you don't want to do that. The corner, off in the corner. And that way it doesn't harm the value of the property.

And it doesn't leave you with something that's not marketable when you get ready to sell. Right, right. So, yeah, but just the, you're correct in that going forward with the plan that's on the table, is a bad idea. You are correct about that. It's not going to end well. Sooner, later, whenever this is. I mean, the grandson could be really old by the time you're really old. Also true. You know, I mean, he's 57, so this grandkids, it's probably six. Yeah. And so 30 years from now, he's 36 or 40 years old when Papa dies. Yeah, that's a whole different thing. Yeah. And he might decide he didn't want the land. He sells it to somebody. Now suddenly you don't like your neighbors.

You know, there's a lot. A lot can happen in 30 years. Mm-hmm. Mm-hmm. A lot will happen in 30 years. That's very interesting. Very interesting. Good question. But you're recognizing, I think the bottom line is you're asking this piece of property to do things it cannot do. Foresee the future. You can only do one of the two things. It can't do both. And so you're not going to be on the property if you're wise. Thank you. Hey, quick reality check. AI isn't just for sci-fi nerds and Silicon Valley tech bros anymore.

It's the new weapon of choice for every scammer with fast Wi-Fi and bad intentions. Identity thieves could be using AI right now to steal your info in ways that would have sounded impossible just five years ago. We're talking voice cloning, deep fake videos, filing bogus tax. filing bogus tax returns, draining your bank and retirement accounts, and even home title fraud. And it can happen fast, so most people don't find out until it's too late. So as someone who has had his identity stolen before, I don't mess around. I use Zander ID theft protection because it keeps up with today's threats without the crazy price tag other companies charge. You get real-time monitoring across your whole financial and digital life, and if something does go down,

they'll give you the full white glove treatment. like 24-7 restoration services by pros based in the U.S. and up to $2 million in stolen funds and expense coverage. So you don't need to live in fear, but you do need to be smart about protecting your identity from thieves. So go to zander.com or call 800, 356, 4282, and get yourself protected today. Karina is in Washington.

Hi, Karina. How are you? Good. How are you? Better than I deserve. What's up? I have a question. I'm trying to figure out the best way for me to proceed.

So earlier this year, I had picked up a second job because I wanted to save up for a house. And that's what I've been doing thus far. And I learned that my current. a second job actually offers a Roth 457B, and so now I'm wondering, should I put more money into my 457B so that when I leave, I can roll it over into my Roth IRA, or if I should continue saving all my money for a house. I'd save all your money for a house. Okay.

Yeah, you've got your emergency fund in place and you're debt-free, right? Correct. Okay. And you're going to save up your down payment, and then you're going to start your retirement savings, correct? Yes. How far are you until being done with the down payment? How long would take you?

It really depends. In our area, houses are pretty pricey, so they average about $500K, and I have saved up $83K. Oh, good. Okay. So when do you think you're going to buy? Originally, I was thinking that I would get a mortgage, but a month ago, a coworker of mine turned me on to the Dave Ramsey Show, and I read your book. and started looking at your YouTube videos.

And so originally I was thinking probably, you know, this fall or, you know, in the winter. But now I'm starting to think maybe I should wait another year save up and then, you know, put a bigger down payment or whether I should wait for about four years and just try to buy house and cash. Wow. What's your income? Originally I had started with about $70K, and right now it's probably going to be about $160 with a two job. 160? That's great. Correct. Wow, nice bump from 70. What did you do? I am in biotech and I have an IT job. So what are you thinking you'll live on 60? Is that the plan? And then in four years, you'll have 500? That's kind of what I'm hoping for. Interesting. I mean, I'm never going to discourage you from paying cash. Just know it's a moving target. So there's part of me that says if I can get in the game,

earlier i'm getting in the game earlier so just think that through yeah i i think i would go with your plan but if the if the market starts moving on you you maybe can jump in with the 300k down payment or something if you had to but let's let's let's work your plan for right now i love that that's very cool good for you congratulations that'd be very sweet place to be that's us we need more people with that mindset i think talk about hustling man hustle hustle hustle i love Mike's in Pennsylvania. Hey, Mike, how are you? I'm doing well. How are you guys? Better than I deserve. How can I help? So thanks for taking the call. I have a pretty basically, my situation here is I'm going to be

receiving an annual bonus in a month, a few months, and I'm trying to decide what is the best use for the cash. So current situation, I have a little more than a emergency fund in the bank. I have about 50,000 in cash right now, about 25 of which I would say is emergency fund related. And I'm going to be getting a bonus of 60,000 gross, so probably about 40,000 after taxes. Between my wife and I, we have about 50,000 in student loans. And then I have, the only other debt we have is two mortgages. So I have a rental property that was originally my primary residence, that I have about 80,000 left on. And then I have my current primary residence that I have about $240,000 on.

And the simple thought was put the money toward the student loans, pay them off completely. But the rate on my current mortgage is about 7%, whereas the rate on my rental mortgage is about 3.6, and my student loans are at about 5. Well, you'd still have... So when I look at the long term, you're wrong. You look at the wrong term, you've got to get rid of the stupid. student loans. You're not going to prosper as long as you keep those things around. This is not an investment strategy. This is stupidity, and you've got to clean it up. Right. So the student loans was the, that was the first one where I assumed that's what I should probably put it

towards. You're right. You're assumed correctly. And then you'll still have, you'll still have a little bit because like you said, your emergency fund is inflated. So you'll still have a good chunk that. I'd take 25 and put on a student loan a day. And when the bonus comes down, pay off the rest That's right. And then you'll still have money left over that if you wanted to throw it towards what were you saying? Your primary? Is that what you're trying to do? Yeah, well, I have the primary mortgage and the rental mortgage. The primary just has a much higher rate. So while I would assume, like typically I would have paid down the rental, but the primary is a much higher rate. So I'll just have more savings for putting it toward that. What's the balances on the primary and on the rental?

The primary balance is about 240. The rental is about 80. And the rental is probably worth about 175 and the primary is only worth about $2.90-ish. Is the rental local? They're both local, yep. I manage the rental myself. I've had that for about seven years now. Good for you. Okay. I would clear the student loan, then I would clear the rental and I'd refinance the primary. Okay, so you would go toward the rental first after student loans. Just because, not because of anything except it's just only $80 grand and you're going to knock it out quick. Because I smell a $200,000 income, don't I?

Yeah, I'm right around $160,000 right now. for the bonus and the bonus is annual but it's not guaranteed but i i typically do receive it yeah yeah and so you're you're making 200k on average and almost like i've done this and so um yeah yeah yeah with 200k you're gonna knock the 80 off pretty quick as well with you're sitting there with your emergency fund refinance get rid of that seven and some change because you can get a 5.7 right now in a 15 year yeah once the rental's gone how much will you clear in profit every month just curious. It's 2,200 a month right now, gross rent. Yeah, sweet. So you're probably making $1,500 a month, give or take, whatever your property taxes are in Pennsylvania, which I don't know.

But, yeah, you mean, you're probably making some money there at that point. And that's another what, another $20,000 a year that you can throw at the primary. But yeah, I'm going to refinance that primary because you're going to, it's going to be more than two or three years before you get it paid off and I want to get that rate down because that rate is a little bit jacked. But yeah, but here's the thing. When you're paying off debt folks really, really fast like we are with this student loan almost instantaneously and with the, um, the, the, the end on the, uh, the, uh, the, uh, the whole thing here is not even five years.

Right. The whole thing. Okay. And so when you're doing all that, then interest rates, the shorter the period of time in which you're going to pay off the debt, the less interest rates matter. The only time interest rates matters when you're playing them out 20 years, when you're playing them out 10 years, playing them out five years. But when you're paying off in four months, it's irrelevant. Includable. Almost. I mean, it's not like interest rate's not your problem. Right. At that point,

cash flow is your problem. Right. Right. That's what you're leaning in on. So good stuff. Dylan is in Fort Worth. Hey, Dylan. Hey, Dylan. Hey, Dave. I look like I got the perfect duo today. I got the payoff debt queen. the real estate master. So happy to be back on again. It's been a few years. So my wife is listening. So we have a new surprise coming that was really unexpected of a baby in, of course, nine months. So we bought our home for 420, probably close to two years ago. So we're not quite past that capital gains market. If we were to sell it now, we're probably looking at 420, 430. We owe $3.88.

I have a feeling I know what you're going to tell me to do. We have 62 left in student loans, and that's from myself and my master's from years ago. It's now been lingering like a pet for 10 years. I think our big question is we're trying to reduce that monthly cash and increase that monthly cash flow. If we could be going from like 3560 a month down to like 2,500, to 2,800, which is what we see rentals going for the around here, probably a game changer with cash flow. We could then throw all that in debt, stockpile money, go into sork mode until baby comes.

What's your income? We've also seen. What is your monthly take-on pay? I have very irregular. On a regular month. Quarterly. What do you make a year? What do you make a year?

This year will probably be about 150 for me, about. It's $70 for her. If a regular month is $6,000, then, yeah, you've got to get out of this house. It's more than 50% of your take-home pay. But $6,000 is not $150 plus $60, so those numbers aren't that up. So hang on. We're going to come back to you because I can't figure out what the flip you're doing. Hold on.

What does the future hold for business? Ask nine experts, and you'll get 10 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 42,000. businesses have future-proofed themselves with NetSuite by Oracle, the number one AI 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 unified business management suite, there's one source of truth for the visibility and control you need to make quick decisions. NetSuite's real-time insights and forecasting help you see into the future with actionable data. And when you're closing the books in days, not weeks, you spend less time looking backward and more time focusing on what's next. And speaking of what's next, download the CFO's guide to AI and machine learning at netsuite.com slash Ramsey. It's free

at netsuite.com slash Ramsey. All right, we're talking to Dylan, who's got a baby on the way. Surprise. It's awesome. And we're trying to figure out exactly what's going on. If I remember, your house payment was $3,500. Is that right? Yes, sir.

And as my wife just texted me, a baby wasn't a surprise, but we weren't sure if we were going to be able to have one. Got it. We were texting offline, and we're roughly around 9 to 10,000 take-home pay a month. It shows I get paid commissions quarterly. So, like, every four months, we have a big surge of, like, a $10,000 to $15,000 commission. Above the 9 to 10K, or that included in the 9 to 10K? Correct. No, above, above.

So you get 9 to 10K plus you get quarterlies of around 15K. I'd say so. So you're averaging about 15K a month. yes so the way i kind of have to budget it out is i kind of have to have those sinking funds ready um to kind of know what's what's coming over you know until the next quarter hits well that that may or may not be but either way what is your question is can you afford this house yes you can afford this house why are you wanting to move i think it's just that that monthly is so tight on

us. It's not tight. It's because you're not on a budget. It's not tight. You make $15,000 a month. You have a $3,500 house payment. That's not tight. Well, and I think it only feels tight because you're trying to live without and act like your commissions aren't real. Probably true. Yeah. So your commissions, let's pretend for a second. Let's pretend for a second. Let's pretend for a second. Let's pretend you got your commissions in your hand, $15,000, and you said, I'm going to allocate $5,000 for each of the next three months. I'm going to pull from that commission bucket. And I'm going to put $5,000 on my $10,000 income. That's making me have $15,000 income for the next three months. Then when your next commission check comes in, you do the same thing. You're trying to do this backwards, looking in

the rearview mirror rather than looking out the windshield like I just outlined because you've not gotten ahead of it yet when you do that this is not going to feel tight at all yeah and i have been dropping each big checks onto a truck painter so yeah you're just acting like you're acting like you don't get those checks it's not even part of your budget that the problem is that's leading you to a faulty decision on the house because you're acting like you can't afford the house you can afford the house if you don't want the house that's a different issue you can you're you're obviously a and you're allowed to sell the house if you want to, but not because I, you know, pretended like a third of my income isn't there.

Yeah. So for that, for that first quarter, it's not there. And then when you receive it, then you can say, okay, for the next quarter, like you said, you're putting that $5,000 per month. And now you're ahead of it. If you get $18,000, it's $6,000 a month. But now you're ahead of it. It's just that first quarter when you're not ahead of it.

Yeah, you just got to say that. And so you have three, if you start my plan, you have three more tight months. That's right. And then you'll never have a tight month again. Yep. It's the same thing with normal budgeting when you get paid on the 30th. The 30th check goes to the next month. It can't be used for the month you got it.

Yeah. You can't wait to pay your house payment until the end of the month. So yeah, you've got to get ahead of it on all of this. It's just a little one-month cash flow, or in this case, a three-month because it's a quarterly commission check. So then you've just got to decide, do you want this house? Do you like this house? So I think what happened here is the announcement of the child made you go, oh, we've got to really start.

Yeah, you do have to start now. That's good. That's really good. It's good catalyst. We're going to give you a year of every dollar as a baby celebration. And I want you to get in the new improved every dollar because it's going to guide you through everything. But you get ahead on the sinking funds, not behind them. And then quit ignoring the fact that you actually make this commission because you're throwing 100% of it at something else.

And no, we can't do that. So it all goes into the plan. Then you work the baby steps from the plan. And while doing that, you look at the ratio of your house payment and say, okay, I can afford this house. I choose not to. That's right. But it's not because it's in air quotes tight. That's right.

Okay. Now, I feel better. You feel good. Nate is in Wichita, Kansas. Hey, Nate, how are you doing? Better than I deserve. How are you, sir? Better than I deserve.

What's up? My wife and I went through bankruptcy last year and into early this year because we just made an absolute mess of ourselves financially. And at the start of this year, we really decided to focus and commit ourselves to getting out of the rest of my student loan debt, which is all we have left, and trying to live really disciplined. We lost our car last year when we went through bankruptcy, obviously. and we've been just driving an absolute beater, and we're trying to make it work.

My daughter just turned three last month, and I'm feeling very grateful for that, and she's healthy and happy, but I'm just trying to maintain hope right now because it's hard. It's so hard to stay disciplined, to stay focused, to not give him the temptation to go back into debt, to have a nicer car, so things are a little bit more reliable. What's your household income, sir? just under 70. And how much is your house payment?

We're renting right now. It's just under 1,000. Okay. All right. And are you still putting money into your 401K? No, I was pretty undisciplined through my 20s. I just turned 31 a couple weeks ago. We don't have any money in retirement yet.

You're not putting any money out of your check into retirement? Not yet. as soon as we get out of debt. And how much student loan debt do you have? Just over $20,000. Okay. All right. We've paid off about heat so far this year.

Okay. The thing is that you're facing, the math is not as much of a problem as the emotions. Okay. Right. I know, I know I'm just being a more. Well, I mean, it's, you've been through hell. And there's a shame that goes with bankruptcy. see, you're like labeling, I'm a money failure, you know, and you're not, but, you know, for a

moment there you were, but you're not that way forever and we're not going to stay that way forever. So I remember how it shook my confidence when I went through that, and that's just very real. So, okay, now, how do we fix that? Well, we need some quick wins. We need some small wins, and that starts to build our confidence up. and the best place to do that is a budget, don't you think, Jade? Yes, sir.

I agree. Yeah. I mean, I agree wholeheartedly. So I would get your, you know, again, we'll give you every dollar for a year, and it's the new improved every dollar, and so it's going to guide you through the baby steps. But what you've got to do now is say, okay, we're going to look at the money coming in every month. Are you getting a tax refund? Not much of one. I set up my taxes so I don't end up giving the government a free of interest free loan. So you've done a lot of the things already where you can find some margin.

Every dollar will help you find some more margin. But with a $1,000 house payment, you've got some margin in this because you don't have any other payments now except the student loan. And so, you know, our first goal is to save $1,000. Our next goal is start knocking off the student loan. Making 70, you can probably do that in about a year if you live on beans and rice. And your confidence will come, not because the magic wand waves and gets rid of the student loan, but when you start being in control of your money instead of it being in control of you. The hard part is you're doing something that you've never seen done before, right?

So you're attempting to pay off debt to become debt free, and you've never been there before. And so the natural inclination is to say, I'm going to go back to what I know. That's the comfort zone, even though it's not good for me, even though it got me in bankruptcy. That's why you're like, you know what, let me just go back to credit card debt. Let me just go back. And you're fighting yourself because you're heading towards truly a brand new frontier for you. And so what you need is to keep engaging with people who have done it before so that it becomes more and more real to you and you can see it.

And it starts to become a normal reality. Right now it's not a normal reality for you. Is that fair? Definitely. So keep engaging, keep being around here, watching these shows, listening into these debt-free screams, get on social media, follow Rachel Cruz, follow Dave Ramsey, follow myself, and this is going to become normal to you, what we're talking about. And that's what you need so that it doesn't feel like this foreign thing that no one's ever done before. Hey, guys, if you're already shopping at Aldi, way to maximize your grocery budget, good for you. Now, here's how to level up your savings. Make Aldi your first stop every week.

From fresh organic produce to grass-fed beef, to marinated chicken that's ready to cook, to high-quality dairy products, you'll be able to snag everything you need without the hassle and nonsense, just legit quality and low prices. And families like yours can save up to $4,000 a year just by shopping at Aldi. And that's not a hack, it's just a smarter habit. So stop overpaying, make Aldi your first stop for groceries, and watch the savings stack up. Find a store near you at aldi.us. That's a-l-d-I-U-S. Savings based on regional analysis of Aldi versus slight competitors.

Prices may vary by location, product availability, and the market. Well, last two callers, we gave the all-new every dollar to. It's a game changer. Watch the premiere on our YouTube channel to see the new app in action. I hear how folks are finding thousands of dollars in margin in just 15 minutes when they open it up, start plugging in their numbers. Every dollar's new features will point this out to you and then show you exactly what to do with that money so that you can move from debt to wealth. And that's exactly what we've been showing you how to do for 30 years. And now we're growing it right here in the palm of your hand. Imagine how much you could find to put towards your money goals.

sure and check it all out. Again, watch the premiere on the YouTube channel. It's pretty incredible. Carl is in Cincinnati. Hey, Carl, what's up? Hey, Dave. I'm calling here under some pretty crazy circumstances. So, first off, I'll tell you my situation. I am a 100% disabled veteran from the Iraq War, and my income is strictly from those sources. It's fixed. It goes up when the government decides to give us an increase, but that's about it. And I've navigated a lot of things quite well I know. My wife died a month ago. Oh, my gosh.

And, yeah, it's been traumatic for my family. What happened? She had a stroke in her sleep. It was hoarding to everything that happened. How old was she? 37, man. She had a heart defect, but we didn't expect this to happen. I'm so sorry.

Oh, my goodness. Wow. We lost about 40% of our income when she passed, and gracefully, we've at least had some life insurance, which was just two years of her salary, split evenly between her youngest, our youngest, and myself. Because of that, I was already in the middle of the Dave Ramsey plan at the time, and because I wanted to do the right for my kids and set ourselves up and economize. We are debt-free other than our mortgage. We have six months of savings set up, set aside, largely due to because of that life insurance. And I am just trying to figure out with my income, which is about $81,000 a year, just strictly that, trying to live comfortably while saving for my son's future.

both my boys got education benefits guaranteed to them so we don't have to worry about that I want to try to invest how much stop a second you're doing like 43 things at once and your wife just passed away let's just calm down a little bit um yeah I'm sorry man um the life insurance was how much share was 45,000, and the other was Theodore's, and that's going to be in the certificate held until he's 18. And how much is that? About the same, about 45,000. Okay, all right. And, so that was structured wrong. Okay. Um, it was strictly through her work. It was a benefit through work. Yeah. Because of her heart defects, it was pretty hard to get her in any insurance.

Yeah, but by structured wrong, I mean, there should have been none left to the child in a certificate. horrible. So you're treating the 45 as your emergency fund? Did I hear that right? I put that towards paying off credit card debt and the rest in the savings. And economize, economize. That's literally what I'm doing. Okay. And how much is your house payment? $2,600 a month. And as soon as my lending guy, a really dear friend of mine who works in the lending industry for veterans, he helped me get this house when I didn't have the credit to deserve it, but I got it anyway. And as soon as the rates are low enough for me to do an earl, VA Earl, I'm going to. I'm going to lower the rate but not restart the loan.

That should hopefully bring me down a few hundred dollars a month once that hits. But I can manage with what we got right now. Okay, so if you've got an $80,000 income, you have no debt except the house, you have some money in savings for you have some money in savings. You don't have to save for Theodore's future. You're fine. My thought was, is I want to leave him something that I don't qualify for life insurance because of my disabilities. That is not my thought right now.

My thought right now is you get your house balanced, quit worrying about saving for kids. He's got $45,000 sitting there in a cert, and he's got a free education because his dad served his country. Thank you for serving your country. Okay. And so that's all set, and he can make his way. He'll be just fine. I'm worried the way you leave him in inheritance is not by having a kid's savings account. The way you leave an inheritance is you get yourself straightened out, and you begin to build wealth for you over time.

But right now, the first thing you do is you just get balanced. You buy groceries. You keep the lights on. You pay the house payment, and you live on your income, and you can do that. it's just been easier to focus on that and just sit and, you know, idle time sucks. Yeah, I don't doubt that. I mean, it's waves of grief coming at you and catch you off guard at the worst possible time. But in terms of the math of your situation, don't try to make this do too much.

The first thing is just live, set up sustainable. And that's food, shelter, clothing, transportation, utilities. You know, you're in good shape. You're not in a pinch. now if you start trying to put you know 25% away for retirement and I'm going to put another $2,000 a month for for Theodore you don't have that kind of room that's not an option she did have survivor benefits that are going to start this month and I want to invest that that's what I want to do if if you if and only if your dad-gum budget is balanced got it

okay if you do so much investing that you call me stressed out then you're just you're over-analyzing this. How much is her benefit going to be when that pays? $1,600 a month. Divied up between the two of us. Divied up between the two of you. How old is Theodore? Hello?

I think we lost him. Must have. All right. Yeah. Oh, there he was. Well, okay. Anyway, yeah. So it shouldn't be divvied up between the two of you.

There's a survivor benefit that should go to you. Shouldn't go to a minor child. So, but even if it does come to him, it's for his care, and we're going to use it in the budget for his care. Right. So we're going to take care of the household. Let's get the household going. Then we'll start worrying about investing. Breathe.

Give yourself six months to cry, man. I mean, 37 years old. Oh, my God. It's just a month ago. Sheesh. Just give yourself a, let's just get this budget to where we're not going in the hole. We're not having a problem. And we're just, everything's running smooth.

And we'll worry about investing a little bit later. You got time. You're okay. You got plenty of time. We'll get to investing six months from now. But for right now, let's just see how big a pile of cash we can pile up and living on the income that we have coming in. Right, right. Just keep it real clean, real simple.

And then that gives you, you know, if you. You don't want to add financial stress to grieving. Yeah. Well, like you said, I think he's trying to give him. He's giving himself something to do when really there's not much to be done. I really wouldn't. I'd find a different hobby than screwing around with his money stuff right now. You know, give yourself a little room to breathe and the hurt.

And then six months from now, your brain is going to be working a little better. And then you can talk about investing at that point. That's how I would do it. Wow. Now, so a couple of pointers then across the board, you always need to be in touch with Xander insurance and get term life insurance, and you need 10 to 12 times your income on you if you're insurable. Now, Carl's not insurable. His wife may not have been either, because they may have already detected the heart.

As a matter of fact, he said that because he got it through the work. But for the rest of you, you're walking around out there, and you're 37. without any medical issues, for the cost of a pizza, you can get 10 to 12 times your income. And so you're making 50 grand. You put 600 grand on you. And it's four people who are dependent on your income of somebody, if something happens to you. Because all the time people are like, I'm taking a policy out on my kid. I'm like, no, no.

You got it twisted. No, you put it out on you. And 600K and 15 to 20 year level term insurance. And Xander insurance can help you do that. They've been doing it. Been a Ramsey endorsed, Ramsey trusted for, God, 30 years. And we've been sending people over there. And you need your life insurance in place if you can.

Now, Carl's family was not able to, but that call can remind some of the rest of you to get your stuff done. Make sure you're lined up. If you've listened to me for more than five minutes, you know that being normal with your money is not a good thing because normal is broke. And I want you to be weird. That's why I love what we're doing with Fair Wins Credit Union. Our friends at Fair Wins just launched a brand new Ramsey debit card. And it says debt is normal. Be weird. Right on the front. I love that. Because every time you swipe it, you're choosing to live differently with no credit card payments and no debt.

You see, Fairwinds has been helping people like you ditch debt faster and build wealth for years. They're not trying to shove credit cards or auto loans in your face like the big banks do. And they've worked with us to create the smart bundle for Ramsey fans. It includes a no-fee checking account, a high-yield savings account to supercharge. your emergency fund, and now the Ramsey debit card to help you stay focused on the baby steps. We're excited for you to try it. So check them out today at fairwins.org slash Ramsey. That's fairwins.org slash Ramsey, insured by the NCUA. Welcome back to the Ramsey Show in the Fair Wins Credit Union Studio.

Jade Washaw, Ramsey Personality Number One, best-selling author, is my co-host today. Kayla is in Virginia. Hi, Kayla. How are you? Hi, I'm doing pretty good. How are you? Better than I deserve. How can we help?

Okay. Let's see if I can get through to that cross. So I recently separated from my husband because of abuse. Okay, I'm good. And I'm currently living with my parents in Virginia, but my husband and I originally lived in a different state, so I'm going to have to go back there for custody season soon. And I was wondering, obviously, I'm not moving back in with my husband.

Is it smarter for me to get a chief? apartment that's around the one bedroom that's around $600, $700 for me and my two-month-old, or is it better for me to get a two-bedroom apartment because I work from home and I'm just wondering what's more important paying off my debt as fast as possible or keeping up my mental health with just having more space and a space for the baby versus a space for my work. How much debt do you have? I have about 32,000 in student loans, 6,000 and 6,000 in credit cards. 6,000 credit cards.

And so how much, what does he make a year? He doesn't make anything. He's a student. And so honestly, I don't know how he's going to pay for our current house. He was insistent on keeping it, and I kind of want to stick it to him and see him struggle because I know he won't be able to afford it. Your name's on the mortgage, too, honey. It's a rental.

Oh, your name's on the lease also. I explain everything to my landlord, and he understands what's going on. Yeah, I bet he understands. Your name's on the lease, unless he understands by giving you a, unless he releases you from liability in writing, your landlord and understood nothing. Okay. So I don't know. I'd be careful about sticking it to him.

with your name on there. Okay. Now, what do you make again? I make 20 an hour. I think it's about 40K. Okay. There's part of me that I would really focus on getting your situation financially cleaned up. And if you're able to live cheaply for $600, I would do that, especially while your baby's

young and you guys can kind of huddle up in a one bedroom. and then if you can clear out some of this debt, then the time can come where you can move to a two-bedroom. But I think now's the time while the baby's little and doesn't take up a lot of space. Now, you said mental health, I'm guessing because living and working and sharing a room all in one space,

that's claustrophobic. Is that what you're saying? Yeah. Yeah. Yeah, but you've been in a domestic violence situation, so you've got a whole different issue on mental health. You've been dealing with a 10 out of a 10 on mental health, the baby being in the room is a two out of ten.

I think you're going to feel relief. So, yeah. Are you talking about moving back to that city because of custody? I don't know about the same city, but the surrounding areas within 30 minutes. Okay. Are you going to be safe? Are you going to be safe? I think so.

It was emotional and verbal abuse. It wasn't physical, thankfully. But he is violent. And so it just depends. Like, he would break things. So I really don't know what he would do if he found out where I lived, but. Okay. Yeah, so here's the thing.

You're coming through an absolutely horrible situation. And so you've got some spiritual recovery to do, some emotional recovery to do, and some financial recovery to do. Agreed? Mm-hmm. Yeah. And so the last thing you need is right now is to be spending any money on an extra bedroom. So right now I'm with Jade.

Let's keep everything as cheap as possible. How long have you been with Mom and Dad? How long have you been there? Two weeks. Okay. How much longer do you plan to stay there? We're meeting with some lawyers tonight to figure out how long I can stay without him being able to. charge kidnapping or anything, which you

threaten. Yeah, he can't, well. So, well, yeah, let your attorney advise you on that. And I would recommend you stay with your parents as long as you can. Like for a couple months, if you can. And during that time, I want you to pile up cash. Okay? Don't pay

down debt right now. I want you in the middle of a storm. I want you to pile up a big old pile of cash for attorneys and for deposits on apartments and all that kind of stuff. Okay? Then once you get settled, and you've got a divorce underway, you get settled on the cheapest possible apartment, then and only then will we turn loose on these debts.

Now, if you haven't cut up the credit cards, you need to cut them up, okay? They're cut up. Good, good. Yeah, I've been trying to pay them off, but my husband is, for some reason, against going ham on paying off our debt. Oh, it's real easy. I know why that was he was trying to control you. Yeah. That's a control mechanism.

So, yeah, so what we're going to do is you're going to clean this stuff up after you get stabilized and the way you get stabilized is you keep your housing cost as low as possible utilizing mom and dad for the next one to six months and after that then and only then as the divorce progresses and only when the lawyer says you absolutely have to move back into the market do you move back to the market and you do the cheapest thing you can then and you clear the debts and you pile cash clear the debts and pile cash in the meantime because that if you had 15 thousand dollars saved right now and it was just a pot sitting there in a pile it would give you a whole different comfort level than sitting there with no no cash and this other you probably

wouldn't have even called us but because you'd have that much different of a feeling that's right and that that's where i want you to get to first then we'll clear the debt and then we're going to be in an inexpensive temporary housing which is like for a year or two okay it's not your whole life it's for a year or two so that you get away from the jerk and wow pretty crazy that's that's um something i i i um good for you good for you for pulling away and for having the strength to do that good for your mom and dad to give you a safety net to land in um and uh you know and it sounds like you've got your head on your shoulders you're already thinking legal counsel you're figuring out what you can do can't do.

It's not like you've got a good support around you, which is how you break free from this kind of stuff, because it's got a, this level of stupid has a gravitational pull. It sucks people back into it over and over again. Especially the more desperate they feel. Yeah. And control. The financial control is one of the things we learned 30-something years ago was when we see a guy that is 1,000 percent controlling every ounce of the money.

There's very often domestic violence included. That's right. It's a symptom. It's an indicator of what's going on. It's not 100%, but it's really close to 100. It's in the 90s. And so if the wife's not allowed to go the grocery store without her husband, if she's not allowed to do anything, make any money decision without her husband.

If she's not allowed to do it, he's got a complete death grip on every single dollar. There's usually domestic violence tied with that. So that's a little bit of what you were experiencing there, Kayla, where he didn't want you out of debt because it gave him a power over you. Hey, you guys, more than a hundred million Americans carry medical debt, and that is so scary. And it shows that traditional coverage often leaves people to face big bills alone. Families need more than just coverage. They need community. So what if your health care costs less and you are actually supported by other believers in the process? That's why I love Christian health care ministries.

CHM is a budget-friendly, faith-based alternative to health insurance that's been serving believers since 1981. And they've paid over $12 billion in medical bills. Y'all, that is faith in action. So let me say it again. CHM is not insurance. It's a nationwide health cost-sharing ministry. It's Christians helping other Christians with their medical bills. With CHM, you get to choose your providers.

There are no networks, no surprise bills, and no insurance headaches. Whether you're just starting out as a family, or you're looking for something that fits your budget better, CHM is where your faith and finances agree. Programs start at just $98 a month. So go to chministries.org slash budget to learn more and take the leap of faith today. That's chministries.org slash budget. The Ramsey Show question of the day is brought to you by Y-R-R-R-E-FI, defaulted student loans that are private, can drag on for years. But Y-R-R-R-R-R-E-F-Y-F-R-Nancing with a low fixed rate and a payment you can actually manage.

Go to Y-R-R-E-F-Y. That's the letter Y-R-E-F-Y.com slash Ramsey, not in all states. All right. question comes from Chad in Washington. He says, my wife and I followed the baby steps and are debt free except our house. Our net worth is one million and we owe $75,000 on a house that is worth $750,000. We are in our early 50s. When we got married, my wife had a $100,000 annual salary, but when we had kids, we made the decision together for her to stay home and homeschool them. Fast forward 20 plus years. The kids are grown. We are doing well, but my wife is still not working. my income is $150,000 a year. I have asked her to get a job for a few months to knock out the mortgage

and build up a gap fund so I can retire a little early. We have plenty to live on, but I've noticed some budget drift as the kids don't require as much attention as they did when they were little. Is my wife a princess or do I just need an attitude change? Interesting. Okay, so just to recap, You guys are millionaires. You owe $75,000 on the house. Your wife has not worked in 20 plus years is what it sounds like. And now you're saying, hey, I could retire a little bit faster and we could pay off the house a little faster if she would just get a job. That's where we're at. I don't think she's a princess. I think there's something that maybe you guys need to do to meet in the middle. I can understand you wanting to go a little faster on the house. And I can understand you wanting to retire. little faster. But I don't necessarily, I wouldn't go as far to call her a princess. I think you need to frame up the argument in a way that she's also excited about it. Because whatever you've been saying, it's not, you know, it's not, she's not excited about it.

So she doesn't want to do it. Yeah, Chad, if we look up nerd in the dictionary, we're going to see your face. Okay. You got, you completely dialed in here, bro. And that's good. That's good. That's what got you here. But, yeah, you're 100% concentrating on numbers, which is what I do. That's how I know what you look like. I know who you are. And if you're not careful, you forget about relationships. No, your wife's far from a princess. Yeah. Does she need to dial it in and get a little bit more serious and join the crusade to build some more, the last little bit of wealth? I think, yeah. Yes, she does. We tighten up that budget a little bit and we can, but does she have.

have to necessarily go back to work to accomplish that? I don't think so. I think the budget is her, that's been her thing for 20 plus years. So if she can tighten up her end of the thing, which is managing the money at home, and if you can tighten up your thing, which is bringing in the money from outside, I think that's fair. I mean, you manage the money at home together. Yeah. You're going to do your budget. We're not going to do it. But I mean home economics. But no budget drift. We're not going to mean drifting. And, but I think, I think you could dial it back a little and she could dial it up a little. And like you said, Meet in the middle.

Meet in the middle. That's what it sounds like. But, no, it's neither. It's not that you are completely out of line and need an attitude change, and it's not that she's a princess. That's right. That's right. But I think you're making some valid observations from a nerd's perspective, and she's probably gotten just a little comfortable. That's true.

Yeah, it happens. Dial up the seriousness just a little bit. Dial down the seriousness just a little bit, and I think we'll find a really happy place right here. By the way, you guys have done great. Yeah. Woohoo. Luke is in New York hi Luke how are you I'm doing good Dave much like you I'm doing better than I deserve how are you just the same sir what's up all right so I am 25 I just moved back home from graduate school I just got my

master's degree and you know I listen to your show a lot and I know sometimes there's recent graduates on but I guess I just needed like a refresher um so you know I'm having trouble in my job search I know you always say to not just apply to a thousand jobs on the line without really talking to anybody. But, you know, I have kind of a niche skill set. I worked in the sports industry for a few years, and I guess, you know, that's what I want to do. And I guess I'm kind of being picky at this point, I'll admit. So I just kind of wanted to get like your advice or whatever on, you know, handling a job search postgraduate degree. So what are you wanting to do in the sports industry?

So my master's was in data science, sports business analytics, which, you know, I didn't just choose that degree. It was what I was doing out of school. I was working for a major sports organization, moved down to get my graduate degree at a school that had, you know, pretty good sports and was working for their basketball team. And, you know, something in that field, I live around New York City, so obviously there's tons of opportunity for roles like that in other fields. So I have kind of brought in my search in that sense, but it's still just.

just kind of been not the most fun process. Yeah. Well, you're right. You're in an epicenter of sports, without a doubt. If you were going to be close to a whole bunch of teams, that'd be the place to be, right? And all kinds of different things. And yet, having said that, it's a fairly small pond you're fishing in. Yeah.

So that means you've got to go one direction or the other to jog something loose. and one is you lower your expectations for salary and position and you take more of an entry level, get your foot in the door in a sports organization, or two is you step outside sports. And you make what you think you can make. So what do you think that this position you're trying to get is worth? Well, I guess that's kind of definitely part of it.

I've definitely lowered my expectations in terms of salary. I would guess like the 85,000-ish range. range, but at the same time, I'm not really locked into this area. You know, I just moved to Mississippi for school and for this job. So, you know, I'm not kind of, I'll kind of move wherever if the opportunity is right, and there's definitely, you know, a path to developing as a professional and developing my technical skills. But I'm just in a weird tweener spot where, like, I'm not entirely entry level. And then for the jobs, you know, I'm able to have gotten interviews. It might be, it might be, I think I heard language that you were using early in the conversation

that it's possible you are overvaluing the degree. For sure. Like, I got this degree, and you think that's going to be like the magic bullet, the silver bullet. The silver bullet, the secret sauce is Luke. And what Luke learned while he was getting the master's. The master's degree has zero value in and of itself. Only the knowledge that you put in your brain while you're getting. the master's degree. Now, that knowledge has value. So knowledge is valuable, but degrees are

worthless. So people, people don't care what degree you got. They don't care where you went to school. What they care is, did you learn something that you can use to help us move our process, our company, our organization forward. And so if you'll concentrate on how you can add value, not concentrate on, look at me, I got a master's. That might change your interview, posture, the posture of your heart in the interview. It's like, hey, guys, I went back to get a master so that I could get really good at this data stuff and I'm really good at this data stuff and I can help you with your data analysis and it's going to do this, this, this and this and I want to add value and I'm excited and I'm bumped up about adding value, adding value, instead of like opening up

your shirt and showing them the S on your chest or the MBA on your chest, right? I didn't know where you were going with that. Okay, great. Superman is here, right? And so, You know, like Clark Kent and, you know, no, don't, don't, don't, you know, you got to be real careful with a new degree that you worked really hard to get it. And I'm glad you got the knowledge. But they then don't place too much emphasis on that. Plus, there's a certain level of, I don't know, ladder climbing with any position, right? No matter what, when you start out, you're kind of at the low end of the totem pole and there's some building that has to be done in your role, right? like you're building your personal brand and you're building your skill set and your so there's

that part of it there's a grunt work aspect all the time uh as you're building so that's just part of it doing our onboarding and stuff here that you know i want sometimes i'll swing in and sit in with the new team members inevitably want to ask question what's it take to get ahead at ramsie and like oh here's an idea be really good at your job yeah start proving your value add value add value make us really happy that we hired you and that's how you move ahead we're very are utilitarian. That's right. Most businesses are, by the way. We really just want a return on our investment. That's how this thing works. And so you got to make us more than you cost us. Or we all go down, right? That's how this works? So how can I add value? How can I add value? And how can I,

in a very practical way, hit the ground with my feet and start running from day one? I'm going to be able to be. Well, guys, big news. The Fed cut rates. You know about that a couple weeks ago, and the 15-year fixed-rate mortgage rates have dropped as well. Lowest we've seen in about 11 months. If you're financially ready, it's a great time to buy houses because house prices have kind of been basically flat up a little bit. Buying an affordable home you love is possible when you work with a Ramsey trusted real estate agent. These high-octane, high-protein pros are handpicked to guide you through the weird market and keep your financial. financial goals in mind while we're doing it. Find a trusted, Ramsey trusted, local pro for free at ramsysolutions.com slash agents or click the link in the show notes. Tyler's in Toronto. Hi, Tyler.

What's up? Hi, Dave. Hi, Jade. I want to start by saying I'm a long-time listener, and God bless both of you and your team for the work that you do. It's made a great deal of difference in my life, and I'm sure for many others. So thank you. How can we help you today? Well, I am calling because my wife and I, we are both 30. We've been together six years, and we are currently on baby step three, but we are stuck. We're stuck on step three because we have been working at gazelle-like intensity for the last five years or so. And between the two of us, we have two full-time jobs and three part-time jobs. and I'm calling to ask for help on what advice you would give to boost a household income

so that we don't have to be working 70 to 80 hours a week each because I'll be honest, we work conscious and hard and we love each other, but we are tired. Sounds like you don't make any money. Yeah, what are you making? Well, so part of, we live just outside Toronto, so we are in an ultra-high cost-of-living area. Our monthly budget, which we have followed dutifully since we moved in together four years ago, we, so our monthly expenses total, including everything, is about $6,800.

And we make, and between the two of us, we bring in about $105,000 a year. Okay. And what did you pay off during that five years of Baby Step 2? Our total debt wasn't very high. We only had about $8,000 or $9,000. So that wasn't the part part. So if you don't get different jobs, you can't afford to live there? With our current ones, we can, but the compromise is, no, just on our full-time salaries, we can't.

Yeah, that's what I mean. You don't make enough money to live there without working 70 hours a week and three part-time side hustles. It's a cost-of-living thing. Yes. I mean, you also can't live in Manhattan and you can't live in L.A. either. Yeah, what's keeping you in Toronto? What's keeping you there? Two reasons. One, all of our immediate family is here, and both of us are fairly connected with our families and churches. And, I mean, we've lived here for 30 years. We just want to stay in our home.

But, I mean, is there a... Both of our jobs are tied geographically. She's a high school teacher, and so she would, lose her seniority and her salary if we moved. And I work as a copy editor for a municipal company. So if I moved away, I would have to find another job. Right. But I do feel like both of you have jobs that you could find in outer rings of Toronto, right? I mean, how far out from Toronto do you live currently? Are you an hour outside of town? Yes. We already live in a suburb. But we, I, both of us have been looking for the last year and a half because we set a goal and we're fed up with this. We want to get it so we have more time together. And so we have

been consciously applying. Right. And I've had multiple interviews and two offers, but both offers were for less money than I currently make. Well, there's going to be a cap. I mean, you, you're going to, you've got to go into this knowing for my job, for my career, here's kind of the salary cap. Like here's a generality of what I'm going to make. So just because you apply for more jobs doesn't necessarily mean they're going to be higher paying. And Dave made the, Dave made the point. If you choose to live in Toronto, there are certain things that are going to go along with that price-wise. And you have to at some point say, I can either afford it or I can't. I have family members who lived in L.A. for the longest. And they said, the truth is, even I'm a teacher and the

spouse did something else. If we work here for our pay, we will not be able to afford the lifestyle we want. We won't be able to buy a home. We won't be able to do X, Y, Z. And so, because of that, they moved to Georgia, where they could have that life. So you guys have to decide as a family, what's more important? Working 70, 80 hours a week to have this dream of staying in Toronto or having the picket fence and having some breathing room and being able to have, you know, whatever that is, you guys have to make that choice. And the third option is completely change your careers. Ah. And get your income up. But you cannot, you know, you're right. The reason you're tired is that you don't see a way out. You feel like a rat in a wheel. Because mathematically

nothing's changing. And you're smart enough to realize doing the same thing over and over again and expecting a different result as the definition of insanity. So, you know, you've got to change something if you want something to change. So there's three possible variables. And, you know, it's location and is one of them. And then the second one is to change careers completely. and but I you know I feel for you but there's some things you just can't you know you can't afford to live on $20 an hour in Manhattan right you're not doing it on $20 an hour but you're trying to do it on about $40 an hour and so and you just can't afford to live in Tokyo and London and Toronto and Manhattan you just can't make it there on that kind of income so um I mean, you guys are staying afloat, but you're doing it by just, you got every finger stuck in the, every hole in the dam. And if you pull one out, the whole thing's going to flood out on you, and you realize that. So I'm sorry, man.

I wish I had a magic wand that would make it easy to do, but it's not. You're going to, you're going to change careers or you're going to change locations. And, or you're going to work 70 hours a week, which I don't recommend as a way of life. I don't mind doing that to get somewhere, but I don't want to do that to say that's, that's, that's, For the next 40 years, what I'm going to do. Yeah, there's a cap on, there's a cap on that. And five years is a long time to be in that mode. You don't only get physically tired.

You get emotionally tired from doing it that long. You lose sight. Justin's in Illinois. Hi, Justin. How are you? Good. How are you today? Better than we deserve.

What's up? Awesome, awesome. So, yeah, I try to get right to the point. I'm 48, and in my 20s and in my early 30s, I never gave retirement a passing thought. You know, the word 401 meant nothing to me. And so now that I am retiring, you know, I know you can't make up for a lost time. I just want to make sure I'm doing the right things.

So that, you know, hopefully I can't retire someday and with a healthy retirement. You know, just want to run numbers by you and basically see what you think and, you know, what I wish to change. Are you out of debt except your house? Yes, completely the house is paid for. and everything is great. Very good. Okay. Yes, sir. So are you maxing out your 401k's IRAs and so forth, all in Roth? Yeah, but my 401K is in Roth. I do 14%, which is my company's max. I guess I fall under their high earner category. So I'm at 14%. How much is that? I understand at 50. I make about 140 a year. So it's, you know, 18, 19,000.

and even call it $1,500 a month and what else are you doing? On top of that, the reason I'm not worried about that, the 401k that much is my company also has profit sharing which obviously fluctuates but the last two years it's been

$30,000 that they put into my 401K. That's great. What's in there now? What's the total NISTIC? The total is only right about $100,000. That's why I was calling you today because they had a

financial advisor come in a few months ago and just look at your numbers and see where you're at. And he gave me some numbers for, you know, 15 years on the line and just, I don't know, compound interest. So I look at my numbers today and, you know, the numbers he gave me, I'm like, that's not right. You know, one of those deals. Listen, I plugged it in now. If you work from your current age, 48 to 68, you've got 100,000 in there now. You put 1,500 in a month. Average rate, annualized rate of return, 10%. You're at 1.8 million. That ain't too shabby. there you go

if you want to get some more help sit down with a Ramsey SmartVester Pro and they'll show you in detail exactly how that works and how you're going to get there you're going to get there Emily is with us in Detroit.

Emily, how are you? Hello, Dave, how are you? Great, what's up? Hi, well, I'm calling with sort of a financial morning. ethical and biblical question, all in one. Okay. So my brother and I, we both work in ministry, different churches.

We live in different states. He's clear across the country than me. He and his wife, they have eight children, and their belief is that God called us to go forth and multiply, and they believe Christians should be having his money children. Well, they are doing a good job of that. Well, regardless of finances. So their only income is my brother's pastor's salary,

and, as you may imagine, pastor's salaries, you know, nobody goes into the ministry to, you know, make it big. So he has actually said in podcasts and interviews that if you have more children, then you can afford to have, that qualifies you as the needy. And the church and family members are called to help the needy. And so his solution to this is to be on state aid in addition to a salary and his in-laws also pay them a stipend every month because they believe he's in ministry and they should be helping them with their business. I think it's lunacy. I think it's crazy, and I was just kind of curious what your opinion was of that.

I completely agree. Thank you. Yeah. That is not biblical. I don't believe it's biblical either, and even though we're the same denomination. The Bible does say to be fruitful and multiply. The Bible also says that those that won't take care of their own household are worse than an unbeliever. I would 100% agree with that.

And he and I are the same denomination, but sometimes I wonder if we're reading the same Bible. But my other question to piggyback on that is do you think Christians in any capacity, whether you're a pastor or a firefighter or whatever, should ever be taking advantage of government, or as I like to call it, taxpayer-funded eight? Well, I'm not ready to throw rocks at everybody who ever does anything. But obviously we at Ramsey are big on helping you prosper. And I've never met anyone who prospers.

on government aid? I would 100% agree with that. So it's not an act of love for me to recommend that, or you certainly wouldn't tell people to do it as a way of life because it's not good for them. It's not as much a moral judgment as it's just loving the person and saying, gosh, I've never met anybody on welfare. They had just a wonderful life. I would agree with that.

The consistency of staying on welfare. Yeah, but are you going to hell or are you a bad Christian if you go through a rough patch and the government helps you for a little bit? I'm not going to be that judgmental. I'll give you a break on that. Okay. Not for the perspective. And my other question was actually kind of on behalf of my parents.

My parents are very generous people. They fly out, so they live in Detroit with me, but they fly out to where my brother lives periodically, you know, to see the kids to keep up that relationship. And they're very generous when they're there. But when they are there, you know, they kind of have their limits on generosity. My brother will make comments like, gee, you know, my van needs new tires and, you know, see these bald tires, it's not safe. Or one of the kids lost their glasses and, you know, we just can't afford to repair them. What are some good boundaries that parents of adult children could have on saying, well, this is your problem, you know?

Yeah. So it's just kind of my question. Is there any good guidance on that? The thing is, there's not anything your parents are going to say. say or you're going to say it's going to change your brother he's made his decision true it's very true and so i'm either just going to love him where he is and disagree with him i mean i have relatives that vote wrong and i love them anyway you know and so um that you know that's okay uh you know and and they think i vote wrong so that's okay and they love me still so but but now you know how much

money am i going to pour into a situation like that i listen they're fixing the bald tires or replacing the lost glasses is not going to repair this situation it's bigger than that right and that's what the advice they've been given by other people is that's just a band-aid on it but the tires are going to be an issue again the glasses are going to be lost again whatever it is it's not yeah so you know I would just say okay I have I have a budget of money I'm going to burn on these grandkids just to be just to be that guy and I'm not going to worry about it but past that the answer is no and so you know when we go out here and visit we're planning to drop a that thousand dollars into kids stuff that they need right now because their dad's kind of a doofus.

And so, um, you know, I'm just going to have that as my line item. And then when it gets above that, I'm not going to, you know, I'm not going to do any more than that. Also, Emily, everything that you're talking about is not even a direct effect on you. You're talking about this is your brother. This is your brother and your parents deal. So if I were you, respectfully, I'd just mind my own business because nobody's coming to you for money, right? Well, it's her mom, and this has not been said directly to be, but a good friend of mine is actually married to my sister-in-law's brother, and she has made money comments about how, oh, gosh, they're in such bad, you know, straits financially. Everyone in the family, including, you know, myself and my husband, should be helping them. And I just think it's wrong.

I think you should be embarrassed. If you're in your 30s and 40s and your county and family members to pay for things for you, I think you should be so ashamed. As an ongoing pattern, yes, but as an off thing. But, yeah. But, you know, again, somebody four degrees of separation away doesn't get a vote on what I do. If they don't like that, I don't agree that he has labeled himself needy biblically. And I don't agree with that label, so I'm not going to biblically step up and make him not needy. He's needy, but it's not money. He needy a new job.

Careful. You'll get a jadeism. You'll get a jadeism dropped on you like a bomb. You need a job. Oh, that's it. That's the deal right there. Oh, boy. Here's the thing. It is frustrating to watch people that you love, especially when they're taking advantage of people that you love. And they're not winning. But I'm also not going to get sucked into anyone else's guilt trip or I particularly resist someone trying to Christianize their guilt trip. I know that's right. So, like, we had a guy one time at the old office, Jay, this was funny. He came in and he was at the front desk. And I walked out.

They said, this guy's out here to see you and I walked out front. And he said, God told me that you're going to give me a new van. And I said, no, he didn't. And he said, oh, yeah, yeah, he did. And I said, no, he didn't. Because if God told you that I was going to give you a new van, he would have told me. Okay. And there'd be a new van sitting out there with the keys in it.

No, that's right. If God told me to do it, that's what would have happened. But God didn't tell you nothing. You had bad pizza last night, and you're blaming God. And then, of course, he starts cussing and screaming about how we're not real Christians and had a little duck fit right there on the floor, and we had to have him removed. But because you don't challenge these God people when they're doing this stuff. So, I mean, crazy Christians give the rest of us Christians a bad name, y'all.

I'm just saying. So, yeah, God told me that, you know, and so, yeah, you're going to quote scripture that demands that you remove my private property from me, we're going to have an issue with that, needy, needy a new job. That's it. Yeah. Wow. And here's a sad thing.

There's eight kids being affected by this. That's what I know. Yeah. That's tough. Now they're being raised by that, and then they can't figure out why they strayed away from the church. Exactly. Yeah, because they were raised poor because their mom and dad had decided to, have a bad

biblical definition series of biblical definitions yeah um but i tell you i do love the idea that that we ought to be fruitful and multiply but um maybe we also ought to raise our income while we're doing that right so that we can feed them that's supposed to be the kind of the thing goes with it so i agree with you i agree with your frustration emily but to jade's point there's not anything you're going to do about any of this so this was just a discussion we all had because nothing changed at the end of this discussion. Nope. Because we could give no one instruction in this process that's going to take the instruction.

Yeah, if they wanted help, they would have called in. If the parents wanted help, they would have called in. Yep. So now you get to just sit on the sideline and be frustrated or just watch them and grin and go, that's my brother. Yep. Yep, that's him. That's the guy. I know that guy.

That's the hardest part of all this, though. When you see a better way and you know a better path and you just want that person to just change. You want it more than they do. Yeah, that's how we become enablers if we're not real careful. Or just really frustrated with family members. Yeah, you're just sitting back there just. Meanwhile, they're broke eating a sandwich. They don't care.

You know? They're broke, eating a sandwich somebody else made. That's right. That's right. Media job. I can't believe you, Jake. That was really good. That's good.

That's good. I like it. I'm going with that. I'm sticking with it. I'm going to steal that one. Steal it. For about three more times, it'll be something. I said.

That's why we only recommend Ramsey trusted real estate agents. They're hand-picked pros who know their stuff, listen to your needs, and have your back from the first call all the way to closing day. To find a Ramsey trusted agent near you, visit ramsysolutions.com slash agent. Ramsey Solutions.com slash agent. Welcome back to the Ramsey Show in the Fair Wins Credit Union Studio. Jade Washaw, Ramsey Personality, number one bestselling author, is my co-host today. Kayla is in Milwaukee, Wisconsin. Hi, Kayla, how are you?

Hi, how are you? Better than I deserve. What's up? So I had a question about term life insurance. I've been listening about you saying that we need about 10 to 12 times our annual income. And I just, I guess, from my point of view, it seems like that's very, very high. And maybe I'm just like missing something in the calculations. And so I'm just hoping to kind of get an idea of like why that number you pick.

That's a great question. Thank you so much. I appreciate that because a whole bunch of other people probably wondering exactly the same thing if you are. I'm so glad you called. So, to start with, it is not universal. Number one, everyone does not need life insurance. It's if people are counting on your income to live and you die, then they're up a creek, right? And so, and as you build wealth through your life and get out of debt through your life and your net worth increases through your life, you progressively need less insurance to the point that you're self-insured.

I'm 65. I'm worth millions of dollars and I don't have a dime of life insurance. Okay? My wife will be just fine if I die. Okay? As a matter of fact, she's kind of planning it. Okay. So, but that's because we're out of debt and have built wealth.

You follow me? And there's no kids to raise. The kids are all grown and gone and so forth. Okay. Jade, on the other hand, has two littles. And she and Sam are raising a family right now. Okay. and so different positions in life so if you're 20 and you have no spouse and no kids

you don't need much life insurance because no one's counting on your income so that's that's the sidebar that's the caveat but then back to your original meat of your question is let's say you're 34 you have two kids and you make $60,000 a year and your spouse makes $70,000 a year okay that's when we would say if you got a house mortgage, you know, you've got some student loans, you're still paying off, you're working the baby steps, you're a normal 34-year-old in America today, oh, you definitely need 10 times. And the reason is this, $60,000 income earner 10 times would be 600,000, 12 times would be 700,000. So if that person died, let's say that was the husband, he died and left the wife behind with two littles and half the income.

that used to be there, that wife could take that $600,000 and invest it. If she made 10% on $600,000, it creates $60,000 of income without touching the nest egg that is created. The goose will keep laying that golden eggs perpetually. If you invest $600,000 at 10%, in a good growth stock mutual fund, it should average that or more, then she's going to have the same income. off of that mutual fund that her husband used to produce. And you did not sacrifice retirement.

Yeah, and she didn't have to starve to death. Okay. And so that's where it leaves her in reality. And we've got thousands of those stories over the years. But that's where it comes from. You invest that 10 times and at 10%, then you end up with replacing the income of the person, and that's what life insurance is for.

That makes sense? yes i think so yeah okay so if you know what's your situation how old are you um i'm 35 okay single or married i have i'm married we have three kids two in middle school one in high school okay and what's your net worth our net worth is roughly about 200,000 okay all right so you're doing pretty good all right how much debt do you have we don't okay good how is there any Anything? Well, how else we have a little bit left? There's a little bit less than $100,000 on it. Okay. Well, you're ahead of the game. Agreed? Yeah. You're doing better than average for your age. Okay. Funny, I picked out 34 a minute ago, huh? For the example. But that is the exact average. So what does your husband make? Um, my husband makes about 80,000.

Okay. So if he had a million on him and we invested that at 10% and make $100,000 minus taxes, you'd have $80,000 and we would not miss his income. We'd miss him, but we wouldn't miss his income. And here's the weird thing. If he's healthy, if he's not obese and he doesn't smoke, that $1,000 million on that 30-something-year-old is very inexpensive. it's like the cost of a pizza i mean it's nothing when you look it up so have you priced it out yet um yes yeah we had gone through zander and had a couple estimates and so we had priced it out

i was just trying to figure out exactly like where where we should land with that so truthfully a million is a little much for y'all because you're in such good shape because if you didn't get his whole income replaced as good as job as you've done you'd probably be okay. But for the difference in the cost in 800 grand and a million on policy so low, I'm going to go ahead and beef it up a little bit. And even later on when the kids were grown and gone and we had some wealth, Sharon wanted me to keep life insurance for a while and I kept it for a little while. S.W.I. Sharon wants it. There was no reason for it whatsoever mathematically. She just wanted some. I finally talked. I finally talked her out of that a few years ago. But for about

a decade I kept a life insurance for no apparent reason other than SWI. She said I'd rather have that million dollar policy than another diamond. I'm like, wow, good, okay, you can have it. It's just a gift to you. But you understand it's not good financial planning. You understand it's not what I teach. And she's like, I don't care what you teach. I want it. Okay. To be a fly on that wall. But that's where it comes from. If you take 10 times or 12 times your income, your spouse could invest that amount at 10% and we have replaced you if something happens to you financially obviously no one could replace you you're special but um yeah right but anyway so yeah that that's the thing you're gonna be okay and then as you age like let's talk about the once you've aged out of it like

when you feel when you feel like you've net worthed out of it let me call it that well the kids are grown 15 what we say 15 to 20 year level term that's a good point because 15 to 20 years from now the kids will be grown and gone that's right and they're making their own money They're doing their own thing. They don't, you know, they're not a liability anymore financially. 15 to 20 years from now, you'll be out of debt 100% house and everything. That's right. Because we tell you, you never take out more than a 15-year mortgage.

So you're going to be completely debt-free 15 to 20 years from now. And 15 to 20 years from now, you probably have a million bucks or more in your 401k. Because you will have been investing in baby step 4, 15% of your income. And so your assets are rising. Your debts are going down and the kids move out. Then it takes less to support. you and you set up with good financial planning working the baby steps a situation where you become self-insured right we're really at that point the only thing you're thinking about is your

health yeah and caring for your health and so there you go yeah but we're not if again if something happens to me today we've done all of those things and then some right so Sharon's more than okay and vice versa I'll be okay you know without her income it'd be okay she didn't have an income but That's good. So that's other than mine because it's ours and all that. That's right. What's up, guys, George Camel here. If you've been thinking about making a real difference in your community, this is your moment.

People are drowning in money stress right now, and you can be the one who helps them by leading a financial peace university class. It's totally free for you, and we hook you up with all the tools and support you need. So if you're ready to help people ditch debt, save money, and actually sleep at night, go to FPU.com slash lead to learn more. That's FPU.com slash lead. have to be. The Ramsey Investing and Retirement Hub is packed with interactive tools and resources that can help you get informed, not intimidated. Check it out, Ramsey Solutions.com slash retire or click the link in the description if you're listening on YouTube or podcast. Guys, remember, retirement is not an age, it's a number. So it's not like 65. Bing! No, it's more like

$2,06, bing, you know, okay, what is it you want? What's the nest egg you want to where you don't have to think about money, then you are able to retire at that point. Now, we can call that financially independent. I don't like that phrase very much, but we could call that whatever. And I don't like just saying, I'm never going to work again either. I think you ought to do something. I work and I don't need to because I love what I do and I help people and it's a good thing. And so, So find something to lay your hand to. That's a good thing because too many people do, quote, quit work and like a year or later, they're dead. So you need to something you're doing, right? You need to be plugged into something. But that's, remember, retirement is not an age. It's a number. All right.

Here we go. Amelia is in South Carolina. Hi, Amelia. How are you? Hi, Dave. I'm well. How are you? Better than I deserve.

What's up? Great. Okay. Well, I'm calling because my. husband is a physician and his practice is a private practice and they are about to merge tomorrow with some other groups and we just figured out that his 401K from his old company or you know the company he's with today that's about to become a new company tomorrow um we don't have to put that in to the new company's 401k I guess we can instead make it a self-directed IRA.

Could just roll it to an individual IRA. Yeah. Yeah. So I think that that may open up lots of different options and just wondered if you had any advice. Like could we consider putting some of it into real estate investments or something like that? Okay. All right, good. Well, the first thing is, yes, I would roll it to something.

I would not leave it with the new company 401K. This is an opportunity to move it to something where you have a lot more control and a lot more options. At a minimum, you sit down with a SmartVestor Pro, and you pick a series of good mutual funds on your own, and you manage, you roll it to an IRA. There's zero taxes on that, and you manage that from this point forward at a minimum. Okay. If you chose to do a self-directed, you could roll some or all of it that way. How much is in it? It's our biggest of all of our retirement accounts.

It's $1.155 million. Okay. Do you own other investment real estate now? No. Okay. How old are you guys? 52. Okay.

All right. So here's the, yes, you could roll half of it or some of it or all of it. Let's say you moved a half a million over and you bought a couple of $250,000 rental houses in South Carolina. And you put the other half a million or other $600,000 in a regular IRA like I was talking about in mutual funds. Okay. In the self-directed, then, you can buy real estate, as you mentioned, and you can do those two $250,000 houses in there if you wanted to. Okay. The downside is two things.

One, people screw up and forget that you can't touch any of the money from those rental houses. Okay? Just like you can't cash out your mutual funds in your IRA until your 59.5, you're going to get penalized. Okay, so you can't pull the rent money out and use it. 100% has to be operated like it's someone else's company, and you can't embezzle or commingle funds in any way. It has to be a standalone operation, and 100% of the repairs are done from the IRA,

the roof, the heat and air that goes out on the rental, the carpet that has to be replaced on the rental, and 100% of the income created, in the rental has to stay in the IRA. You understand? Okay, yep, that makes sense. Because if you pull one dime out, number one, they may toss you out of the whole thing, but number two, you're going to get penalized on that dime and taxed on that dime when you pull it out.

So don't commingle it, and people often mismanage these things. So you've got to just be real airtight with that and promise, promise, promise, and stick with it. The second thing is you've never owned any real estate. Now there's an investment, no. Yeah, and you're getting ready to be a landlord and buckle up, Buttercup. This is a new experience. Okay. So when she pulls the rents, those hypothetical rentals that she purchases,

she pulls the rents, those money, that money has to immediately go back into the IRA. You're not pulling it. You're running it as a separate company. It's got its own checking account. You're running it as a company over here like it's not you, like you're doing it for somebody else. So it all stays encapsulated within the IRA. So there's no liquid money for repairs. No.

That's interesting. Yeah, well, the rents would create because they're stuck in there. You can't pull the rents out. Wow. Okay. So the rents begin to build up cash. Right. Over time.

Hopefully you're cash flowing. I mean, you're buying two paid for rental properties, right. So hopefully you're cash flowing. You're making some money. So those $2,500 rents are piling up. Then you've got to pay property taxes out of that, pay insurance out of that. You got to do your repairs out of that. And what's left in there is profit, but 100% that profit stays in there.

That's what we're doing. So, yeah, you just got to be ready because here's the thing. If you get in these things and this is a lot of trouble, you'll make more on those two rentals. If you buy them well and manage them well, then you will on mutual funds. But you're also going to invest a bunch of time in it. Okay. That makes sense. Because people who say real estate's passive investing make me laugh.

there's nothing passive about it okay it's real estate the beauty of it is it requires some more effort with mutual funds you can set it and forget it look at it once a year twice a year and not worry about it you know i look at my real estate stuff every month i get reports on it every single month and that's just me looking at the people that are managing it for me that work for me okay and i look at my mutual funds once a year Uh-huh. That's a, I mean, so I burn a lot more brain calories on my real estate than I do on my other, but I make more money on it. Yeah.

But I love real estate. I'm a real estate guy, so it makes a lot of sense for me. I would not put 100% of it in real estate. I would do something like I outlined maybe 50%. Okay. But do you think with the real estate market where it is right now that this is a good time to consider something like that? If you get a bargain on a piece of real estate, it's always a good time. Okay.

Don't pay retail. Good Lord. No. No, we want to get a deal. And so we're going to get a deal. We're going to buy a $300,000 house for $250 because we're writing a check and we're closing Friday. You want to sell your house. It's sold.

I'm getting a bargain. Okay. And we're looking for a deal. And deals are hard to find, but they're worth it. It's $50,000 you made right then. As soon as you buy it, $50,000 under market. And that's what I'm looking for if I'm buying, I don't buy houses anymore. but if I was buying houses right now, that's what I'd be doing.

I'd be looking for a bargain. Are they everywhere on every corner? No, they never have been. There's no market that they're everywhere, but you can find them. And there are somebody out there needs to sell a house right now, and there stands Amelia with cash. And yeah, you can do it. And here's the other thing. If you get into it and you hate it, you can sell them inside the self-directed IRA

and roll the self-directed into mutual funds into a regular. regular IRA you can you can you can put the car in reverse and back out of this and maybe not even lose money but if you just get into it and go this is a pain in the butt I don't want to fool this and I want to like be traveling I don't be dealing with renters right and so that's okay that that's fine so you can put the car in reverse and get out of this so yeah if I were you I'd try it since you got the it but but I wouldn't try it with more than half and I wouldn't do it and of course you're going to pay cash but um I actually knew a guy that did this because he was There was a guy that did flips, and he took his million and made it into three doing flips.

All inside the IRA, though. He couldn't eat out of it. Well, I was going to say it's kind of a fail-safe. He had to have a job over here to eat. Yeah. It's a fail-safe in that way. You're not going to spend your earnings. It keeps your hands off of it unless you screw up the whole thing, yeah.

You work your butt off for your money, but your money's never going to return the favor if all you do is hope for the best. ready to learn how to make your money work for you, check out the SmartVester program. SmartVester can help you find advisors who specialize in retirement planning, charitable giving, advanced investing strategies, and more. Whatever your goals, your pro will take the time to explain your options, so you never have to invest in anything you don't understand. Head to ramsysolutions.com slash smartvester to get connected. Ramsey Solutions is a paid non-client promoter of participating pros. Learn more at ramesysolutions.com slash smartvester. Michael and Kara are on the debt-free stage right here in the lobby of Ramsey Solutions.

Hey guys, how are you? Doing well. How are you? Better than we deserve. Good to have you. Where do y'all live? uh king george virginia oh fun welcome to nashville and how much debt have you two paid off 20012 626 good for you and how long did that take 65 months good for you and your range of income during that time was 96 000 to 120 and down to about i think it's going to be about 115 this year cool what do you all do for a living so i am a vendor i work for um lift off distribution which is a Red Bull vendor. And I work for a child development center at the Navy base. Oh, very cool. Very cool. All right, $213,000 over 65 months. That's your house? Yes, sir.

Oh, look at it. Weird people. A paid for house. How old are you two? I am 34. Wow. And a paid for house. Oh, and there's a picture of it in the snow. I like it. So what's that house worth? Well, they said in the email after, I think it was 3.30, yeah. $330,000. Amazing. Good for y'all. And you're 34 years old. And how much have you got in your retirement next stage at this point?

146,000. All right. Halfway to millionaire. Going to be there quick now. How's it feel to have a paid-for house at 35 years old? You don't know how weird you are, right? Oh, yeah. Yeah, we hear it a lot.

Yeah. It feels great. Yeah, we're really excited. Yeah, that's fun. Good for you. So what started the journey? Yeah, I mean, like 65 months. Five months ago. Wow, five years in search. So you did an interview on the Sunday special, and I got to listen to it one day when at the time I was working at Frito. And I was loading my truck and I was listening to it and I was listening to it. And I said, oh, I can't wait to get home. I got to tell my wife, this is the greatest thing since sliced bread. I got to go home. So I got done, came home. And I said, you know, we got to do this journey. And my wife was like, what are you talking about?

I came in, I came in through the front door like I was crazy and, uh, he got into the Fritos again. Yeah. Yeah. And she was like, okay, well, it makes sense. So, you know, where do we start? And I said, well, the first thing is, we got enough money. We had a car payment. Pay the $3,000. Let's just pay the rest of it off. We got the money. And she said, okay, let's do it. Well, all right, one down. Yeah. So you already, you didn't start with a bunch of consumer debt you had kind of kept your way out of debt up until this point oh yeah yeah no it was uh we've always been against credit cards yeah credit cards and all that stuff to be honest with you i wouldn't have gotten i wouldn't have gotten the car debt if my mom didn't tell me that it was good

for you and so since it was so good for me it uh you know i went ahead and paid that off says yeah so we paid that off and then uh we did the six months get your get your emergency fund and then And right about that time, COVID happened. So once COVID happened, I took advantage of the refinance rates because they were way down. I went to two and three quarter on the house. And then at that time, you know, so we continued to put anything extra on the house. And it was just a small amount at first. And every raise, we put more.

And I got a little more nervous. Just being intentional. Every raise, every tax return. It just was automatically the raise that I needed to put on the mortgage every month. Every single month, every single year, if it was $7,000 back, okay, divided by $12, that's what it goes up. If I got, she got a raise at work for cost of living or something, okay, it's $1,200 divided by $12, that also goes on it. And we just lived exactly the same way for 65 months, no vacations, no eating out, no nothing. Wow.

Streamline. And now you're completely done and halfway to being millionaires already. Yes, sir. Congratulations, you guys. Thank you. Wow. How many people making fun of you while you're doing this? To be honest with you, it didn't really tell a lot.

I don't think anyone made fun of us. A lot of people were just like, wow, that's awesome. I wish we would do that. Yeah, they were like, I had a lot of people saying, you know, it was that it is unusual. Why do you want to do it? And, you know, I just was kind of fed up with some career path stuff that corporate America does to people. So I got really, really aggressive. Mm-hmm. Yeah. Yeah. You got walk away power at that point. Yeah. Yes. I know that's right. So what's the, my favorite question is, what are you going to do to celebrate? Yeah. You haven't done vacation. You haven't done anything in five, six years. Well, we brought all of our kids here today. That was not a vacation.

As far as vacations and stuff like that, I don't, I'm not totally ready for it yet. I just, because the mission's not quite done. So this house is done. So this house is done. done. But the house that we have now, you know, is, we got a full house. Five kids, nine pets, 1,200 square feet, running out of room. So probably going to take the next year and a half or so pile up cash, take the equity by, you know, $5,000, $600,000 house cash. Then from there. Then you can take a vacation. No, I'll take a vacation. Listen, I think, take one in between. A little one.

oh boy congratulations you guys thank you thank you very proud of you pretty amazing who was cheering you on um our families uh yeah his parents my parents um i'm one of 13 kids so we have lots of aunts uncle's cousins so we had we had a lot of a big support system yeah wow wow wow that's good that's good that's the way it should be all right so can this still be done do you think people listening can do it oh absolutely absolutely definitely if you just need to be be motivated. Yeah, it is the discipline. It is discipline. If you, if you, where did the discipline come from? How did you develop your discipline? To be honest, I, um, I think it's been a work in progress. It was the last 10 years. I think he's just steadily got more disciplined and everything.

And I think a lot of it is perspective. I listen to a lot of podcasts because I do work by myself as a vendor. I get to listen to a lot of it. And, you know, being able to hear what other people are doing being able to um not just on the ramsie show but on maybe on on jaco's podcast or other things like that and hearing the type of disciplines that people go through the life uh things that they go through as well that you know if if the worst thing that i've i've got to do is you know throw product in the rain okay my life's pretty good i ain't got to go out and go get a a new car to impress somebody or or some go spend some money or whatever to feel good i can i can hold off you know cool wow Well, way to go, you guys.

Rock and roll, man. That's fun. That's fun. So how does it feel one more time? It feels amazing. It feels great, like you said that. You brought the kids with you? They're in here to do the dead free screen.

They're in here to introduce them. Get the names and ages on them. Come here. You come with me. All right. There's the first one. There's the first one. This is Decky.

This is Declan. Mm-hmm. We got a Landon. We got an Anthony. We got an Elliot. And we got my big baby Riley. Ah, I love it. All right.

Very cool. Fabulous, guys. Well, done, well done. Good stuff. Well, these kiddos don't even know how powerful a hero their mom and dad are. They've changed their whole family tree. Everything's different in your house because of your decisions. I'm so proud of you.

Thank you. All right. Michael and Kara and the gang from Virginia, 213,000 paid off in 65 months, making 96 to 120. house and everything halfway to Baby Steps Millionaires at only 34 years old count it down let's hear a debt-free scream

ready three three two one we're debt free yeah oh oh man if you didn't know

what freedom sounded like you can play that back now that's what freedom sounds like that's how it works I love that. Listen, if you can pay off a house in five years, then you can save up a down payment to buy a house. You know what I'm saying? Like, it's just a mirror to show real estate dream is not dead. Right. They paid off their house. They paid off their house at 34 years old. With a house full of kids, by the way, and dogs and cats. Yes. This is not a, this is doable. This is reachable. And that's why we do the debt free screams to remind you guys that real people are. doing it too, and that gives you permission to go do it. Hello, it's called hope. I'm going to be able to be.

Proverbs 18.4 is our scripture of the day. The words of the mouth are deep waters, but the fountain of wisdom is a rushing stream. Elizabeth Elliott said, never pass up an opportunity to keep your mouth shut. Make a boring podcast, but other than that. Michelle is in Dover. Hi, Michelle. How are you? I am wonderful, Dave.

How are you? Great. How can we help? Well, I was calling in because I need some guidance getting out of a financial mess. And I have been in and out of this mess for many years, and I'm tired of being tired. And I just figure someone has eyes from the outside looking in and can say, hey, this is what I see. and I know, like, I know how to do it. You know what I'm saying?

I just, I don't know what I need. I just need some help getting out of the mess because that's what it is. Yeah. You're sick and tired of being sick and tired, huh? Yes. So tired. Yeah. Okay.

So tell me about it. What's the mess? Well, the mess is I have, I've been, I'm in debt. Yeah. What kind of debt have you got? 40,000. I have IRS debt, $22,000 worth. IRS, $22,000.

Yes, $22,000. What else? A car loan, $20,000. I have a credit card $477. And I have a loan. I literally just had my car repaired and financed $834 of that, $834,000 to be exact. That is? Yes.

No student loan? No. You got a mortgage? No. I've got an extraordinarily expensive for my budget rent. How much is your rent? I'm tired of paying. 1899.

Okay. All right. Are you single? Yes. And what do you make? Um, it fluctuates. I work as a teacher. I work online, so I have about,

I have about one, two, three jobs, and generally, I literally just did this. In one of the jobs, I bring home $500 a month. Let me see, I'm just looking at the numbers, $500 a month. The other one is $1,000 a month, and the other one is approximately $3,000, $2,800 a month, approximately, because they fluctuate. All of them do. Okay. All right.

And how did you get IRS debt? Some of this 1099 and you didn't pay your taxes? Well, I was, yes, that is the end, that's the cut and dry thing, yes. I've worked at this, one of these companies for 15 years. And when I first started, we were 1099 and, of course, you know, the tax bill is so high and I couldn't afford it to be quite frank. And I've been paying on this since then. Okay.

All right. So for many years, you've had this IRS laying there? Yes. Okay. Okay, so you've got $3,800, you've got $4,300 a month to take-home pay. And $2,000 almost. Your rent is ridiculous. Yes.

It's ridiculous. Okay. And how much is your car payment? It's $427, I believe, is the exact amount, but I've been behind on it. So I literally called yesterday and got a payment arrangement for $500. $400. I've been paying $4.30 on it. Okay. All right. So, first thing is we have to address living emergency to emergency. And then the second thing is you're going to have to make some adjustments in your rent.

You can't stay there and prosper. Got it. You simply cannot afford $1,899 on $4,300. That's where the, that's your math strain point. It's killing you. now how many bedrooms are there three okay so the other option to be taken two roommates but if you're not going to do that

you have to I'm sorry what I said I don't want to do that I don't want you to do that either so you're going to have to move then you simply cannot do this okay unless you're going to tell me that somebody's offering you a job to double your pay and I missed that in the conversation so Yeah, this is what's killing you.

Don't you think, Jade? I think so. Can you tell us more about the jobs that you're doing? Yeah, so I'm an ESL instructor, and basically it's the way that they pay, it's kind of like peacework, if you will. So depending on how many students I teach for that day, then I get paid. Basically, I get paid for every student that I teach per the minute. And the other is it's one is. The same thing, actually, it's just another company.

I do that as well. And then the other job is I work as a tutor for schools throughout the United States. I just came off of a job on the other side of this same company where I had just for six months because of the summer where I was working full-time. Is there any decent money in translation at all? That's what I'm wondering. Well, there is, but I don't know any other language. These companies, these in the ESL and stuff are. So you're teaching English as a second language, but you don't know the other language.

Right. It's the unofficial first. English is the unofficial first language in South Korea. That's where I teach. So I don't have to know Korean. I see. Got it. Got it.

Yeah. So you're, okay. My end goal is that my end goal is that I've been called to ministry. but I do not and refuse to be broke. I don't know the Delaware market. Is it an expensive market? No, it's not. Okay.

You're just found an expensive place to live. Okay. And is this taken up 40 hours a week or 50 hours a week? Oh, I'm working literally sunup to sundown, before sunup to sundown. Let me change gears back to what I said a minute ago. The first thing you've got to do is to do your detailed budget. and you have to prioritize every dollar that's coming in. And the priority sounds like this.

The first thing you buy is food. The second thing you buy is lights and water. The third thing you pay is rent. And it's an adjusted rent because you're moving. Okay. And so food, shelter, clothing, transportation, and utilities. We pay your car payment. We keep the lights on.

Okay. So we're not ever behind on the car again. We're not ever behind on the rent. We're not ever behind on the lights. You've got enough to do all of that. the only question is then how can we make progress when we knock out these first two little debts the little credit card debt and the little card debt you just took on but from now on you're going to be so in control that these little things that pop up are not going you're going

put a thousand dollars as your baby step one aside the savings and so if a little car thing pops up you just pay cash for it you stop everything you go back build that thousand back up but you've got to get away from this crisis to crisis to crisis to crisis to crisis because it starts to feel like your life's a country song well the rent is the unlock for that yeah well but being on a budget and a prioritized budget that's right every detail written down before the month begins and then it's prioritized as a dollar comes in it is already spent because you've got the next thing up next thing up first thing up's food second thing's lights and water third thing shelter four things car and car gas that's it next thing up next thing up

And then we're going to knock out the little 400. We're going to build our $800 or build our $1,000 up. Then we're going to start on Baby Step 2 and working our way through that. You adjust that. You also have a car you can't afford as well. And so, you know, I'm going to start looking at that. But it's not as big a pain point as the rent is. The rent is roughly double what you can afford.

Yeah. And so you may, you're doing all this remote anyway. You may be moving out a ways. from the city to find a bargain in a little bit of a more rural area and get a much better deal of some kind, you know, a garage apartment over the back in the backyard of a rich old lady and you move in there and help watch over her a little bit or something and she's, make sure she's doing okay and you get a bargain with that garage apartment until you get this thing squared around. And then when you get it squared around, you get these debts cleared, then you

start to build your good emergency fund. You start to build some wealth. Then you got some wiggle room to start to build a better quality of life at that point. But in the meantime, we're going to beans and rice, rice and beans. And we'll give you every dollar for a year and get you set up and get you going on that. That's going to really help you with the process. Our gift to you. That puts us our 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. Thank you.