The Ramsey Show - You Have To Mentally Take Debt Off The Table If You Want Financial Peace

Episode Date: March 7, 2025

📈 Are you on track with the Baby Steps? Get a Free Personalized Plan Jade Warshaw & Rachel Cruze answer your questions and discuss: "My husband is a dentist and we're still broke" "I went into debt for my sister's car" "Cancel my vacation after losing my job?" "How do I get out of a debt settlement contract?" "How do I get caught up on retirement?". Support Our Sponsors: 🌱 Get 10% off your first month of BetterHelp 🏥 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! 🥗 Save 15% on your first Field of Greens order with code RAMSEY ⛨ Find top Health Insurance Plans at Health Trust Financial 💸 To find out more about student loan refinancing, check out Laurel Road 💻 Visit NetSuite today to learn more 🗂️ Use promo code RAMSEY for 18% off at The Nokbox 💵 Learn more about Timothy Plan 🏛 Get started with YRefy or call 844-2-RAMSEY 🔐 Visit Zander Insurance for your free instant quote today! Next Steps 📱 Watch the full episode for free in the Ramsey Network app. 📞 Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET or click here💼For business and leadership insight, listen to The EntreLeadership Podcast. 🛒 Preorder Build a Business You Love Now at Ramsey Solutions 💵 Start your free budget today. Download the EveryDollar app! 🎟️ See Dave Ramsey and Dr. John Delony LIVE in a city near you 💰 File your taxes with 100% accurate software that’s 20% of the price Listen to more from Ramsey Network 🎙️ The Ramsey Show   🧠 The Dr. John Delony Show 🍸 Smart Money Happy Hour 💡 The Rachel Cruze Show 💸 The Ramsey Show Highlights 💰 George Kamel 🪑 Front Row Seat with Ken Coleman 📈 EntreLeadership Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Hey guys, Dave Ramsey here. Me and Dr. John Delaney are coming to a city near you on the Money and Relationships Tour. It's happening soon, so don't wait. Get your tickets at ramsysolutions.com slash tour. Music Music From the Ramsey Network app, it's the Ramsey Show where we help people do work that they love, build wealth, and create amazing relationships. I'm Jade Warshaw. Next to me is Rachel Cruz. We're taking your calls all hour long, talking about your life, your money.

It is a live show, so call in. We want to hear your calls and we'll get started. It's gonna be great. Let's get into it. All right. We've got Emily from New York City, New York. What's going on, Emily? Hi, thanks for taking my call. I'm mainly calling because we, my husband and I feel like we make pretty good money, especially for where we live. And we're in a lot of debt mostly from him going to dental school. And I would love to be a stay-at-home mom. We had to be over the summer. I would just love to not have to work and just be home with her all day.

But I just don't feel like that's like the right decision financially until we get out of debt. So I guess I'm just calling to see if that's even feasible for me to do or kind of your thoughts on that. I mean, it might be let's let's run the numbers out. So you said your husband has got it's a dentist. Is that what he is? Yeah. Dental debt. So how much debt is there? Um, like around 350,000. And what's his salary now that he's working? And what's his salary now that he's working? He makes like $250,000 and up. It depends.

And Emily, will that change significantly year by year? Do you guys see that growing or do you think it's going to be pretty consistent for the next couple of years? I mean, if he owns his own practice, then yeah, it would go up significantly, but then we're taking on more debt. Sure, sure., it would go up significantly, but then we're taking on more debt to help him out for practice. Right, sure, sure. Yeah, so it just depends, I guess. What were you making when you were working before the baby?

So I'm still working actually. Oh, okay. I just, I would like to stay home. Gotcha. But I am still working. I make around 115. 115, okay. Is there any other debt besides the 350 in school debt to talk about? No.

Really, that's it? No cars? No, we have like a little bit left on the car, but like, I mean, we could really pay it down like today, I guess. How much is a little bit? Like less than 10,000. Okay. and then no credit cards nothing like that No, nothing else. It's mostly The student loans what what savings do you guys have Emily? We have like fifty thousand in an emergency fund, okay And then we're also we're renting right now. So we're trying to save up for a house I just feel like we're doing like maybe too much at once But we're like, yeah is the 50,000 with is the 50,000 saving for the house too?

Or is that quote-unquote just the emergency fund? Yeah, that's just the emergency fund. How much is how much is for the house? We have maybe like between 15 and 20 towards the house towards that's okay and for New York Are you guys like Manhattan? Where are you guys? Like in the suburbs, okay outside how much are your operating expenses every month with rent and everything? How much does it take to run your household? Sorry, I have the number right here. I mean with everything, I

feel like we're like with savings and everything we're like right on what we bring in a month because we do try to put like money towards savings. If there wasn't savings what is it just for like food, rent, like all your just just to keep things afloat? I guess yeah I guess between like five and six thousand. Okay. Like if we're cutting back on a lot of things. Yeah yeah yeah no totally yeah like bare bones would be six. So you're putting aside for savings, down payment savings. Are you also investing right now? We both put 6% into our 401k. That's matched by our company.

Okay, so I think I understand why you're feeling like you're doing a lot because you are. And they're all good things. Like none of this is, they're not quote unquote bad decisions. I mean, it's great to save. It's great to think about investing. But I think that you're doing a lot because you are. And they're all good things. Like none of this is, they're not quote unquote bad decisions. I mean, it's great to save, it's great to think about investing. But I think that you're feeling this because when you do a lot of good things at once and in the wrong order, it can feel like, oh my gosh, I'm just trying to fight for my life here.

So what we would teach is the good news is you've got savings, you've got money here, and you've got a great income. It's just, how can we do this in the right order to where we're really making progress and we feel good about how our money feels month to month? So I would say, here's the caveat for all of this. You're pregnant and you're getting ready to have a baby.

So I- No, you just had a baby. No, we have the baby. You just had the baby. She's had it this summer. Oh, lordy lordy. Okay, great, great, great. Okay, so forget what I just said.

And I would tackle it like this. I'd say, okay, great, great, great. Okay, so forget what I just said. And I would tackle it like this. I'd say, okay, if we really want to get ahead, how can we get as much money in our month to month budget as possible, right? That's what I'm solving for. And so I would say temporarily, let's pause retirement contribution. Let's get that 6% of our entire income back into our pocket

and let's pause saving for% of our entire income back into our pocket. And let's pause saving for a down payment just temporarily. So now we have the full force of our income working for us and we can quickly pay off this debt, right? Right now you guys are making the amount of your debt. And so that gives you a two, you know, if you live on half, you're done in two years. Can I? Yeah. I mean, that's what I was going to say, Emily. Like running the numbers, let's just say in a dream world, you put what you were saving for your house and your emergency fund,

and you did the classic Ramsey baby steps. So you went down to a thousand dollars, you put everything. That means you guys would owe 280. And if you worked for one more year and you guys lived on $80,000, because you said it would be terrible, but we could live on 6,000 like with everything. And that's the barest bones, rice and beans, beans and rice,

the lowest. I mean, when you do that, yeah, you're going to need 70,000-ish. And if you guys are making 400 right now, do you say you're making 115 or 150? 115, yeah. 115, okay. Yeah, between like 350 and 400, I guess. So really just living on your income would do this. Almost in, okay. Yeah, between like $350 and $400, I guess.

So really just living on your income would do this. I mean, in a year, almost in a year, Emily, you guys could do this. Now, what the weird mental shift is, these other things you've been saving for, having the safety net of this big emergency fund and this stream of home ownership soon here, you know, that like you start back to square one when you do this, but that gives you the option then for you to be home, right? That this debt is paid. And then now we're slowly going to work back to our goals, but we can do this and more of a, you know, strong financial foundation or let's just dream that maybe you worked one more year. I don't know.

And you guys put in a way another hundred thousand to jump start back. Like I feel like I can't, like I feel like I can't not work until we're in a home, like our own home and not renting. I mean, that's- That's up to you. That's your prerogative. I mean, I think what Rachel and I are outlining, what she just outlined is the fastest possible way. The fastest possible way is you continuing to work,

you live on your one salary and you plow through this. Another option is you're like, listen, Jade, I've got this little baby, I wanna be home now. If you do that route, then it's only your husband's income. Yeah. It's going to double the amount of time it's going to take you to get out of debt, which you're still not far beyond that parameter of the one and a half to two years. If you really double down and really get on a tight budget on that. So you've got options, but as long as you know, this is what we're doing.

We're paying off the debt first and pausing all savings and retirement to do that. Then after that, we're saving up. And for you guys, I think you'll already be set up to do this, but you're making sure that you buy that house based on the one income that you're gonna be living off. So based off of the 250,000, I wouldn't base it on what he might make in the future because you really don't know.

And the worst thing to do would be to get more house than you can pay for. And then it feels like a burden, right? So I think if you're making those decisions, you're going to be okay. Yeah. And I think too, Emily, it's one of these like it's, it's a values conversation, right? I mean, you can say, you know, we value right now me being home and it's where I want to be. And if that's what you and your husband agree with from like a lifestyle perspective,

and that in your family decides that, that's great. That's what you guys have decided. Now run the math on that. And if that starts to feel like you can't breathe and that you're gonna be home, but you're gonna be stressed out because you guys are living on nothing for four years, where you're like, okay, I could just do one more year,

get out of this debt. You know what I mean? Like it's an either or game. But for me, just like now when the baby's little, it might be like, do it now so that you are home. When they're four, five, six, and they're schoolin' all of it, yes. When they remember.

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We go taking calls about your life and your money. Another call from New York City, New York. We've got Jasmine on the line. What's up, Jasmine? Hi, how are you? Doing great, how can we help? So I'm in a bit of a pickle. I'm having trouble trying to find out

what's the best financial decision. I made the mistake of putting on my sister's car in my name. She needed help. I tried to call sign for her, the dealership denied her and they only approved me. She promised me if I put the car in my name, that she would make all future payments. Long story short, we got into dispute, she refused to refinance,

she went and bought herself a new car and left me with a $22,000 loan debt. Oh no, Jasmine, she kind of did it out of spite, is what it sounds like. Oh no, she didn't. Oh my gosh, okay. Man. She thinks it's very funny. I already have a debt on my car,

which I owe $6,000 on. I'm currently pregnant with my third child. Oh my gosh, Jasmine. So my question is, should I sell both cars and just finance a new car or should I just sell her car and just pay the difference, which would be $8,000? It's upside down 8,000? So the market price for her car,

she has a 2020 Toyota Corolla. The market price for her car, she has a 2020 Toyota Corolla. The market price for her car is 14 and because I owe 22, once I sell it, I would have to pay $8,000. Go ahead. Did you Kelly Blue book it for an individual seller by chance? Yes, and that would only be 15. So I would still be at $7,000. Yeah, yeah, yeah, yeah.

You're still underwater. Okay. I just didn't know sometimes you can can get a couple of thousand dollars more for individual. What about your own car? You owe 6,000. What's it worth? Is that one upside down and what did it begin as? I started with this car of 15. I took out a six a year loan. So I owe 6,000 on this car. Ketty Blue book put it for seven. I had a deal. She called me, we'll give me eight for it.

So I mean, that's a plus, but, uh, I would still have to pay rollover, you know, her car if I get a new car. So either way, I wouldn't be before both situations. Okay. Um, I I'm more inclined to keep the car that you have possibly. Uh, let's find out more about your income. Tell us about your income. Tell us about your income. Tell us about your other debts

so we can get a fuller picture here. So I make 47,000 a year. Very little money, it's not that much. I am currently renting, so my rent is only 15. I have $10,000 in credit card debt already, and she put $418 of EZPass tickets in my name that I also have to pay for. You can't, you said EZPass tickets.

Is that something you can dispute as fraud? No, I can't dispute it because she was driving the car and the police is in my name. Ah, got you. Okay, so tolls, not like part, I got't dispute it because she was driving the car and the police is in my name. Ah, got you. Okay. So tolls, not like part. I got it. Tolls. Okay. Um, oh my, your sister. Can I just ask what this is neither here nor there? But did you know that she was capable of? Yeah. Shifty from the beginning. Did you know that? Or are you just learning this about her? I'm just learning this about her. Nobody in my family would help her and I felt really bad for her

because she was in a bad situation and financially during that time, I didn't have any debt and I don't have with my car. So I said, hey, I don't mind helping you as long as you pay. But soon now I'm stuck with this debt. I wonder if, so my first thought is, yeah, definitely got to get out of the car note, the $22,000 one. It's not a car that you need and it could be worth saying, okay, like I'll get a personal

loan for the difference so I can offload the vehicle. That way I'm not paying the full payment on a $22,000 car. I'm just paying a payment on the $8,000 loan to get out of it. And then maybe keeping the loan that you have for your car. Obviously it would be and then maybe keeping the loan that you have for your car. Obviously, it would be first on your debt snowball, right? So you pay off your $7,000 car. Now, what is your car payment? My car payment is $336 a month and hers was $500 a month. Okay, so once you pay off your car, that'll free up $336 a month.

And the hope, here's my hope, I don't know if it's worth your time or effort, but my hope is that while you're paying off your $7,000 or your $6,000 loan, you can be telling her, hey, I sold this car and it's now just an $8,000 loan, you really do owe this and you should be paying it and maybe you guys can start having that conversation and I try to collect whatever I can from her.

I'd be like, listen, hit me with half, hit me with anything, but you've really put me in a tough situation. I've got children, I've got another child on the way. I need help with this, and truly you're on the hook to help me. Really, you should be paying it, but I take whatever I can get.

Do you see what I'm saying? And so by the time that one comes up in your debt snowball, hopefully you've got, hopefully something from her, and if you don't, you just continue to plow through it because it's on your name. Yeah. Yeah, but the thing is she thinks it's funny. So she says that nothing's in writing in cancer could have caught for it and she just went and got a new car. Yeah, you can't. I mean, yeah, that's the that's the dangerous thing.

Yeah. Yeah. And so why what like I again, we can't like sit here and like psychoanalyze your sister. But you keep saying that she thinks it's funny and all of that. How old is she? She is 23. I'm 26. OK. And she understands the severity of like she she understands what's going on. In her text message, it's it's it's not her problem.

It's my problem. Wow. OK, so it's just it's not her problem, it's my problem. Wow, okay, so it's just, it's really a character integrity issue. I know, and Jasmine, we call this around here, stupid tax, where there's just things that we pay, it's going to end up being 8,000 for you after you sell the car and for the difference. But I don't have the money right now, so I would end up being paying $500 a month on top of my car note. See if you can get a personal loan for the difference or go down to the credit union. I don't care where you do it. I just care that you get, I'd rather you owe $8,000 than $22,000.

Even if it's a slightly higher interest rate, I still care about that because you're going to be able to, it's going to free up a little bit more money and you're gonna be able to clip through your $6,000 car note faster by lowering that amount of debt, therefore the payment on it. So don't get a new car. Don't try to have it roll over anything. No, no, no, no. Because you're A, you'd be rolling over negative equity

and B, you're not solving the problem at the root, which is the debt. The debt is the problem, whether it was debt from, like Rachel said, stupid tax, or debt from your own car or your own credit cards. Debt is still the problem, and we don't wanna, you can't solve a problem while simultaneously creating it. So you've gotta put a full stop on debt.

Okay, okay. So yeah, so keeping your car, Jasmine, and then your goal is for the debt snowball. You're gonna pay off your debt smallest to largest. So even with the credit cards, which we didn't really talk about in here, but listing those out, if it's three or four cards, and one is $2,000 balance, one's 4,000, whatever it is,

so let's just pretend that the car sold a $22,000 car and you now have an $8,000 loan. So you have an $8,000 car loan, or a personal loan, because of the car, your $6,000 car loan, and then list out your credit cards all separately, and then sit there and just say, okay, smallest debt to largest debt, and you're gonna pay minimal payments on everything

and pay the smallest one off first. And again, even if it's the, even if one of the credit cards is a $1,200 credit card, pay that one off first, and then you're gonna go down the line because that's how you're gonna get the most effective use of your money. Once that's freed up, that credit card is paid off,

frees up a couple hundred bucks a month to roll over to the second smallest debt, and you just keep that going. And, oh, God, Jasmine, I'm so sorry, but for everyone listening, this is why you don't co-sign. Because the bank looked at the sister and said, we don't trust you.

You can't, no, they said you won't be able to make the payments. And if a bank won't give you money, who gives money to dogs? They like send dogs credit cards in the mail. Banks will give any money to anybody. So if they don't wanna give money to somebody, that's the massive, that's the biggest red flag

that is possible. Like a bank will not lend someone money. That means they're not good with money. They do not have the money to pay it. So you're not willing to take the risk. Yes. So do not take it people learn from Jasmine. So Jasmine, I'm so sorry. And not to throw another little like element

into this whole situation, but she did say she's expecting. I know. And so we usually go in stork mode if you are pregnant. So Jasmine, I mean, honestly, you may even wanna pause all of this. Go ahead and do the debt snowball, list everything out so you kinda know what your plan is. But honestly, I would be just stocking savings

for right now. If you can get rid of the car, that would be one thing I would do. I would take out that $8,000 personal loan and get rid of the car. But you also wanna stockpile some cash until baby's here and you're okay. Everyone's okay. And then whatever money you've had saved during this time, press play. Hopefully that'll pay off a couple of those smallest debts as you're saving.

But I'm sorry, Jasmine. Best of luck. I hate that your sister did this. Listen, I'd put her in a headlock. You can do that when you're siblings. You can wrestle them when they don't act right. This is the Ramsey Show. can do that when you're siblings. You can wrestle them when they don't act right. This is the Ramsey Show. I hate to admit this, but I don't always eat right. I know I need to eat more fruits and veggies, but sometimes I just have to pound some chips because they taste so good. That's why I love my field of greens. It helps me eat healthy when I don't have much time. And

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Why refi could help you save thousands of dollars visit why refi comm slash Ramsey to see how they can help That's the letter why our EF why comm slash Ramsey. Hey, it may not be available in all states Today's question comes from Lucia in Arizona She's have two young Hispanic daughters under the age of five and it's a tradition in our culture to have a celebration when a woman becomes 15. The average cost for this event in America right now is between five and $20,000. How can I save for this while keeping up with inflation? I can't imagine what it's going to cost when they're 15.

Wow. Wow. Man. The quinceanera. Quinceanera. Sweet 16, sweet 15. Yep, yep. What do you think, Rachel? I mean.

Well, I mean, the range is what you're talking about here. I would have the same mindset as a wedding, that you can go as expensive as you want, you can go as inexpensive as you want. And a lot of that is dictated by the emotions and the expectations of the person involved, AKA your 15 year old or AKA the bride. And so I think there's a lot there as a parent,

you have more control over than a wedding, right? And so I think you tell the 15 year old, here's what we have saved. And it's a part of your tradition. So you're gonna know, we're gonna save for this, right? So be putting money aside for it. And when the time comes, I mean, I wouldn't worry about inflation and all of that,

because we can't control it, but just save what you can. And what you have at that time is what you have to spend. But no, I would not be going into debt for it. I wouldn't even be honestly stressing over it either. You know, I would have a plan for it it and then let it be as it is. And the 15-year-old doesn't get to dictate the decisions either. So yeah. Yeah.

I'm also filtering it, Rachel. I'm also thinking, okay, two girls, which means two weddings coming up and possibly two college educations coming up. So I feel like I would filter it a little bit through knowing what else is coming. So unless you guys really have a wonderful income, I mean in five years, less than five years are gonna be going to college too.

And then maybe in less than five years are gonna be getting married. So there's part of me that's like, all right, I wanna be really realistic to make sure that we're able to save for all of that and good luck. Godspeed. Godspeed. But you have control over the expenses and that.

So you get to make it as fancy or as not, but yeah, I wouldn't let the cultural pressure, right? Cause I know this is a bigger deal than like a Sweet 16. You get that. It's like right at passage. Yeah, it is. It's a big deal. So you want to celebrate and honor that.

But yet we're not going to be stupid about it. That's right. When it comes to the cost and we're going to be wise because that's a bigger gift to them than this one night kind of celebration, right? So. And invite a lot of people. So they get a lot of gifts and gets

a lot of money back. There you go. Put it in the college one. That's good. Put it in the college one. All right. Kaylee is in Phoenix, Arizona. What's going on, Kaylee? Hi guys. Can you hear me okay? We can. Awesome. It's such an honor to get to speak with you guys. I'm kind of new to the baby steps. I became debt-free about two years ago. Congratulations. Thank you. Yeah, my network is currently at 44,000. But my problem is I really want to go back to school to get my master's. And I'm not sure if I should continue maxing out my retirement accounts each year or if I should just start saving now and not max out my retirement accounts but use all of my savings as much as I can to front as much of my school costs

as possible. Okay. So how much is the school gonna cost? How long is the program and everything? Yeah, so my prerequisites are gonna be around 13,000 and then the program will be around 29,000 and then plus living costs. Okay, and what are you getting your master's in? I wanna get it in nutrition. Okay.

What will you do with it? I want to work as a registered dietitian. I'm not sure like the specific job that I want. I know what the entry level costs or the entry level pay is for these jobs. But I am interested in like any aspect of the field, whether it's like consultation, research, private practice, or anything like that. The range is around like starting out 80 to 90 thousand. Okay. And you've talked to people in this industry, right? And a master's is a requirement, would you say? Is that a barrier to entry to even get in and apply to some of these places or is it just look nice on the resume? It is a

requirement in order to hold the dietitian license. Okay okay and you're making what now did you say? Right now I make 61 a year. Oh good okay and what do you have in savings that's not retirement? Currently in my high yield savings, I have 17,000. Okay. Okay. So your question is, should I stop maxing out retirement and use that extra to put towards paying for the schooling? Right? That's the question. Exactly. My question is, can you do it without doing that?

Have you run the numbers? Is it possible or is that the unlock here? Like, do you mean, can I do it while still maxing out my retirement accounts? Yeah, or what is, I guess, what is that stop where you say, here's at the point where I need some of this cash. Can you still invest up to your match or can you still, is there any point that you can do a little bit

of investing and also save for this? If I wanted to not take out any student loans whatsoever, I wouldn't be able to invest anything from this point moving forward into a retirement account. Okay. And which would be for how long? Four years? It would be about two and a half years.

Okay. Yeah. I mean, honestly, Kaylee, I probably would. I would pause. I mean, it's a short time. You already have some in there, which is great. So that'll continue to grow. And I would take student loans off the table, if I were you.

Not an option. Yeah, I take it off as not even an option. So now going forward, how can I go to school and get my master's debt-free? So that 17 is gonna help with the prereqs. And so, I mean, what you could do, and people do it all the time, it's a lot, but people work full time.

They sure do. And go to school. And if you can keep your job and cashflow your way, I mean, Kayleigh, that would be incredible because at the end of it, you have no debt, you're starting off, you get to switch jobs, you'll be making 80, which is a $20,000 bump, at the low end, and you start retirement funding there

and you're off to the races versus saying, oh, I'm gonna just pretend that you go $43,000 in debt. You come out and you're making 80,000. Well, that's half of your income already in debt. So it's gonna take you probably three years to get back. So it's kind of this like, there's a big give and take here. So the sacrifice on the front end, which is gonna be a lot, school and working,

but cash flowing your way, even pausing retirement for two years, and then getting that degree, and then I would press play on retirement and go on. So that's what I would do. But I would mentally, it's a mind shift thing, but you have to mentally take debt off the table and then see what your options are.

Because when it plays, it's the easy route. It's easier to just assign your name right now. It feels easier, yeah. It feels easier. And then on the back end, it's so many more years climbing out of it financially. And that's more time missing out on retirement, right? I mean, like all of it,

because you're gonna be pausing for more years than two to pay this off, so. And I mean, I feel like it puts a salty taste in your mouth about the thing that you love doing, right? You go to get this degree in nutrition because you're like, I love nutrition. I love helping people. And then with this debt attached to it, now you kind of feel that every time you go to work, every paycheck is going towards that. And so I feel like it kind of taints that whole. The passion part of it. Yeah. All right. Very good call. Thank you for the call. Thank you for the question. Let's go to Ariel.

I like that name. Ariel in Washington, DC. What's up, Ariel? Hello. Thanks for the call. Thank you for the question. Let's go to Ariel. I like that name, Ariel in Washington, DC. What's up, Ariel? Hello, thanks for having me. I'm calling to get your advice on whether or not I should cancel an upcoming family vacation based on some issues that I've been having. I was laid off right before Thanksgiving and just trying to figure out

what the right responsible thing to do. Ariel, I'm gonna hold you over. I took your call with not much time left on the clock. So do you mind holding for me? Not a problem. All right, I'll see you after the break. Sorry about that. I was looking and I thought, we've got plenty of time.

That was a lot. Well, you know what, spring break's coming up. So a vacation call, that's gonna be a good one. Yeah, that's gonna be a good one, yeah. Rachel, do you ever get these sketchy text messages that are like, Hey, you need to update your address and verify so we can get you the package you didn't order. Yes, I have George sketchy and never trust them. And that's why we recommend delete me. They help with that. Yeah, they do.

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So even if you don't have all your documents yet, go to ramsysolutions.com slash smart tax and get started. getting tax stress off of your shoulders. So even if you don't have all your documents yet, go to ramsysolutions.com slash smart tax and get started. That's what you need in your life. That's the only one I'd use. Amen. Oh yeah, for sure. All right, so just before the break, I picked up Ariel.

She's in Washington DC and she's got a great question about vacation. What's going on, Ariel? Sure, so I was calling to see and get your advice on whether I should cancel an upcoming vacation or if I should keep it based on my circumstances. Ooh, tell us more. Was there like a down payment?

Will you lose money? Yeah, so I have to cancel the next couple of weeks or we don't get our money back. But I was laid off right before Thanksgiving and I'm still trying to find a job, but just trying to figure out what the responsible thing to do is. Yeah. How much are you, how much are you in on it and how much will you lose if

you cancel it? So the trip is about 3,500. Um, and we'd probably lose about 2,500. Oh man. Oh gosh. And that's even if you cancel in the next couple of weeks. Yes. You will still lose that. That's what you're gonna lose? Yes. Okay. So you're a thousand dollars basically out of pocket. It's 2,500 out of pocket.

But a thousand dollars would be added to go out of pocket. Sorry, that's what I mean, okay. Yes, yes. And are you married? Is there a dual income situation in the home? I am, yes. And he's working, but he does work for the federal government and so far it's okay,

but it's a bit uncertain. You'd have to open the year as well. How much does he make a year? 120,000. 120, okay. Do you guys have any debt? None but the house. We are net worth millionaires, but we have cash. It's just.

Oh, tell us your cash situation. We've got close to 200,000 in cash. And in like in a high yield savings? High yield savings and investments as well, but not retirement. Ariel, you can go on this trip. Yeah, just do it. It's a thousand bucks.

Okay. Yeah, you're good. You're totally good. Okay. Honestly, take it. I'll be do it. It's a thousand bucks. Okay. Yeah, you're good. You're totally good. Okay. Honestly, take it. I'm gonna say, even if it was $5,000, you're okay. Yeah. You have $200,000 in savings.

Mm-hmm. Okay. Yeah, yeah. You've just been living in this tight, cut everything out phase for a while, so it just feels crazy to cut out certain things. That's fair, because your savings will eventually dwindle if you're just living off of it.

So I get it. But from like relatively speaking, I would not lose 2,500 not to pay 1,000, especially where you are with your cash. Like yeah, yeah, you're great. So what kind of job do you? Go ahead. I said I'll take it.

Yeah, for sure girl. Go on that trip. Yeah. Okay, so what's taken you so long to find a job? What were you doing? I said, I'll take it. Yeah, for sure, girl. Go on that trip. Yeah. Okay, so what's taken you so long to find a job? What were you doing? So I was doing marketing for a tech company and I have been interviewing. I was actually offered a role a couple weeks ago, thrilled about it.

And then I got found out last week that they eliminated the role. Oh, shoot. So I went back to square one. Oh, man. I'm sorry. square one. Oh man I'm sorry. So I'm interviewing, I'm networking, I'm doing all the things but it's just... Taking a while....crazy out there. Yeah, yeah. Oh are you guys able to live off of... I know his income's a little bit unstable just because he's working for the government and everything but for 120 are you guys able to sustain life on

that or are you having to dip into this 200 to live off of? So far we've been able to. We have two little kids in daycare. We're cutting out everything we can. It'll be, we'll start eating into it, I'd say in the next couple of months. But so far we've been able to. But it'll, I need to find something soon, that's for sure.

Keep it afloat, okay, yeah, for sure. Yeah, and if you guys get to that position, you know, maybe for you, it's even something that looks different and maybe not as high up as where you were, but I think you guys are good. I mean, yeah, you're in a good spot. I'd say you're good.

Go on the vacation. Be smart about what you're spending while you're on the vacation, just like day-to-day things. But other than that, I'd say enjoy it. You, you know, enjoy it. It's a vacation. All right, good one.

Let's go to Ricky. He's in Atlanta, Georgia. ATL,, enjoy it. It's a vacation. All right, good one. Let's go to Ricky. He's in Atlanta, Georgia. ATL shoddy. What's going on, Ricky? Hello, how are you doing? I have an investment property that I own this worth about 700,000. And I'm trying to decide I have two offers one offer it's 600,000 at 6% for 25 years on finance with with 15% down and one offer is a cash offer for 700,000 and or should I keep the property and I'm 62 and I'm getting ready to retire and I have some money in my 401k but I've worked with some financial people and it seems like if I take this property and pay the depreciation and the capital gains and put the money into an IRA,

I will leave more money for my kids in 25 years than if I hold on to the property. With the value of it and everything. What would cause you to consider the other offer over a $700,000 cash offer for the amount that it's actually worth? Because I've been told in the past that it would spread out the depreciation of capital gains And I wouldn't have to pay the taxes in one year. I could spread it out over the loan. What was the rental bringing in in? monthly rent It brings in about $9,400 a month. Okay. And you're just kind of tired of it. You're like, oh, I don't want to deal with it. I'd rather sell. I've been

doing it for 20 years. Yeah. And at one time I had two partners and 66 properties. We have split up and I'm down to 13 properties. Oh, wow That's great. Yeah, I mean I would, I like diversification in general. So the fact that you have other properties is great because you're still in that, you know, a little bit of real estate, you know, in your entire portfolio. But if you have a cash offer like this, I mean, I would be, yes, I would be tempted to take it. I just know how much work it is to keep up with properties and you've kind of played the long game because really when it comes to making money in real estate it really is what you've done where you bought. I mean how many years ago you've had it for how long? I've had it for 20 years and of course we paid $400,000 for it.

We really made no money on it till now. Yeah, yeah. Because all of the money went to the mortgage. Sure, yeah. So now that it's, yeah, paid off and now you have so much equity in it, that's like the payday of rental, right? Where you get to do this and sell it and yeah,

put money in IRA, live off the interest. And you know know I think that that's probably what I would do I think it simplifies everything and since you're a real estate guy you still have other properties are those other ones paid for yes they are I'll keep I'll keep five rental units okay completely paid for okay Ricky so how much how much are you worth I'm just curious how much are all these properties combined with my private real estate it's about two million dollars that's great all paid

for yes Wow well done Ricky well that's really cool yeah I mean I think either way you're gonna be fine so but yeah I like the idea we just met with our financial planner this week and like last year what the market did was insane. It was like in the, like, I mean, it was just crazy. 22 wasn't a great year, but 23, 24 were great years. So it is kind of fun to see the math game in the market, just knowing, okay, you had a piece of property, which is ideal, right?

When you make money in real estate, you're kind of making it at the buy. So you buy it, hopefully cheap, and then as it appreciates and you gain equity, then you get to sell it, and that's where you're making the money. And so that's, I mean, it's literally, that's what he's done.

And then go put it in the market, and hopefully knock on wood, I know it won't all be that as good of a year as we've had the last two years, but it's just been incredible. It's really the same game with putting it in the stock market as it was with real estate. This is the same idea of keeping that investment over time.

And over time, like you said, you might not have a year like 23, 24, but you could and you should see at least a 10% return over that scope of time. And so that's what we're talking about when we say that. So I think it's great. Great, Ricky. Way to go. Well, congratulations to you. Yeah. Congratulations. I love a call like that. I love celebrating wins with people that does it for this hour of the show. Hang with us and we'll be right back for the next hour.

Statistics show that half of Americans don't have enough life insurance or they don't have any at all. I don't understand this, John. Why don't people want to take care of their family? They think they're not going to die or something? Well, I used to be one of those guys, I didn't even think about it. And one of my buddies said, hey, the only reason to not have life insurance is if you hate your wife and kids. And I immediately went and got term life insurance.

That's a gut punch. For decades, Dave, I've sat across people who've lost a spouse, they've lost somebody important to them. Me too. And they don't know what to do next. Terrifying. You're gonna have a crisis here. You know, you got two options while you're sitting and talking to a young widow.

She's concerned about how she's gonna invest all this money properly and not mess this up, or she's concerned how she's gonna eat tomorrow. That's exactly right. These are the two options. It's saying I love you to your family, term life insurance. Jeff Zander and the team at Zander Insurance

makes it easy and affordable. I've used them personally for 25 years. It's saying I love you to your family. Term life insurance. Jeff Zander and the team at Zander Insurance makes it easy and affordable. I've used them personally for 25 years. They're the only people I trust. Go to zander.com or call 800-356-4282. From the Ramsey Network, it's the Ramsey Show. Thanks for hanging out with us. We're taking more calls about your life and money.

Again, if you wanna call in, you can. The number is 888-8 about your life and money again If you want to call in you can the number is triple eight eight two five five two two five That's how you call in that gets you on the line when you call and you'll just leave a voicemail Um, you can call at any time of day You don't have to call while the show is going on leave a voicemail and we'll set up a time to get you on the line Or if you do call during the show you could get on right away. That's the way it works. All right, Rachel You're ready to get into it. Let's do it. All right, Patricia in Sacramento, California is on the line. Hey, Patricia. Hi, how you doing? We're doing good. So I need help. I went from zero debt in January 23 to 54,000 in April 24. I was trapped in this abusive relationship

that I was hospitalized and arrested for fighting back. But I'm out of that now. But I was trapped in this abusive relationship that I was hospitalized and arrested for fighting back, but I'm out of that now. Oh my gosh, Patricia. I'm so sorry. I was in survival mode, so I signed up for a debt relief company and I trusted them. But now that I'm able to take a look at what's going on, I see that they're taking all their fees up front. Um, they're barely paying my creditors and I have to respond to my second lawsuit

by next week. Oh my gosh. I've also found expired docu signs that I never saw they would expire really quickly. And so I don't know what they've negotiated. I know they've negotiated about 36,000 of it and there's still the rest of it's outstanding and I did pay off my first lawsuit privately. So the companies that they stopped paying are suing you right?

You stopped paying your debts and the money that you sent they weren't paying it So is that what is that who's suing you? Your creditors? Well, there were like 12 or 13 cards altogether. So they've settled with some of them, but the ones that they just wanted accept wait in line. They're the ones suing me. Yeah. So like I said, I paid off one and yeah. How much have you given them, the debt relief company, to start? I have given them $7,000, over $7,000, and 4,000 of that has gone to their fees. Only 3,000 has gone to my creditors.

And I did find that when they settle, what's considered settling is when they negotiate a settlement and make the first payment, then they're eligible to take all their fees, which is 25% of my enrolled debt. I'm sorry. I mean, you're finding out what's absolutely true, which is these places are a scam.

And I hate that you're finding that out the hard way. Do you know what it will take to get, like, how can you get out of this? Have you kind of researched what it would take for you to get out? Will you be dinged if you say, listen, I don't want to pay any more into this. I don't want to do this anymore. Um, what's their, what's their, um, policy on that? Well, the contract,

they say I can end anytime. So that's why I figured they're padding their fees up front in case I do decide to end. Yeah, you're right. But, um, but I, um, the, the one that I want to settle right now, cause I do have some money to settle the second lawsuit, but I tried to call them directly and they won't talk to me because of the power of attorney. So the company won't call me back either. And so when I called them this morning, they said, um, there's no update, except we've got the power of attorney. And I'm like, no, stop. I don't want them to settle with them. Well, you have to cancel. It sounds like you have to cancel your agreement with the debt relief place first so that they're not signing and making decisions for you. So I feel like that's first in line.

First in line is getting documentation that I'm no longer part of this program. I'm not giving them any more money and I have my power of attorney back so they can no longer sign for me. So I'd want that first. I'd want documentation of that, not just a, okay, over the phone, right?

And then after that, then you can really do for yourself what they were saying, quote, they were going to do for you, which is, yeah, at this point, at this point, because there has been no payments made on this debt, yeah, they're going to be ready to settle and you should be able to do that. Okay. But yeah, they said they want to talk to me. And so do you think I have time before because I have to respond to the summons by next Tuesday. Do you think I would have time? How much do you owe for the ones that are suing you? So the ones that suing me, they want like $4,500, but I enrolled $3,800 with them in

April. Well, I did just pay off one lawsuit and they were wanting 3,800 and I settled that for 20. And you got that in writing? That's in writing, the first one you paid off? Yeah, so what I mean, what I would say, Patricia, is this 4,500, I don't wanna give you the wrong advice, but from what I have gathered over the years of doing this show and talking to people,

it's $4,500, they say it expires on Tuesday. If it takes you another week to get out of the debt settlement, you call them back. 10 days later, they're there. They just want the money. I mean, at this point too, with debt settlement, you haven't paid them for so long, they're lucky to get anything, right?

I mean, at this point, and how these companies work too, these debts are sold so many different times. They've gone through three different companies. I mean, they're not really keeping track. There's a level of intimidation always with them, whether they're on the phone or through mail. And so, I mean, some of it is legit, right? I mean, they can, but I really think, Patricia,

if you take all of next week to get out of the debt settlement and it takes you a couple of days and for them to email over paperwork, like what Jade's saying, and have documentation that you are really out, then I would call this company back and show them and tell them, hi, I had that document, I'm a few days late, but I have $3,800, I can pay you and just settle this now.

They're gonna take your money. They will, they will take it. So I wouldn't be, I would be on it. I would be urgent about all of this because I want you out as soon as possible, but I wouldn't let their timeline be the one that's dictating all this either. Yeah, I mean, like you said, Rachel,

a lot of it's fear tactics and you go, oh my gosh, they're suing me. Oh my gosh, I have a timeline. Oh my gosh, if I don't. And Rachel is exactly right. It's, you'll have the opportunity to make a deal again. Well, I have to reply to the summons by next week, because if I don't reply to the summons and they'll make a judgment again.

And what do you know? What's the reply? What's the process of that? What does that mean? I have to go to the courthouse and file a response. It costs two hundred and fifty dollars. That's what I did. So could your Could your response be, well, here's, there's two things happening here. A, you're concerned about filing the response,

which is next week, right? What day? Yes. What day? It's the 13th. The 13th. Yeah. I don't know what day is that, is that Tuesday? It's like Wednesday.

Okay, so you have two business days to try to get out of this and if you can then you can apply Go to the court summons and say I just got out of the debt consolidation I have the money here and I'm ready right that's one response the other response is I've been trying to get out of this debt consolidation and I have record of Me trying to call and pay this and they have not taken my payment. But I have the money, I have the check here, I'm happy to pay it today, right? So there is part of this where you might have to like plead your case on that and that's why it's so important to document everything you're doing. I called them on this day at this time and they

have to record those calls too. I called them at this day and this time. So you just do be, uh, do your due diligence on making sure you're keeping record of everything and then show up at the summons with wherever you're at in life. I just filed the paperwork or I'm waiting to hear back on them and just take it one day at a time because I think you're freaking out a little bit about what may or may not happen. And if the, if you have the money and you're saying, Judge, I want to do this, I don't think the judgment's going to be against you. I think they'll be fair on that. Right. So how would I go about revoking the power of attorney? Do I need to get a lawyer

to do that? Or can I do it myself? I don't think so. I mean, it sounds like whenever you signed up for this debt relief, part of the papers you signed said, and you guys can speak for me and sign for me and all of that. And so it should be that when you get out of this. Yeah, revoked along with the entire agreement. Yeah, or both. Oh, Patricia, I'm so sorry.

You know, you've gotten yourself out of a lot worse situation than this. So this is, you can do this for sure. You can do this, it's gonna take some time, but we hope that helps. We're cheering you on. than this. So this is, you can do this for sure. You can do this. It's going to take some time, but we hope that helps. We're cheering you on. Hey you guys, I'm not a fan of the big banks and you probably already know which ones I mean, but I do like credit unions because they're non-profit organizations that focus on their members and And I'm proud to endorse Fair Winds Credit Union because they share the Ramsey mission of helping people get

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Fairwinds and do anything you could do at a physical location. So go to fairwinds.org slash Ramsey to learn more and while you're there look at the combined checking and savings account bundle they created just for Ramsey fans to help you take control of your finances. That's fair wins. F-A-I-R-W-I-N-D-S dot org slash Ramsey. If you own a small business and you like the Ramsey Show, then you're going to love the Entrez Leadership Podcast. Almost 200,000 listeners tune in every Monday to hear me take calls from real business leaders and give tactical advice based on my 30 years of experience leading.

This is not a podcast about business theory. It's real insight from a practitioner who actually does this stuff. Find it anywhere you listen to podcasts. Or if you're listening on YouTube or podcast now, just click the link in the description. So around here, we teach a method called the seven baby steps, and it's seven baby steps to finding financial peace, right? It's the quickest, most efficient way to building wealth. There are seven baby steps to finding financial peace, right? It's the quickest, most efficient way to building wealth.

There are seven baby steps and if you are working them, we have a really great way to check to see if you're on track, okay? So there's a quiz that you can take to check your progress and you can also receive a personalized plan that's just for you as you walk your own journey on the baby steps. So simply head to the show notes and you can click the link that's titled, Are You On Track With The Baby Steps? So if you click that link then we'll send you the quiz and you can complete it. So that's a really great way to stay motivated and make sure that you're staying on track with this whole thing because it is a journey and you need that extra boost. All right let's take another call. We've got Grace she's in Omaha Nebraska. Hey Grace.

Let's take another call. We've got Grace. She's in Omaha, Nebraska. Hey, Grace. Hi, I am going to college next year and I just had a question about which college I should go to. My state school I would have to pay for and it would be about two years to go. But I got an opportunity to go to a very prestigious school that would be a full ride, but it would be four years.

And I'm just wondering is time more valuable than money? Oh wow okay so both options are paid for is that what you're saying? My first option which is like my state school I would have to pay out of pocket. You would pay out of pocket. Yeah and right now I just don't have stuff in savings but it would be I'd have to work very hard and it would drain my savings count Pretty much. Okay. How old are you grace? I'm 17 17. Okay. Great. What's the can we ask what school it is the one the four-year?

The four-year school is Notre Dame Wow say less golly grace You know what? I, yeah. Yeah, I mean, I'm going to the school that's paying me and it's four years. Which is normal. Which is normal. And I think that, again, it's not for, I get this for everyone.

Like some people do the trade route. Some people leave high school and go right into real estate and get their real estate license. So, you know, like anything's great. But I do think there's something about those four years out of high school where you're on your own and it's kind of that bridge between being so dependent about mom and dad on so many things.

And now like, I don't have to go fully real world. I have like four years to get a great degree, learn some life experiences, kind of have that bridge. I think it's like from an age perspective, I think it's good. I agree. Because you'll have your whole life to work and do all the things.

And if, and because it's paid for, right? I mean, if the money, if all this was different from a money situation, I may have a different answer, but it's paid for. Yeah. And I mean, I would do it. What's your, what do you want your degree to be in? My degree, that's another thing.

If my degree is going to be in educational administration so I would like to teach in foreign countries is like the entire idea. Oh that's awesome. Notre Dame has a program for that. That is cool. That's perfect. What's keeping you not doing Notre Dame? Is it just because of the time? Like it's four it's two extra years? It's two extra years and from my house, it is almost 14 hours away and I would be paying in travel expenses as well because my parents will not pay for that

and they don't really want me to go to Notre Dame so I'm kind of- Where is Notre Dame? I should know this, but I don't. Where is it? Do you know where Chicago is? It's about two hours from Chicago. Okay, okay.

Syria. So it's quite a drive and I'd have to fly there Do you know where Chicago is? It's about two hours from Chicago. Okay. Okay. So it's quite a drive and I'd have to fly there because they do not allow cars for freshmen. Oh, that's interesting. Okay. So you'd be driving home for- And to your parents, would they help pay for the state school?

They would help pay for the state school. They do not want me to go into the degree that I'm going in. So it's not so much, I'm afraid it's not so much a gift as it is a loan. And so I'm really want to pay it by myself. What's their problem with the degree? Which is why I'm very hesitant. What's their problem with that? It's teaching and it doesn't make, they say it's teaching and it doesn't make any money.

So they're a little hesitant to. For the Notre Dame part, it's like whatever I'm not making for you It's just a time investment right and what Rachel said there's just the and the part of becoming an adult that you get over four years like sometimes there Part of school is not just the education. It's the experiences that you have so teachers are in our top five of Baby steps millionaires to grace. So yes five of Baby Steps Millionaires too, Grace. So, yes. I saw that on your Instagram.

Yes, so I mean, it's known, yeah, teachers don't, teachers should be paid way more. I have children in public school and I'm like, God bless you, all of you. So they should be paid more. But if you, it is a career over time, you know, you get the pinch, like you do, yeah, you, there are benefits.

You do move up, right? But it's, yes, it's not a career you're gonna make $300,000 know, you get the pinch. Like you do. Yeah, you there are benefits. You do move up, right? But it's yes, it's not a career you're gonna make $300,000 in right. So, so I get that. But it's what you want to do right now. Is it grace? Yes, it is. Yeah. So I, I wouldn't let the drive home like what you're driving home for Thanksgiving, right for spring, summer break, whatever that is, I wouldn't let that deter me from making the choice. Okay.

I wouldn't, but. Yeah, and unless you saw like a really clear path to do the state school and do it in two years and pay for it, and that made you feel more comfortable being closer to home or whatever, you know, it may be, it may be some extra work on your end to do that option. Sorry, last question, Grace, is it an academic scholarship that you're getting? The scholarship that I'm getting for the region that I'm in, I have a benefactory that reached out to me and my school and wanted to pay for it because Notre Dame is Catholic and then I came

from a private school. Oh, I gotcha. Okay, okay. I gotcha. But yeah, it's around academics as well. Okay, okay. Because I wonder, is there any scholarships and grants you could get from a state school option just to get some other, you know. Yeah, you can look at that. Some other things, but. Yeah, for my state school as well, I have $10,000 in scholarships for that to help me with it. And then they did give me a $20,000 scholarship as well

for my state school, but it will still come out of my pocket. Wait, so you have $30,000 for the state school, 10,000 and then 20? Yeah, so about $20,000 would be if I went through their four year program. So I'm trying to get them to give me the full 20,000, but they don't want to do that. But I'm still looking at $23,000 that I'd have to pay.

You would have to pay? Well, 23,000. Over two years, right? So that's 12,000. That's a thousand bucks a month. I mean, it would be some work for you to do it, but I don't know. There's not a wrong answer here if both of them don't include debt. That's the truth. So if you're able to do the two years with whatever scholarship they give you

and you're able to cover the rest and there's no debt, that's not a wrong choice. Also, if you choose to do the Notre Dame for four years, which is covered completely, that's not a wrong choice. At the end of the day, it really just down to what you want to do. Yeah. Our only caveat is there can't be debt. That's our stance on the decision that you make. Okay. So I hope that's what I want to hear. I hope that helps you got you've got some things to mull over and think over but I think that it's really great that you have those opportunities and that's what we wanna see.

It's nice to have choices, I think, at the end of the day. And it's really hard at 18 to know what you wanna do long-term, so it can always change. But if you have a niche and an inkling of like, okay, I wanna do this, and she said, and I wanna teach, I wanna teach, where I go to foreign countries and do this, like I wanna do that, and Notre Dame has a countries and do this, like I wanna do that.

And Notre Dame has a program for that too, and it's paid for. It does feel like a pretty obvious option except for that like element of getting home. And you would have to cover the cost of that. So that may be meaning that you, you know, work a few nights a week or something and just to have some extra cash.

I think that's a small thing to figure out. Yeah, I do too. Grand scheme. I agree. I agree. But gosh, that's great. Great question. Grace, I know. I know. All right. Let's take a Facebook question. All right. Logan wants to know, I made it to baby step six, Rachel, and I have a question about paying off my mortgage.

On the mortgage, do I continue to eat beans and rice, rice and beans until the house is paid off and only see the inside of a restaurant if I work there? Some Dave quotes there. Or can I grab a cold beer and just relax a little bit? Rachel, that's what Logan wants to know. Logan, you can relax. Pop a beer, you're fine. No, so we always talk about, you know,

baby steps one through three is intense. So while you're getting out of debt, building up an emergency fund, you are, you're going to be focused and every amount of energy and money is going to get those completed. And then once those are completed, then you move from intense to intentional. And so paying this house off, you know, again, some people stay because they choose to intense and they just go right down the lane and pay off the house. But this is the time to kind of ease up because I don't think, you know, long-term, which you and Sam, you

guys said, maybe except two for years. I mean, it was a marathon. I am, I am popping a beer right now, Rachel. I am drinking beer as we speak. So just, yes, relax, enjoy it. And yeah, Jade's enjoying herself as you all see. Yeah, yeah. If your student loan payment and interest rate are burying you, refinancing could be the solution. Now, I recommend contacting my friends at Laurel Road today. Through their online application, you can get an initial rate quote in less than five minutes and if you have a more complex situation, you can schedule 30 minutes to talk to an actual human being.

Thank goodness. Laurel Road makes it simple. There are no fees involved and you could save thousands over the life of your loan. Remember, you should only refinance if it makes sense in your situation. So if you're looking for a low rate or a shorter term

so that you can pay off these student loans fast, talk to my friends at Laurel Road about their competitive interest rates and how you could actually get a lower rate by signing up for auto pay. Listen, nobody's coming to save you from student loan debt. If you want them gone, you can't mess around. Go to laurelroad.com slash Ramsey to find out more about student loan refinancing. Again, that's laurelroad.com

slash Ramsey. Laurel Road is a brand of Key Bank National Association. All credit products are subject to credit approval. Hey guys, good news. Presale is on now for my new book, Build a Business You Love. If you're a business owner, you know running a business is hard. That's why I wrote this book,

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Hey, how's it going? Going good. What's going on in your world? Not much. I was just curious to see. I have, in probably like five years or so, I'm thinking about buying a house. I'm just kind of just curious to see about manual underwriting. I know, I think I know mostly about what I know about it and I'm

just curious to see what companies you'd suggest to go through to do that. And I know it's kind of rare to find, I guess is what I've heard anyways, but just kind of see what you guys think. How old are you? I'm 23. Okay, cool. Well, you're right. Like manual underwriting is what we would say for people who don't have credit scores, right, which is what we suggest.

And just kind of clarifying the idea that a zero credit score means that you have not borrowed money. And if you did borrow money, you paid it all off and your credit score rolled to zero or indeterminable. It is not a low credit score. It is not a bad credit score. It is a zero credit score rolled to zero or indeterminable. It is not a low credit score. It is not a bad credit score. It is a zero credit score. And you're right. You know, you do have to do your due diligence

and search around because every loan company, you know, every mortgage company won't do that, right? So here we talk about Churchill Mortgage because they will offer manual underwriting and they'll do it for just about every state, Rachel. I know there's some that are not on the list But most of them are I think it's like and if not, they can help find a provider in your in your area, too So I would contact Churchill is who I would recommend and yeah, and it is I mean yet

there's a little bit more of the effort put in To this kind of process kind of like sometimes it's effort without living with debt. Like if you don't have a credit score, you know, there may something with insurance may come up that they pulled your credit report, they don't have anything. So you're gonna have to show them past bills

that you've paid on time. Like there's a little bit more effort, but it's way worth it from a mental capacity than keeping debts and managing debt your whole life for the score, right? So, but no, but it is still possible and people, yeah, they're doing, they're still doing it all the time. And it's still a possibility.

Yeah, absolutely. Let's go through what you'll expect. Let's go through what you'll expect. So you'll be able to start planning for that because I think that knowing that going in is important. So you do have to show rental history. So if you're living with your parents, I feel like this is where people get hung up

is if they're living with their parents and they haven't been paying them any sort of rent, you still have to be able to show 12 months of rental history. So keep that in mind. You're gonna have to show 12 months of other trade lines. Like Rachel said, if you're not borrowing money, then other trade lines could be things like cell phones

or utilities or even insurance payments, car insurance payments, something like that. And you're gonna have to show like actual money that you're making money. So you'll have to show income for the last 12 months. If you're self-employed, it'll usually be like 24 months, and they're going to want to see your pay stubs for the last 30 days. Okay. So that's what you're looking for. And if you are self-employed, they might want to see your tax returns as well. So that's kind of just a nutshell of what they're going to ask for. So you can be prepared for that. OK, perfect. Thank you.

So would it be smart to make an account with that said bank or mortgage company so that I can like whatever I get, if I can, if I'm able to throw money into that account, I can start a relationship with them. Is that kind of a smart way to do it? Or do you guys suggest anything other than that? So they're not a... I just want to be set up for when the time comes to be ready to do it. I love that. I love that you want to be ready. I think you're thinking of it as a bank, a

bank or like a bank account. It really just is a mortgage company. So you would set, if you're ready to set aside and start saving for a down payment, we would say a high yield savings account is a good place for that. Not with a mortgage company, like an ally bank or somewhere, you know, that's be looking online is usually a great option for high yield savings.

So yeah, your savings for the down payment should go in a high yield savings account with a traditional bank or an online bank. And then when it's time to actually buy the house, which for first time home buyers, we recommend a 5% down payment and on a 15 year fixed rate with your payment

being no more than 25% of your take home pay. So after you have all of that, then you're able to say, okay, I'm gonna go to a mortgage broker or mortgage company and get a mortgage. They're gonna have to do manual underwriting because I don't have a credit score and then you keep on moving. Yeah.

And it's great. Yeah. And I always will take it a step further because if you're a first time home buyer, Rachel, I feel like there's so many things that you're like, I didn't know that. I didn't know that. It just keeps hitting you. And so one of the things that I started, it's just like a little acronym to remember. It's like when you're ready to buy a house,

you play the right cards, right? You play with a stacked deck, D-E-C-K, right? So D is down payment, right? Rachel just said what you're looking for, 20%. If you can do more, that'd be great, you know? But if only you can get it's 5%, like that's fine too. But even earnest money, E is for earnest money. People forget that when you make that offer,

you've got to be ready with cash. Some money to put down. That goes right away, right? To say, yes, I'm serious about this offer. And that does go towards closing costs. But if you were thinking, oh, I'm not quite ready yet. Oh, I didn't know I needed to have that money yet. Knowing that that's coming is important.

Of course, C, you're on the hook for some of the closing costs. So that's another expense there. And then K, you have to keep in mind the other things that go along with buying a house or moving like boxes, Rachel. And packing tape and the bubble wrap. Like that stuff is so expensive.

So just really getting your mind around all of it as you're saving up is so important so that you're not kind of hit there and like disillusioned at how much it really does cost. So it's like a taste of being a homeowner, just getting through the home buying process where you're like, oh my gosh, there's just a lot. There's so much, so much. I hope that helps. Thank you so much for the call. Sarah is in Rochester, Minneapolis. What's going on? Hi, first of all, I'm so excited to be able to talk with both of you ladies.

I love listening to you both, so thank you for taking my call. Thank you so much. You bet. Yeah. My question today is about my husband and I's situation if we're ready to buy the house that we're currently living in, and we have the opportunity to do that on a contract for deed, actually. From your parents home? Yes. Where are they gonna go? It's not my parents

home, my parents own the home. Oh okay were they using it as a rental like for a like an investment property? It was actually my grandmother's home. Oh, okay, and so they've had it Where what has what have they been doing with it the past couple years? So we've actually been living in the home since she passed away for the past six years We my husband I wanted to get married before We would move in together and then also consider purchasing the home. So now we're kind of in this spot where we've been here a long time and we've been paying rent and we just want to know to buy in our financial

situation is is it this a good time and I maybe part of it is we're just a little scared to make the jump. Sure how much are they selling it to you for? Around 400,000. 400? Which is the other scary part. Okay. And is that like a market value or is that a discount? It's market value. So you're not getting any kind of deal because it's grandmother's home. Well, there may be a little bit of a deal in there, but that's,

I would say probably maybe no lower than like 3.80. Okay, no, that's fine, yeah. And do you guys, do you feel like financially are you guys out of debt and have some savings? So we've been working really hard on getting everything paid off. We actually just paid off one of our vehicles.

Oh, congratulations. With you guys for a while thank you which was really motivating so we do have one other vehicle to pay off that we still have $20,000 on okay how much you guys make a year making around a hundred and forty five thousand one forty five okay do you have money saved at all any savings well I have, we have money saved about $15,000 in a CD. And then we've been keeping like a little bit of an extra savings for us with the kids, but the rest we've really tried to put towards our debt.

Okay. So what would be the down payment for the home? So we could put a down payment of 20,000. How? Where's it coming from? That we had set aside to put that from. So you have an extra 20,000? Yes. Okay.

Got it. I would slow down a little bit, Sarah. I think it scares you because you guys are in a little bit of a shaky situation. I take the 15, some money from the 20, pay off the car tonight. You'll have 15 left. That's your emergency fund that I would resave for a down payment to make you feel good about it. So I think you guys are still a few more months away, maybe a year away.

But the good thing is the house isn't going anywhere. That's right. It's grandma's house, so tell your parents, hey we need a few more months and I'd be out of debt emergency fund with a good down payment. Listen guys, I've heard just about every excuse for why folks think they can't get ahead with money, so let's go ahead and settle this right now. You get the final say on what happens with your money. That's why you have to start telling your money where to go so you can stop wondering where it went. So if you're going to start winning with money

you have to get on a budget. The easiest way to get started and stick to it is with the Every Dollar Budget app. It'll help you make a plan for every single dollar coming in and every single dollar going out every single month. And guess what? It's free so no excuses. Download every dollar in the App Store or Google Play today. All right you're listening to the Ramsey Show and I don't have to tell you guys money and relationships can be two of the biggest stressors in life.

I mean, it's so true, they go hand in hand. So if you're feeling stuck, you're feeling overwhelmed or uncertain, let me just tell you, you're not alone. Stress and fear do not have to control your future. And at the Money and Relationships Tour, you'll learn how to take control and shift your mindset around money and relationships tour, you'll learn how to take control and shift your mindset around money and relationships for good.

So join Dr. John Deloney and Dave Ramsey live for a high energy experience where you will see real transformations happen in the room. Okay, they're going to be live in six cities. That's Louisville, Durham, Atlanta, Phoenix, Fort Worth, and Kansas City. That's April through May, so you can go on and check out the dates.

Don't wait guys, tickets are going super fast. Get tickets at ramsysolutions.com slash tour. And if you're tuning in on YouTube or podcasts, be sure to click that link in the show notes to get the information that you need. I hope to see you there. All right, let's get into these phone lines. We've had great calls today, keep them coming.

We've got Becky in Louisville, Kentucky. right, let's get into these phone lines. We've had great calls today, keep them coming. We've got Becky in Louisville, Kentucky. Becky, what's going on? Hi, I just had a question. I am 47 and I was wondering how to get caught up on retirement with $47,000 worth of debt. Ooh, okay, $47,000 worth of debt. You're thinking about retirement.

Tell me your age again, you said it really quickly. Oh, sorry, okay. $47,000 worth of debt. You're thinking about retirement. Tell me your age again. You said it really quickly. Oh, sorry 47 you're 47 and $47,000 of debt. Yeah, look at that Okay, so let's kind of unwind this a little bit what what's your income tell us a little bit about what you do And I own a cleaning business. It's just my husband and myself that do the cleaning. And we make about $6,685 a month as after tax. And what else did you say you needed? Is your husband the same age you are? Is he in his late 40s? Yes, 47, yeah.

What kind of debt is it? I was looking at it. It's mostly like back taxes and we have three credit cards. Okay. So you owe the IRS. How much of that is IRS debt? I owe, let's see, about $25,000, one to our local DOR, Department of Revenue, and then $15,000 on IRS.

And then we have two SBA loans that adds up to about $13,000. Okay. Okay. Yeah, so you've got your work cut out for you here. I mean, typically we would say to do the debt snowball with some smallest to largest and go through like that. In this case, we always say that IRS debt or tax debt jumps straight to the top of the list.

So, I mean, that's the case for you. I would start off with that IRS debt, the 15,000, and work through that. And then I would go to the DOR debt and then the SBA loan would probably be final. In the meantime, my question is is what can you guys do I mean you're entrepreneurs you're creative minded what can you guys do to start bringing in more income kind of using your skills in the now? Yeah I was curious about you how much per house are you guys making? Well we do we do mostly commercial jobs. That's the majority of our income is what we make.

We have a few residential jobs we could probably add on, but residential jobs, probably a week, we probably make about $600 a week. Okay. And are you guys working 40 hours? Oh, plus, yeah. It's usually about 60 hours a week. 60 hours, okay. Yeah. And making 70 combined.

I guess, uh-huh. Around 70,000, 6,000 a week or a month. Uh-huh. Okay. Well, when you break it down, you know, you're both working full-time, so it comes out to be $35,000 each that you guys are making per year.

And I'm just wondering, because the biggest thing for this is to get your income up. Like what Jade was saying, to get out of this, is gonna be like, that's gonna be the biggest thing. So I'm just wondering from a time perspective, is there anything spending 40 hours a week, something else, like what else, because you're spending 40 hours a week, you know, doing something else? Like what else, because you're spending 60 hours a week is what you're saying is really what ends up being.

So I'm just wondering, you know, what else is out there? Not to close down your business, because I know this is how you guys are making a living. Well, what would it look like to add more and bring other people to help you so you're not, I mean, you guys are only gonna have so many hours in the day. Yeah.

But to get more clients on, and then you're bringing are only gonna have so many hours in the day. Yeah. But to get more clients on and then you're bringing on people to say, okay. Or upcharge. Yeah. I mean, have you guys raised your fees in a while? The last time we raised it was last year. Okay. Okay.

But I mean, of course everything is going up, so. I mean, yeah. I look for ways to offer some sort of, I mean, obviously raising your prices to meet inflation makes sense, but then you can find premiums that you can add that don't necessarily take a lot more of your time, but it gives you a reason to increase your price, right? So you could look for things like that.

You look for things like that. I'd look for other built, like other commercial properties, other personal properties, and then I'd bring on a couple of folks that are like, because there's always people looking for side hustles. So somebody who wants a house cleaning side hustle can go to you guys. And now you're just taking a percentage of it because you're the one sourcing the work, right? So I think there's a lot here for you to do. But you're going to have to get creative and you're going to have to pull the trigger on that stuff sooner than later. So you can see the impact of

that money. Okay. Yeah. So really Becky, I mean, it's, it's cutting expenses and upping income is what it comes down to. So before even doing anything into retirement, paying off this $47,000 and that like that's, that's number one goal. Okay. And then once you pay that off, be stacking some cash after that for an emergency fund, and then start looking, yes, at retirement.

Do you guys have anything saved right now in retirement? I think I've got about two thousand. Okay. Okay. Do you have any cash available? Just a thousand that we've saved for emergency fund. Yeah, okay, that's great. But we do have a big job coming up that's gonna give us about $30,000

And from the job good you think I should you just use all that towards the debt or some of that in retirement Use all of it towards the debt but pay taxes on it first so that you don't So that you don't land yourself in this Yeah, but the whole tax thing was like a big not have knowledge in it when we first started. Sure. So yeah, it's just like that. Becky, how do you get more of those jobs? Having someone pay you 30,000, is there more of that out there?

Yeah. Oh, may have lost Becky. Okay. Well, yeah. Okay. Well, that's great. Well, yeah, if I were you, I think being able to find those bigger fish to fry if you will,

because if it's the same amount of time, find clients that are gonna be paying you more for the same amount, right? I mean, if you're working 60, I mean, it is a little defeating of like, man, 60 hours a week, making 35,000, you'd make more doing something else. I mean, when it comes down to it.

So again, I know this is y'all's lifeblood and you've built this business, so I'm not saying to abandon it, but you do kind of have to reevaluate what is my time worth. That's right. And am I charging enough too? We do find that a lot in small businesses

that demand is there. Yes. And yet you're like, okay, you've kept your prices relatively okay, but you could up them. Test it, at the very least test it. Take a couple of your clients and get to that number that you think. And I think you'll be surprised at what people will pay

for a couple of reasons. Number one, like the service people are willing to service people are willing to pay for. And it's a pain in the butt to change. Like it's a pain in the butt to say, oh man, okay. I guess I need, it's too expensive. I guess I need to find a new service. Like most people are like, okay, whatever. Yes, totally, seriously.

Do you know? And I would be apt to tell you that corporations are gonna be less likely to change and absorb some of your raises than individuals, like with a homeowner. So yeah, Becky, I would, yeah, I would be looking around. And again, that $30,000 deal, that's amazing. So how else can we get that?

Yeah, I like that. All right, thanks for the call. Quick question from Jeremy on Facebook. He says, do you have any guidelines as to when we should think about withdrawing investments? I invest regularly and I understand the power of compound interest, but I also wanna take my family on holiday vacations.

Oh, yeah. Well, I mean, I would sit down with your financial planner and kind of map out, okay, if we have some non-retirement accounts, you're gonna be paying taxes on the growth, so you need to remember that and what's worth it, what's worth cash flowing versus living off these investments.

And what's that? We just had that conversation this week. I'm like, when does that happen? But as long as you can cash flow things keep those investments growing I agree, but when you get to a point as you get older and that maybe income starts slowing down That's what those investments are there for. That's right. So we taking those out. But yeah, it's a great question. Great question. Great answer Hey, if you want to keep watching the show, you want to hang out with us for another hour longer? You'll have to find us in the Ramsey Network app. You can do that by searching for it in your app store.

See you on the other side. Hey, you're still here? What are you doing? You do know that the rest of today's show is playing right now over on the Ramsey Network app, right? All you gotta do to finish the episode is search Ramsey Network in the App Store, Google Play Store, or just click the link in the show notes to download the app for free. Yep, you heard me right, for free. Then right there on the home screen, you can watch the rest of today's show. Bada bing, bada boom. Alright, I'm getting out of here. Enjoy. We'll see you on the app.