The Ramsey Show - Your Financial Situation Is Not Hopeless

Episode Date: March 7, 2024

💵 Sign-up for EveryDollar today - The simplest way to budget for your life! Rachel Cruze & Jade Warshaw answer your questions and discuss: "Why should I pay cash for my house if I have the money to do so?" How to navigate saving while in college to avoid taking out more student loans "My husband manages all our finances and doesn't share any financial information with me and I don't know what to do" "How early can I budget for the next month?" "Should we kick out our 21 year old son to start a life on his own?" How to know if you should sell your house to pay off debt "Should I pay off debts in collections first or start with debt that's still in good standing?" Support Our Sponsors: Zander Insurance BetterHelp NetSuite Angel Studios Next Steps 📞 Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET or click here! 🏦 Take Your 3-Minute Money Assessment - Get a personalized money plan! 🎟️ It's game on! Get your ticket for Total Money Makeover Weekend.  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 💼 The Ken Coleman Show 📈 EntreLeadership Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

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Music Music Music Music Music Music Music Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I am Rachel Cruz, hosting today's show with Jade Warshaw, bestselling author. Good to have you, Jade. Glad you are here. Good to be here. And we are here to answer your calls, America. It's a free call.

Why do I say that? I always say it's a free call anywhere in the country, but it's always been a free call for a long time. Toll free. Toll free. 888-825-5225. So give us a call. Again, we're talking about your life, your money, your relationships. We are here for you. So first up, we have Debbie in Raleigh, North Carolina. Hey, Debbie, welcome to the show. Thank you so much. First, I'd like to say thank you for all the education you guys have given me over the last few months.

It's been very helpful in my journey. I'm so glad. Thank you. So here's my story. I got divorced about four years ago, separated for about four years to get divorced. I was married for almost 25. Oh, man. So I've been navigating my life for the last couple of years trying to figure out what works for me. I was fortunate enough to get a nice alimony through my divorce. And I had, my ex-husband had to give me a vacation home of ours that I sold for twice as much as what we valued it for. So I have $1.6 million in the bank

and I'm looking to build a house and my financial advisor is telling me I shouldn't pay cash for my house and I am just like it's stressful for me I don't know what the right thing is to do and um is he giving you a reason is he giving you a reason what's his reason for that he says it just doesn't make sense to take 37 percent of my money to build a house like that that it just doesn't make financial sense and interesting i haven't you know when i when i was married you know my ex-husband took care of all of our finances so this is so new to me and i and i listen to your show a lot and i hear all the different things you know, that you

guys say about what they claim. If the interest rates are lower, you're getting more for your money if it's invested. And again, I get super confused. And so I just don't know. You know, I'm 50. I'll be 60 in two months. Okay. You know, looking towards retirement.

So, Debbie, what other debt do you have? Do you have any debt? I have no debt. Okay. You know, looking towards retirement. So, Debbie, what other debt do you have? Do you have any debt? I have no debt. Okay. What's your current home? What's your current home valued at? I don't have a house right now. I live in an apartment. Okay. And how much are you looking to,

how much are you wanting to spend on this build? So, the quote for the house is $630,000. And you just want to plop down the cash pay for it outright and that be that yeah and as you have retirement do you have anything any other savings well i have the 1.6 million which would dwindle to 1 million which would you knock that down to one million right okay and what's it what are you living off of right now like what's your so are you still working so i i i get alimony which is about sixty two thousand dollars a year tax free and then i have what i call them my side gigs for my jobs That I absolutely love That I make about $25,000

Which is, I'm a nanny And I truly love my job So And Again, I'll be 60 soon So I don't know how long all this is going to last As far as my income goes Yep

But my alimony is lifetime Yes So Debbie, your financial advice far as my income goes. Yep. Well, my alimony's lifetime. Alimony's lifetime. Okay. So, Debbie, your financial advisor is naturally always going to yield in the sense of investing your money. Of course. Because that's, you know, how most people make money. And again, we're not mad at that.

You know, there is a time and a place to invest money, and that is a wise thing to do. But it's also really stupid, Debbie, in my opinion, to go and take out a wise thing to do but it's also really stupid debbie in my opinion to go and take out a loan for something that you have money for with a plenty of other money of a million dollars left over if you said you had a million dollars you want to go buy a million dollar house i'd say no debbie we can't do that but you're spending six yeah you're gonna have a million dollars at 60 years old as a net worth of just cash plus a six hundred thousand dollar paid for house and if you invested that million dollars debbie and you did that you you know for 20 30 years you're okay debbie you have a paid for house uh-huh you have no bills i know that sounds so i almost would just fire your financial

advisor because i think you're on different pages i think i think the way they view money is in a in a very stereotypical way and again ramsey we're known as being a little bit different in this arena anyways but um but from a mathematical standpoint this is not a massive risk you're gonna have a million dollars still still in a paid for house and you know there's always there's always that equation of peace who wants to enter into still, still in a paid-for house. And, you know, there's always that equation of peace. Who wants to enter into retirement with a mortgage payment? Right, right. That's just more that you'll be,

that's more money you'll be pulling out of that investment anyway. I mean, it's going to get paid for regardless, so you may as well pay for it up front. Yeah, and Debbie, the $ that's that's everything right land build and all correct i've already bought the land okay it's already purchased yeah yeah and it's on a beautiful lake like i feel really special and fortunate yes if i woke up in your shoes i would definitely do this yeah and you mentioned earlier debbie and just to kind of give some clarity around it um you said you'd listened to the show and heard about interest rates and all of that so one deterrent for people for paying off their house is they may have a low interest rate on their mortgage at two to three percent right

where in the market you could be making ten percent so a lot of people say why would you you know why would you take money that could be making ten percent and pay off something that you're only paying two percent if that makes sense. So people have that argument a lot. And mathematically, we understand that. We know that that is the math. But what people don't put into the equation, number one is a level of risk. Whenever you carry any level of debt, even a mortgage, there is a level of risk in your life. You owe someone something. And then the second, Debbie, is that they don't calculate and put into a formula, a spreadsheet, peace, like what Jade mentioned earlier. This level of peace that you don't, again, you're not strapped to anyone. You are free and clear financially. And that

is the most powerful thing that you can do. So Debbie, I'm so thankful you're listening to the show because I'm so sorry you went through this horrible divorce. But we talked to a lot of women who are in a similar situation that for the first time, they're kind of out on their own financially and they're having to learn and all of this. So Debbie, if you stay on the line, Christian's going to pick up and I want to throw in Jade and I's book, both of our books. Yes. Do you just to continue just to learn and to grow in this area? Because personal finance, it doesn't have to be that complicated, but you do want good people in your corner. And I don't trust the advice of your financial advisor, if I were to be honest. I just think it's, you know, money is so much more.

Sometimes we're just looking at the numbers and the dollars and the cents. But in this case, it really humanizes because it takes into account like our psychology and our emotions and the way we feel, not just a math equation. And so honestly, you're right. This is one of the one times where the math, it's not always about the math and how the math maths. That's right. That's right. Yes. Yes. Yep. Sometimes it is. Sometimes it isn't. But when it comes to debt and borrowing money, there is a truth that the borrower is slave to the lender. And when you are free of that, it's an amazing thing. What happens to your, your body, your, your soul, your mind when you don't owe anyone anything.

So Debbie, I think you're in a really, to go through such a hard situation, you have a beautiful life ahead of you that I think you can do really well. And I think trust your guts because Debbie, you were right. How you're feeling, it's the way we would go to. So thanks for the call.

I've been doing this show for over 30 years, and some of the saddest calls I have taken are from situations that are completely preventable. Yeah, and what's so hard is I feel like one of those, especially the ones that I'm like, oh, it's terrible, are people that call in and their spouse has passed away suddenly, and they don't have life insurance. When you have to think through, how am I going to pay my bills? How am I going to eat next week? Yeah, in the middle of all that grief.

Like it's just, it is, it's terrible. And so life insurance is the one thing, especially as a mom with three little kids that I'm like so big on for people to get because it's inexpensive. Zander is the place that Winston and I actually get all of our life insurance. And it doesn't cost much

because Zander shops among a gazillion different companies. It doesn't cost much. You just have to admit that someday you're not going to be here. You got to say it out loud and you got to say, I'm going to say I love you to my family by taking care of them and taking the time to put this stuff in place. The cost of stinking pizza. To get a free quote, call 800-356-4282. That's 800-356-4282 or go to zander.com. Welcome back to The Ramsey Show. I am Rachel Cruz hosting today with Jade Warshaw and we are taking your calls at 888-825-5225. Up next is Emily in Pensacola.

Hey, Emily, welcome to the show. Hi, thank you so much, y'all, for taking my call. I appreciate it. Absolutely. How can we help? Okay, so my husband and I had gone through a financial piece, gosh, over a decade ago. But, you know, life happened and five kids happened. And right now we're back on it but finishing up baby step number two. We have no consumer debt, a little bit of student loans left that we expect to be paid off by the end of this year. And then we'll just be left with our mortgage. We are in a 30-year veteran loan, but we plan to pay it off early within hopefully 10 to 15 years. My question is, so right now we have, my question is kind of regarding my credit score. We have four credit cards right now that are open, but frozen. We have not used them in probably about a year.

We're kind of, I guess, not sure what to do with those accounts. We're kind of leaving them open right now so that if we close them, they don't affect our credit score. Our hope is that if we have the opportunity in the next few years to refinance, to get a lower interest rate that we would do that in order to help us pay off our mortgage even quicker. But we're just not sure, do we close our credit cards and risk that affecting our credit score? Would that affect it drastically? Or do we leave them open and frozen and kind of maintain our credit score?

We just don't kind of want to tank it and lose that chance to refinance in the future. So there is something to be said about when you're going through the process of paying off debt. There's kind of this spoken or in some cases unspoken thought that, okay, when we do this, we're not borrowing money again. Therefore, we wouldn't're not borrowing money again. Therefore, we wouldn't need our credit score again. Therefore, we can close our credit cards. And so in your case, you're kind of thinking about, well, we don't plan on borrowing money anymore, but we want to refinance. And I can just tell you just from personal situation,

we have a mortgage and we don't have any other credit cards and we don't have anything else. And before we had our mortgage, our credit score went to zero. We purchased a home with a loan and our credit is like almost perfect. And all we have on there is our mortgage. So you might see an initial drop just because you're closing accounts, but it's not going to go to zero and it's not going to be terrible because you're still have something major like a mortgage that you're paying every single month on time. And so there is part of that, that it's going to make it okay. And it's going to keep it, you know, in the upper range. And so I don't think you have to be worried about that. But I kind of, my question for you is, do you have any other qualms about your credit score? Because I do think that when you go

and set out to follow the Ramsey plan, you have to know eventually your credit score is going to go to zero and you kind of have to cut ties with that old way of thinking. Yeah. And I, so ultimately, like we do want our credit score to be undeterminable. Like that is our ultimate goal. We don't plan on taking out any more debt. Like you had said, we have two cars. They're old. They're paid for. So we have basically our credit cards are frozen in a safe.

So we haven't even kind of activated the new ones that was our extended length of credit attached to some of these cards that you know with wanting to potentially refinance in order to get the house paid off that we just didn't want to what's your interest right now like 6.8 okay so you guys just recently bought in the last year too two. Okay. We bought it. If I were you, I'd cancel them sooner than later so that your score has the ability to kind of do what it's going to do and then even out to where it's going to even out. And then when the time comes, who knows when these interest rates get lower, then you will have a clear indicator of what it will be and it won't be in that fluctuation stage. Yeah. And Emily, when you look at the calculations of how a credit score is even mathematically

determined, one of the pieces of the pie is new debt. And you guys aren't doing that. So in one sense, you got everything frozen, but you're not taking on new debt. So you're not playing the game naturally anyway. So there is a chance even because of that, mathematically speaking, you may even see a downtick slowly because you're not playing that game and so if you're not playing it i would just cut ties with it and like what jade said even it back out or you know if if all else fails like you're gonna be fine you know what i mean so um so in my

head it is it's just a i don't want i don't want accounts out there floating around even if they're frozen no way so just just being able to get rid of them, getting guests, like Jade said, when everything is back then and stabilized. And sadly, the truth is, who knows? Who knows what's going to happen in the future? So I'd rather take things under my control and do something that I can do, which is just get rid of them, close it out,

and then see how the world shakes out and then go from there. 100%. All right, next, let's go to kyle in charlotte hey kyle welcome to the show hey how y'all we're doing well how can we help so i got a little dilemma i'm just been started watching uh the ramsay show probably two months ago and i'm currently in baby step one i did um get the EveryDollar app. I am using that, created a budget. So I have me and my fiancee.

We have a three-month-old baby girl. She has a 14-year-old daughter that actually lives with us as well. We bought a home about two years ago. Mortgage is around $157,000 left on it. She has two vehicle loans. One is around $157,000 left on it. She has two vehicle loans. One is around $18,000. The other one is around $8,000. So she also has three credit cards, and she has a personal loan.

So I don't have any debt currently in my name, but all of her debt together is around $42,000 not including the home mortgage. She stays home. She's a stay-at-home mother. I'm a full-time firefighter. I have two part-time jobs as well.

I'm trying to figure out you know I am going to snowball the debt after I do the baby step one, which that's baby step two. But I'm trying to get her on board with the budget. When do you get married? We actually don't have a marriage date yet. That's what I was going to say as well. So our relationship is actually hanging on by a thread because of, you know,

we don't see eye to eye on the financial state. That's a big deal. That's a big deal. Kyle, has that changed in the last two months since you've been watching us or has it always been like that? So it's been like that more since my daughter was born. Yeah.

Okay. You know, I've always been a saver. And, you know, now that my daughter's born, you know, I grew up, my parents separated when I was 12. So I've seen, I know how that affects the kid. And I don't want that. Yep. And, you know, I look at the future like anything can happen. So she's not like that.

Like I asked her the other day because I was listening. I was like, you know, what is your 10 year goal? Where do you see yourself in 10 years? And she's she's told me she said, you know, I just I worry about today. I don't worry about 10 years. So when you ask her her philosophy on on money and you're asking her hey like are you at a point in life where you're done borrowing how do you feel about paying off debt is she able to give an answer that has any promise so she will say she don't

want to borrow any more money but it's just now, you know, she's made some financial decisions that I didn't agree with. And, you know, I don't, I don't have, I didn't have the control over that at that point. Well, listen, the hard part is you guys are in, in a, this situation is made more complex because you're not yet married, but you're kind of in this situation where your life seems like you're married so you you feel like listen i have to step in her debt's

my debt and so the whole thing is very confused and i think that as much as you can keep some clarity around that and either marry her or not but i would not start paying off this debt until you've decided if this is the person that you're going to spend your life with. Yeah. Yeah. And Kyle and I would have the conversation with her from a vulnerable, you know, not just what are you, you, you pointing. Tell her you like what's going on in Kyle. What is the fear that you have?

What is going on? And start these conversations. And you've said this before, Jade, on different shows. But like it takes it sometimes takes time. Yes. Right. You've had a mindset a natural shift and then ramsey's probably confirmed that because we lean probably more on your side kyle but you guys together need to sit

down and have these conversations but for now keep the finances separate you don't need to be paying on her debt because if she's not getting out of debt she's digging herself deeper in a hole this show is sponsored by BetterHelp. This is the season for Halloween. It's October. We're wearing costumes and we're wearing masks. So if you haven't started planning your costume yet, get on it. And while you're thinking about it, I want you to be honest.

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and your schedule. Just fill out a short online survey and you'll be matched with a licensed therapist. Plus, you can switch therapist at any time for no additional cost. Take off the costumes and take off the mask with BetterHelp. Visit betterHelp.com slash Deloney to get 10% off your first month. That's BetterHelp.com slash Deloney. Welcome back to the Ramsey Show. Today's question of the day comes from Taylor in Missouri. She says, my husband graduated college about 10 years ago and has not paid off a dime

of his $80,000 in student loans. Anytime I approach him about it, he just blows me off. I'm a stay-at-home mom with our third baby on the way

and I'm afraid the government is going to garnish his wages. What should I do? Ooh! Well, I mean, yeah,

you're getting up to it. Yeah. 100%. Like, if you don't pay your student loans, that first day that you're past due, that's considered delinquent. And then if you're delinquent for 90 days, you're considered default.

And then at that point, a lot can happen. Number one, your loan can go into acceleration where basically the whole amount is due at once. And you're no longer eligible for payment once and you're no longer eligible for payment plans and you're no longer eligible for forbearance or whatever those other things are and they can start to garnish your wages yep um amongst other things so if i were you i would be very concerned about this here's these are those times where you have to have really clear boundaries in place and you have to have a a what if like if and kind of I hate to say

like an ultimatum but this is the way I feel and here's what I believe needs to be taking place and if these few things don't start to take place then this is what's going to take place on my end and so that's the way I would approach it my guess is she doesn't say what the conversations have been but i would approach it yeah yeah and if he's a husband that blows blows me off that's a problem it's probably not just in this scenario either right it's probably not just about money that that is how your marriage functions because it's not like oh he's so empathetic and listens and we're a team here and there with everything else and there's one thing he's just not, he just turned. That's usually not the case. Usually there's a pattern in who you are as a person. It's pretty consistent through all the situations in life. And so my fear, Taylor,

is that there's probably more of a marriage issue here than the fact that he's just not paying his student loans, which is an issue too. So yeah, I think there's a lot of work to be done, I think, on the marriage side of this, because a husband that just blows off what a wife says or a wife that just blows off what a husband says, there's obviously not a level of respect and empathy and humility there. And those are some ingredients that you need to have a lifelong healthy relationship. And so I would work on that aspect and then out of that hopefully comes that's a case for counseling and if I'm in your shoes in the effort to keep my family safe financially I'm just gonna reach in and pay the bill I'm gonna reach it I'm gonna say what's the login

and I'm gonna pay the bill and if that causes a problem again to Rachel's point the fact that he's functioning like he doesn't even own oh oh the money and isn't even paying on it yeah it's pretty wild yep so it's the same thing like if the mortgage wasn't being paid and you knew the money was there pay the mortgage like don't wait for somebody to do something that you can do to keep the family safe financially and then deal with everything else in counseling that's that's jay's take I love it all right up next we have Emily in El Paso. Hey, Emily, welcome to the show. Hello, how are you? Hi, we're doing well. How can we help? I want some advice on how I can start tackling my student loans. I'm still in school and I have

about two years left and I want to try to get ahead of it even though I don't have much income so that I'm not really drowning in it when I get out. How old are you? Are you a traditional student? I'm 25. I'm in my, I'm about to start my third year of medical school. Okay. And what, how much income are you bringing in? My income is really just allowance that I get for my parents. It's $400 a month, and I realized I don't need to be spending that much on food every month. So what's your plan? Take half of it and start paying student loan payments? Yeah, I thought I could probably manage to do $200 or $300 of it per month and put that towards my loans. So this is medical school, Emily. So how much, how much do you owe now being two years in? I currently owe a little over 23,000. Okay. That's not, that's not

as bad. Wow. Okay. How are you doing that? Is it the school you chose or do you have scholarships? Do you have, do you have situation that you're getting helped? It's a combination. I am doing school in state to where I live, so the tuition's already a little lower. And my school pays for about half on scholarship. So in general, I usually only need to take like 10 or 12 grand out per year. So I think on the conservative end, I'll probably need to do the same for the next two years and probably double what I've taken out now. Honestly, if I were in your shoes, I would flip it because these student loans aren't due yet. I would focus on piling up cash for the coming semesters so that you're not continuing to take out more debt.

And if possible, I don't listen. I know medical students. It's crazy. If there's any way to pick up any extra work that you can on your off days, on the weekends, whatever it is, I would do that. And I would see, OK, like, can I stack up a thousand dollars a month? Is there any way where I can find that and make that happen? Because if you can do that, then you're well on your way to taking care of the next 10,000. It's did you say 10,000 per year or per semester?

Per year. Okay, then yeah, I love that goal. Try to get a thousand bucks a month and then you're not taking on any more debt. And then when you graduate, you can tackle this 23,000. My guess is they're subsidized so they're not gonna gain interest

while you're in school. So Emily- They're unsubsidized. Well, that sucks, but I still would not change the course of action. What do you think you'll be? I shouldn't worry about them right now. No, I'd worry about not accumulating more debt.

When you graduate, Emily, what type of work are you going into? Do you know how much, on average, people are making in that field? So I want to go into surgery, but in general, a first year resident, regardless of specialty, I think that the general average in Texas is around $50,000 a year. Okay. And then what's your earnings beyond that? Like, what do you see your potential being in year one, two, three, four, five? It goes up a little bit per year, but it depends. I might be able to find better numbers.

I'm not really sure. No, no, you're fine. Well, I was just trying to, yeah, get a gauge because, you know, the goal would be, like Jade said, if you can do something where you work weekends, even some nights throughout the week and bring in a thousand bucks a month, that would be huge to cashflow the next two years, which means you'd have $23,000 left to pay. And at that rate with what you're making, I mean, it, it, you know, it could take two years at that point, but if you work extra above your normal salary, you can get it paid off even faster. Right. So I think it's just just it's this idea of looking at the math looking at the numbers and making a plan knowing when you graduate you're probably still going to be living

like a college student while you get these paid off yeah i don't mind that yes no that's great well i appreciate you even thinking about it too in mid-school because for a lot of people it's once they graduate and the bills start coming that they're finally like oh oh, my gosh, how do I how do I do this? How do I navigate this? So she's probably seeing that balance grow because the interest is accumulating and she's probably like, oh, crap. Yes. Yes. So. So, yeah, what Jade said, though, I think is is wise is to be able to do as much as you can to cash flow that next semester. But, man, this is a great story, though, for all of you that want to go to medical school, because usually when we get these calls,

law school, medical school on the show, it's six figures in debt. And so listening to somebody that stayed in state, picked a school possibly because she got so much scholarship on that side that half is getting paid for, which is just incredible. So again, all these advanced degrees to go into these fields that are so needed and we're so thankful for, medical degrees and other

things, there's still options out there. And so for those of you that may be in that situation, be creative in the way you think about this. I think the hard thing is people fall into the normalcy of, well, it's just medical school. There's nothing else I can this. I think the hard thing is people fall into the normalcy of, well, it's just medical school. There's nothing else I can do. I'm going to go to whatever school, pay it, figure it out when I graduate. And so I was talking to someone like Emily is so encouraging because she made a couple of calls right there

and turned some things and it was great. Yeah, it's possible. Where there is a will, there is a way, clearly. Yes, where there is a will, there is a way. And those student loans, Jade, for you and Sam, that was a big chunk of your debt. So I'm like, it's the one that just I feel like people, it gets dragged. And I think people think that they can just forget about it and, oh, I'll just put it on the shelf and it won't bother me.

I'm like, yes, it will bother you and it will continue to accumulate. And even if your wallet's not feeling it, because i know a lot of people are on zero payments because of the administration your body feels it yeah don't make no mistake as john deloney would say your body keeps the score and your body knows when you're not safe and debt puts you in an unsafe position that's right this is the ramsey show 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 40,000 businesses have future-proofed themselves with NetSuite by Oracle, the number one cloud enterprise resource planning system. Ramsey Solutions uses NetSuite, and you should too. Whether your company's earning millions or even hundreds of millions, NetSuite helps you respond to immediate challenges and seize your biggest opportunities. With one unified business management suite, there's only 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 can 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. Welcome back to The Ramsey Show. Let's go to Ann in Pittsburgh. Hi, Ann. Welcome to the show. Hi.

How are you today? Hi, we are doing well. How can we help? Well, I hope you can help. That's my question. Is there any hope for our situation? We have been married 19 years. We're in our 50s. We have one

special needs son. We're both self-employed. I have a business from home, which has been very helpful with our son and being home when he gets off the bus, all that kind of stuff. My husband has always controlled 99% of the finances. I don't have, my name is not on the bank account. My name, I don't have a login. Um, our, his business and our home bills are combined on the same account, which I know probably should not be that way. Um, we have a home loan of about 243. If sold, it might be worth 700,000. Um, the big problem I came to realize is that our credit cards are at $209,000. We have a car loan for $21,000, and some of the credit cards are his business only.

But as far as I'm aware, in certain states, your debt is your debt and half and half debt and assets. So I guess I'm trying to figure out, I can't get through to him. Um, he just blows up when I try to say, Hey, let's try a budget. Hey, here's all the credit cards on an Excel spreadsheet that shows all the percentages. Like it's just, um, kind of banging my head on a wall and I don't know how to protect myself, how to protect my son. The only good news is that I do have a 401k that is in my name from before we were married. And then we also have, I have a little bit of savings.

And then he does have a life insurance policy. God forbid anything happens, but he's, he's not well mentally and he's been, you know, threatening a lot of things. And I thought I should try and get some advice. Are you thinking about walking away from this? At this point, I really can't right now. I can't right now. My business is here on the property. And if i would leave the other thing is i would be taking my autistic child away from the only home he knows um that he's had his whole life his dogs his everything that's comfort to him and your husband's not open is he it's i'm guessing based on what you said i think i think he knows that that he's in the toilet i think he knows that he's in the toilet.

I think he realizes, I mean, he's paying the minimums on the credit cards. That's it. And where's the revenue of your business going in? What account is that going into? It's going in with everything else. I mean, I don't make much. Last year, he had it written down here. Last year.

Hey, do you suspect that there could be IRS debt as well? Because when you tell me that all the business bills and all the personal bills and everything's together, that sounds like a mess. I don't. I think he's pretty OCD about keeping track of stuff. Last year's gross income was $233,000. But then by the time we got to the bottom of the income, the income is $26,000. Once he takes off depreciation, vehicles, all that kind of stuff. What type of business does he have?

He's an electrical contractor. So he's making $26,000 a year. He's paying himself $26,000. Technically, yeah. And it's just him. He doesn't have employees. And what about you? Just employees. And what about you? Just myself. And what do you bring in? What's your payment from your business? I'm lucky if I bring $10,000 or less. So you guys combined are living off of $36,000 and you've got the $21,000 in card debt. And how much in credit cards? $206,000?

$209,000 in card debt and how much in credit cards? $206,000? $209,000. $209,000. Okay. And is there anything else that you think might be out there, not including the mortgage? No. And of that $209,000, $40,000 is just for his business. But of course, I'm pretty sure I'm liable for that as well. But everything else. And so is he using these credit cards to keep you guys afloat just month to month? Yes. Yeah. And when you said he's not mentally well, what do you mind going into a little bit more detail on that? I mean, there's there's increased alcohol. Just you can tell there's depression. Yeah. We'll even mention the debt. We'll mention my wife told me that we're this much in debt and you know, she must be full of it. I don't believe it. And he'll say this in front of his best friends and it's like, oh my God, now he's like sharing it with folks. But I think he's embarrassed.

I think he doesn't know what to do. Yeah, I do too. Yeah. So I think, you know, and it just sounds like my first protection is for you. And the fact that you don't have any access to anything. And I mean, there could be there could be a whole other life he's living. Right. I mean, on on different levels, on different scales, financially not. I'm like, you have no clue what's really going on because the money is kind of the paper trail to a degree on life and being able to see that. You have no access to that, which is a hard line I draw. You have to be able to have access and have everything visual that you see. I mean, it's one thing if you're like, oh my gosh,

she's a spender. I'm a saver. I don't know what to do. It's a whole other thing. And you cross another line into another level of seriousness when you don't have the ability to access your money. So this is a, it's a, it's a, it's a more serious weight there that I, that I hold now in this conversation that, that creates more ultimatums. And I hear you say, like, I can't leave, all of that. But what I would do is that there's other ultimatums in this marriage that has to change because you're not safe at that point, right? Right. How'd you find out about the 209? Just curious. Did he tell you or you discovered it? Oh, he did not tell me. I discovered it. I started going through his files.

And I made like the biggest Excel spreadsheet you'd ever want to see in your life. And I just, you know, tried talking to him. And, you know, we were okay there for a while. Oh, I'm paying it down. I'm paying it down. And then, you know, once a year I'd pull these files again and get everything sorted and I did it again this year and I said this this is he's to the point now where everything is minimum. Yeah for me this falls into what I what I would call a level of financial abuse and infidelity because

he's keeping everything on his side he's making moves without sharing them with you and they're at the detriment to you and your family and your son. And I would push back on the fact that there's nowhere for you to go. There's always an option. But I can guarantee you this, it is not going to be a comfortable option. There's going to be no piece of it that feels comfortable or easy or, you know what I'm saying? So I do think that you have to give yourself an ultimatum and you need to say all right what am i gonna do what are my limits what are my boundaries and what is my time frame for me to and and what what is an indicator that this is uh moving forward or that

it's staying the same like you does that make sense You have to have something very real and very measurable for this situation. Yeah. Right. Right. So whether that's whether that's I'm going to offer counseling and I'm going to give him 60 days to agree to it, or I'm going to ask him for these account passwords and I'm going to ask him for, you know, complete transparency and I'm going to give him 45 days to wrestle with that and get to that point. You've just got to make it very clear, write it down on paper.

If you have a friend, get a friend. If you have a pastor, find a pastor. But you need somebody who knows. Does anybody else know this is going on besides us two girls on the radio? Yes. Okay. Yeah, a few friends, close friends and family members. And what are they suggesting?

What are they saying since they know the situation even more? And they know him and they know he's not right. You know, I married a 37-year-old man who was set in his ways. And unfortunately, he is a collector. And that's where the money has gone. He collects things. And to the point I said, can we sell some stuff? So is he hoarding too?

Like, are you in that sort of a situation? No. No, it's just enormous collections of things that are really our only hope. These assets that could help us get out from under this, but he's not willing to touch. I'm not selling any of my stuff, he says. Like, oh, that's great. Because years ago he did. He would sell a stamp collection or he would sell another collection. So you're just seeing a deterioration. So, Ann, I would bring in a third party in that. And again, and it's so hard

to say this on this side of the desk, because now, because now we have to go, but you're going to be living this life. But not only is it a secret, but you're also behind. You're trying to live on $34,000 a year as well. So there's two ends of this that are really urgent. So I'm so sorry. I hope this was helpful to give him some ultimatums, but I so, so appreciate the call. This is The Ramsey Show. Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I am Rachel Cruz hosting this hour

with Jade Warshaw. And we are here to answer your questions. So give us a call at 888-825-5225. All right, up first we have James in Mesa, Arizona. Hey James, welcome to the show. Hi Rachel, how are you? Doing well, how can we help? Well, a quick question. So recently, I'll try to give you a little background or context here. Recently, my brother, who is 57 years old, and a friend of mine, who is 42, I believe, they recently came to me and asked me for some advice of how they could get out of debt. Based on their circumstances and situation, I felt the best advice to give them, even though I've given them Dave's book, even though I try to have them listen to the show, that based on their situations, bankruptcy, I think, is the best option. So my question to you,

when is taking baby steps or filing for bankruptcy is the better option than taking baby steps? Well, I mean, I'd want to know more about their situation, but I'm almost... I mean, honestly, this is just me and Rachel will give her take. When I think about bankruptcy, they're either going to sell off your assets and put you on a payment plan or they're going to just put you on a payment plan. And to me, those are all things that you could take on and do yourself. Like you can look through your assets and sell them off and you can call and make a payment plan. And like there's so much of that that you can handle on your own. Obviously, yes, some of the debt they can you know will be uh written off but i

i'd want to know more about their situation well first of all they have no assets they have no assets the only assets that my brother has he has a uh he is turning uh 58 uh he will be able to retire from the police department in a year okay he has a pension he has uh he has two hundred and ten thousand dollars worth of debt okay then the answer for me is automatically no automatically no that that i would not file bankruptcy because i think that two hundred and ten of debt is something an amount of debt that can be paid off especially when you are able to make an income if you told me that there was something disability something that was keeping him from being able to work you're talking to some listen you're talking to someone on the line who paid off

four hundred and sixty thousand dollars of debt with my spouse so it's going to be hard to convince Convince me otherwise. But keep going. Keep going. Yeah, but so some of the debt, I would say, well, there's student loans, which I think you, if I'm not mistaken, that does not bank repable. That's right. But a lot, some of the debt, even some of the debt is to me, is personal loans that they owe to people. We're talking about when you add it all up, they probably owe $100,000 worth of debt that they just owe to people that they cannot pay back. I was in a situation like that myself at one point where I loaned people money trying to help them out because they got behind on their mortgage and this and that. I went to each of them and just said, look, just give me as much as you can. And the way,

the only way the best way for me to put it is, is I probably left 50 grand out on the street. I just, does he owe you money, James? Pardon? Does he owe you money? Are you one of those hundred thousand? Yes, I am one of those. My mom is one of those. How much does he owe? In a formal state? Because if you file bankruptcy, is it formally money that has been lent out? Like it's not through a bank. It's just people giving their own personal money. So even bankruptcy and that. So it's personal for the case with my brother. It's personal money. It's car debt. It's title loan debt. It's. So you are loaning him money to pay his car note and his title loans.

No, no, no, no, no, no, no. I will not loan him money. I will not loan him money. Hey, help me understand. Help me understand this because I understand it's not your situation. You're calling on behalf of a brother and a friend. You told me he was a police officer, law enforcement. He's got a pension. What was keeping him from,

what got him in this situation? Was it habits? Was it a bad business? Yeah, living beyond his means. Credit card debt, he has a timeshare, taking trips that he really couldn't afford. Bankruptcy doesn't change that.

He probably got $50,000 worth of credit card debt. Did you hear what Rachel said? And it's a good point. Bankruptcy's not going to change that. And here's the thing. If he was ready to change his behavior, he'd be calling us, not you. And like you said, you gave him the total money makeover like it sounds like you've been inserting yourself into this situation um and he's I mean you can lead a horse to water

but you can't make him drink so it kind of sounds like he's just not interested and you love them right so you're trying to and you see that this just ends in, this ends badly, but there's a part of this where you really just have to shake the dust off your feet and keep walking and doing what you know to do and living by example. And when he comes to you for help, when he's ready, you'll be there to help him. Yeah. Yeah. Okay. I was wondering if that was an option. When is that option? When is that point of no return? Yeah. Because when I say bankruptcy, Rachel, I'm talking life bankruptcy. That's going to every person that you owe and just say, look, I can't pay you. I'm talking about literal bankruptcy, but also life bankruptcy. For all the personal loans that he owes to people. Yeah, he can do that. He can go to someone and just say, look, I can't pay you. I have to

reorganize. I got to get out of this debt first, which is not fair to me, his mom or a friend. No, it's not. Right. Right. I agree. I agree. He's never going to pay them back. He's never going to pay them back. Yes, that's right. And I think he can have that conversation because this is the reality of what it is. They're not going to get their money. So the reality is... No, they're not going to get their money. That's right. That's right. So he can in good conscience... I realized that at one point with all the people that I tried to help, I'm not going to get my money. So I went to them, like, for example, there was someone who owed me $8,000 because they were behind on their mortgage and i helped them out i asked them for ten percent i said could you give me eight hundred james james you need to stop you need to stop loaning people money hey

wait wait wait we've been talking about the brother and the friend now i'm going to talk about you you need to stop you're not a loan shark and you're not a bank. You need to stop lending people money, especially family members. Don't lend them money. Give them money if they need it. And you get to decide if it's wise for you to do that. But I think that you need to stop lending people money as well. That will be your piece of medicine to take away from this call. Which I did 15 years ago.

Okay, good. 15 years ago, I made that decision. I said, I will never loan anyone money again. Good, good. 15 years ago, I made that decision. I said, I will never loan anyone money again. Good. I think that's a great lesson. And I've stayed on my financial plan and my investment plan. It's my brother, my mother,

it's everyone. You've got to pray for him. You've got to pray for him, James. And it is tough. And I totally hear the care in that. But also, James, there is a healthy boundary for you to draw. This is not your life. And you sound way more concerned than maybe your brother even is. And so this, he's a big boy. He's a grown man. He's a police officer. He can be able to deal with it. You're not going to be able to convince or change him. He has to be the one to do that. And so bankruptcy is an option. It may be 0.02% of the situations that we hear. Majority of the time, it's people's habits and their ability to put income towards debt and pay it off in sacrifice. This is The

Ramsey Show. One thing we're so excited about, Jade, is that we are having an entire weekend here at Ramsey Solutions headquarters, and we're going to be hanging out for an entire weekend for the Total Money Makeover weekend event, May 10th and 11th. So this is one weekend and it's going to be a full of content. This is basically your crash course to everything that we teach around money.

It's going to be all new content from all the Ramsey personalities. We will all be there. So regardless of what baby step you're on, this event is for you. And we're going to be doing A live taping Of the Smart Money Happy Hour With myself and George Camel

On Friday night Which is always so fun And throughout the event You guys Throughout the whole weekend We're going to be doing So many Q&As We're going to be

Hanging out with you Answering your questions We're going to be It is such a powerful thing when you've come, if you have come to a live event, to be in a room with thousands of people that are like-minded. They're walking the same journey as you. It is so encouraging. Hopefully, you learn something new. You're empowered again. It gives you hope, and you're able to keep going on this journey. So again, it's Dave Ramsey, myself, Rachel Cruz,

Dr. John Zaloni, George Campbell, Ken Coleman, and Jade Warshaw. So get your tickets today. Our Platinum tickets are already sold out, but you can still, our Platinum Plus tickets are sold out, but you can still get Platinum or VIP. And early bird pricing ends today, March 7th. It is done with early bird pricing ends today March 7th It is done with early bird pricing today So make sure to go get your tickets

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Big deal That's a big deal. All right. Next is Jenny in Oklahoma City. Hey, Jenny, welcome to the show. Hey, thanks for taking my call. Absolutely. How can we help? So a little bit of backstory. My husband and I have three kids and one on the way. Congratulations. Thank you. I just started listening to you guys probably about consistently for like a month or so now. So I'm really fresh and I got super excited. But I realized after listening that it was probably the worst time to get excited because I know you guys have something called stork mode. Yes. So I'm just curious. I'm due in April and I have a student. We have a student loan for forty nine hundred and then a credit card that's about at forty five.

And then we have our car loan. And then I just filed taxes. So we owe about haven't finished filing them, but I believe they're going to come to around $3,000 or $2,800. And so I just wanted to get your advice on what exactly to tackle first. We do have a little bit in savings. We've got about $8,000 savings. So based on prioritizing what the best thing would be to do once I have the baby and then also wondering should we sell the car and get a beater or should after we pay off these two little small ones, should we just work on paying

off that car? How much do you guys owe on the car? 26,000. 26. What's it worth if you were to sell it? Uh, about 22. So there's that little gap there too. Yeah. Okay. And how much do you guys make a year? Well, when I, I'm just currently on leave. So what we usually make would be about 98,000. Okay. And then you have another vehicle that's paid for? Yes. And what kind of vehicle is it? It's a Honda 20. It's a four-door honda accord so if you were if you were to sell this 26,000 one and put 4,000 with it from your savings this is this is assuming after the baby by the

way um and then you let's say you took the other 4,000 maybe put another thousand with it and bought a five thousand dollar car i'm assuming the main car would be the other car you have. Right, because once we have the baby, we won't all be able to fit in the little car. Okay, are you able to fit in the car you have now that you owe on? Okay. Yes. I see.

Okay, so yeah, I mean, April's coming up fast, so you're good. So the first thing I would do is the IRS, which you owe in taxes for sure. That's my A1. So go ahead and get that out of the way um that leaves you with yeah five thousand um yeah and then I would pay off the forty five hundred dollar one after baby's here uh because that'll get you guys down to your a thousand

dollar emergency funds and then I would knock out the forty forty nine hundred next and then and then looking at the car situation so I might keep it. If you think you can pay it off in two years or less, which you can, I think I'd keep it because the size of your family and the option, if your family were different, it might, if things were different, it might make sense for you to sell it. But honestly, in in this case with the amount of money that you guys earn and with the size of your family uh you need a vehicle that will fit your entire family yes yes yes so yeah and it's not a it's not an outrageous percentage to your income either right if you owed 26 000 and you made 36 000 then yeah we got to get rid of this car um but you guys you guys make $98,000

Which is great So I would keep the car Like Jade said but the great thing is so many of these are like Little ankle biters Jenny that Within 60 days after having the baby You could have a majority of this paid off And just have the car left What's the car payment?

It's $450,000 Okay I've heard worse like it's not, but it's not like $768. Or $1,100. Yeah, exactly. So yeah, I would do it exactly like Rachel said. When you have this fourth baby, what's the plan? Are you going back to work or you stay at home mom from here on out? And how will that affect the income?

Well, I currently have the option of um hourly pay so like i've got a job that i can go back to or i can do real estate real estate hasn't been exactly the best right now as you guys probably know starting starting from scratch real estate or you were doing real estate before no i've had it on the hook for about seven years okay off and on just kind of okay Okay, good. I'm pretty established, but kind of going back into rebuilding because I did take some time to just work hourly and more consistently. So it would be a little bit of a rebuild, but nothing too complicated, I think. So you think you'd still hang out around 98,000?

Yeah, for sure. No matter what, that would be where we would be to make ends meet. And then if real estate took over, we'd revisit it at that point, but we would definitely want to stay around the 98,000 just to suffice. Yep. That's great, Jenny. Well, you guys are in a great position. I mean, I think after baby comes, knocking out the IRS, the other two debts, and then tackle the car, which you guys can do. So well done, Jenny. I'm excited for you guys. I think you're gonna get some really great traction quickly. That's always encouraging when you have, you know, even that $8,000, you know,

fund that you guys have, even to be able to throw some of the money at that and just get these out of the way. It gets you moving, which is which is so great. All right. Up next, we have Luis in Cedar Rapids. Hey, Luis, welcome to the show. Thank you. Absolutely. How can we help? Well, I want your advice on whether or not I should finance a house for my son. All right, tell us the situation.

Well, yeah, he has always followed Dave's advice, so he has never in his life borrowed money or had a credit card. So when he went to the bank to get a mortgage, he had no credit history, and no one would loan him the money. It's not like he has to buy a house, but we would like him to own his own home. He has a plan where he would rent out rooms to some friends to make additional income with that house. How old is he? He's 36. He's 36. Yeah, we were originally going to go partners on the house,

where he has saved up a significant, sizable down payment. But with the cost of, you know how the cost of housing just shot up in the last year. Yep. And so we said we would go partners originally. Is he married? No, he's single. He's single, okay.

So he's been living with you? No, oh no. He hasn't lived with us since he was 21. So he's just been renting? Okay. He's been renting with me. He should be able to do manual underwriting, no. He hasn't lived with us since he was 21. So he's just been renting? He's been renting with me. He should be able to do manual underwriting, Louise. If you have a rental history with payments and you can prove employment for two years, did he try manual underwriting?

I'm sure he's never heard of that. I have never heard of that. That's what you got to do. Yeah. So if you don't have a credit score, you have to do a process called manual underwriting where the bank or the mortgage company actually looks at you, the person. And again, you have to be current on all of your bills for two years, show renter's history that you pay on time

and employment for almost two years. So there's a little bit of work in it, but they can actually underwrite you the mortgage. So no, Louise, I think it's a kind mother's heart in it, but I would let your 36-year-old son do it on his own. And every mortgage company doesn't do that. You have to do your due diligence. Yes.

Go shop options. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm Rachel Cruz hosting with Jade Warshaw. We are answering your questions today. And if you are new to the show, love the show, listen to the show, an old listener of the show, any of you, it would be wonderful for you to share it with your friends and your family. This is one of the ways that we can spread the word. And honestly, word of mouth, it's one of the best marketing tools that we have. It's you guys listening and

watching, sharing it with the people that you know and that you love because our goal for people is to get control of their money. We want everyone to have a plan from point A to point B that is effective and helps them when it comes to their money to get control and to build wealth, to change their family tree and have peace ultimately is what we're shooting for when it comes to the subject that is not peaceful for a lot of people. So, yeah, leave us a review. Share the show. We so, so appreciate you guys listening and watching. All right. Up next, we have Jared in Cleveland. Hey, Jared. Welcome to the show.

Hey, Rachel. Hi, Jade. Thank you so much for having me. Absolutely. How can we help? Well, I'm in. Well, Jam doesn't begin to the show. Hey, Rachel. Hi, Jade. Thank you so much for having me. Absolutely. How can we help? Well, I am in, well, Jam doesn't begin to explain it, I guess. I'm a bivocational pastor. I work 60 hours a week for my secular job and about 30 hours a week in the ministry. I'm married. I have two wonderful boys.

Love my church because I love my God. You know, God's been good to me, but I've got back against the wall. My back's into the wall. If that's a possible thing, I've got a mortgage that's out of hand. I've got two car payments that are out of hand. Kind of got dealt a bad hand when it came to those particular debts, got lied to in both of them, and it cost me a lot more and stuck me where I kind of didn't have a choice. But I'm looking at a mortgage where I'm paying $1,700 a month. I'm $18,000 in negative equity in my car, and I've maxed out my credit. I've got nowhere to go um and i could really use some sound godly advice from you ladies oh jared i'm so sorry tough i know it's it's really it's stressful and especially when you feel like you're trying to do the right thing uh and it's not

gaining traction then that is difficult but um yep hopefully hopefully we can help here. Okay, so what do you do for your vocational job that you said? So I'm an on-call supervisor, and what I do is I take care of people with developmental disabilities. Okay, and how much do you make in that job? My take-home is $1,900, and it's biweekly. Okay, so $1,900 every two weeks. Correct. Okay. So how much do you make as a pastor? What does that bring in? My salary is $1,500 a month. And then I have a housing allowance and stuff like that too. I don't know if that figures into this or not though. Yeah,

it does. So what's your housing allowance allowance because is that going towards your mortgage it is yes uh and it's 1900 okay good so is your housing allowance covering your mortgage then if your mortgage is 1700 uh yes it does cover that and uh it usually covers most of the electric bill uh as well okay okay um. That's big. Okay. And then how much do you owe on the cars? For mine, I owe just under $25,000, like 24-7. Okay. And then for the other one, I owe $8,900. Okay. And how much in credit card debt? $12,500 for the one, and then the other one is a total of $13,000. Okay. And does your wife work outside the home at all? She does. She works from home. Yes. Okay. What does she earn each month? Bring home.

She's about, it depends on the hour she's able to get but uh i'd say she's about uh 800 a month or so somewhere in there what does she do uh she does uh medical billing okay okay so i've got you uh eight thousand dollars a month between the two of you obviously um 1700 of that is going to the mortgage um okay so help me when i look at this i'm like okay mortgage is covered there's some debt here it's like 6500 left after mortgage so where's it going yeah are you guys on a budget yes uh we are on a budget um where we're at now two so the credit card debt that i gave you, one of them, uh, was the 12, five, the other two are through, I I'm doing a debt consolidation because they were maxed out

and I couldn't afford the minimum payments. So I moved that into one payment. Um, and then, uh, also, you know, I'm trying to, I'm nervous. I'm nervous. You're fine. You're fine. We have time. We have time. You're good. And then in addition to that, I pay for my son. He goes to a private Christian school. That might be an area. How old are the boys? My oldest is seven. My youngest is four. So seven and four. How much is tuition for the private school? It is $3,700, I want to say, for the year. Okay. What else? So you're paying $308 a month for...

Yeah, I'm curious where the $6,500 is going, though. Because how much payments for your car? How much are they for your car uh my uh my car is 470 no 480 a month okay and and then my uh i i pay for my wife's car as well and that is now no more because the president, he just took those. Well, let's pretend. Let's just pretend. What would the minimum payment? What was it? $200. Okay. Minus $200. So now we're at $5,080. Keep going. I'm just helping you work through this. It's not to try to call you out. No, not at all.

I appreciate it. Let me think. Then cell phone bills, 190 a month. And then I've got car insurance, which is up at 180 a month. Okay. Okay. Okay. Then, of course, you know, we're talking about tithes, so 10% of the amount that I gave you there is going to the church. So $800?

Yeah. Okay. $3,900? What's been on these credit cards, Jared? What are you putting on for $13,000 and $12,000? Well, a lot of that was just trying to make the ends meet, not having enough to make the bills. I just recently, my income is higher the last couple months because I started asking four more hours at work. Okay, so that's new. It was below that. Okay, okay. Okay, so Jared, just looking at these numbers, there's not like a, oh, it was below that Okay, okay Okay, so Jared I mean, just looking at these numbers

There's not like a Oh, I forgot the $3,000 bill here Whatever that is Right, like there's a month There's not a big gaping hole I may just call it out, Jared I just feel like you guys have been sloppy Would you agree?

Well, I wouldn't disagree Yeah, I think that's it And Jared, and I'm going to say this Because you mentioned this And as believers in this, I think that's it. And Jared, and I'm going to say this, because you mentioned this, and as believers in this room, I think we're spiritually somewhat consistent. Scripture has nothing good to say about debt. Nothing. Every time debt is mentioned, it is in a negative fashion.

Now, it's not a sin. We'll still go to heaven. It's fine if you still got your credit card debt. Like, okay, everything's fine in that regard. But the wisdom that comes from every time it is spoken, it is in a negative fashion. And so in that sense, I would say, let's lean on the spiritual conviction that we all believe here from something that is consistent, and that is eliminating debt. So you've been running to something that is getting you deeper and deeper in a hole Right and so I think

For you guys if you tighten the subject I'm Encouraged by it because I think your numbers are There I really do and so I want you to hang on the line because Christian's going to pick Up and we're going to give you every dollar premium And I want you to cut up these credit Cards and I want this to be a moment Where a line is drawn for you all

And you're going to say no more we are not running to these credit cards to make minimum payments and make make ends meet because you don't need to you have thousands of dollars and you have a really blessed situation of even as this as in this pastoral role to have the mortgage paid for the housing allowance I'm like you guys are in a really great position you You're going to be working a crap ton. You're probably exhausted, Jared, working 90 hours a week. But for a period of time, I mean, truly, if you guys, if you guys threw, I mean, five grand at some of this, I'm like, you could be knocking this stuff out. I mean, month after month. And so I would, I would get on a really tight budget that there is nothing, no expenses going out

that are not necessities, Jared. And you guys can do this. I really believe in you. I think you can. This just has to be a turning point from here on out. This is The Ramsey Show. Welcome back to The Ramsey Show. We are taking your calls at 888-825-5225. Up next is Lauren in Raleigh. Hey, Lauren. Welcome to the show. Hi, Jade. Hi, Rachel.

I absolutely adore you guys. I'm very thankful that I could ask you guys my question. Oh, I'm so glad you called. How can we help? So, me and my husband, we purchased our house.

It's 1,100 square feet. We purchased it five years ago. We figured, okay, in five years we'll be able to buy our next home, you know. But then it turns out that market, everything, our house, that was our dream is now what our current house is worth. Best laid plans, I tell you. Yeah. So I'm self-employed. My husband works for a company.

I pay currently $550 in rent every month for the space I have. We currently owe $136.075 on our house. Our joint net income is $13 32. And my question is if it's a good idea to expand on our house, adding a workspace for me so I can consolidate clients in and out of the home. I have a set amount of clients. I don't take new clients. So I feel comfortable there and adding on a master bedroom so we can have more space to create a family eventually. One thing is that when I spoke with my town, because we're town limits,

when I spoke with them two years ago, I asked them in regards to this, and they said, well, you can't have a separate structure outside the house. It has to be attached to the house, and we cannot approve it until after you build. So you have to build, and then you go through the perm. Oh, gosh. That makes no sense. And what happens if they disapprove it after it's built? I can't use it for work, but I can, it can be a part of our house. And so that's the thing is what they say is it's kind of risky, but basically what happens is they'll have a town council, they'll open it up to the public. And then if one person says, Hey, we're not comfortable with her having a business out of her house, it could be like JK. So is this just

in an effort, like you just don't want to pay rent for office space anymore? That's the whole point? No, it's not that. It's every single place I've rented at, I feel like I just keep getting issues of either last minute changes on management. So I left my last place because I knew the girl was about to sell and I was like, let me find another place soon. last place because I knew the girl was about to sell. And I was like, let me find another place soon. I found a place. The guy was great. Easy peasy. I rent above a place. So they have event spaces downstairs. Everything was fine. Within a year, they changed management. And now the events have overcome so much to the point that my clients can't even find spacing. And I feel like I'm just never guaranteed as long as I'm renting.

And even when I look at it, I'm spending $550 every month for the next 15 years. That's like $100,000. So that could be going into my home. What would cause your city limits not to approve? Let me, I mean, we haven't talked to money yet, but what would cause them not to approve it? It would just be the matter of, of course uh they would send out letters saying hey here's the town council i would be a little snippet but i'm just like praying that that little snippet no one would pay attention to but if anyone says hey i'm not comfortable but once i've let one at once that town meeting's closed it's approved if no one said anything and do you live in a hey i'm not comfortable do you live in a neighborhood where there's like a lot of people that could get upset because of parking or like

is help me understand it a little bit better because if i had a if i had a business out of my house i live in a cul-de-sac and i was running you know how eight or ten people throughout the day you know annoyed yeah if i'm having people park on the street and they're having to go around there could be a nuisance there yeah are you in that sort of situation or are you out in the field I am in a neighborhood I am blessed with the fact that we live on almost an acre so I could expand our driveway to create parking so no one would have to be on the street so risky Lauren it feels so risky no I don't think I would put that much I mean because it's going to be a lot of money to to do this addition right and so what kind of line of work are you in again did you say i'm an esthetician okay yeah i mean i think it's i

think a little bit of me is like this is the tax to do business like you have to have space and if you're in a situation that you would build something out and then they can come back and say you can't use it unless you guys as a family said we would we would use this as a play like we sure we could you know multi-purpose the space for our family so either way we're okay that's one thing um what would it cost have you priced it out um we when we priced it out about two uh two years ago um the lumber and everything was up they quoted us around 120 okay and so i don't know if it'll be 120 or 150 who knows now it went down a little bit but um we have to go through that whole process again we basically

once we got a quote we were like okay this is scary we were too scared to make the leap but the thing is is like anything that we look around our area nothing for what we're looking for like I mean our house even is worth what we're looking for. Everything we see is like $399 and up, everything. And so like, well, we could add on to our house and we would have a mortgage of less than $300. I don't think that I would, I think that we're solving the, I think that we're using the wrong tool to solve the problem. I don't think going up to a $300,000 mortgage is the solution to a $550 rent.

I agree with Rachel. I think it's just part of doing business. Right. You know what I mean? Maybe it's starting to keep your eye on commercial areas that might be a place that one day you can sink some money in and purchase yourself. I don't know. That is what I was going to ask, yeah. If you would recommend me purchasing.

I don't recommend you doing anything on debt let me make that super duper clear whether it's this edition or you've got your eye on a commercial space you know that's you know whatever that is but um based on what you're saying i would not do this edition um okay i wouldn't because i don't think that there's no guarantee. You put $120,000 in, which again, yeah, which is exactly the amount of rent you would pay more than the rent you would pay over the lifetime of you working for 20 years at $100,000. You know what I mean? Like it's, it doesn't.

And once you start, you know what I mean? And you guys said you want to start a family and all of that. And Lauren, I'll throw that out there. Like things change so quickly. You could look up in seven years, Lauren, and have maybe not be doing this anymore. Right. So again, if it made sense financially and it was like, yep, we could throw 10 grand here.

We have it saved. I can renovate this one area. Everything's fine. Then yeah, run. But you're having to depend and risk on other people deciding if it's okay after the project's done that's a that's a done deal for me I'm not putting money in for something that I can't use because one person Mary Ann from down the street you know said no and then I get screwed like I'm not depending my all of you know my eggs in that basket true that and then number

two yeah I just don't think that yeah y'all are in a position right now to do it. So I would just pay for it. Which, again, there's things all the time, Lauren, and it's not outrageous, but there are things as adults that you have to do that you're like, man, I kind of hate that, but it's the price to be able to do what I do. And that's it. And the thing that's glaringly obvious to me is it's going to cost somewhere between $120 to $150 to do this build. In your mortgage, you only owe $136. I i know we could do it off within like i'm like that's what i'd be focused on i'd be focused on paying off this mortgage okay yep and then suddenly the 550 you're paying

in rent for your workspace it don't matter do you guys have other debt very very true we don't know it's just the house all of our cars are paid off but another thing is like our cars are 10 years old who knows if we need a new car but yeah that's right things scare me but but yeah so now the one question though just to tack on it really quick is okay say we didn't do that would you rather us pay off the house within like six years and then do an addition not for the work stuff but just say Yes I would I would and with what you're making I think Lauren you guys

Pay it off in five Four I mean I think you could really get aggressive With it and just say let's like Really make this our big goal and we're Gonna we're gonna throw everything at This and then when you look up and say okay Do we want to save now for the addition So it may it may take some time and some Pat to do all of this, you know, or again, I will

reiterate because it is just so true in my life. Four years from now, who knows where the world is and you guys could have a paid for house and then realize, OK, we actually like this one over here. That's much better. And we'll take out a hundred thousand dollar mortgage now, move there, get step up or like you know do what you got to do um in that regard too but i think having having no debt especially a mortgage it it gives you so many options and it frees up so much income it's amazing so true rachel you make such a good point with the timeline you don't know what's going to happen.

Four years ago, I had one kid instead of two. Four years ago, I lived in South Florida. Now I live in Nashville. Four years ago, I had a totally different job. You don't know what's going to happen. I know. I know. Oh, so great. Lauren, we're excited for you. Thank you. Thank you for the call. And thank you, America, for listening. Thanks to all the gentlemen in the booth who make this happen. Jade Warshaw, always a pleasure hosting with you and thank you America. This is The Ramsey Show. Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love and create amazing relationships. I'm Rachel Cruz hosting today with my good friend and bestselling author, Jade Warshaw. And we are answering your questions on life,

on money, career, relationships. So give us a call and we can help you out at 888-825-5225. All right. Up first, we have Alex in Philadelphia. Hey, Alex, welcome to the show. Thank you very much. How are you? We are doing well. How can we help? I'm just calling to see, I'm on baby step number two, and I'm checking about pausing all investing.

So I have the opportunity to invest after tax in my 401k and get a company match. And what I was planning to do, I just started the program in January, was to put my after tax contribution into my 401k on a Friday and get the company match. And then on a Monday, pull out my contribution to put towards my debt. And I would still gain the company match. And even at the end of the year, if I paid the 10% penalty, because I'm only 37, I'd still profit about $2,700.

So I'm just trying to see if that works or not. You know, I appreciate the game. Yeah, I mean, he's a smarty pants. You're smarty pants, Alex. You're trying to, you're trying to fornagle the system. This is good. So you've got a Roth 401k.

That's a really cool benefit. Plus you've got the match on it, which is another great benefit. And it sounds like you're just trying to take advantage of it and say, well, at least I can have some money instead of no money. How much debt do you have? Let's see if it's all, what's making it all worth it, right? I started the program in January. I was a

little over a hundred thousand i paid off sixteen thousand one oh one seventy eight so far this year good i'm gonna have about eighty seven three hundred left okay good for you um how much do you make a year so it's about 140 oh good so this is. You you're making headway. You've got a really good shovel. I personally would not do this for many reasons. A, you're you are you're having to come back and you're having to pay the 10 percent penalty. And at the end of the day, you're not accomplishing fully what you think you're accomplishing because you're having to go back and pay the penalty and 10 percent. So you're like, I'm putting this money here. I'm going to come back in and grab it back out, but I'm still having to pay a fee on that money. And for us, the whole purpose is so that you have

as much of your income at your disposal to put towards your debt. That's the whole purpose of this. And it's temporary. It's not going to happen forever. And I get it. A match is free money that's on the table. And no one wants to give that up, Rachel. But it's part of the stupid tax that you pay for getting into debt. Part of the stupid tax is I have to forego this really cool opportunity in order to clean up my mess. And the silver lining of that is it's temporary. It's not forever.

And it should motivate you to move faster to get this debt paid off, which it sounds like you are going really quickly. And what you've said too, Jade, before that makes sense, is that on both ends, you can't double dip in the sense that like, yeah, you may be losing out on that match, but you're also losing out keeping debt around longer and paying interest and all of that, right? So there's, you're kind of, it's both ends of it, if you will.

So, but yeah, by pausing it, I know I would, because I think the, yeah, I would just pause it, Alex. And again, 2,700 bucks. I mean, that's a, yeah, that's a good amount of money, but it's not going to change your world. I think Alex is going to change his world,

not this 2,700, but I appreciate kind of gaming the system. And if you want to do it, that's your call. You're a grown man, you can i think i think i think but just focus intensity just doing it all and saying hey there's not shortcuts like i'm going to figure this out we're going to do this and pay off this debt and you've already gained so much traction i mean like you've done a really great job so so i probably i i wouldn't i wouldn't do i wouldn't do the gaming the system plan no i i would not.

Although I think that's the first call like that. I don't think I've ever heard of anyone doing that. I'm just opting in to pay the penalty and just to keep going. Listen, desperate times call for desperate measures. It makes you think in a completely different way. Yes, for sure. All right, up next we have Tiffany in Atlanta. Hey, Tiffany, welcome to the show.

Oh, my gosh. Hi, Rachel. Hi, Jade. Hello, listen, y'all. Hey, Tiffany, welcome to the show. Oh, my gosh. Hi, Rachel. Hi, Jade. Hello, listening, y'all. Oh, thank you. Thanks for calling. How can we help? So I have a question about the every dollar budget.

I just wanted to know how is it too soon? How soon is it to start the budget for the next month? To plan it out, just to have it down visually? Yeah. I mean. I do it. Whenever, yeah. I mean, I think you may end up changing it the closer you get to that month because other things may pop up that you didn't realize

or something cancels and you take it out of the budget. So there may be some changing, but I think you could go ahead and plan out. I mean, I think as early as you want. Okay, I just didn't know if it would, you know, mess up the next month. I just didn't want anything to mess up. Yeah, it won't because with every dollar, too, it duplicates the previous month. So it just copies and pastes basically into the next month, and then you go in and change. So for a lot of it, Tiffany, you'll see so many categories are very consistent.

You know, we keep pretty much food pretty consistent, you know, gas for your cars, pretty consistent bills, cable. So a lot of them you probably won't change. But when you get or at least for us, how we do it at the bottom of our budget is our line items that are the random ones throughout the month. And so, yeah, I mean, I think if you want to plan and every dollar you can plan out far in advance. So if you said, yeah, we have a big thing coming up in May and I want to go ahead and make the budget. So I need to know how much I need to be making for May because this big expense is hitting. Then, yeah, go ahead and go ahead and do it. I would just caution you that you may want to update it the closer you get to that month or double check and make sure that you're going into the month with numbers that are more realistic than if you had planned it earlier, if that makes sense.

Oh, okay. Yes. Yes. Thank you so much. Yeah, absolutely. I'm so glad you're budgeting, Tiffany. I think that's awesome because budgeting, you guys, it is, we don't go into major detail. I feel like a lot on the show about budgeting, but it is one of the foundational principles that comes with with getting out of debt getting your emergency fund started I mean all of it it really comes down to this and it's such a it's such a peace of mind uh when you have it I'm like I we love it I I really do as a spender I would go off the rails without a budget yes easily it just helps me like I don't know we're planning for spring break coming up our kids will be out out of school. Yeah. And I was like, all right, I'm gonna get an Amazon swimsuit. And I went to the clothing category. I was like, it feels great. I'm like, I'm gonna go spend and and buy something new. And it's there. It's allocated. I have my limits, which I don't always like, but there is a limit. And but other than that, it's just I don't know, it really does. It keeps you with peace of mind and control.

So every year, Sam and I will sit down in January and we'll plan every budget for the year just to see. Well, it's like a planning thing and it's like a two, three hour event. And we go through the whole year just to get a picture, like a snapshot. And we dream a little bit. We talk about what we want to do. We talk about. And then then for me it's great because there's kind of just a template there you know it's going to change but then like going into what next what month is next we just got to March so when I set up March's budget it was basically already there and I got to kind of see okay what's changed since we last talked like yeah and we both can look at it and see and it's just I don't know it's a great planning yes you know we do something similar we it's not every it's just, I don't know, it's a great planning situation. Yes, you know, we do something similar. It's not a monthly thing we do at the beginning of the year, but we do look out and forecast.

Okay, we're doing this. The kids will probably be in like four different camps in the summer. So we're going to put some chunk of money to the side for camps. We're going to do this for vacations, for Christmas. We kind of plan out in categories what we think we're going to spend throughout the year. And it is, it's so helpful when you're down to those decision-making. So Tiffany, we're proud of you for budgeting. Good for you, girl. This is The Ramsey Show. All right, you guys, a lot of you have questions when it comes to taxes and we get it. I mean, it's confusing. There's so many

terms, so many ways to do it. It feels like, and, and it's a lot, but we want to help you guys get a better handle on them. So let's unpack a question from one of our listeners. I'm a new business owner. What are the most important things that I needed to do to make bookkeeping for my business easier? That's good. Great question. Well, first and foremost, congratulations. Start a new business. We always, we love some entrepreneurs and small businesses and starting one.

So number one, if you're not already, keep a personal and business expenses, keep them separate. And we actually took a call earlier in the show where someone had them combined and it gets really hard from an accounting purpose. So keep those two things separate. Also create a regular bookkeeping routines that you're on top of tracking your expenses, combined and it gets really hard from an accounting purpose. So keep those two things separate. Also

create a regular bookkeeping routine so that you're on top of tracking your expenses, your receipts, your invoices, all of that. And then lastly, try to automate any processes with accounting software or by working with a tax professional. So it can really pay to have a CPA in your corner because they will review all of your books to help reduce risk, eliminate errors, and maximize your tax deductions, which is really big for small businesses. So again, you want to focus on growing your business and then let the people who know what they're doing in these areas, let them do their work. So a Ramsey-trusted tax pro really can help. And our team has vetted this group of people. So they really are top notch. So head to ramseysolutions.com slash tax pro to get started. That's ramseysolutions.com slash tax pro.

All right, up next, we have Christine in Salt Lake City. Hey, Christine, welcome to the show. Oh, thank you. I'm so excited to be talking to you. We're so glad you called. How can we help? We have a 21-year-old son and we've encouraged him to live with us so that he could save money. But recently, my son has been watching lots and lots of Dave Ramsey videos where it says that's really going to stunt his growth emotionally. And so I'm wondering what's the best course to take where we should encourage him to buy a house? Because I've also been hearing that there's never been a worse time to buy a house. Or if we should

just help him find a place to rent. So he's 21. Tell me, did he go to school? Is he still in college? Like where is he at on just kind of his life process? He didn't go to college. He just went out and he went to a technical college to recite in IT. And he has a great job. He's making about $64,000.

Good for him. I know. So he's really responsible. I mean, we've never had a problem having him here because he's working hard. He has about $46,000 saved. Nice. My gosh. Yeah.

And he, so I told him, this is kind of a funny part of his story, but I told him, Josh, I'm so proud of you because you get this great job. He didn't run out and buy a fancy car. He was driving the car that he had just, you know, driven through high school. And then just that very week, someone plowed into it and totaled it and drove off. But he ended up, he just, you know, paid $6,000, got himself a new car. So he's really responsible. Sure. It hasn't been a problem.

And he's great and nice. Yep. So my take on this always is it's not a black or white issue. It's definitely not one of these things that's like, oh, my gosh, he has to be out next week or you've damaged him for life or something. It is not. It's not urgent you're okay you're you're a great mom he's obviously a really smart guy I mean like two years in technical school and then you're making 64 grand coming I mean like he's just 21 wow right

I mean like you really I mean you guys have done a fantastic job so I think where our caution always is and not just us but I think you know other people in the space too, would say that there's just this element of growing up that happens when you are out on your own and you're forced to make decisions and keep a level of responsibility that you just don't have to have when you're living with mom and dad. And so we don't want him in this situation forever, ever. Amen. But, you you know they're like my sister she had a transitional period after college for about six months she moved back home yeah um and then moved into an apartment you know like i mean like there's there there's a time and a place right this ebbs and flows it's not a it's not a black or white issue but the thing is is that i i would

want there to be a plan at least i think the indefinite idea is really tough where it's just like oh yeah this is just what we're doing. But I think for him to say yeah, okay, I think by October, right? Let me get through the summer and by October, my plan is to be able to rent somewhere, rent for a bit. He doesn't need to run in and buy a house

right now. I don't think that's wise right now. I think he needs to be out on his own for a little bit. But I think having a date, Christine, for both of you guys would be wise because I don't think staying there forever and ever is a smart plan. And so it can end up being that. You could look up and it's been two years and it's been the same. So I think just having a date out there that you both agree on.

And again, nothing's on fire, but I would have a date out there to say, we're shooting for again nothing's on fire but i would have a date out there to say we're shooting for this and this is what i'm gonna move out because he can i mean he has 46 000 he doesn't have any he could move out next month that's from okay jade's we're on that side i'm like oh you can keep him till october yeah i mean my thought is like however long it takes him to find the right place like if if it, you know, he doesn't have to move out of the first place he sees. But if it takes him a couple of months, I think that's good. Maybe roommates, if not, you know, or maybe he's like, forget roommates. I got money.

I'm going to get my own spot. That's good. Yep. Yep. I just, yeah, that's way to go, mom and dad. That's great. Yes. Well done.

Well done. Oh, thanks. Yeah. But you would tell him to rent at this point rather than trying to jump in when things are so crazy? Yes, I would. And again, he can look at some of his goals. And I think a goal of owning a home eventually is great. And really our perspective for the most part with the housing market is that when you're buying a home,

making sure that you're in the right position, not that the market is in the right position. Right. So I really think if you have if he has a great down payment for a house that he can afford within 25 percent of his income, he has at least five percent down. He's going to be in the area for the foreseeable future. And he wants to get in. Then, yes, he can. But being 21, his first step really out on his own, I would rent for a year or two um you know even stuff with you know i don't know the election's coming up this year i don't know there is a part of me that i'm like there's no rush in this um but he has a great cash position to put a down payment on a great condo or a townhome you know he's a single guy like he he could get into something sooner than later which is great but for the first year or two I think renting an apartment I mean he didn't need he didn't need a lot of space yeah because

when you when you live for by yourself on the for the first time there is that feeling of man okay like you're getting used to that and I do think that rushing into home ownership I mean there's a layer of stress and responsibility that it's like oh this is doubling down on that yeah like this is real and so it'd be nice to, like you said, have a year or two to kind of get your footing under you and then enter into that. Yep, ease in. All right, up next, we got Michelle in Atlanta.

Hey, Michelle, welcome to the show. Hey, how are you guys? Doing well, how can we help? I'm 59 years old, $335,000 in equity. And I'm wondering if I should sell my home, which, by the way, my monthly mortgage is only $1,069. Should I sell, try to get out of these student loans that seem to never disappear? What were they from, Michelle? Are they from your education or a kid's?

A little bit of both. I have four sons that I helped through college as well as my college education. Okay. How much is it? How much are the student loans? The student loans in total are $100,028. Okay, $128,000. And then you've got other consumer debt? Yes. I unfortunately two months ago had to buy a pre-owned used car, but it wasn't $5,000. It was $37,000 for that. I know.

You know, Michelle, we're up against a hard break. I'm going to keep you on the line, though, and we'll come back to you, if that's okay, after this break. So hold on. Don't hang up, Michelle, because there's some numbers here we want to unpack and kind of figure out this puzzle for you and hopefully give you some clarity and a plan. So, Michelle, stay on the line. We'll be back with you. This is The Ramsey Show.

Welcome back to The Ramsey Show. I am Rachel Cruz hosting today with my good friend and best-selling author, Jade Warshaw. And we are answering your questions. 888-825-5225. So give us a call. All right. We have Michelle on the line from the segment before.

We held her over because she's in a situation that we kind of wanted to walk through more with her numbers. So what we learned from her is she's about $330,000 in debt. About $128,000 of that is student loans. $37,000 of that is credit cards or a car loan. And then the rest, a little bit more consumer debt, and then the rest is her mortgage. So, Michelle, was that a fair recap, would you say? That is right on point. Okay, perfect.

So what's the other consumer debt you mentioned? So I had a medical scare last year, and so I have like $23,000 in medical expenses. Wow. Okay. And a $10,000 personal loan that I had before everything happened. Okay. What do you bring in every month in income? Every month I bring in $5,960. Okay. And that's after 401k and medical and everything that comes out of my check. How much are you putting in 401k every month?

5% or every check 5%, which is the max match amount for my company. What's the dollar amount? Just so I don't have to do that math. So it's like, yeah, it's like $270 every paycheck. Oh, every paycheck. Okay, great. Yeah. Okay.

I think that your initial question is, should you sell your house to access the equity, which is around, you think you'd pocket $230 in equity? Is that what you think if you were to sell this house? I think I would pocket anywhere between $200 and $ and $230,000 after all of the fees. Michelle, what do you have in retirement? Less than a couple of hundred thousand dollars. Okay. And tell us more about this house. Like, is it the right size for you?

Is it where you ultimately want to end up? Tell us more. Well, it's the house my children grew up in. It's about 23 years old. I've kept it in really, really good shape. And my mortgage payments are like $1,069. You can't find rent for that price here in Atlanta. Yeah, we hear you, totally.

So I'm just kind of between a rock and a hard place and also thinking about retirement, which hopefully will be soon. I think you have to look at this. I think you have to look at this on a 10 year play. So you're 59. There is a world that if you get crazy about this with your income,,500 because I'm going to pause investing and I know that feels so counterintuitive for you right now but if we if you were to pause investing that'd give you another 540 dollars that gives you 6,500 a month it's just you right okay so you want an extremely tight budget you're only $1,000 a month in mortgage payments.

Like, I, you know, I'm looking for extra work that you can pick up for yourself. And I'm going to try to knock this out. The average person is out of debt in two years or less. And that's what I want to leave you with. And with the amount of debt you have, it's a lot. You know, you're 50, 60, 70. You're knocking on the door of $200,000 of debt, consumer debt. But I think that there is a possibility here um because i agree with you to sell this house yes you'd be out of debt but my guess is you'd want to go right back into debt by getting another

property exactly and then you're starting from scratch and so for me i'd probably walk this out and see if I can get this debt cleaned up and see if I can keep going and get this house paid off on down the line. Even the car, Michelle, it's $37,000. How much could you sell it for today? Well, I'm glad you asked that question. Last Friday I went and a dealer offered me $30,000, so I would be upside down still $7,000. Have you Kelly Blue Booked it?

Because sometimes dealerships will lowball you because they want to make a margin of spread on it when they resell it. Actually, one dealership offered me $22,000. Then I went to another recommended dealership that makes good offers, and they were right at $30,000, which is a lot more than the previous one. I haven't looked at the Blue Book. I thought about doing it, you know, a private sale, but I know there's a lot of work around test driving. And again, me being alone, I don't know if I would want to do do that yeah I would just run some numbers I would just look it up on kelly blue book because it may come because if it comes out to even 33,000 right that's that's a I mean three that's 3,000 bucks that you don't pay which is awesome so so I would

look at that but I probably would sell this car um just okay just overall the situation you're in and your income um it's bumping up to that half of your annual income is in this car. And I don't like that. So you may have to take out if you can get it. Do you have any money saved that's liquid cash, not retirement? I have, well, of course, I have my starter emergency fund. And I do have vested stock that'll be maturing like between um the next month and this December oh wow what's it worth um well today's market is said it's worth about 63,000 We got the golden tickets. Oh my gosh, Michelle.

Look at that. Okay. Wow. Okay. I'm like, absolutely. I mean, if you were to sell this car, Michelle, and get a crappy $5,000 car, you know, you'll be, that'll be 7,000 cause you'll have a little, you're underwater a little bit. You'll need some cash To buy something

But seriously Michelle Get a car that you get a deal on And it's great Because if you knock that out And then this stock Matures I'm like oh my gosh That knocks out medical that knocks out the personal Yes

And then you have How much is that left About 20k left I think in that Which can go Now you've got 108 on the student loans And that's it Yes that's right Okay so when I sell the stock

Because like I said Between the end of this month And the end of the year Total will be 68,000 Should I initially Knock out some of the year total will be $68,000. Should I initially knock out some of the consumer debt and then target the student loans? Exactly. Yes, exactly. So you'll want to pay off the smallest debt first. So knock out that personal loan of $10,000 and then knock out your medical debt. And even that, Michelle, is going to feel so great. I'm like, just even getting that out is going to be awesome.

And then, yeah, and then throw the rest at your student loans. And by the time you do all that, you've gotten your consumer debt from over $200,000 to right around $100,000. Yeah. And if you can find $4,500 a month to put towards that, you're out of debt in two years. Oh, wow.

And I know you can find that. Yeah. I'm sure I can. Yes, Michelle. I was driving my 2007 Camry forever, and someone hit me and totaled it. So that's why I'm in this predicament of this car. I'm so sorry. But I think I want to sell and try to find something else.

I mean, I really would, because your peace of mind in getting this traction, Michelle, is so key. And I this traction, Michelle, is so key. I hate to put ages on it, but especially at your age, you're 59. You're 59 and you want to feel some really fast traction. A car is not worth this level of stress.

The freedom is going to feel so much better. A great Honda Civic that's 20 years old, give it to me all day. You will feel better in that. Well, let's keep playing it out, too. So you pay off the $108,000 in two years. And then by then, you've got your mortgage, which you owe what? Right now, you owe $167,000 on.

But after two years, it'll be a good amount less. And then you know, you will have felt, hey, I paid off $108,000 in two years. I can pay off $157,000 in two and a half or three years. Three years. Right? Do you see what I'm saying? In five years, Michelle, you could be completely. Now, it's going to be a lot of hard work. It's going to take a lot of discipline.

And with that stock, I want you to talk to a SmartVestor Pro because there's going to be some tax implications. We want to make sure that you do everything correctly in that regard. So Christian's going to pick up. He's going to help you get connected to a SmartVestor Pro. And then we're also going to give you Every Dollar Premium and Financial Peace University, which is our crash course when it comes to money. It's nine lessons that teaches you everything. And Michelle, you are at such a great point right now. Golly, there's so much hope. I'm so thankful you have this company stock. It's really going to be a gift to you Really going to be a gift to you

So thanks for calling This is The Ramsey Show Our scripture of the day comes from Lamentations 3, 22, 23 The steadfast love of the Lord never ceases His mercies never come to an end They are new every morning. Great is your faithfulness. Serena Williams says,

I really think a champion is defined not by their wins, but how they can recover when they fall. Ooh, good one. I always love when there's quotes like that from people that win all the time. I know, right? And I'm like, Serena, you're a really great tennis player, though. Can we just throw it out there? But it is true.

It is true. How you recover when you fall. Love it. All right, up next we have Joseph in Atlanta. Hey, Joseph, welcome to the show. Hey, thank you for taking my call. Absolutely. How can we help?

So I have a question about, i guess the order of debt or how i should go about uh paying off some of this debt my wife um has a house with a car it's not much but on my side i have about fourteen thousand dollars of credit card debt that's in the red like they're you know uh in collections and i have like another 24 000 from chase that's a charge off and i was just told it's a charge off but i don't exactly know what that means okay so i was just kind of wondering should i should we focus on paying off my wife's debt and the vehicle and all that or like how should i go about it so you said the house is in your wife's name or does she have a separate property

that she brought into the marriage? No, it's in her name. Okay. Yeah. And then she's got a car. What's the debt on the car? It's like $34,000. Okay.

And so that's it. It's just the car, the credit card and the chase charge off, right? Yeah. I definitely would start with whatever is late or in collections just to get it current the youngest the youngest listen to me which happens the youngest debt which happens to be the smallest debts too which is which is great how much do you guys make a year together um without my side business it's around like right under 90k 90k and how much do you bring in with the side business uh after like expenses and everything like on a on a good year it could

be 50 on a bad like bad year like this year like 30 okay that's pretty good yeah excellent okay so y'all are it's it's 120 on the low ends but could go up to 150 or,000. Or more. Yep. Okay, great. That's awesome. What about your wife? Does she work? Yes, she works from home. Okay. She does health care.

And do you guys have any savings? Yeah, we have $1,000 on the side, and then she has another $10,000 on just for herself because she likes to keep it, I guess, just in case. Listen, I peeped it out earlier. It sounded like there was a lot of separation there, but now here it is again. Yeah, I don't like some of the vocabulary I'm hearing, Joseph. Well, I mean, I don't mind. It's not like, you know, I have access to it,

but I like to have her safe, keep in mind or whatever. She likes to keep it well i mean i'll just be honest with you you know here the way we view money is when it's a married couple we view it as one and if it's truly if there's ten thousand dollars it should be our money not yours or mine because when it comes down to it you together have a life and you together have debt and man oh man that ten thousand dollars sure would come in handy right now to pay off a credit card debt that is both of your debt and so there's there's a piece to this that you know it's a different mind yeah it is a it's a total different

mindset shift with this because if you guys have functioned so long she does probably feel protective and has this ownership over this 10 grand. But what if you guys sat down together and didn't have names on anything and all that, and you just put everything in a pile, if you will. And one night you just went down the list and said, okay, here's what all we have. Here's our savings, all of it. And you kind of just, you changed your mindset just for a night and just said, okay, what if all of this was ours? Our income is all together. Everything is together. How fast could we get this paid off?

How fast could we build back the emergency fund? How fast could we be investing? How fast could we get to a million dollar net worth? And start just dreaming big, Joseph, like with you guys together as one, with one unit in one mindset doing it. And it's again, it's a different exercise with a mindset shift because you have been, well, this is mine over here. I don't want her money to have to pay off my debt. You know, it's this it's this tit for tat kind of situation. And in a marriage, y'all are one. You are all one. And the more you can be unified, Joseph, I'm telling you, we talk to so many couples.

If you're in a somewhat of a healthy relationship, we've taken some calls here that we're not good. But if you guys have that mutual respect, you love each other. You're in this together. There is something that deepens in the intimacy of your marriage when you truly go all in, when you truly say we are one, we're going to do this life together. And so that would be my my encouragement for you joseph is to is for you guys to have that conversation yeah and and i would start with um keeping your thousand dollar emergency fund you got 10 grand i would

throw it at the credit card debt that gets it down to four grand that's in collections and if it's in collections you may even be able to negotiate joseph i would call the collections company and ask them um tell them i got 10 grand yeah my wife's money no i'm just kidding i have 10 yes will you settle will you settle this will you settle this debt right i mean in collections they may be able to do that and if they do number one do not give them access to your checking account for them to get it themselves you send them a cashier's check number one number two get it in writing have them email you but i would i would try to negotiate the ones in collections because those are more easier to negotiate um and then you guys start working this plan and start uh working to pay this off and i

mean yeah you got 58 grand left after that 14 000 credit card uh and you guys could have this knocked out in in 18 months i do got a quick question. What do I do about the charge-off thing? Because it's like one of them six years. I'm sorry, I'm a ghost. I've been, they can't find me. I'm the gingerbread man. What does that mean? You off the grid?

Yeah, a little bit. I mean, they, you know, they'll send sheriffs to the house looking for me for the wallet or whatever, but they can't find me. Listen, pay it. Joseph, you gotta pay your bills. sheriffs to the house looking for me for the wallet or whatever. Listen, listen. Pay it. Joseph, you got to pay your bills. You got to pay it. You can't, like, escape the law.

He said you can't catch me because I'm a ginger person. What does that mean? Well, it's destroying your credit. I'll tell you that. Not that you care much about the credit. But at the end of the day, if it's money that you owe, you need to pay them. It's, like, beyond collections. They will find you, Joseph collections yeah i mean you're you're on the map you freaking got you got mastercard you got capital one or whoever you're with i mean like yeah they're you can't

yeah you yeah you can't you we're not gonna we're not gonna uh sidestep uh the situation we are gonna tackle it head on joseph uh but my man said he's the gingerbread man. I've not heard that. That's hilarious. Pay your debts. But you can negotiate. You can negotiate. Oh, man, Jay, that is. Look, Rachel, I got to go back.

We got to go briefly back to this. My money, his money thing, because it's just for for me it's a level of trust like there's something there at the when you whittle it down to all of its you know to its lowest common denominator it's it's a trust thing it's I I trust you with these areas but I don't trust you with that and it's kind of it's a weird uh way of thinking because it's um it, right? Like if you want a commitment, I want a 100% commitment from my husband. I can't say I'm committed to you in every way, but leave this 10% there that I'm not committed.

And that's my finances. Because here's the thing, listen, you put that in any other context. If my husband says, Jade, I'm committed to you Monday through Saturday, but you know, Sunday, that's my day. Like that's for me. I'm like, what?

Like, yeah, I will come for you. You'll be on the moon. But, and it's the same thing with your money. You can't say I'm committed to you and all these other areas, but my money, like that's my thing. Right. Commitment is. And what's hard is money has become such a security place for people. It feels like, oh my gosh, it's, if something happens, this is my escape out. Right. And again, if you, the asterisk always is you guys if you Are in a situation We give jade i feel like we've taken a few of these Together hosting like

Yeah there are times to protect yourself If there is abuse if there is addiction you have the What is it the keep your money safe The safe yeah so it's you seek Counsel that's the s seek counsel if there Is any type of addiction abuse that's The a financial infidelity Financial abuse that's the S. Seek counsel if there's any type of addiction, abuse, that's the A. Financial infidelity, financial abuse, that's the F. And then with the counselor, you evaluate your options. That's the E. And for a lot of people, it is you need to remove yourself from the situation.

Yes. It's not to say that you're getting divorced. It's not to say that it's over, but you're removing yourself and getting yourself and your family in a safe position. That's it. But then for all of you other couples out there, I'm telling you, when you see yourself as one, there is a stamp of approval or something that happens when you say, we're combining it. We're combining our lives. And we see people win faster. Your net worth goes up when you say, this is all of us, all of our income. Well, thanks to all the guys in the booth for a great show, Jade. Thank you as always. And thank you, America. And remember to take control of your money and create a life you love. Dr. John Deloney here. Mental and emotional health challenges, broken relationships, it's all just part of life, but they don't have to define you. The Dr. John Deloney Show is here to help. It's a

caller-driven podcast where you can get practical advice on dealing with anxiety, loneliness, depression, relationship challenges, your kids, and so much more. Listen to questions from our callers, or if you're walking through a tough situation and need some help, give me a call. You were never meant to do life alone, and that's what this podcast is all about. Follow along on Apple, Spotify, YouTube, or the Ramsey Network app. Remember, you're worth being well.