The Ramsey Show - Your Money Habits Matter More Than Math

Starting point is 00:00:02 Brought to you by the Every Dollar app. Start budgeting for free today. Normal is broke and common sense is weird, so we're here to help you transform your life from the Ramsey Network and the Fair Winds Credit Union Studio. This is The Ramsey Show. I'm Dave Ramsey, your host. Thanks for hanging out with us Rachel Cruz, Ramsey personality, number one best-selling author, co-host, a smart money happy hour. My daughter is my co-host today. The phone number here is AAA-25-2522. The call is free, and some say the advice is worth what you pay for it. All right. Renee is in Knoxville.

Starting point is 00:00:46 Hi, Renee. How are you? I'm doing well. How are you? Better than I deserve. What's up? Thank you for taking my call. I am very concerned about my parents.

Starting point is 00:00:56 They are both retired. Their income that they bring in is roughly around $4,000 a month. And their debt has surmounted greatly since they have retired. tired and I'm very concerned at where that's going to lead because I feel like it's going to be directed toward me and my husband to help them and I just don't think that's fair. I agree. Okay. How old are they? Let's see, 73 and 76. Okay. And how old are you guys? 53. Okay. And, but they, um, but they, um, They own three homes, one of which my cousin lives in and my brother lives in the other one, and neither of them pay rent.

Starting point is 00:01:46 My parents pay the insurance. They pay the taxes. And I don't think that's right. And I don't know how to address it. You know, especially when my mom tells me that she is trying to scrounge for coins to go get a $5 for $14.99 from the grocery store. and she was asking my advice about consolidating her credit cards because that debt has gotten so much that she can't keep up with it. They need new tires on her. And did you say to her, why don't you have my lame brother and my lame cousin pay you rent, and then we wouldn't be having this discussion?

Starting point is 00:02:24 I've tried. That's the answer to her question. If she says, I'm kind of scrams, coins, well, you know, the reason is is because you give the house away to laymo over here who needs to get a job and pay you rent. Exactly. And she... Don't call me whining. Right. And, you know, I don't know how to have a deeper conversation with her, you know, when they're in this situation. And they had a friend that gave them $400.

Starting point is 00:02:54 And, you know, I just, I don't think that's fair because he's on a fixed income, too. Are they looking to change, Renee? I know she's calling and complaining to you. but do you have hope that truly if you laid out some kind of plan that they would want to follow it, or are they going to be just stuck in their ways? Because there's a point that they can just complain, right? And then there's other attitudes that are desperate and really wanting change. It doesn't sound like they're going to, they want to change.

Starting point is 00:03:24 I don't see a change. She tells me that she's actually trying to go back to work sometime. Where's your father? Why are you in all this discussion with your mother? Where's he? he won't go back to work for sure no i said where is he why isn't he in this discussion because she's she wears the pants in that family oh okay all right yeah and you know and his advice doesn't work and so it's all it's all her and everything falls on her and you know

Starting point is 00:04:00 well my grandmother used to say my grandmother used to say those convinced against their will are of the same opinions still. So I doubt you're going to fix this. You're just going to have to watch it burn to the ground. It sounds like the only option you've got is to just sit down with your mom and your dad in the room, in person, and turn off the television and say, we need to have a real serious discussion. You people are screwing up your lives and I love you and I don't want to watch you burn this

Starting point is 00:04:29 to the ground. And, you know, you haven't been that direct. You've kind of just patted her on the hand. right and just kind of say well mom i'm sorry you kind of knowing what you're doing but you haven't really gone you people are screwing up here well and what's full stop you know yeah right and i don't i doubt you're going to get their attention well i was going to say and the hard thing is rene you almost have to go because i would have i would have i would have one last sit down of like here it is

Starting point is 00:04:57 and then beyond that rene i think it's the hard reality that you're not going to be able to change them and they're making it to a point where they can't pay their bills and i would say it's not up to you and your husband. At that point, they're going to be selling houses. You don't know what I mean? Like they're going to have to get equity. Like they're, they will have to have problem solved.

Starting point is 00:05:13 Yeah. So I'm curious, is your fear, and even the reason you call, is it more out of concern genuinely for you and your husband looking forward? Or is that of annoyance and what feels unfair with how they're treating other people in their lives and they haven't given you that same sentiment? Because it's probably hurtful, too, right? Where you're watching them and what they're doing. Yeah.

Starting point is 00:05:34 because you said that a few times in the call already. So there's probably a level of hurt, of, golly, that look what they're doing for everybody else. They can't even do it for themselves. Right. And, you know, I mean, it is genuine concern for us because I don't, I don't want all of our hard work to, you know, come to it. It won't. Unless you voluntarily hand it over. Yeah.

Starting point is 00:05:59 Your hard work is not in jeopardy at all unless you can't say no, unless you're your mother's daughter. I mean, if you want to follow in her path and go, oh, well, yeah, I'm going to be the next family enabler, then, yeah, you could burn your own thing to the ground trying to keep these people afloat. But you can also stand back and watch them and go, hmm, well, this is interesting. Right. You know, I mean, because we're trying to focus on our future. Yeah, just go build your thing. I think I would sit down with mom and dad.

Starting point is 00:06:27 And I think you've got maybe part of the discussion is, look, I've talked to, and I wouldn't even have your husband in the room. I would just you sit down with your mom and dad, and you need to go full throttle in their face, very blunt. To be unclear is to be unkind. No southern sugar coating. No bless your heart. I can do that. No bless your heart.

Starting point is 00:06:48 Bust them. Okay? Yeah. For their own good. And then part of that conversation is I've discussed it with your husband's name, and we will not be supporting you because you have given away free rent to these two lameos instead of taking care of your own self and calling me up and whining about credit card debt when you got equity in a house over here and junior won't pay the rent because you're enabling you. So don't

Starting point is 00:07:14 be calling me. I was going to say stop that guess. Put up that boundary. Go ahead and lay it down now. And then you walk away and you are not at risk unless you have the inability to say no also. But debt is not inherited. Right. So you don't get, I mean, if they go to, if they die with the negative net worth, it only affects the bank, not you. And so it's just, it's just harsh. It's so hard to watch people you love be stupid. It's more entertaining to watch stupid people when they're not yours. Right.

Starting point is 00:07:48 You know, but when they're yours, it's true. When you're yours, it's hard. You know, when it's like your family, you're, my God, I'm kin to you. You know, I mean, it's just like, you know, it's hard. Yeah. And there's an innate. level within a family. And I get your concern, Renee, of, you know, your parents take care of you for 18, 21 years. You know what I mean? And it's that feeling of what's going to happen. Am I literally

Starting point is 00:08:14 going to let them starve? And they won't. I think your mind's probably gone extreme of, oh my gosh, we're going to have to save the day. You're not. They have equity in probably two of these houses, I pray, right, that they're going to end up selling. They're going to eat and be fine. But man, it's a pull on your heart of like, here are my parents and I don't know what to do. So. Ouch. Running a business is hard enough. The tools you use to run it should make your job easier.

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Starting point is 00:10:26 Hi, Jared. How are you? Hey, how's it going, guys? Thank you for taking my call. I really appreciate it. I just started actually listening into your show after my younger brother's been trying to help me get out of some credit card debt. I just had a question here, man.

Starting point is 00:10:41 I'm kind of here with my hand. tied and you know I'm sick of living the way that I do but I'm about 23k in a credit card debt and I have about two credit cards that I'm currently using with about 30% use in each with monthly payments of one being 600 and the other being 200. I haven't missed the payment. I make the minimum payments but what I find is that when I make the payments it's just the interest is what's killing me here and I just kind of you know needed some advice to you know maybe you know guide me in the right direction to get out of this debt. Is this the only consumer debt you have, Jared, are the two credit cards?

Starting point is 00:11:18 Yes, it's the two credit cards. I'm with my partner of five years, and I was just honestly honest with her the other day about the debt that I was in. And, you know, she's still willing to help me and stick around. And I have a really good, strong support system around me. You know, it's just, in my little brother, he's actually going to school for a business and marketing. You know, he recommended listening to your guys' show.

Starting point is 00:11:38 And he knows a little bit about credit cards and credit cards and credit debt, he just, you know, figured to start with you guys, you know, maybe some, uh, quite helpful tips here, you know? How much do you make a year? Uh, so right now I have it jotted down. I'm still getting comfortable with, you know, just the other day was honestly my first years of 28 years of living. I sat down and finally put the numbers in my face and made a budget with my little brother.

Starting point is 00:12:00 He helped me made a whole spreadsheet on Microsoft and everything. Yeah. Um, so we cracked some numbers down. Um, we're going to reconvene in another couple of days, um, just because it was kind of a lot to put in his face. right now I make about $3,000 a month. That's what I know. I have two good jobs right now, and I make $3,000 a month, and it's costing me around $2,700 to live, and that includes my monthly payments to those credit cards. And do you have a car payment? Do you have a car payment? I do not. I actually

Starting point is 00:12:27 own my vehicle. Thank God. Good, good. Do you have any student loans? I do not have any student loans. Good, good, okay. What are you doing for work? What are the two jobs? So honestly, I work in the cannabis industry over here in Rhode Island. It's a very booming industry, especially with Massachusetts being close. I work in both markets, both Rhode Island and Massachusetts. I work retail in one, and then I work in cultivation and the other. And they're making a lot of money, and you're not. Yeah, yeah.

Starting point is 00:13:00 You could say that, yeah. From one spot, I work inventory in the other spot, and I see the numbers that one thing. they make a lot of money and you're not oh yes it is mr yes it is mr and so the um uh i mean your issue is that your income is low and the answer to your credit card interest rate is to increase your income dramatically and so what you're going to have to do is shift a career make some career shifts that are pretty dramatic and and your number of hours are going to increase because your income, if you doubled your income, obviously, that's $3,000 more a month and you put that on $23,000 in eight months, you're out of debt and we don't worry about interest

Starting point is 00:13:46 rates anymore. But there is not a hack for paying off $23,000 a month, or $23,000 a credit card debt at $300 a month. There's no hack. There's nothing. Even if the interest rate was zero, you're going to be dead before you get these things paid off at zero at $300 a month. That's $3,600 a year against $23,000. So you don't have an interest rate problem. You've got an income problem. Yeah. So I'm wondering, Jared, though, for real, from a career standpoint, you're 28.

Starting point is 00:14:20 Is that right? Is that what you said? Yes. Yes. You know, I mean, it's kind of the point in life. You're like, hey, what do I want to be? What do I want to do with my life where I have a sustaining career where you are making 60 grand a year.

Starting point is 00:14:33 Yeah, or 160. I don't care. But just at least, you know, getting to that point. So the income is going to be, yeah, it is going to be because it's $800 a month. Is that what you said, that you're paying? Yeah, yeah, between $1,600 and the other ones, $200. Yeah, yeah. So, and also you're still using the two, correct?

Starting point is 00:14:55 Yes, and I'm at the point where, like, I don't want to, but I have to. to dip into them to cover some like expenses to cover like a bill or something of that nature. I'm done with putting random expenses on it like I have been. You're going like a crazy cool again and having fun. But yeah. Yeah. Yeah. This is a, it's a harsh reality that you started facing.

Starting point is 00:15:17 And the good news is all having done what we do listening to you, we know that personal finances 80% behavior. And I will tell you that you are using the proper language, the words you're using, the way you're forming your sentences to talk to us, tells us that you are ready to change. You are sick and tired of being sick and tired. And you feel stuck and you need a way out. And so this is grown up time.

Starting point is 00:15:41 Like you said, the party's over. And so we may have to, you know, you're going to have to do something different for income. You don't have to do it in the next 20 minutes, but by Christmas, you need a different job. okay because this this one sucks and you know i mean and and and you probably just need to get away from cannabis all together hello yes yeah he said the party's over i was like maybe not for jared no no no i know no i know no but there's a great book by ken coleman that says find

Starting point is 00:16:22 the work you're wired to do and there's an assessment in the back but i do i think they're we're going to give it to you as a gift yes so yeah yeah hang on the line christian will pick up and we're We'll also sign you up for our budgeting app, which is really easier to use than a spreadsheet, much easier to use. It's called every dollar, and we're going to give them both to you as a gift, because we think you've got what it takes to do this. I think you can do this, sir. Wow. I'm not hearing that from you guys, and then the support system I have at home, and you guys don't understand, like, this is just the big side of relief, you know. There's just one thing that's been bugging me my whole life and spend this damn debt, and I'm just ready to change.

Starting point is 00:16:57 I really appreciate it. You can do all this. It is going to require that you change jobs. And I'm not kidding. And it's hard to. You cut them up, quit using them, and you change jobs to get your income up. So I would pick up six part-time jobs right now, drop one of those bad ones, and then go look for a new full-time job that pays me double. I mean, crap, you can make more loading boxes at FedEx at Christmas than you're making right now, like double what you're making.

Starting point is 00:17:22 Okay? So, I mean, ups and FedEx is getting ready to start hiring for Christmas. I know people, it's not even Halloween, but get ready. I mean, here we are. And so you just got to start thinking differently, like, I need money from a legal and moral source. I need money. And so I'm not suggesting breaking bad here, but I am just saying, I am saying, you know, you need money and you need to go get you some. And that's where I was.

Starting point is 00:17:53 I was your age when I had this exact discussion with myself. I mean, I made a list of stuff I was working on that week that would bring in money that week. I didn't work on any nine-month strategies. I was just filed bankruptcy when I was 28. Rachel was a baby. And I'm trying to feed these children. And my wife's looking at me like I've lost my mind because apparently I had. And things had to change.

Starting point is 00:18:19 And I went to making, I made a list of stuff on a yellow pad and the things at the top of the list to do were things. that brought in money that week. And it was just like my theme was, not greed. It was desperation and need, but it was I need money. And so don't talk to me unless you're talking about bringing some money by Friday. And that was my whole thing. And that was our first step to getting the devil away from the door. And you got to get the devil away from the door and it's income for you, sir.

Starting point is 00:18:49 And it's not continuing to go deeper in credit card debt, even for bills. and like making it a challenge to say, okay, next month I may have to call some companies and shift when I have to pay this bill and that bill. But I'm going to have the cash going forward because as you continue to go back on that, that's just adding to the problem. So you have to stop it,

Starting point is 00:19:09 which is going to be a painful 30 to 60 days. But that's where the desperation of the weekend jobs, the night shifts, all that. You know, you're exactly right. All the extra jobs. But also, if you're going to prioritize and not pay something, you pay food first, Lights and Water second.

Starting point is 00:19:23 Yep. Transportation third. So food, shelter, clothing, transportation, and utilities are before you pay master. Before you pay your master card. The borrower's slave to the lender. The master card. If you're in a really bad debt situation, I know how scary that is. You might be getting harassed by debt collectors every day, threatened with lawsuits,

Starting point is 00:20:16 and maybe you think bankruptcy is the only way out. I've been there. I remember feeling so scared I couldn't breathe. But it's not too late to get out of this mess. Contact Guardian Litigation Group. Guardian is not a call center. They're a real law firm. You get a real attorney assigned to you. So if a creditor sues, you're protected from day one, not scrambling to find legal representation when you're already in the middle of it. And Guardian only gets paid when your debt is negotiated and you accept the settlement. Guardian has helped over 55,000 people settle more than $600 million in debt. That's why I trust them and send people their way. The longer you wait, the fewer options you have, the more expensive it gets. But it doesn't have

Starting point is 00:21:02 to end that way. Guardian can defend you. Go to Guardianlit.com slash Ramsey. That's guardian-l-I-T-com slash Ramsey or click the link in the description. It's turning advertising. Results may vary and no specific outcome is guaranteed. Jeremiah is in Atlantic City. Hi, Jeremiah. How are you? Hi, how are you doing, Dave? Thanks for having me out. Sure. What's up? Hey, just in a situation right now where I'm making $85,000 base, but commuting around two to two and a half hours, so like four to five hours round trip for a job three days a week. my dad recently got sick and he's okay now though but I'm going to find something closer to home it's just been kind of tough and and wear me out just kind of reaching like a point of

Starting point is 00:22:09 burnout yeah you spend five hours a day in the car unless unless the car is your job yeah so why don't you just move over where the job is um my dad got sick uh and they used to do pretty well in the corporate world, but they don't have much of a retirement. So, you know, just as a young person, my parents. So you have to take care of your parents? They've taken care of me. We're, you know, we're kind of like a close family unit. As of now, I'm a only child.

Starting point is 00:22:46 So it's, you know, you're all working at. 28. So why can't you move out and move to your job? I'm sorry, I don't understand. I could. I've been in some sales roles where I've found that it's been a little bit unstable, no matter if you push pretty hard. And unless you get a roommate, it's just a little bit risky with, you know, ultimately the cost of living nowadays. I have been getting a hotel one night a week, but I know that that can eat up a pretty good amount.

Starting point is 00:23:20 but I hear the path of what you're saying. Okay. Well, I'm in, is the job that you currently have, what are you selling where you currently work and make 85 base plus commission? So I'm in commercial insurance. How long have you been doing that? About six months.

Starting point is 00:23:50 Okay. And is it, I mean, do you have a quota that you're supposed to be hitting and you're not hitting? Is there some kind of? I haven't been selling yet. I pulled a couple policies for 120,000, but nothing's guaranteed in the sales world

Starting point is 00:24:08 or just kind of what I've experienced in the past. You know, I should keep pushing with it. No, you're not understanding what I'm asking. I'm asking why you don't think this is stable. And you've been there six months and you've made two sales. No, no sales yet. So what are you doing? I'm trying to make sales. I'm making calls, but, you know, when you pull the policy, it's just a little bit of a longer sales process.

Starting point is 00:24:42 So did you take this job, Jeremiah, knowing about the commute in the first place? Yeah, sure. I did. I was getting low on funds after a layoff from a tech company. and my dad got sick, so I just kind of, you know, took the first thing I had and kind of jumped into it after, you know, three-month hospital sent. Okay. Are you healed now? Are you okay physically? I'm okay.

Starting point is 00:25:13 I'm just, you know, just pushing. But your job, you have a job that's not going to survive is what you're telling me. Because they're not going to keep paying you $85,000 a year to pull two policies over six months. I can promise you. yeah that that that that's what i'm they're going to fire your butt well yeah and some other sales roles i've pushed pretty hard like just tried to make the most money i could and uh you know i've done well but over-exempted myself at times there's local jobs near me though they just don't pay nearly

Starting point is 00:25:45 enough uh you know i the plan was to move to the city uh you know ultimately where where the you know, it's a little more feasible to earn more. Okay. So there are no jobs, there are no careers that don't involve stress unless you make $20 an hour and somebody tells you what to do every day. Pick that up, set that down. But if you're going to go make $100,000 a year, it involves stress and involves risk, it involves you getting up, leaving the cave,

Starting point is 00:26:21 killing something, and dragging it home, and welcome to the world of adulthood. There's anxiety involved. okay yes sir you got to get a callus and you got to get out there and bust it and I'm not sure this job's gonna last because I'm not there I can't hear what is going on that's that if I'm your employer why I would keep you because you're going to have to produce more than you're producing and every time I talk about that you just talk about stress and risk and all these things instead of and I can just push harder well yeah that's that's welcome to selling you you knock doors and you sell stuff So I think you just took this job because you fell backwards into it and you were desperate.

Starting point is 00:26:59 You had nothing to do with you wanted to be in the insurance business, had nothing do with you wanted to work for that company. There was nothing exciting about this except they gave you a check on Friday. And you took a J-O-B. That's what it sounds like to me. That's how you've described it. And so you need a new job. And the new job needs to involve something you care about and something that you're willing

Starting point is 00:27:18 to push for because you care about it. and, you know, you're selling ads to advertisers on the Ramsey show, and you believe in the Ramsey show, and it's your job to go get some advertisers on this, and if you don't, then you don't get to work here, because that's your job. And, you know, that kind of thing, but you care about it, and you can go get it done, and it's not a matter of being pushy, it's a matter of having a good product that you love, that you can represent with integrity, and then you serve people by giving it to them, and letting them give you money for it. And that's selling. Selling is serving. It's not pushing. It's pulling.

Starting point is 00:27:54 Yeah. And the family dynamic is something I'm thinking about too, Jeremiah. You've got to get out of there. Yeah. And you feel the weight of being an only child. And I don't know what the family dynamic, if there's pressure from them to you to stay close to take care of or if they're really needing how, I don't know. I would be questioning and pushing on that scenario, too, to allow you then to move if you to and to be a 28-year-old guy who's trying to make it. And that may not always be the case if you have one foot somewhere that you have to be. I desperately, after talking to you for a few minutes, love you, and I want you to build some muscles. I want you to build some muscles from doing some lifting.

Starting point is 00:28:34 And the muscles are to operate in the marketplace and to operate as a standalone 28-year-old man. And you take care of your parents. When they are in trouble, you run over from your place. and stop by and make sure mom and dad are okay. But you're not hanging out there from some emotionally needy situation. Instead, you're like a man with square shoulders and you're out there in the marketplace doing stuff. Well, and I'll tell you, now's the time to do it.

Starting point is 00:29:01 Yeah, it's a good time. Because you're single, you're young. Like, this is it. Like, when you start to enter into a relationship of marriage, you got kids, you got thousand things pulling at you. Right now, it's you, Jeremiah. Like, it's the simplest it's going to be right now in life. So we'll give you another copy of that book that, you know, the-

Starting point is 00:29:20 Oh, find the work you're wired to do. Find the work you're wired to do. And take that assessment. And I want you to stop and think about, okay, what does the 48-year-old version of Jeremiah look like in his career? And what are the steps to get there? Who do I want to be when I'm 48? When the 48-year-old version that has some emotional muscle and character, that man,

Starting point is 00:29:44 Jeremiah is standing over there 20 years from today looking back at this 28 year old, what's going to make that guy smile at you right now? Who do you want to be? And, you know, that's, you're starting to set goals. And you're saying, I'm going to step into a career with intentionality that's in my giftings and I'm not going to fall backwards into it and mommy's not going to fold my underwear anymore. Now I'm going to have my own place and I'm going to be a man and I'm going to go out here

Starting point is 00:30:13 and do stuff. And that's what I want for you. I mean, you've had some stuff that's knocked you down. You've got a few scars and a few hurt places, a few bruised places emotionally. Me too. When I was your age, I was bankrupt with two kids. So I get it. I understand. It's scary. But I want you to get a healthy level of desperation and go kill something and drag it home. Hey, I want to talk to you for a second about love and not love like in Titanic or something. I mean responsible love. The kind of that moves you to take care of the people closest to you. And one of the most important ways to show that kind of love is by having term life insurance. If you have anyone depending on you, a spouse, kids, anyone, you need term life insurance. Term life insurance gives your family

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Starting point is 00:32:23 Okay, you've worked hard to get out of debt. You're out of debt everything but the house. That's baby step two. You built your emergency fund of three to six months of expenses. That's baby step three, which means you are now on baby step four, five, and six. If you are on baby step four, five, and six or beyond, we want to invite you to come hang out with us and celebrate. On the Ramsey Cruise. Here the ship horn.

Starting point is 00:33:07 That's the best ship horn I got, y'all. I'm sorry. Pretty good. And we're working on it. But yeah, the Live Like No One Else Cruise. Now, we tell you not to go on vacations and cruises and stuff like that when you're in the first three baby steps, right? Before and beyond, we want you to come with us on the Live Like No One Else Cruise. I'm going to be doing a bunch of teaching on what to do now that you've gotten to four, five, six, and seven.

Starting point is 00:33:27 What do you do when you finally get rid of the debt monster? Yeah, we're going to talk about it a lot. and George is going to be doing some nerd teaching because George is the nerd. And Rachel and John are going to be doing marriage and money stuff. And we're going to be doing some Entree leadership stuff. And we've got great guests. Natalie Grant is going to be with us. It's going to be an incredible cruise.

Starting point is 00:33:49 Jade Warshall. She's going to be doing teaching as well. Who? Jade. Oh, of course. Jade. I left off. I'm sorry.

Starting point is 00:33:54 I'm looking at all the faces on the ad here. Yeah. Wow. So Western Caribbean. And so that means like Jamaica and all that kind of stuff. So it's going to be an incredible cruise. And this is not like one of the Walmart on the seas Cheapos. This is a nice one.

Starting point is 00:34:09 Okay, I don't do the Cheapos. This is like Holland America, which is freaking cool. Okay. It's a beautiful ship. And this was the same ship we did. The other one. Yes, last time when it was the Western Caribbean. We're doing the Eastern Caribbean this time.

Starting point is 00:34:24 Oh, the other way around. Yeah, no, but this was the same ship. It's the same ship. But this time's Western. Yeah, but the ship itself, the restaurants are in. incredible. The coffee shops, the bars, the lounge, I mean, all of it. It's really, really nice. And the good thing about a cruise is it's all inclusive. You get right in. There's pickleball courts. I mean, all of it. And it's all there. Once you board the ship, your food,

Starting point is 00:34:47 you know, everything is included, which is so nice. It's real primo. And you know, what we ended up doing, too, because we were all on there, if one of us wasn't doing something on a stage where we're just walking through and one of the stages was empty, we just jump up and start answering questions and people do that. And so we taped a bunch of the shows there. We did the largest debt-free scream. It's March 14 through 21, and it is not yet sold out, but it is approaching it. You can still get a cabin, but you need to do it. Quit messing around. You're not going to get to go, okay? And so you need to get this done. So go to ramsysolutions.com slash events, click the link in the show notes, all that kind of stuff. Live like no one else cruise, baby.

Starting point is 00:35:26 Come on, let's do it. This is, you need to celebrate when you hit some of these milestones. That's what this is about. All right, Daniela is in New York. Hi, Daniela, how are you? Hi, I'm so glad I got to call in for the father-daughter duo. I started listening to you guys two weeks ago. Wow. And on Friday, I actually was able to talk to George and John, and now I'm glad to talk to you guys today.

Starting point is 00:35:49 I discovered an even bigger issue that I have, and I'm in my 20s, and I just want some advice before this just gets worse. Okay. So I got a UIL insurance. policy at the time I thought what I thought was what I now know as a money market and a high yield savings account. That is what I thought that I was getting with this additional bonus of life insurance and a death benefit. So I put in $10,000 right away. I first started my payments at $500 and eventually lowered them to $200. This was March of 2025. I had $15,300,000 of $500,000,000

Starting point is 00:36:32 the total premium. The accumulated value now is 13,281, and that's because I had to borrow 2,900 against myself, which I didn't really know this at the time. My transmission went out for my car. I wanted to take the full 15, and the agent, who was actually someone that's close to me in my circle, told me, oh, the only thing available is 2,900 right now. And he was like, but you can pay this back whenever you want. Like, there's no, there's no rush. So I'm like, okay, great. I'm taking 2,900.

Starting point is 00:37:05 I'll just have to use that for the down payment. Then I can no longer pay the car mostly in full. I'm going to take it for the down payment. Okay. I'll stop. Just stop. Just stop. Okay.

Starting point is 00:37:14 So it's real simple, honey. You bought a piece of crap. Right. And you've been screwed. Yeah. And you've realized that now. That's the end of the story. Yeah.

Starting point is 00:37:26 I mean, you turn 50s. thousand into 13, you know, and they talked you into borrowing your own money and act like they did you a favor. If I go down to the bank and I take money out of my savings account, I don't have to talk the banker into that. Right. That's what you did. You just took money out of your own savings account. So what you should do, what you should do is you should cancel the whole thing and tell them to send you a check.

Starting point is 00:37:53 End it now. So what they told, so what I did was I stopped the auto pay. because they told me you have enough in the account, stop the auto pay, and I lowered the death benefit. Would you please just cancel the stupid crap that you bought and quit giving them money? You've been screwed. I just figured if I did that, the two steps that I took, that would at least give me something to walk away with whenever the surrender policies are gone. Because right now I would have nothing and I would probably owe. No, no.

Starting point is 00:38:28 You don't get nothing. you get your $13,000 back. I wouldn't get that because the surrender policy, the surrender fees aren't up until 2035. But they're not 100% surrender fees. So the surrender value was $1,000 in $1,000. Yeah, $1,060. You put in $15,000 and they're telling you that you're after surrender fees,

Starting point is 00:38:51 you're going to get $1,000. What is the name of this company? I wouldn't get anything, actually, because I took $29. I know. What's the name of it? this company. National life insurance, and I actually heard someone call about this last week, this exact company, which is why I decided to look into it. I had no idea. So if it wasn't for someone else calling last week, I wouldn't have even known. And I did some research and it says

Starting point is 00:39:13 the best way to walk away from it is. And anything else that this person that's in your circle ever wants you to do, you smack them and then you run away. Yeah, I'm never going to. I just feel, I feel, but for real, though, for real. This is this, this is a real thing. If she, the surrender is a... It doesn't sound right. I'm probably going to go to the insurance commission in the state of New York and file a complaint. Because I've never seen surrender charges that are 90%.

Starting point is 00:39:39 So it's because the policy is so new. No, honey. It's because it's so bad. Yeah. It's the worst. I'm dealing with the guilt of not knowing what I didn't know, right? Essentially what I'm not picking on you. I just want you to not play footsie with rattlesnakes anymore.

Starting point is 00:39:58 Right. And we call it stupid tax, Daniel. Everyone's done stupid stuff, right, with money. Everybody has. Including me. Yes. And so that's going to be, you know, this is it, if that's the case. But continuing to be in it, because you don't want to be in it until 2035.

Starting point is 00:40:16 Well, I'm not contributing anymore. Yeah, let's do this. Let's do this. I can't unpack your horrible policy that national life screwed you with with your friend in air quotes. God, this makes me so. so angry for you. Oh, so I can't unpack all of it right now. But here's the bottom line. I need you to get out of this as fast as possible and never give these people another dime. The best way to unpack it is go to Ramsey Solutions.com and find a smart vester pro that does

Starting point is 00:40:44 actual real investing in your area. Contact them. Tell them we talked on the air and you need some help looking at this policy because it sounds to me like that they may have violated some stuff and you may need to file a complaint with insurance commission of state of New York. I'm not sure. But for sure, for sure you've been misled. Right. And for sure you've been screwed. Okay. So I just don't know if, I don't know if it's breached the legal lines or not and whether the insurance commission will be interested in taking these guys down or not. But somebody needs to take them down. We just told 32 million people that national life sucks just now. So that helps. That makes me feel a little bit better. But still it doesn't help Danielle. So I want

Starting point is 00:41:26 you to sit down with somebody that can unpack this policy and verify the information, because I think your agents lying to you about your surrender amounts. They're unreasonable. It doesn't, I mean, usually you get hit hard, but not 90%. It could be 40% or something, but not the whole thing. Yeah, I've never seen that. And so if it costs you three or four thousand dollars to get out of this, get out. If it costs you 15,000 and you can wait a year and not pay a 15,000, well, we'll talk about that. But, you know, the last thing we want to do is do business with National Life's IUL.

Starting point is 00:42:03 Let's just make sure everyone here is that real clearly. Did I say that clearly? Okay, good. Because we're consumer advocates here. You don't have a problem with Ramsey unless you're screwing people we love, which are people. That's the people we love. Hey, guys, George Camel here. There are a lot of things you probably shouldn't ignore.

Starting point is 00:42:30 Your check engine light, that weird smell in your fridge, the smoke detector that that's been beeping for six days, and maybe most importantly, your phone bill. The things we ignore have a funny way of costing us the most. And your phone carrier is counting on you ignoring that overpriced bill month after month so they can keep charging you more and more. But that's not the case with Boost Mobile. You don't need to keep overpaying when you can pay just $25 a month for Boost Mobile's Unlimited plan.

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Starting point is 00:43:27 Unlimited Plan. Welcome back to the Ramsey Show in the Fair Winds Credit Union Studio. I'm Dave Ramsey. Rachel Cruz, Ramsey personality. My daughter is my co-hosts today. Austin is in Montgomery, Alabama. Hey, Austin, how are you? I'm well. How are you, sir? Better than I deserve. What's up? So, me and my wife invested in expanding our business back in March, bought an F-250 in a fleet washing trailer, and the F-250 motor went down about three weeks ago, bought an extended warranty on it. However, not sure if the warranty is going to cover it in our line. It's about $16,400 to $6.

Starting point is 00:44:20 We don't have the cash to pay for it. So I'm curious, do we save up for it or due to the revenue it brings in, do we take out a loan for it? Okay. This is the side hustle? This is no. This is a branch of our full-time business. We have a detailing business that does about 15.

Starting point is 00:44:43 to $25,000 a month in revenue, and this section of the business does between $9,000 and $12,000 a month in revenue. Is that in addition to the $25,000 or is that part of the $25? Correct. In addition to. Okay. So you're bringing $25,000 gross on a detailing business, which ought to be about 90% margin. So why do you not have any money? So we've got a lot of overhead.

Starting point is 00:45:09 We're about $18,000 a month in overhead. What is your overhead? Uh, we've got about a 4,000 square foot shop and got about, uh, about, oh, you're not doing mobile detailing. You're bringing them into your place. No. No. Yes. Yes. We do higher yet work. Not that mobile's not nice, but I know. I know. I'm just, okay. Um, I get it. It just, it, I, for some reason, I had it in my head one way. Okay. Now, so yeah, you got a 4,000 square foot shop. How much is the shop? Uh, now, okay, so the shop's only $1,300 a month. We've got about a five, you know, we've got about a $500 a month power bill.

Starting point is 00:45:48 And then from there, it's just, we've got $2,000 a weekend payroll. I mean, I don't have all of the things right in front of it. I've got an office manager that does all of that. But it all comes out to be about $18,000 a month for us to handle everything that we need to handle. We need to hit $25,000 a month between the two businesses. that pays my wife, it pays me, which obviously pays all of our home bills. And we just started really getting it. Let's stop a second.

Starting point is 00:46:22 Okay. So I kind of got enough of it, I think, to start working on it with you. I love what you're doing, by the way. You're a great entrepreneur. And you're a classic entrepreneur. You suck at bookkeeping. And you're going to have to get better at it or you're going to go out of business. I went to the same stage myself.

Starting point is 00:46:36 I'm going to send you a copy of our book, Building a Business you love. and you're in the second stage of the five stages of business, and your lack of processes and systems are killing you. Because you don't know what the flips going on. You are a guy that works really, really hard, and there's a lot of chaos in your life. Well, he delegates to the business manager. Yeah, but you're a lot of chaos in your life,

Starting point is 00:46:56 and you don't, you don't. Yeah. So you've got, I know, I've been right there, you're a classic, and you're going to be okay. But Larry Burkett used to say, the guy that trained me on biblical finance, used to say that financial problems are not the problem. there, the symptom of something else going on.

Starting point is 00:47:10 So the fact that you don't have any money to fix this truck is not a problem. It's a symptom. And that's why I was digging into the rest of it, why you don't have any money. That's what I was trying to figure out. So I'm going to go all the way back to the source at the beginning of this creek, long before it became a river. And let's get this business, the core business profitable. And let's change our mentality of we're going to borrow our way into prosperity.

Starting point is 00:47:34 So next time you get ready to fix something, grow something, add another element to you. your business, you do it with paid for equipment or paid for period, and you're going to have to cut your payroll down and go back to running some of the equipment yourself probably for a little while, because I think you're payroll heavy. You've delegated the crap out of this, and so everybody else is making your profit, not you. You've got lousy margins for your business. Yeah, I feel the same. Yeah. And I'm not picking on you. I'm just loving, I love what you're doing. Is it around seven grand, Austin, that you guys have? Because you said, 25 and it takes 18 to do everything, right?

Starting point is 00:48:12 And it's a labor-intensive business. There's no cost of goods sold other than the labor. So, yeah, that's what I'm wondering. Because in too much, you'll have 14,000 with just that to be able to fix the truck or... And hopefully, stupid extended warranty will cover it. We didn't go. That's what we're hoping. Yeah, that's what we're hoping.

Starting point is 00:48:27 Yeah, if it doesn't, I'm going to set the truck down until I save up the money and answer to your question. Okay. And that's going to force me to fix the problems in the business because the business will make me more cash when I fix the problems inside of it. Right. And I'm going to hook you up with our Entry leadership guys, and I'm going to send you a copy of the books around that and show you exactly what we did, because we went through the exact same thing 25 years ago, all right? We're a 300 million dollar business now, but we were doing about what you're doing. You're going to do about a million

Starting point is 00:49:01 and a half in gross revs if you keep it up, and you've done it from nothing because you're just a guy that just picked up, started washing cars, man. And you're the American dream. I'm so proud of you. Thank you, sir. But now you're going to have to calm down and concentrate. So here's the thing. What we got a saying on our wall around here, what got us here won't take us there.

Starting point is 00:49:23 Right. That's where you are. What got you to this point won't take you to the next point. So you've got to get down in these systems and processes and bookkeeping, and you've got to become a master operator of a business. from a business acumen standpoint. You've got to grow you and your skills about running a business. And when you do that, man, you're going to double your profits in this business

Starting point is 00:49:46 and you're going to pay cash for the next truck and you're going to pay cash for the next thing you try that does or doesn't work. I've paid cash for all my mistakes over the years and I made plenty of them, but they're not haunting me. I'm not looking for an extended warranty to bail me out. And I can just think of about three right now that they haunt me in terms of how much money we lost trying stuff, but it was all cash. And so it doesn't hurt quite as bad.

Starting point is 00:50:11 So I just, I think you got all the right stuff. I think this truck is God's signal to you to learn something and what got us here won't take us there. And you need to, so we got to get down in the current core business, clean it up, shine it up, and let's double the profit margin in that roughly. I mean, I think there's, I think there's another five or six thousand bucks that's going out the door just because we're pissing it away with no systems and processes. And we do it here at Ramsey. We fight it. It's a constant fight. This overhead monster will take you out of business.

Starting point is 00:50:46 But you're the guy that proves that capitalism works. You're doing a good job for people. You're charging them a fair amount. You're covered up in business. You've not got a marketing problem. You've not got a work ethic problem. You know, you guys are, and you're, you love doing stuff and get trying something new. You know, you're going to be that you're the kind of guy that makes more money than people with a Ph.D. in something. Because you just know how to leave the cave, kill something and drag at home. So we'll help you. And you call us back anytime we can help you. But if the Well, I was going to say, it's just the desperation of these moments. And wake you up, though. And it's what plugs the entrepreneur back into the details of it all.

Starting point is 00:51:27 Yeah. Because for so long it's been okay. And, you know, not saying the business manager's lazy or doing a bad job. I'm not saying that. But they're probably not going to be as tightened up and back to that, you know what I mean, as you are. Absolutely. And so there's a gift in that, Austin, of what you can bring to that. Yeah. And have that and retained earnings in that business. So when stuff does break, because it will, you cash flow it and you just keep on moving.

Starting point is 00:51:49 Amen. Good stuff. Hang on. We're going to send you a couple books, brother. When it comes to your health insurance, one of the biggest mistakes you can make is believing you're stuck in a one-size-fits-all plan that costs too much and covers too little. That's why I recommend Health Trust Financial. They're the only Ramsey trusted health insurance partner because their advisors take the time to understand your situation and help you explore the coverage options that are available to you.

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Starting point is 00:53:46 It's hard, though. We don't teach you easy. We just teach you stuff that works. I mean, there is no good microwave barbecue. If you want good barbecue, you've got to cook it, man. Like two days, the dog next door is howling, right? That's good barbecue. That's the way money works.

Starting point is 00:54:06 And you will either learn to tell your money what to do or you will always wonder where it went. You don't have a choice. And that's what every dollar does. It tells you, it gives you the two, to make your money behave instead of you being a slave to your money problems. You track your progress, you get personalized recommendations from us, coaching from us. It shows you exactly how to not only manage your month, but also hit your long-term net worth goals and get rid of your debt, the Ramsey way.

Starting point is 00:54:34 You can start every dollar for free by downloading it in the app store or Google Play. Kimberly is in New Orleans. Hi, Kimberly. How are you? How are you? Better than I deserve. What's up? Okay, so I have about 28,000 in credit card debts and 28,000 in student loans. What'd you buy? I have.

Starting point is 00:54:57 I don't know. It's built up over the last few years. I did borrow $7,000 last year to pay back into my retirement. Okay. That's all right. 28,000. How much you make, huh? About 60,000 a year.

Starting point is 00:55:20 Ouch. That's scary, isn't it? Yeah. Yeah. I have an investment property. The balance is 60,000, and I was thinking about taking out a cash out, doing the cash out refinance to pay off the credit cords

Starting point is 00:55:40 so I can start paying down a student loan. What's the investment property work? earth? About 160,000. How'd you get it? It was my, it was my first home. Oh, okay. So you got about 100,000 in equity in that, Kimberly. Is that right? Yes. And what's your primary home worth? If, I think it's about 280,000, and we have about 132 left to pay on that. We. Okay. What does he make? About 80,000. Oh, so we have $140,000 income.

Starting point is 00:56:20 Well, I do our finances separate because he does not save. I have $25,000. Neither do you. Well, she's got $25,000 save. I have $25,000. I will have $26,000. No, this is my savings. I know, but I mean, you're $28,000 in credit card debt.

Starting point is 00:56:39 Don't you see the correlation? I do. Yeah, that's a mess. We don't act like you're somehow successful and he's not. Well, he has zero saved. Well, you got zero saved after you pay off your credit cards. Does he have debt, Kimberly? He does.

Starting point is 00:56:58 How much does he have? I think it's about $11,000 in credit card debt. He has a motorcycle thing. I'm really not sure what the balance is, but I know his note is about $700,000, and he also has a vehicle with about 350 for that note. And how long you all been married? 10 years. Okay.

Starting point is 00:57:23 So here's what I'm going to teach you, all right? We did the largest study of millionaires ever done in North America. We interviewed in detail 10,167 millionaires, not broke people with an opinion. Millionaires. Okay. Okay. 89% of them say one of the key reasons they became a millionaire is because they worked together and combined forces with their spouse. They didn't treat their spouse like a roommate. They treated them like a husband and a wife. And so they combined all of their problems and all of their incomes and all of their savings and got in attack mode.

Starting point is 00:58:06 And it's you and me against the world, babe. And we're going to lock arms. We're going to both be smart. We found almost none of the millionaires became millionaires while dragging a spouse along who sucked at money. It almost never happened. You're never going to have peace in your house until you guys learn to work together and aim together at something. I know that's a big ask from where you are.

Starting point is 00:58:35 Well, she said, how do I get him to? Yeah, I know. It's hard. It's hard. But I'm just telling you, that's where we've got a. start is we've got to go way back on this thing and because you have been spending more than your saving so your net net for you is really close to zero you saved 25,000 while you went 28,000 in debt that's a negative three okay and he's over here borrowing motorcycles and car

Starting point is 00:59:03 payments and y'all are starving to death making $140,000 a year in New Orleans and you you should be able to be rich on that. Yeah. And so I want a better life for you, hon. What do you think, Kimberly? Okay, so what did he suggest? I would sit down with him tonight, and you guys have a relational conversation

Starting point is 00:59:28 of how, where you want this marriage to go in general, right? Because, I mean, a healthy marriage has a level of unity, a level of sacrifice together, and to say, I want to do this life with you, and I'm scared to death to combine. The answer, you know, you would say is, or what we would say is, yeah, you combine your money and you guys work on your household together. But you could absolutely vocalize your fear and to say, I'm so scared to do this. Because you're misbehaving.

Starting point is 00:59:59 Yes. And I want to, together, reach some goals so that we can get out of this mess so that we can live a prosperous life. What if we had no payments, right? and sit there and dream and talk about it. What if we made $140,000? We had no payments. How much is going out of your household and just debt payments? And what if that was just sitting in your account, right?

Starting point is 01:00:20 You start to actually have hope for the future when you see what a reality could be. If you cut up your credit cards and said, I'm never going to use them again, and he promised what raised his right hand and promised he's never going to borrow money on anything with wheels or motors again, because he's got a bad thing about motors. He likes them. And I know because I'm one of those guys. I like motors too. So, you know, he, but that'll make you broke because those stupid things all go down in value.

Starting point is 01:00:45 So we're going to pay cash for everything from today forward. And if you had zero payments, how much do you own your house again? Primary about 130. 1.30. Okay. All right. I mean, let me, let me paint a picture for you. Only, though, if both of you were a firmly in agreement and completely leaned in, which you're

Starting point is 01:01:08 long way from that today, okay? But if you could get there, if the two of you could get there, and you said, okay, both of us are going to do the Ramsey plan, we're both going to walk the baby steps, we're not borrowing money, we're going to be on a budget that we both agree to, and we're going to lean in, and we're going to take $140,000. Let me show you what could happen, okay? You could sell that rental house and be 100% debt-free except your house, and you could pay off your house, the rest of your house, in about three years. Three years from today, you could be 100% debt-free and on your way to be a millionaire about four years later. But you'd have to be tied into this.

Starting point is 01:01:47 How old are you guys, Kimberly? 42 and 46. Do you all have anything in retirement right now? Well, I have a 401A. 4-1-K. Okay, how much is in there? I have no idea. Okay.

Starting point is 01:02:03 I mean, because if you look and you guys, if you did and you guys paid off everything and you invested, I mean, 14, 20, you know, doing quick math here. Man, that would be. Well, you got a car payment, you got a motorcycle payment, you got a house payment. Yeah, but I'm, yeah, yeah, yeah, yeah. Credit card. I mean, what are you talking about? I'm thinking of, it would be $2,000 a month.

Starting point is 01:02:29 I'm just thinking what you would invest in retirement. If you guys just did your income, it'd be $1.7 million, okay? If you guys invested $2,000 a month. That's at 62. In 20 years. Yeah. In 20 years. But that you retire with almost two million dollars in a paid off house.

Starting point is 01:02:45 That's what's possible. Yeah. That you start actually working towards something. Do it faster than that. Hang on. I'm going to give you a copy of Baby Steps. I'm sorry. Yeah, Baby Steps Millionaires and Total Money Makeover.

Starting point is 01:02:56 You guys read those two books. I'm going to try to talk you into doing it. It's a long way from where you are. But if I can talk you into it, it's going to change your life. You know what's scarier than a life-sized skeleton on your neighbor's front porch, a stranger from the internet showing up on your digital front porch because they found your address online. It is so easy for creepy data brokers to get a hold of your information these days. They're out there right now, buying and selling your personal data without your knowledge

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Starting point is 01:04:12 Get 20% off any privacy protection plan from our partners that Delete Me for Cybersecurity Awareness Month. Go to join DeleteMe.com slash Ramsey to get the deal or click the link in the description. That's join delete me.com slash Ramsey. Jack is in Cedar Rapids, Iowa. Hi, Jack. How are you? Hey, I'm doing good. How are you, Dave and Rachel? Better than we deserve. What's up? I'm coming at you with a more morally focused financial question. Just jumping right into it. My fiance and I are 24, been together going on five years,

Starting point is 01:04:55 and have been living together since middle of last year. We were due to get married last Sunday, but on her way to work about two weeks. before she got in a pretty devastating car accident and she's very luckily lucky to survive the hit itself. Oh my gosh Jack I'm sorry. That's awful to stay brief. She got flown out of the local hospital where she was transported to to be in intensive care where she's been for now going on three weeks in the top of the hospital in our state. Oh my gosh. So a set date for getting out of the hospital, starting rehab and getting back to work and just giving

Starting point is 01:05:31 getting back to life as normal has yet to be mentioned. And as far as living life normally, she's going to have to live with their parents due to mobility restrictions and the ease of living in that house compared to the apartment we live in because it's on the second floor. The biggest thing that's been on my mind and the thing that I want the advice with has been the magnitude of the bills that are probably going to come in. And what that means for me in my future,

Starting point is 01:05:58 because legally speaking, we weren't ever married. And so to the state's eyes, I wouldn't have any responsibility for these bills. And I personally am just not okay with the thought of not having anything to do with the burden that would be dropped on to her and her family because of the pending invoice that's coming. Am I being too nice and willing to take too much of this worry on myself? And am I wrong for thinking that I could possibly move back home to save up faster for these bills?

Starting point is 01:06:29 Oh, man. What a horrible thing. I'm sorry. Are you guys going to get married eventually? Yeah, we will still get married, but it, you know, we just got through with canceling and delaying honeymoons and flights as far as we can. So nothing, nothing's set in stone as far as rescheduling it. Okay. I assume she had health insurance.

Starting point is 01:06:55 Yeah, we're on a parent's health insurance yet. Yeah. and so typical health insurance has a couple things. You've got a deductible, and then you have a co-pay portion, like an 80, 20, and you're responsible for 20. They're responsible for 80. And then there's another number called a stop loss or a max out of pocket. Okay.

Starting point is 01:07:19 And that number, depending on what type of health insurance it is, is usually somewhere less than $20,000, which means the total out of pocket is probably. somewhere less than $20,000. So she's not going to get saddled with a $1.2 million NICU bill. Yeah, and that's what I was scared of. I didn't know if you were going to be looking at $10,000, $50,000 or a little different.

Starting point is 01:07:43 But it's not there. It's still very expensive. You're right. You're right. So, yeah. So, I mean, you're going through a tragedy, a drama, and it's harsh and scary and all of that. And so in the middle of all those emotions,

Starting point is 01:08:02 the insurance emotions or the medical bill emotion are coming up, and they're bigger in your mind right now than they actually are probably, is my point. Yeah, I know I'm very conscious. I'd like to think of the big picture and also focus on a small detail, so pretty much anything that their parents are thinking of, that her parents are thinking of I'm thinking of as well.

Starting point is 01:08:24 Yeah. The stress on insurance and, you know, liability and, you know, if anybody were to sue anybody because of the accident. Well, that, again, is on the insurance company, the car insurance first. So was the accident, a single car accident or what? Two cars involved. Okay. And was it her fault, or do we know? It was hers.

Starting point is 01:08:50 Okay. All right. So her car insurance comes into play. in, and how much liability coverage she had. And so was anyone else seriously hurt like she was? I don't know the extent of the other injuries. I know when I got to the hospital where she was initially transported to, the law enforcement officers in the room at that time said that they were already discharged.

Starting point is 01:09:18 So they probably couldn't have been in the hospital more than three hours. Okay. So most likely, if there's any liability to the other party, her liability limits would be unusual for them not to be at least a half million dollars on her car insurance. So again, car insurance is probably going to cover all of that. Most likely. Okay. Okay. I'm not sure.

Starting point is 01:09:41 We don't know where we are yet. It's very early in all of this. It's also early to worry about it, not think about it, but to worry about it. It's okay to think about it, but I don't want to worry about it at this stage. In other words, because we don't know what it is until the monster comes out of the closet and we figure out he's three inches tall, then we don't have to worry about him. But he comes out of the closet and he's 30 feet tall, then he's a problem. Yeah, how are you financially, Jack? Do you have savings?

Starting point is 01:10:09 Yeah, I have my savings. I've been listening to you guys and following your steps religiously for years. So I She was you know On auto pay for the rent and chipping in with the bills I have you know I completely stepped in and Disabled all the auto pay just to make sure that she doesn't

Starting point is 01:10:29 How much do you have saved? But I Total in savings right now I got about 11,000 Okay But right now I'm paying I'm paying for all of living and I can get by Yeah I can do it

Starting point is 01:10:43 Because I think from a relational standpoint I mean, you are two weeks, 14 days away from saying in sickness and in health. You know what I mean? Like, I'm about to commit my life. So the fact that you're wanting to step in and help care and take care of her, I would be worried if you wouldn't be desiring that. You know what I mean? Like, this is your wife.

Starting point is 01:11:04 You're 14 days from your, this is your wife, you know? So I would say that is totally understandable. And yes, I would. And I would. I think I would take care of her. I don't think you need to cancel the apartment move in with your parents because we don't know the size of the problem yet. Okay. But the answer to your question, not morally or ethically, but more relationally is Rachel's point is, yes.

Starting point is 01:11:26 I want you to treat her like she's your wife in terms of making sure she's okay. But not necessarily signing up legally for all these bills, but we're going to walk through this together. And if I need to throw some my $11,000 on the table, I can. To help her. But I want to see what we're dealing with and what it is. there for for long term so my prediction is um that the medical recovery that she because she's obviously got hurt really bad um is going to be 90% of what you guys face the financial problem is only going to be about 10% I think the health insurance and the car insurance are going to cover

Starting point is 01:12:08 the vast majority of the incident but there could be ongoing therapies and things that you guys may as a couple pay out of pocket, right? And that would be... Well, you may help with the deductibles or the co-pays later, but they're not even kicked in yet. They're not there yet. Yeah, but I'm just saying for him, like, for them to be thinking, like, if they end up getting married in six months,

Starting point is 01:12:30 you know what I mean? She could have another two years of therapies and rehab. You know what I mean, yeah, all of it. Part of what we're signing up for, yeah. Now, let's go worst-case scenario. Something crazy happens. The other party sues for $500 million for harm. and wins, okay?

Starting point is 01:12:47 Then your fiancé is probably going to file bankruptcy before you get married. Right. Okay. And you're not going to sign up for $500 million. Okay. That's not going to happen, but I'm just saying that's the... Worst case scenario, she files bankruptcy. On the other end of it.

Starting point is 01:13:03 And then you guys move forward together, and you walk, but you walk through it together because the car wreck and her, if she's got piss poor insurance or something, if her insurance policies are weak or her. her or her insurance companies, you know, horrible on paying out the claims, then, you know, she could get in a pinch here that you can't help her out of. Yeah. And her parents can't help her out of. And so it's just a horrible part of this tragic story.

Starting point is 01:13:30 Is her, you said mobility issues. Are the mobility issues permanent, do you think? It's not permanent. Okay. All right. It's just part of recovery from a horrible accident, yeah. Yeah, part of recovery. No broken legs or anything like that, but just she's needing assistance to just stand up out of bed out of a chair right now.

Starting point is 01:13:52 Just walking with her through this is your relational responsibility, not taking on all the bills and bankrupting yourself to prove it. But walking with her, making the decisions together is your responsibility. Yes, you're a good man and you will do that. If your business is making seven figures or more, you should be proud of that. that. But that growth probably brought a mess with it. Systems that don't talk to each other. It's impossible to track down your numbers because they're scattered everywhere. That's a visibility problem. And NetSuite has solved that problem for more than 44,000 businesses like yours. NetSuite brings financials, inventory, CRM, and more into one place. And their AI tool,

Starting point is 01:14:55 NetSuite Next, builds AI into everything, automating busy work like forecasting, demand and chasing down overdue accounts. It's not complicated to use. You just ask it questions like you're talking to a person. And you're not starting from scratch because NetSuite is built on leading practices from thousands of businesses preloaded and ready to go. Ramsey's solution switched to NetSuite years ago. It helped us know our numbers and we've never looked back.

Starting point is 01:15:25 If your revenue is at least seven figures, try NetSuite next for free at netSuite.com slash Ramsey. That's net suite.com slash Ramsey or click the link in the description. Our question of the day is brought to you by Ask Ramsey, your free AI money tool that provides personalized Ramsey money answers based on Ramsey principles. That's why we call it Ask Ramsey. You can get it at Ramsey Solutions.com slash ask Ramsey. Today's question comes from Dean in Virginia. My home escrow keeps going up due to rising insurance rates and property taxes. Some people recommend paying for those items once a year of instead of with your house payment,

Starting point is 01:16:31 which allows you to keep the funds in a high yield savings account to gain interest in the process. I am debt-free of them the mortgage. Is this a good idea? Man. Well, that's the rising insurance rate. and property taxes, yeah, is, it's a real thing. And my only fear would be if it's the once a year, you know, because you do that once the house is paid off, you pay everything, you know,

Starting point is 01:16:58 is to make sure that you actually do it and don't get behind. Because a little bit of escrow for me is a built-in savings. It's forced almost, you know what I mean, that it's going to get done. So, Dean, I guess, yeah, I'm with you, Rachel. I would ask the question of myself, if I'm, you. Do I have some? Am I disciplined enough to set aside one-twelfth of the actual insurance cost and the actual,

Starting point is 01:17:23 even if it's rising, you have to change it because it has to be paid, one-twelfth per month of taxes and insurance and set it in a savings account, high-yield savings account, and pay it. I would not do that unless two things occurred. I would not do it for the interest rate. The interest is not spit, okay? 3% on nothing is nothing. Okay.

Starting point is 01:17:47 So you're not going to get rich on the high-yield savings account on the interest. I wouldn't screw with it for that. Your labor is worth more than that. I would do it if your mortgage company keeps screwing up your escrow account, and they're taking more than they need to because they keep a shortage or an overage, and they can't seem to add up and divide by 12, which honestly, I think probably over half of them. escrow accounts out there suck and are out of balance because these mortgage companies have

Starting point is 01:18:18 eighth graders doing the math that are functioning on a second grade level. And so it's just, it's horrendously incompetent. I would do it to keep from having to screw with the irregularities of a poorly run escrow account, but not for the 3% that you're making on that, HYSA. And I would only do it if you can be super disciplined and make sure that you, you're making, you're setting the money aside. Don't get yourself in trouble. I agree with the rate. And to keep up with the property taxes and insurance.

Starting point is 01:18:48 I mean, all of that. Yeah. This does not fix rising insurance rates or property taxes. It doesn't change it a bit. You still got to pay them either way. And if you don't pay your homeowner's insurance, your mortgage company will put what's called for,

Starting point is 01:19:00 and prove it to them that it's paid. They'll put forced placed insurance on your house, which is about 10x the cost. And then try getting that money back. Man, that's a power. So you don't want to mess with not paying one of these things. So if you're super disciplined and if your mortgage company is horrendously incompetent on managing the escrow, I might do it separate. But otherwise, I would just run with it because it doesn't, the increase in the increasing cost doesn't change, whether you pay it or they pay it with your money.

Starting point is 01:19:36 Doesn't change. Salina is with us in Tampa. Hi, Selena. How are you? Hi, good. How are you? Better than I deserve. How can we help? Good. So, just a few questions. I am 43 years old and I'm a registered nurse. I recently sold my house in California and moved to Florida. So I made $160,000 off the sale of the house, which currently is sitting in my savings account. I also have a $30,000 CD, which is an earning. much and $20,000 in my Roth, excluding my emergency fund through the same bank. So I currently don't have a mortgage. I have no car payment, no credit card debt, no student loans. I paid those off.

Starting point is 01:20:27 And my retirement situation is fairly good. I have been putting away about 18, 20% of my earnings into 403Bs of 401Ks through various hospitals I've worked over the years. And, I have been putting away And I was recently told by the financial advisor at my bank that the projected value of my retirement will be about $4 million by the time I'm 60 if I keep on the same path. You're killing it. Way to go. Thank you. Thank you. So my question is, should I roll these all over into one account as he suggested and with what kind of company?

Starting point is 01:21:08 and in addition, how much moving forward should I be putting into a Roth versus traditional pre-tax 401K. I'm currently doing 18% into my Roth at my current hospital at Tampa General, which I think is probably better than doing the pre-tax. And lastly, what should I do with the money and my savings in my CD? Way to go. You got such good problems. Yes. Yeah, I know it's nice. I was taught at a very young age. Yeah.

Starting point is 01:21:43 So you have multiple 401Ks and 403Bs from previous employers, correct? Yes. Okay, so I would just do a direct rollover and just into a traditional IRA to have it all so that way you can control what's going on and they're not stuck at these other companies. I would also actually ramp down a little bit of what you said you're contributing up to 20% into retirement. and I would take it to 15%. And I would, I would favor the, do you have a 401K right now with the hospital you're working at? I do.

Starting point is 01:22:19 Do they do a match? Yes. How much? What percentage? I believe it's 3%. 3%. Okay. So what we teach is to take the 3%.

Starting point is 01:22:29 So go up to the 3% in the 401K. She's got a Roth 401k at the new hospital. Is it a Roth 401K? Yeah. I'm doing both. So they offer, I'm doing the 401k and the Roth through the same hospital. No, it is, you can do a traditional 401K or a Roth 401K. Oh, okay. Yeah, okay, then I'm doing the Roth. Okay, yeah. We would tell you to do the Roth 401k with the match and stop at 15%, throw the rest of it at your house.

Starting point is 01:23:01 Do you own a home? No, so I sold the house in California, and I... So the 160. I'm currently looking. Yeah, that's the 160 sitting in my savings. And I am looking to buy another, but I'm not ready just yet. I'm a little. I would honestly put that, yeah.

Starting point is 01:23:18 Well, I would put that into just a high-yield savings account because you'll probably be, you'll buy a house in the next probably four years, would you say? Yes. Oh, yeah, absolutely. Yeah, so I wouldn't put that in the market. And I would just keep that in a high-ield savings. You'll earn 3%, you know, in there versus a traditional savings account. And I would just let that sit there.

Starting point is 01:23:35 And above that. 15% if you have extra cash. Honestly, I would throw it in that high yield and save up a huge dumb payment. So when it comes down to buy, oh my gosh. I mean, even if you had 50%, right, to put down on a house, like that already speeds up paying off the house in that process. Our next goal, in other words, is pay off the house. Yeah. While putting 15% away in retirement and we'll do all your rollovers. And I'm going to advise you to get away from a bank financial advisor. I don't like banks. Yeah, I actually started looking on your list at local smart bests. Yeah. Good. That's what I would do.

Starting point is 01:24:14 Sit down with them and they'll help you do those rollovers and help you get everything, kind of smoothed up and piled up in one pile to watch it. But the good news is the projections you were given are probably pretty accurate. I think you're probably going to have $4 million or more. And you're going to pay for a house also, so that's probably going to be another couple million by the time we get there. And so you've just chose. in a wonderful career field. Your move to Tampa was a brilliant move. Everything about this whole story is spell smart from you. Yeah, you've just, you've just really done some very wise things. So I get a smart vester pro, and like Rachel said, I do those rollovers and do the Roth 401k with

Starting point is 01:24:54 the match up to 15%. Everything else goes on your house until your house is paid off. And then keep your emergency funds set aside of three to six months. Every other thing you got, throw it at the house, that other account that you've got. I'd throw it at the house too. The CD. Make sure, yeah, make sure you have a good emergency fund. I think you said you sold. You had that. Yeah, there were two accounts. Yeah. Yeah. That's perfect. Very, very well done. Well done. Welcome back to the Ramsey show in the Fair Winds Credit Union Studio.

Starting point is 01:25:53 Rachel Cruz is my co-host today. Number one bestselling author, Ramsey personality and my daughter. Alex is in Virginia Beach. Hi, Alex. How are you? Hey Dave, I'm doing well. How are you doing? Better than I deserve. What's up? So I have quite a bit of a mess on my hands, and I've made a few poor financial decisions, so I'm just calling to get your opinion on what I should do next. So I'm a single mom who's been working full-time, and I've been in school full-time for the past two and a half years.

Starting point is 01:26:28 I've been receiving minimal help or inconsistent support on my child's father, So I was primarily taking on all the financial responsibilities, including child care. So now I have two questions. I received a lump sum of about 7,000 of backpaid child support. I was wondering, is it ethical for me to use that money toward my household income and toward the baby steps? And then my next question is, you know, I've been listening to your show for a little bit. And before I attended school, I made sure to apply to a thousand scholarships and pretend like that's my second job. I attended an affordable state school, and so I actually have a refund coming back

Starting point is 01:27:11 because I applied to so many scholarships and received so many funds. I'll be getting $8,000 back. Go, girl. I love it. Way to go. What are you studying? Thank you. Psychiatric nurse practitioner. Excellent. And how old are you? Yes. I'm 31. And how many babies? Just one. Just one. She's three years old. Two years old. Sweet. Three. Three. Three.

Starting point is 01:27:36 And how much are you making a year? So that varies because I've been doing contract work to maximize my income. The caveat to that is that I don't have insurance. However, I've been doing insurance through my school since I've been in school full time. Okay. So how much do you make? So about 65 an hour. And how many hours are you working?

Starting point is 01:28:00 About 36 hours a week. I'm a nurse. Oh, okay. Wow, good for you. Okay, so you're making, what's that come out a month? So that's about, each paycheck is about $3,800 after tax, roughly. Yeah, and you've got four of those. Two of those.

Starting point is 01:28:22 Okay, so you're making about $8,000 a month. Okay, $7, $8,000 a month. Way to go. Cool. Good for you. Well done. And how much debt do you have? And that's the thing.

Starting point is 01:28:31 I know y'all are going to yell at me. No. Not yet, but we might. No. Okay. So I have 7,000 that's in a private student loan from getting my bachelor's. I have 5K that was pretty much a hospital bill from when I delivered two years, two or three years ago. I have 30K in federal student loans, and this is where Dave is going to get at me.

Starting point is 01:28:56 But I have 10,000 in a car loan at Sequea and then the 28,000 in a Tesla. You got two cars. I do. I do. Why? Because I made very poor financial decisions. I'm ready to clean it up. Yeah, can you sell one of them? I could. So that was one of my questions. With that 7K and the 8K come again, should I? Okay, so let's stop a second. We had some fun with this. Let's think a minute. We got 80,000 in debt. You said when you said the $28,000 Tesla, and that's your second car, and I made a poor financial.

Starting point is 01:29:35 decision, Dave's going to yell at me. Dave would never yell at you just for the fun or the entertainment value. I want you to win, right? And you know that, right? Yes. So really, really what your God, yes, I think so. Yeah, what you're saying, no, but I mean, what you're saying is, is that I know I messed up. That's all you're saying, and we've all messed up, right? Yes. Okay. So how do you fix the mess up? You sell the Tesla. Okay. 30 seconds. It takes to make that decision. Because there's nothing about this. It's a blessing from God.

Starting point is 01:30:12 This has brought you nothing but pain. And what's crazy is... Every time you look at the car, you feel dumb. Yes. Yeah, and it takes your debt down to 50, then you put the other money towards it. Yeah, you're going to be cleaned up fast. Yes, I was going to say you're down to 35 just in this one call. You got seven in child support check.

Starting point is 01:30:30 You got eight coming back in the other stuff. And so, yeah, you sell the Tesla and you start applying the principles. Because you're doing so many smart things in this story until we got to the end of the story. You know? And you just got to stop that last little part. And, you know, you get you back on track, kiddo. You're doing good. Why are you emotional, Alex?

Starting point is 01:30:52 I'm emotional because I kind of had my intuition. I knew that it wasn't smart. I knew that I knew about you guys. My mom did introduce me to Dave Ramsey. and I still kind of knowingly went in, but at the same time, she was there with me and she took the class, so I'm thinking it's a smart move

Starting point is 01:31:13 because I got a good deal on it, but it's not. And so I beat myself up. And Alex, can't tell you this too. You're working full-time. You're in full-time school, and you're a single mom on your own. It doesn't sound like he's helping at all.

Starting point is 01:31:26 You're on. I mean, you're exhausted. You're exhausted. And exhaustion can, if you're not careful, bring on some desperation and what feels good in the moment. feels good to have a new Tesla, right? Like that it felt like a, you know, a medicator for a hot second because it's like, okay, that would feel really good. Like I'm, you know what I mean? Like,

Starting point is 01:31:44 I can totally see how, how it occurred. And then once the newness wears off and you look at the bill every month, then you're, have to have the regrets, which is fine. You know what I mean? You woke up from the party with a hangover. Yeah. So you can, you can reverse some of this. That's the beautiful thing. This isn't permanent for the rest of your life. Yeah, thank goodness. Yeah. I think I think you're a warrior princess. I'm proud of. I think you've done so many things right in this whole discussion. And the other answer to your other question is, it is not immoral to use child support money to live on

Starting point is 01:32:16 because you are paying more to raise that child. The child costs more than the child support money coming in. Okay. And so you're already in the hole, even if he pays, you're in the hole. And when he does finally pay the back child support, You're still the child still costs more to raise than he's giving you. So, you know, you use that money. It's just part of your budget, period.

Starting point is 01:32:44 And the same thing's true if you're out there and a spouse passed away and you get social security checks from your spouse that passed away for your minor children. That does not need to go into a mutual fund. It needs to go to pay for food and lights and water and raise or run your household. and raise your children. That's what that money's for. And so it's actually unethical to not use the money as part of your household. So do that and sell the Tesla.

Starting point is 01:33:14 And then let's use this money and let's start working these baby steps. Yeah. Get you cleaned up. And let's finish this plan, finish this schooling. Because, I mean, nurse practitioner is strong, kiddo. That's strong. Thank you. Yeah.

Starting point is 01:33:28 You're going to do a minute. You're going to look up in a year, 18 months, and it's going to be a totally different. financial situation for you, Alex, really. And let me tell you what, you need to teach this child as they grow up what you've done and how you lived because they have a warrior princess right in front of them. And if they can learn to work like you've worked and sacrificed like you've sacrificed for a noble cause, you will have raised a great kid. You spend hours researching before making a major purchase like a home or car.

Starting point is 01:34:38 but it's also a good idea to put in the work searching for the right insurance coverage. To protect your biggest assets, I recommend using Ramsey trusted pros. Whether you're looking for car, home, or any other type of insurance, Ramsey trusted providers have been coached and vetted to serve you like we would. Find what you need at ramsysolutions.com slash insurance. Well, we wish we could get to every call and every question here on. the show we can't if you have a money question and you want to answer for your situation head on over to our website use our free AI tool called ask Ramsey it's free and it was trained on

Starting point is 01:35:37 only Ramsey principles if you don't know how AI works it can only it's artificial intelligence it's not real and so it can only spit back out what you feed it and so that's like the problem with Google because Google Google's artificial intelligence is like reading through Reddit, which is a sewage pit. And so it's getting all this crap in it to give you an answer. But if you go to an AI tool that's only been fed a steady good diet, like only Ramsey stuff, then it's only going to give you Ramsey answers. And that's what Ask Ramsey is.

Starting point is 01:36:13 Okay. So like three years worth of answers off this show, dumped into it. All the books we've read and all the books we've written dumped into it. Not all the books we've read. All the articles. all the articles we've written like 2,000 articles on our website on different financial issues, all dumped into it. And so it's going to give you an answer.

Starting point is 01:36:31 And we've even been working on the snark. It's starting to be pretty snarky like we are because we're a little smart aleck here. And so we kind of like that. It's part of our brand and a little sassy, right? And so Ask Ramsey's got all of those things. It won't yell at you. And I don't yell at you as often as some of you think I'm going to. But anyway.

Starting point is 01:36:48 I don't know. I have to call today. I've been like, Dave, don't yell at me. I know Dave's going to yell at me, but then Dave just says, hey, I love you and I want you to win. We've had empathetic Dave today. Very, very caring. Okay, there we go. All right.

Starting point is 01:37:03 We don't know which Dave's going to show up. You don't know which Dave is going to show up. But with Ask Ramsey, you know, okay? So there you go. It's true. All right. Not enough coffee. That's all it is.

Starting point is 01:37:11 All right. Check it out, Ramsey Solutions.com. Click the link in the description. If you're listening on podcast or YouTube, it's free. Check out Ask Ramsey and ask it a question. See what it does for you. You'll like it. Juan is in front no, Hesus is in Los Angeles.

Starting point is 01:37:25 I got it all covered here. What's up? Hey, Sus, how can we help? Yes. Me and my wife, we've been watching your show for a while, and we've been following your steps of getting out of the debt and stuff. We don't have any dead, and we have six months worth of expenses. Way to go.

Starting point is 01:37:48 And after all expenses and everything, we have $4,500 left over a month. Wow. Good for you guys. And we would like to see because we like a lot of naive when it comes to that, work and invest in money. Good for you. Very well done. What do you do for a living? I work in housekeeping in public area.

Starting point is 01:38:17 Yeah. You work hard. Good for you, man. Yes. How much do you guys, I know you have 4,000 left over, you said, Jesus, but how much do you guys make a year? Household income. She makes 87,000, and I make 67.

Starting point is 01:38:32 Okay. Well done, y'all. Way to go, man. Excellent. Well, I think the biggest thing I learned about money is if you don't give it a name, meaning a goal, and each of those dollars need an assignment, it will just disappear. And so you say, I got $4,500.

Starting point is 01:38:51 Now, what am I going to do with that? And you need to say, all right, out of that, we're going to invest a certain amount, and we're going to put a certain amount aside to buy our first house, okay? Or whatever it is you're going to do, I don't care, but it needs to have a goal, not just stacking cash. And if you give it a name, it won't disappear because it'll go to the name. You speak a name over it. That's why we call our budgeting app every dollar because you give every dollar an

Starting point is 01:39:18 assignment. Every dollar has a name. And I want you to do that with your saving and you're investing. So probably you've got your emergency phone in place. Probably you're going to start putting some money aside for retirement, wealth building, and you're probably going to put the rest of it aside to buy a house. Does that sound right? She said a house is not a good investment. Who did? We should stay my wife. She's wrong. Okay. Who said a house is not a good investment? Of course, a house is a good investment. I mean, in L.A., in Southern California,

Starting point is 01:39:52 it will take you guys a while to save up that down payment, for sure. But overall, it's going to go up in value. Yeah, investments go up in value. So by definition, a house is a good investment. They go up in value. So our plan, according to us, we're planning to just invest money and retire if it's possible, maybe at $50 or $1,000. 48 or something like that.

Starting point is 01:40:20 Yeah, but where are you going to live in a rental house? You're going to be a renter? No. Well, we live in an apartment. I know, but I mean, you're going to retire with a big pile of money but still have rent. Jesus, how old are you guys? I'm 35 and she's 31. Okay.

Starting point is 01:40:46 Okay. You guys do what you want to do. The first thing I would tell you to do is to give every dollar an assignment, like I said. and I would sit down with a smart vester pro, click on Ramsey Solutions, and click on the smart vesters. It'll drop down a list of the ones in your area, sit down with them, and they'll help you guys set some goals with this money. And if all you want to do is invest it and be a renter, then they can help you do that. I don't recommend that, though. Right.

Starting point is 01:41:11 And where you guys are at, salary-wise, it's about two grand a month that you can be investing for retirement. And if you guys don't retire early and you retire at, say, 60 years old, and you do this every single month, this was crazy. And again, this means that you haven't gotten a raise or anything, which is not going to happen. You will continue to grow your income and be investing more. But it sits at right about $5.6 million. Yeah, why $2,000? He had $4,500. $2,000 a month?

Starting point is 01:41:42 He had $4,500 a month. Yeah, but he didn't invest all of that. He needs to invest 15% of his income into retirement. I know. And take the other 2,000 and save for a house. But I'm just saying if he invested 15% of his income right now. What we teach. Yes, every year.

Starting point is 01:41:57 Yeah, it's called the baby steps. You know, baby step four. It's called baby steps. Slipped away from me there. Baby step four. Invest 15%. Yeah. Okay.

Starting point is 01:42:06 But then the other $2,500 a month, which is $30,000 a year. It's a safe for a house payment or for a down payment on a house. Yeah. $30,000 bucks a year and let that grow in a high-yield savings account. Yeah, for sure. down with a smart vestor pro you could put the whole 4,500 in there. And you'd have that $5 million a lot faster. Yep.

Starting point is 01:42:24 And buy a house later and be a renter for a while. That's not what we recommend, though. Yeah, exactly. I would get in the housing market because they're going up all the time, and they always have. Juan is with us in Fresno. Hi, Juan. What's up? Hey, thank you.

Starting point is 01:42:40 Dave, thank you for talking to me. In a nutshell, I'll get right to it. I have two mortgages. a mortgage and an equity line, so to speak, and then a 401A. I don't understand the difference between an A and a K mechanics, but I'm going to read them straight off my latest statements to you. Every month, I pay $1,15.58 for my primary loan, which is conventional, and the balance a payoff. Outstanding principal balance is 44,009581. And it's a good rate. It's 1.875. How old are you?

Starting point is 01:43:26 61. I'm retired out of the trade. What's the total balance on your retirement? Your total nesting. What's the total nistic worth? My totalistic, Dave, tell me what do you mean? My 401A or K? Yeah, your 401A, K, anything you got in your retirement funds, how much? Total. Okay. I have $100,000 in the 401K. I want to believe there's at least, you know, $300,000 in equity on this house because the payoff is about $100,000.

Starting point is 01:43:57 So the only money you have in retirement's $100,000? Yes, but I have a lifetime pension. Okay. But the only money you have in retirement is $100,000? Yes, sir. Okay. And you owe $44 on your first, and how much? much on your second?

Starting point is 01:44:12 I owe, I think I have it right here in the front of me, 49, 401. Okay, so $100,000 pays it off, but you'd be broke other than your pension. Correct. Don't do that. No, no. Let these pay on out. You just work them on through. You're going to be done with them a few years anyway.

Starting point is 01:44:31 But I don't want you sitting there with no money and only a pension. People ask me all the time. George, what's your number one money-saving hack? I'm glad you asked. Nothing makes me happier than helping another frugal friend. So here's the hack. Get on a budget. Seriously, how are you supposed to save money if you don't know how much you're spending in the first place?

Starting point is 01:45:20 And that's what makes the every dollar budgeting app a game changer. With every dollar, you'll get a clear picture of your spending. And from there, it's easy to see where you can get more intentional, cut back, and save more money. How much money are we talking? Well, the average every dollar budgeter frees up $395 in their very first budget. And if you ask me, I think you're way above average. So why are you still listening to me? Go download every dollar for free and start saving more money right now. You're welcome to stop by and see the show. We do the show on the glass and the lobby at Ramsey Solutions from one to four central time every day.

Starting point is 01:46:09 The amount we charge for tickets is zero. And the coffee that we provide is free. And the homemade cookies, oh, yummy. Yeah. We had the calories removed too. Not. But yeah, you come in there for. to come hang out with us. Also in the lobby of Ramsey Solutions is the debt-free stage. On the stage is Sean and Angela. Hey guys. How are you? Hello. Hi. Thanks for having us. Welcome, welcome. Where do you live? We are from Wyoming. All right. What part? Central Wyoming, around Casper. Okay. All right, cool. Welcome all the way to Nashville. That's a bit of all. Excellent. And so you're here to do a debt-free scream, how much have you paid off? $336,000. Wow.

Starting point is 01:46:56 How long did that take? Six years. Oh, wow. Okay, and your range of income during that time. We started about $180,000 and we ended about $300,000. Wow. What do y'all do for a living? I am an attorney.

Starting point is 01:47:10 Mm-hmm. And I'm a pharmacist. Oh, good for you guys. Okay, wow. Okay, cool. Good for you guys. Great careers and $336,000. I was going to guess paying off the house, but then I hear those two careers, I'm

Starting point is 01:47:21 thinking student loans. We did the student loans first. This is round two, and it was the house this time. Okay. All right. Well done. Congratulations. All right.

Starting point is 01:47:30 Looking at weird people. Yep. A hundred percent debt free. House and everything. What's the house worth? Probably about $6.50. Excellent. And how much in your retirement nests?

Starting point is 01:47:41 About three to $350. Okay. So you're hitting the million dollar net worth range. Yep. Excellent. Way to go. And you're not that old. How old are you to?

Starting point is 01:47:49 38? 42. Right. And your baby steps millionaires. Yes, sir. So how long ago did you start following Ramsey stuff? About 14 years ago. Wow. Okay.

Starting point is 01:48:00 So there we go. Wow. Right when we got out of college with our debt. So how much student-und debt did you guys have with all the degrees? We had about $145,000. Yes. Oh, that's lower than I would have guessed. I mean, a pharmacy and an attorney.

Starting point is 01:48:12 Yep. Oh, pharmacist and an attorney. Okay. Law school. Amazing. Yeah. So great, you guys. incredible. So what made you go all the way and say, hey, you know what? We are going to,

Starting point is 01:48:26 we're going to pay off the house. We're going to take six years of our lives and throw extra income at it and just knock it out. What was the motivation to do that? We were intentional for about the first five years. And then about a year ago, almost today, actually, we decided we just felt that God told us we needed to get out of debt completely. And we calculated we need an extra $15,000 to be able to, if we throw everything at the house, we can. and pay this off in a year. And so we ended up doing DoorDash. No way.

Starting point is 01:48:56 Got it done in nine months. Oh, my gosh, you guys. We were made fun of for being a lawyer and a pharmacist door dashing. We got it for the big goal. But how do you like me now, huh? Yep. That's right. I'm a millionaire and I'm 40.

Starting point is 01:49:11 Shut up. Yeah. Yeah, it turns out that there's a surefire way to making money. It's called work. Yep. Yeah. Way to go, guys. So great.

Starting point is 01:49:19 Pretty incredible. I'm so proud of you. So what was the hardest part of this whole thing for you guys? That's a good question. The hardest part, I think, has just been delaying what we want. We want to buy that new car. We want to move on with something. We want to go on trips like we are right now.

Starting point is 01:49:38 So you're like normal people. Exactly. Okay. And so delaying that, and this trip right here is even actually one of the first trips we've done as a family that wasn't just to go visit family, but we are actually going to take money and spend it. and go enjoy themselves. That's cool.

Starting point is 01:49:55 That's good. I like it. I like that too. Have you guys had a month or two? I'm sure you have where you've had no mortgage payment? We have. We paid it off in June. And then as soon as we paid it off, he went into the hospital twice.

Starting point is 01:50:08 And our son broke his leg. And so there was a reason that we needed to pay that off because we were just able to cash flow anything that was thrown at us. And it was wonderful. Oh, my gosh. Yeah. So now you've had a couple months without anything. So I was in the hospital, but we were grateful that I was in the hospital that month and not the month before. Yeah, right. Oh my gosh, you guys. Life just keeps going. And you guys have kids, right? Three kids.

Starting point is 01:50:33 Yep. How old are they? 13, 11, and 8. Okay. What did they think about the process? How are they? They're a big help. They're cheering us on the whole way. We actually, we'd bring them along with us whenever we would try and get a little bit of work done. They would come and wait in the car with us or help us as much as they could. Oh, I love it. Oh, my gosh, you guys. awesome well done well and they have that memory that that you know when i was 12 and when they're a grandmother and they go you know back in aught 26 mom and dad was doing a thing called door dashing and that's how we became multi-bazillionaires in our family you know that's what they'll be doing when they're grandmother right that's that's perfect because they got that

Starting point is 01:51:13 memory i'd carry that stuff up to the front door for people yeah i mean i can hear it you know it's the stories we all tell we get old is this is how it happened right Yep. Way to go. I'm so proud of y'all. See, you did change your family tree because they got involved and they helped. They know what happened and, you know, that's a big deal. Absolutely. They helped. And actually, this is kind of a special trip for us because we're here with my wife's parents and they are just retiring, having followed Dave Ramsey. And then we are on this journey ourselves. And then now we actually, even are oldest is taking your foundations and personal finance class. And so she's starting her own journey with Dave Ramsey. So it's been great. So great. So generational, right? Three generations sitting right there. That's awesome, you guys. Well, so when someone asks, what's the most important thing you're going to do if you want to get out of debt? What do you tell them the trick is? No trick, but yeah. Persevere. You just have to keep going. No matter what comes at you, just keep persevering. Stick to that budget, even though it's hard.

Starting point is 01:52:13 Were you all working together before you started all this as a team pretty good? And then this just was one more thing you did? Or did you start working together even more intensely? unity between the two of you. We've always had unity. I think this created intentionality. We had to actually choose. Every dollar went somewhere and we had a choice to make with every dollar. Now it's what really changed for us.

Starting point is 01:52:37 Yeah, that aligns your value system in a very, very, very real way. Yeah, for sure. Okay. And hitting a big gold together as a married couple. I feel like that's one thing we talked on the show a lot with couples where I'm like, when you do it and then it's done, you look back and like, We walk through that together. Like, we did that together.

Starting point is 01:52:54 You know, there's something so bonding about going through something that's pretty much impossible is what it feels like. Having a paid off house in today's world feels impossible. $360,000. I mean, that's a lot of money, you guys, right? I mean, it's amazing what you've done. Absolutely incredible. Yeah, very proud of you. Okay, the kiddos names and ages again.

Starting point is 01:53:13 We have Brianna, who's 13, Allie, who's 11, and Kylan who's 8. Okay. And one is going to join you or all or whoever, huh? One of them is going to come up and join us. Okay, anybody that wants to is welcome. All right. But here we go. Oh, is that the middle one?

Starting point is 01:53:27 This is our oldest. Oh, okay. So great. Very cool. So good. Yeah, she did most of the DoorDash work. She did indeed. No question.

Starting point is 01:53:35 I was like, listen, I deserve to be up here. That's right. You're part of the team, kiddo. Well done. All right. All right. Sean and Angela, Brianna, Allie and Kylin? Kylin.

Starting point is 01:53:44 Kylin. Good, good. From Casper, Wyoming area, $336,000 paid off. house and everything in six years making 180 to 300 and of course they also along the way became baby steps millionaires so proud of you guys count it down let's hear a great debt free scream three two one we're dead free that's how it's so great oh my gosh well i mean in today's world this can be done but they're you know they said it 14 times in that thing he kept using the word over and over and over

Starting point is 01:54:30 intentionality no one wins at anything by accident winning is not an accidental act having a great marriage for 45 years is not an accidental act raising great kids is not an accidental act succeeding and pushing through in your career and increasing your earning power is not an accidental act. Building a wealth and becoming a millionaire at 40 years old with a paid for house is not an accidental act. These are intentional acts. These are things you control. Trump doesn't control them. Biden doesn't control them. Thank God. You're in control. You've heard from me and the Ramsey personalities for years, but nothing beats actually getting together in person. That's why we created the Live Like No One Else Cruise. For seven days, we're vacationing.

Starting point is 01:56:01 with you and 2,500 Ramsey people in the Western Caribbean with live shows, us, new content, us, and more. If you're on Baby Step 4 or Beyond, come spend the week with us next March. Choose your cabinet Ramsey Solutions.com slash events or click the link in the show notes. Our scripture of the day, Philippians 412, I know what it is to be in need, and I know what it is to have plenty. I've learned the secret of being content in any and every situation, whether well-fed or hungry, whether living in plenty or in want. C.S. Lewis said the task of the modern educator is not to cut down jungles, but to irrigate deserts. Ooh. C.S. Lewis.

Starting point is 01:57:09 Hmm. What would a jungle be? Wow. No, I don't get it. Cut down jungles. Don't cut down jungles. Don't cut down jungles. It's not to tear down. It's to build up. Oh, to bring life irrigate. Water. Not to slaughter the rainforest. What would that?

Starting point is 01:57:26 Yeah, yeah, yeah, yeah. What is that entail? What is that entail? Don't tear down. That's good, though. Yeah. All right, Linda is in Grand Rapids. Hey, Linda, what's up?

Starting point is 01:57:35 Hi. I'm recently widowed. Oh, no. And, pardon me. It's okay. My husband provided for me, but now I don't know how best to steward the insurance money that he left for me.

Starting point is 01:57:52 Wow. How long ago did he pass away, Linda? August 4th. Wow. Just the day. How long were you married? We had just celebrated our 21st anniversary. Was it unexpected, Linda?

Starting point is 01:58:07 No. No, he's been failing the last few years, so we knew it was coming, and it was a blessing because it allowed us to put a lot of things in place and to have a lot of hard discussions. But it made the final days much, much easier. What was his name? Raymond. Raymond, okay. Oh, I'm so sorry.

Starting point is 01:58:29 Thank you so much. How much is your life insurance proceeds? 300,000, and then we had 81,000 in savings. Okay. And how old are you? 69. Okay. And is everything paid off, or what kind of situation are you in?

Starting point is 01:58:50 We still have a mortgage. There's about $129,000 left on the mortgage. In the house, according to Zillow estimates, is in the $250 to $280 range as far as current resale value. I'm not sure how much I trust that. Yeah, but I mean, it's a guess right now. I mean, Zillow's not accurate, but yeah. Okay, cool. And so what is you, I know it's still real early in this process.

Starting point is 01:59:19 do you have a plan as far as whether you're going to stay or not in the house? What do you want to do? He encouraged me to move to get a smaller place. It was less upkeep and less work. But right now, and from all the wise advice I've heard over the decades, don't make any quick decisions for at least a year. So I'm trying to abide by that. And all of our memories are here in this house.

Starting point is 01:59:44 We've lived here since we married. It's just to be hard to leave that. That will be hard. Yeah. Yeah. Yeah, I want to make big decisions that I can't undo very slowly and after some of the fog of grief has started to lift. Because it takes about, I mean, you're still in the stage where you're just trying to breathe. Yes.

Starting point is 02:00:09 I mean, just starting to talk about it already brings the tears up. And that's normal. And that's a good thing. That's right where you should be. I'm sorry you're going through this. Thank you so much. The, but yeah, I'm real good with you doing nothing. Have you got an income coming in of some kind that you eat on?

Starting point is 02:00:28 Yes, fortunately. What is that? Current monthly income is just over $4,800. Okay. What is that come? Is that from you working or did he have a pension or anything? No, he had a pension and Social Security, of course, and I had a very small pension.

Starting point is 02:00:47 Okay. So that's enough. I'm just like $200 short each month to cover all of my expenses. But with this so new, some of those expenses may be less than what I've budgeted for just because I'm not sure, like groceries, those kinds of things that fluctuate. How much is the mortgage payment? The mortgage right now is $671. Oh, good.

Starting point is 02:01:10 Okay. Yeah, we have a really low interest rate. We get in at 2.75, I think. That's great. Okay. I'm going to stick with what you've heard and go slow because you can eat and you're fine. You're taken care of and just let you have time to breathe and hurt for a little while and cry for a little while. And then as some of the fog starts to lift, then you'll make better decisions and decisions that you'll feel more confident in.

Starting point is 02:01:41 I would if I were in your shoes. I mean, Sharon and I've been together 45 years, and if something happened to her in August, I wouldn't be on the show right now. I mean, I'm still trying to figure out how to make a sandwich. You know, I mean, it's just unbelievable. So I wouldn't be able to breathe. And so, you know, it takes a little while. It just does, and that's good. But probably some advice, though, for after, nothing rushed right now at all, Linda, but for that 300.

Starting point is 02:02:09 I would just park it in an HS and high-ield savings. Go ahead and sit down with a smart restaurant. pro and tell them you want to park everything on hold until you can breathe. Okay. And then decide next spring what you're going to do. May invest some of it, right, to let it grow. Keep some in cash just in a high yield that you can get to if you needed it, right? So you'll definitely be able to do maybe one or two things with that 300.

Starting point is 02:02:35 I would pay off next spring if you're going to stay in the house, I'd pay it off. Okay. And invest the rest. invest the rest and you're going to be just fine. You're in great shape. You're going to have a great life. And if you're going to sell the house and move into a different property, just make sure that the numbers still are somewhere around the same numbers when you do that.

Starting point is 02:02:57 Okay. That you're not, you know, you're not moving up to a half million dollar property, okay? Right. You don't have that kind of money. But that's next spring. And by then you can say, okay, this house has served its purpose. he was trying to be practical and put you in something that's less maintenance, but you're still being romantic, and this is where all the memories are.

Starting point is 02:03:20 Yes. And so the practical versus the romantic can decide next spring. Okay. Okay. I just was so concerned about not making that money work for me. It's okay. You're fine for now. You don't need it.

Starting point is 02:03:34 If you needed it, I'd get a little more panicked about it, but you're in good shape. And if you sit down with SmartVester Pro and tell them to send you $1,000, a month out of it. And you can add that to what you've got. You're 200 short, you said. So that gives you a little wiggle room. You're not just, you're not living on pinched. And you got a little room to breathe. And then next spring, make a decision. That's a $12,000 play. Not a big deal. And you got, you got 89. I mean, you got, yeah, you got 81 and 300. So you got almost $400,000 to deal with. So you're in good shape. You're fine. And you're right. He did provide for you. And just give yourself some room here, A, to go through a normal, healthy grieving process when you've had this

Starting point is 02:04:18 kind of a loss, and B, make better decisions at the end of it. And I think you already had decided all that. You just wanted somebody to tell you that, right? Yeah, so it's insurance, doing the smart thing. Yep, yep, that's it. Yeah, you're doing a good job, Linda. I'm so sorry. Thank you so much. Thank you. Thank you for, thank you for trusting us with your call. And in the middle of your situation. Yeah. That honors us. Thank you.

Starting point is 02:04:43 That's one of the toughest things when something traumatic happens, especially a loss, right, of any kind, having to learn to function in a new way. In general, not just with money, but it's your life, you know, especially your partner. And it's, you're going through dating. It just illustrates, though, guys, you know, it sounds very crass in a way, but get life insurance. God dear Lord, yes. Go to Xander insurance and get your term life insurance in place. Because if she didn't have that 300, it changes her whole world. Oh, my gosh.

Starting point is 02:05:16 Oh, my gosh. Now we've got to make decisions in the middle of this mess. Yep. Because she's pinched. Yep. You know? But the 300 gave her the luxury of grief. Of time.

Starting point is 02:05:26 Of time. Yeah. Yes. And so, and it doesn't cost that much. Yeah, go to Xander insurance and get this stuff. I mean, really. And term life, and depending on age and health, it's very inexpensive. It is.

Starting point is 02:05:38 And you can get a good policy, and especially parents, if you have kids in the house and something happens to one of the spouses, I mean, take care, take care of your family. I've been doing this a long time. The number of times I've talked to a 30-year-old that lost her husband, she's got two babies, and she gets a million dollars. Or a 30-year-old that lost her husband, and she gets nothing. It's a big difference. It's a big difference. That puts this hour of The Ramsey Show and the books. We'll be back. with you before you know it in the meantime remember there's ultimately only one way to financial peace and that's to walk daily with the prince of peace christ jesus

The Ramsey Show - Your Money Habits Matter More Than Math

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