The Ramsey Show - Your Overspending Will Eventually Catch Up With You

Episode Date: March 26, 2025

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Hey guys, it's James Childs, producer of The Ramsey Show. This week Dave and the personalities are living it up on the Ramsey cruise, so we've put together a compilation of some of our favorite calls and segments from the last year. Regular shows are back next week. Hope you enjoy! Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. I'm Jade Warshaw.

I'm joined today by bestselling author Rachel Cruz. Thank you for being here with me today, Rachel. So great, Jade. It's been a good show. It sure is. All hour, we're going to be taking calls about your life and your money. So give us a call. The number is triple 8 825-5225. We'll take your call and we will give you our best shot at advice. I think we do a pretty good job, but I guess at the end of the day, it's up to you. So let's go straight to the phone lines where we've got Jason from San Jose, California.

What's going on, Jason? All right. Thanks for taking my call. The problem that we're having is my wife and I can't decide if we're in baby steps three, four, five, or six. And we seem to be moving in and out of those baby steps. Okay. Tell me more.

Well, we make about $320,000, which is our household income. We've got two mortgages, one on our primary home with about $220,000 left to pay on it. Then we have a rental property that we break even on every month and we've got about $300,000 left on that. We both save for our retirement and we max that out every year to get the matching contributions. I have ESPP along with other investments that I place and then we have college funds for our kids. And the issue is, so my wife manages all the month to month, you know, daily checking operations and she wants to have the six months savings in, you know,

in a savings account tied to the checking account. And I keep explaining to her and showing her that, hey, we've got all this money elsewhere, you know, money market funds and, you know, stocks and you know- What's in the money market? The money market has about a hundred thousand in there. Okay would you say that that's more than six months of expenses? Oh yeah definitely. Okay and so you're saying she wants money on top

of that. It sounds like she just wants a little slush fund so that when if you go over budget it's all good right? No because we do use the the money app and that's working out well she just wants to have access to it. Yeah I don't know if it's much access I just wonder Jason because in your head yeah there's money there but it's kind of attributed to whatever may be needed and I think for her there could be a level of safety of saying hey hey, we're gonna open up a new account in this money market account and we're labeling it the emergency fund

and we're gonna have six months in there and that's it. And like that's what it's titled, that's what it's labeled and that's what it is and nothing else. Because when you start to say, cause I could even feel that like, yeah, there's money here or there and there's some stocks and it's like, okay, but how can I get to it

if we really need it? I think it's more of a security thing for her. And I think that level of organization too is really healthy and good. And so what you could do, Jason, seriously, and this is what we tell people, for your emergency fund, it's its own account, it's over here, you don't touch it unless you need it,

but it's designated specifically for that. And would that help her, do you think, if you just say, but it's designated specifically for that and would that help her do you think? If you just say, yeah, we're gonna take some of this 100,000, have another account, we're not touching it, but it's here if we need it. I think it would, but the question is, the follow-up question to that is, do we stop the baby steps four, five and six to get-

No, because you have 100,000- Now because you have the money. You have the money in that money market account. That 100,000 could be it. Oh, I see. Is it thousand. You have the money in that money market account. That hundred thousand could be it. Oh, I see. Is it just because it's the same place where all of your retirement is and where all your investing is,

is that why she's not viewing it as an emergency fund? That's right, yeah. And we've had issues come up. Last year in the rental, we had a flood that we had to deal with. And we went into one of the accounts, we pulled the money out, we paid cash, there was no issue.

We got peace, right? Yeah, because it's accessible. Yeah, but then did you go back and replenish that? Because in her head, she's like, oh my gosh, we've used that, is it here? I don't know, I can see what she's saying, because that's how I am. Like we have a high yield savings account, Jason,

my husband and I, and so we'll put extra savings every month in this fund. But underneath it, like when I go into ally.com, we have one line that says like savings. We have one line that says emergency fund with that amount of money. And I need those separate. Like I need to know there's this, there's this here

and we don't touch that, but everything else is just extra savings on top of what we need. You know, if something happens at a rental, if we need, if we're going on a trip or something like here's money we spent, here's money we just don't touch, and it's here just in case crap hits the fan. And that feels good to me with the distinction.

Like even Jason, this may sound crazy, even to the point that I'm like, if we're talking about money, I'm like, well, babe, how much is in the high yield? He'll give me the number and I'm always like, does that count? Does that count the emergency fund? Are you adding those together?

And he's like, no, I'd never add them together for your sanity and I'm like thank you. So you don't think we should slow down on paying off mortgage early? No, you have the money. You have the money, so I would take that, I would take part of that 100,000 that you have in cash or somewhere else, I don't care where you get it,

and get a six month emergency fund and a new account and labeled emergency fund and I think that will ease her her tension. I really do. I think that would be that's what I would do. That's what I would want personally. I just want to make sure we're covering this because the screen says we can't save up an emergency fund. And is there something we're missing here? Is it just as simple as relabeling this money? Yeah, it is. It's because she wants, you know, in the regular checking savings account that are, you know, in the day to day operations, she wants to see the savings account be six

months. She is wrong about that. And I'm saying, well, if we want to do that, then we've got to stop, you know, we've got to stop on the, you know, the extra mortgage payments we're making. We've got to stop on the 401k payment. We've got to, you 401k payment. We gotta stop those other baby steps to rebuild that six month savings. Well, I think you guys both have a place where you need to concede a little bit because to her, what she wants is,

I wouldn't keep the emergency fund with the normal checking. We have Ally where we do all of our savings and then we have like Chase over here that has other things. And so I wouldn't keep it with your normal day-to-day funds, but to your point, I mean, we recommend all the time, you can keep it in a money market

or you can keep it in a high yield savings account. So whatever feels right, but to Rachel's point, you do have that money. And so I think that you guys both have to give a little and take a little, you have to be willing to pull it out of a money market because for whatever reason that's making her feel some type of way And then she's got to be fine with you putting it in some place else that has a nice rate of return

You know allies a great one We used to say back when cash was like the prevalent thing of the emergency fund and you would be like You know don't put it in the sock drawer where the pizza guy can get it That's right Like kind of that joke that like it can't be so accessible that you just go and you can just get it You know you want to forget about it. That's right. Like kind of that joke that like it can't be so accessible that you just go and you can just get it, you know. You want to forget about it. Yes. You want it in a place. We feel really blessed because we don't argue about this. This is just like, you never argue about money. We don't have to. Yeah. What's the best approach, you know? Yes. Yeah. I think for

her to know she can get access to it if you guys need it for an emergency, number one. And number two, for her, just peace of mind that there's extra money over here. It's for this. It's not going to get tied up in some stock deal that you're doing, Jason here. Right? Like it's like, there's a level of like that's for the emergency fund and we don't touch it. And I think that's going to help.

Okay. Now one quick question. Now do you pay off your primary first or your rentals first? Primary. Primary. Okay. I want the place where you guys lay your head at night to be completely debt-free and peaceful Perfect awesome. Thank you so much. Thank you for the call. That's a really you know

That's an interesting thing Rachel because I do think that when it comes to savings You know you do have to keep it a little bit It's got to be enough out of reach to where you don't quote accidentally spend it But at the same time it's got to be liquid enough to where if the water heater goes out And you can't cash flow it you can get to it So you don't want to invest it and you made a good point Earlier that and I don't think this was her I'm from what he was saying But you also don't want to have a bunch of money so that you can be lazy with your budgeting and you

Spend more than you make but it's okay because we got ten grand over here. We'll just get it Yeah, don't don't let it be a cushion for your everyday expenses. It's a cushion between you and life when the big stuff happens. That's your emergency fund not to cover lifestyle. That's right. This is the Ramsey Show. You know, one of the first things I discovered working in the financial world is how absolutely devastating it is when the breadwinner of a family dies and there's too little life insurance or none at all. Grieving families are suddenly left behind scrambling to pay bills and trying to

make ends meet. I also discovered that there are a lot of rip-offs in the life insurance world like that whole life crap posing as an investment opportunity. What you need is level term life insurance usually 10 to 12 times your income which is the smartest, most affordable way to protect your family. The key is finding an independent broker who represents a ton of companies and works for you, not for the insurance company. This is exactly what my friend Jeff Zander and his team at Zander Insurance are all about. They shop the term life companies to find you the best options and they've been around for over 95 years.

So you know they'll be there when you need them. Xander is the real deal and that's why they've handled all my personal insurance for over 25 years. I trust them and you can too. Visit Xander.com for instant online quotes or for a more personal touch give them a call at 800-356-4282. Welcome back to the Ramsey Show. We are taking your calls at 888-825-5225. I'm Rachel Cruz, hosting with Jade Warshaw, and we're going to go to Brandon in Columbus, Ohio.

Hey, Brandon, welcome to the show. Hey, how are you doing today? We're doing great. How can we help? So the reason I'm calling is I can't seem to build any kind of wealth whatsoever. What's happening? Tell us more. Well, you know, I got three boys

and I got a office stays at home and I'm the only income. But I think I'll make okay money. But every time I try to build some wealth, you know, like something happens with the kids or something on that one. Tell us about your income. What do you make in every year? Well, I'm a union electrician. Okay. So I make about 1528 if I work on Saturdays. Okay. I usually work Saturdays.

So every month, if you look at your budget, how much is on that top item? My budget, it takes about 4,800 and some change maybe. Okay, but- Is that what you're bringing in? It's all $4,800. Income wise, that's what you're bringing in? Income wise, I'm bringing in maybe about six. in? $4,800. Income wise, that's what you're bringing in? Income wise I'm bringing in maybe about $6,000.

Okay, so $6,000. Okay, and then do you guys have debt? Well, you know, I got my Jeep and my old lady has her van. Is that on payments? I wish it wasn't, but it is. Yeah, that's fine. How much do you guys owe on yours? Well my Jeep I got maybe eight thousand left and on her van we just had to get so it's around twenty two. Okay how much said you just got it? Yeah we just got it maybe about

a week ago. How much are your car payments on those, both of those? Well, that's where it's eating me. Yeah, I bet. Because on my Jeep, I'm paying about four on her van. I'm paying around six. Ooh, I bet you, ooh. Yeah, it's a thousand dollars. Okay, what else?

So you got the Jeep, the van, what else do you have? Are there credit cards? Do you have any other loans? No, I really don't have loans. I mean, I mean we got you know groceries and we got We got rent. Okay, so that's fine. Those are fixed expenses on your budget But do you have any other debt which is you know a lump sum of money that you owe? Hmm. I mean Maybe when I was a younger man, younger, I'll just keep it easy.

I'd probably say maybe about 10 grand. Maybe. What would it be? In credit cards? No, it'd probably be a little bit of hospital and maybe miscellaneous. I'm sorry. I'm kind of lost for words. That's okay.

That's okay. Brandon, how old are your kids? I got a 10-year-old, I got a 6-year-old, and I got a one about to be 2-year-old. Okay. Perfect. Okay, so here's the thing. I think you're having a hard time building wealth because your biggest wealth building tool is your income.

And right now, $1,000 of your income is going or and maybe a little bit more is going towards your debt payments every single month. And it sounds like I'm not sure, but it sounds like maybe you're trying to do a little of this, a little of that, a little of that over here. And the method that we teach you is going to give you focused intensity on one area at a time for the most part. So do you have any money saved? That's the problem. I don't. I can't seem to save a dollar. Okay, so let's go back to the the the essentials here. I think the first thing here is the budget. You told me that out of six thousand

dollars a month it takes 4800 to run your household. So that means somewhere along the way, there's $1,200 left if you're doing your budget correct. Right. But you just said you can't find a dollar. So something about that budget isn't adding up. So let's kind of let Rachel and I give you a quick crash course with the budget. Yeah, because the thing is with the budget Brandon, it needs to be realistic.

So you keep saying, okay, you know, which I get, we, Jade has kids, I have little kids. So stuff does come up when you're a family and there's multiple people you're keeping afloat. So either you need to redo the budget and say, okay, realistically, we need a kids line item because stuff is gonna come up every month that we have to pay school fees,

like whatever it may be. Yeah, sports. Yep, that we're gonna put in. And then there also may be, Brandon, a time that you and your wife sit down and you say, okay, we're gonna limit this budget. And just because we feel like the kids need X, Y, and Z, we may tell them no right now.

Because your goal is going to be to get out of debt. And so that budget is really, really key. And tightening up that budget is gonna be huge. So that's gonna automatically probably give you some of that breathing room of that $1,200 that we don't, you know, it kind of just disappears. The next piece of this I would do, okay. So Rachel's telling you to tighten up the budget.

Yeah, and you have a lot of car. Yeah. Is that what you're going next? Yeah, you just bought this car for 22,000. It's a $600 payment a lot of car. Yeah, that's you're going next. Yeah, you just bought this car for twenty two thousand I think hundred dollar payment and a month Brandon So it And we always say not to have anything with wheels and motors that is more than half of your annual income And you guys are right over that. I mean you're making sixty Yeah, and I mean you guys are you're close to that. You're at thirty

I mean like that's so you're, it's too much. You have too much car. And I think you're feeling that, Brandon. You're feeling that. And so looking to say, okay, what are our options? What can we do that is different? And it's probably gonna be selling that van. And yeah, and that's gonna take,

so let's put this in the timeline. So the first thing you're doing, what Rachel said, you're getting on your budget, you're getting on your budget, you're getting a realistic budget, you're figuring out what can we cut so that this $1,200 is actually a reality. And it's you and your wife agreeing to that because you need that money

so you can save up a little bit to get out of this car and get into a car that you can afford because no more car payments, right? So you need at least $5,000, $6,000 to make this thing happen, at least, right? So you need at least $5,000, $6,000 to make this thing happen, at least, right? So we're getting out of this car. And then after that, it's okay.

We freed up $600, we can breathe a little bit. And maybe it's you picking up a side hustle, your wife, she's got the two-year-old at home, but there's, you know, at least it's one at home and not the others. And so what can she do to bring an extra income? And from this point on, it really is you guys deciding how quickly you clean up this mess by deciding

how much more money comes in. Because the ultimate goal is building wealth. The debt is standing in the way that you clear out the debt and then you get yourself that emergency fund of three to six months saved. Now you're going to feel peace about day to day life, right? So if an emergency hits you, you're fine. And now you can actually start building wealth. You can start investing into your 401k if you have it, start investing into a Roth IRA as an option, but we've gotta get through baby steps one through three,

one through three first. Brandon, have you looked into, you know, other small businesses in your area and what they're paying for electricians? I just wonder, even if you switch out of the union, if you could find a better gig that pays more. Well, I mean, I've, I mean, I've done, I did solar for seven years and you know, I have a little LLC with that. But I mean, realistically, until I hit a journeyman's card, you know, I'm not really, there's really

nothing out there that's maybe paying more. I mean, it may be a dollar, it may be $2, but nothing like jumping up another 10 to $12,000. Okay, yeah. Yeah, because I was just curious if, you know, sometimes in the private sector, there's, you know, other opportunities. So I just didn't know if you had explored that because because I think the goal to Brandon as if, sometimes in the private sector, there's other opportunities. So I just didn't know if you had explored that

because I think the goal too, Brandon, is you guys make 60,000. And yes, there's a level of intensity during Baby Steps one through three to kind of get you out of this hole. So there will be extra work here or there, all that. But I think the goal is eventually to be able to live off of your income comfortably

and enjoy it, be able to live off of your income comfortably and enjoy it, be able to put some money aside for retirement, do some of these things to enjoy your life. And so if that is not coming to fruition, then that's where a bigger conversation is. And you guys are renting right now, right? So even home ownership to be in the picture eventually, which I know can probably feels very overwhelming right now

to think about, but to be able to get there. But hey, Brandon, I want you to hold on the line because Christian's gonna pick up and I wanna gift you guys Financial Peace University, you and your wife, this is our nine lesson course and go through this and again, it runs the gamut, everything from the budget to getting out of debt, all of it and then you know what, and hold on the line too,

and Christian will throw in some of Ken Coleman's stuff. He has a great career assessments that would just be interesting, Brandon. And again, being an electrician making 60 grand, that's fabulous work and wonderful. But I think people do get to a reality of, okay, how do I sustain my life? And if you can ever make more, that's gonna help it

without completely shifting your lifestyle. So just out of curiosity, maybe dig into some of that too and see if that kind of triggers anything for you. So thanks for the call, Brandon. You guys got this. Just stay on track. This is The Ramsey Show. There's a time in your life when you're not

really thinking about what you want to do. You're not really thinking you don't want to do it forever because when you rent, you're still paying for a mortgage, just somebody else's. Plus, rent means instability in your budget because it always goes up, never down. So when you're ready to buy, make sure you work with a mortgage partner you can rely on, Churchill Mortgage. Churchill is Ramsey Trusted to help you make the move from renting to home ownership wisely. Churchill understands that when you buy

a home the Ramsey way, your mortgage payment will be a consistent, manageable part of your monthly budget. Plus, when your home is paid off, that was your largest expense. Now it's extra money in your pocket and an asset towards turning you into a baby steps millionaire. So get started on the American dream of home ownership today at ChurchillMortgage.com. That's ChurchillMortgage.com.

This is a paid advertisement in MLS ID 1591 and MLSortgage.com. That's ChurchillMortgage.com. This is a paid advertisement. NMLS ID 1591, NMLS ConsumerAccess.org, Eagle Housing Lender, 1749 Mallory Lane, Suite 100, Brentwood, Tennessee, 37027. Welcome back to the Ramsey Show. I am Rachel Cruz hosting today with Jade Warshaw and we are taking your calls at 888-825-5225. Up next is Emily in Pensacola. Hey, Emily, welcome to the show. Hi, thank you so much y'all for taking my call. I appreciate it. Absolutely. How can we help? Okay, so my husband and I had gone through financial peace, gosh, over a decade ago.

But you know, life happened and five kids happened. And right now we're back on it, but finishing up baby step number two. We have no consumer debt, a little bit of student loans left that we expect to be paid off by the end of this year and then we'll just be left with our mortgage. We are in a 30-year veteran loan but we plan to pay it off early within hopefully 10 to 15 years. My question is, so right now we have, my question is kind of regarding my credit score. We have four credit cards right now that are open but frozen. We have not used them in probably about a year. We're kind of, I guess, not sure what to do with those accounts.

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

We just don't kind of want to take it and lose that chance to refinance in the future. So there is something to be said about when you're going through the process of paying off debt, there's kind of this spoken or in some cases unspoken thought that, okay, when we do this, we're not borrowing money again, therefore, we wouldn't need our credit score again, therefore, we can close our credit cards.

And so in your case, you're kind of thinking about, well, we don't plan on borrowing money anymore, but we want to refinance. And I can just tell you just from personal situation, we have a mortgage and we don't have any other credit cards and we don't have anything else. And before we had our mortgage, our credit score went to zero. We purchased a home with a loan and our credit is like almost perfect and all we have on there is our mortgage So you might see an initial drop just because you're closing accounts

But it's not gonna go to zero and it's not gonna be terrible because you're still Have something major like a mortgage that you're paying every single month on time And so there is part of that that it's it's going to make it okay And it's gonna keep it, you know in the upper range And so I don't think you have to be worried about that. But I kind of, my question for you is, do you have any other qualms about your credit score? Because I do think that when you go and set out to follow the Ramsey Plan, you have to know, eventually your credit score is gonna go to zero

and you kind of have to cut ties with that old way of thinking. Yeah, and I, so ultimately, we do want our credit score to be undeterminable. Like that is our ultimate goal. We don't plan on taking out any more debt. Like you had said, like we have two cars, they're old, they're paid for. So we have basically our credit cards are frozen and in a safe. So we, we haven't even kind of activated the new ones that they send us all the time. But it's been more of a concern that because that was our extended length of credit attached to some

of these cards that you know with wanting to potentially refinance in order to get the house paid off that we just didn't want to. What's your interest right now? Like 6.8. Okay, so you guys just recently bought in the last year too. We bought it to keep. If I were you, I'd cancel them sooner than later so that your score has the ability

to kind of do what it's gonna do and then even out to where it's gonna even out and then when the time comes, who knows when these interest rates get lower, then you will have a clear indicator of what it will be, and it won't be in that fluctuation stage. Yeah, and Emily, when you look at the calculations of how a credit score is even mathematically determined,

one of the pieces of the pie is new debt, and you guys aren't doing that. So in one sense, you got everything frozen, but you're not taking on new debt, so you're not playing the game naturally anyway. So there is a chance even because of that, mathematically speaking, you may even see a downtick slowly

because you're not playing that game. And so if you're not playing it, I would just cut ties with it. And like what Jade said, even it back out, or if all else fails, you're gonna be fine. You know what I mean? So in my head it is, it's just a, cause I don't wanna count out there floating around

even if they're frozen. So just being able to get rid of them, getting guests. Like Jade said, when everything is back then and stabilized and sadly the truth is who knows what's gonna happen in the future. So I'd rather take things under my control and do something that I can do, which is just get rid of them, close it out,

and then see how the world shakes out and then go from there. 100%. All right. Next let's go to Kyle in Charlotte. Hey Kyle, welcome to the show. Hey, how y'all we're doing well. How can we help? So I got a little bit of just been started watching the Ramsey show probably two months ago and I'm currently in baby step one. I did, um, get the, uh, every dollar app and using that created a budget. Um, so I have me and my fiance, we have a three month old baby girl. Um, she has a 14 year old daughter, uh, actually lives with us as well.

Um, we bought a home home about two years ago. Mortgage is around $157,000 left on it. She has two vehicle loans. One is around $18,000, the other one is around $8,000. So she also has three credit cards and she has a personal loan. So I don't have any debt currently in my name, but all of her debt together is around $42,000, not including the home mortgage. She stays home. She's a stay-at-home mother. I'm a full-time firefighter. I have two part-time jobs as well. And I'm trying to figure out, you know, I am gonna snowball the debt after I do the baby step one, which that's baby step two,

but I'm trying to get her on board with the budget. When do you get married? We actually don't have a marriage date yet. That's what I was gonna say as well. So our relationship is actually hanging on by thread because of you know we don't see eye to eye on the financial state. That's a big deal. That's a big deal. Kyle has that changed in the last two months since you've been watching us or has it always been like that? So it's been like that more since my daughter was born.

Yeah, okay. You know, I've always been a saver and you know, now that my daughter's born, I grew up, my parents separated when I was 12. So I've seen, I know how that affects the kid and I don't want that. Yep. And you know, I look at the future like anything can happen. So she's not like that. Like I asked her the other day, cause I was listening and I was like, you know, what is your 10

year goal? Where do you see yourself in 10 years? And she's, she told me, she said, you know, I just, I wear about today. I don't wear about 10 years. And I'm like, you know. So when you ask her her philosophy on money and you're asking her, hey, like, are you at a point in life where you're done borrowing? How do you feel about paying off debt?

Is she able to give an answer that has any promise? So she will say she don't want to borrow any more money, but it's just like now, you know, she's made some financial decisions that I didn't agree with. And, you know, I don't have, I didn't have the control over that at that point. Yeah, well, it's tough, listen. She can go do what she wants to do.

The hard part is you guys are in in a the situation is made more complex because you're not yet married, but you're kind of in this situation where your life seems like you're married. So you feel like, listen, I have to step in and pay off my debt. Her debt's my debt. And so the whole thing is very confused. And I think that as much as you can keep some clarity around that and

either marry her or not, but I would not start paying off this debt until you've decided if this is the person that you're going to spend your life with. Yep. Yeah. And Kyle, and I would have the conversation with her from a vulnerable, you know, not just, well, what do you, you, you pointing, tell her you like what's going on in Kyle. What is the fear that you have? What is going on? And start these conversations, and you've said this before, Jade, on different shows, but it sometimes takes time.

Yes. You've had a mindset, a natural shift, and then Ramsey's probably confirmed that because we lean probably more on your side, Kyle. But you guys together need to sit down and have these conversations, but for now, keep the finances separate. You don't need to be paying on her debt

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Okay, today's question comes from Matthew in Oregon. He says, my wife and I are debt free except our expensive townhome. We bought it in 2022 with a 30 year term mortgage. Our monthly payment is about $4,200 a month, including escrow and PMI, while our net take home pay is $8,750 a month. Wow.

Our annual gross income is 110,000, which means our housing costs take up about 40% of our income, which limits how much we can invest. We both have the potential for income growth, but today's high cost of living is challenging, especially with four kids. We're in baby step four, five, and six, but still feel trapped.

It's hard to see a finish line of no mortgage payment. Should we stay where we're at and wait for our income to grow, or sell our house and move? Oh, this is one of those reality moments, Rachel. I think that if you're truly engaged in what's going on financially in your home, these are the moments where it's really tough

because for those of you who don't know, here we teach that your payment shouldn't be any more than 25% of your take home pay. And the reason for that is once it creeps beyond that, especially beyond 30%, is you really do start to feel that. And you start to experience what we call being house poor and your blessing on a house now becomes a burden, right? Because you're not able to have the margin

to do the things that life calls for. I mean, in this case, it could be anything from childcare. It could be anything from they're wanting to pay off their mortgage and they don't have any margin. Yeah, well, if you're in baby step four, you're funding 15% of your income in retirement. So automatically that's taking it. You have 45% of your income to live off of.

That's before food and utilities and everything. So it does, it starts to dwindle, not always like in the right spots, right? And so- And if you give 10%, forget about it. That's right. That's right. Now you're down to 35% and for basic living.

So it's almost that feeling of like, we work too hard to feel this broke. You know what I mean? Like we shouldn't feel like this. And it is because 40% of your income is going to housing. And so, yeah, I mean, I would be looking elsewhere because you say an expensive townhome, which I'm assuming is a really nice one,

probably in a nice area. And so I would be looking for other options. You may be getting an older home. It may not be near the city because that's usually where prices go up because the closer you are to the city. So you may be moving out and all of it, which I know with four kids,

I know it's so easier said than done, just be like, oh yeah, get up and move. I know that that's like, could be changing schools, all of this. But the quality of your life and going to bed at night and having peace and not stressing and not being, you know, to this point of like on a, like you just feel like, oh my gosh, I just go to,

I go to a job and I have no progress in my life. Like that is daunting. That's for the birds. You go, think about how much time you spend at work. You go to a job and I have no progress in my life. That is daunting. That's for the birds. Think about how much time you spend at work. You go to work all day, eight hours a day, some people far more than that. And then you feel like you have nothing to show for, you can't enjoy your life,

you can't do the things that make you feel like you're making progress in life. Then there's the part of this equation, Rachel, where they do see a way for their income to go up. Now, there's been times people have called in the show and they're like, hey, I'm at 30% of my income, but I know that I have a raise coming up in the next 12 months.

And if we get that raise, it'll equal out. And so there's a part of that where if they said, hey, we see a place where we're gonna get a 15% increase. Both of us. Both of us. Both of us. Yeah. And that's going to happen in the next 12 months.

Maybe there's a part of this where you can ride it out. That's right. That's right. But only if that's 100% absolutely going to be true. Yes. Yeah. Don't be on a wish and a prayer of it may be happening and then you're stuck in the cycle for the next four to five years because that's going to be exhausting.

Yeah. All right. Let's go to Will in Miami. Hi Will, welcome to the show. Hello, how are you? Doing great, how can we help? Yes, so my father bought a car three years ago. This is on Mercedes.

He's a retiree surgeon and he now works as a surgical assistant. Here since all the recession and all the economic problems we've been going through the country, that area of health, he hasn't been able to get a job for the last year. He has some stuff on and off, but he hasn't been able to have a stable job. The payment for this car is $500 a month, $550 plus insurance that runs up to somewhere between 650 to 700 dollars a month and because because he doesn't have a job right now it's been really difficult to maintain all the expenses. What's he doing to maintain it? I mean right now all our families working we are immigrants and everybody contributes.

You're paying for your dad's car payment? No, I'm not. I'm just saying that everybody's paying their first share, but the car right now is one of those crazy expenses. Are you all under the same roof? Yes. Okay. And so explain to Rachel and I kind of how that works.

When you say everybody's paying their fair share, what does that mean? So between my sister and I, our rent is $3,000. My sister and I pay about half of that. Okay. And the rest of the expenses are covered by our parents. Although we didn't start paying until recently until about six months ago. My sister just graduated from college. I'm still a student. Okay. How old are you? Oh, I'm 28. I'm just a late bloomer student. That's great. I was just curious.

That's great. Okay, so it's just you and your sister. The agreement is we all kind of live under one roof, but together you guys pay for half of the rent and we pay for the other half and everything else. Yes. And so you're concerned that since your dad is not working, how is he affording to pay for this Mercedes or this expensive car that he has? I mean, to be honest, like we cannot afford anything right now.

Even though we are able to cover the basics, that doesn't cover the credit card debts my parents have. That's why I believe that the car is one of the things that is taking them down. So the hard... Oh go ahead Rachel. Well so, okay a couple of things Will. Where did you guys immigrate from? I'm just curious. Oh we are originally from Venezuela. We've been here for eight years. We became citizens last year. Okay, another reason I ask is I do find,

even in the Hispanic culture, there is this gathering of family, right? There is more than just the standard American. It's like, oh, Americans, I just feel like we're more independence and you just kind of, you run on your own track. Where other countries, other cultures, there is more of this like family oriented life.

So I'm not saying one is wrong or the other, Will, but as a 28 year old guy, and I know you wanna support your parents and be there for them and all of it, for your own dignity, Will, as a man, emotionally, I do want you to somewhat separate what your parents have chosen with their own lifestyle versus what you're choosing, right?

So they've chosen to, or he's chosen to have a Mercedes, okay, that's his choice, you have not done that. The credit cards, I don't know, if the credit cards are paying the light bill to keep the house going, that's one thing. But if it's credit card debt that's coming from your parents that charge their own cards for their own lifestyle, that is their money and their choices.

It does get a little bit confusing when you are living under one roof. So I think, well, emotionally, I would detach myself from your parents' choices. And until they start affecting you, which they might soon, Will, there may be a point that you say, hey, I'm gonna have to make a different decision

for my life. Yeah. And I may have to go get a job, pause school, and do something different because I'm not gonna be taken under because of their bad choices. But here's the thing, Will, Jade and I joked earlier,

we were like, it takes a lot of therapy to realize you can't change people. You cannot change people. So I hope that helps. Well, you're, you're an awesome son and we wish you the best. Thanks to all the guys in the booth, Jade. Thanks always for being a great cohost. Thanks to our live studio audience here in Nashville. Thank you, America. This is the The Ramsay Show. It's Holy Week in Jerusalem. Crowds welcome Jesus as King.

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Get your tickets now. Live from the headquarters of Ramsey Solutions, it's the Ramsey Show. We help people build wealth, do work that they love, and create amazing relationships. I am Rachel Cruz, hosting this hour with my good friend, the bestselling author, Jade Warshaw. And we are here to answer your questions. So give us a call at triple eight, eight two five, five two two five. We'll be talking about your life, your money, your jobs,

your family's relationships. So give us a call. All right, up first this hour, we have George in Los Angeles, LA. Hey George, welcome to the show. Hi, thank you for taking my call. Absolutely, how can we help? I have $148,000 in debt right now.

And also my wages are being garnished already. I've been sued from a loan I didn't pay. They're taking 25% of my income every week, every two weeks. So I just taking a lot of money. I make about 90,000 gross. I take home about 75,000 a year. My wife recently started working. I'm doing everything I possibly can to take, you know, more income, everything, but I'm already up to the point where I'm thinking of filing bankruptcy or selling my house.

So I'm thinking what's the better option, either to sell the home or file for bankruptcy. Okay, so tell me what's the debt, the 140? Basically it's three loans, three personal loans. There, one of them is 50,000, the other one's another 50, another one is 40. One of them is 20,000. One of them is a car, but I'm thinking, I'm still, I wanna pay the car off.

So I'm not gonna put that one. The 20,000 is the car? I'm not including that. Yeah, one of them is 20,000, that one's still good. I'm paying that one off. And the other is just all personal loans. What were the loans for? What'd you use them for? I got hurt a long time when I was working and I needed a couple I needed some money just

just to stay afloat my mortgage so I just took out a lot of some loans and just get paid it off but then another one I took out to consolidate debt and ended up just flirting the money. Didn't really do what I had to do. So when does your wife, when does your wife start adding to the income? Cause you're making around 6,000 a month. Uh, started working like four months ago. And what's she making? About, um, I would say 1600 a month. Okay. Okay. What is she making? About I would say 1,600 a month. Okay.

Okay. What is she doing? Job-wise? She just works at a veterinary place. Okay. Do you guys have kids? Yes, two. You have two, okay.

And which of the loans are the ones that are garnishing your wages? Uh, just from a bank. The person that one of the, one of the personal, one of the 50,000. Yeah. Okay. And are both of those personal loans with the same bank? No. No. Okay.

And have you been current on the other $50,000 loan? No, I'm, I haven't paid anything to anybody for a while already. Okay. Okay. And so you've got the house. Everything's in collection basically except the car and the house. So they're taking almost $2,000, a little under $2,000 a month, right? Garnishing from you.

Yeah. And then what percentage of your mortgage is what percentage of your take home pays your mortgage? I pay $1,800 a month for my mortgage. Okay. Okay. Oh boy. All right. Yeah, we need, Yeah, we need you're not able to do anything here. Okay, so the key here is, we've got to find a way to get more money coming in. And I'm wondering with the garnish, if is there any way that you can say, can we set up another payment program because this one is like burying me alive? I tried everything already, spoke to the lawyers.

I've done everything in my part to make some adjustments. I've done pretty much all I can do. I even, every minute I get another job, they're still gonna garnish. So at this point I'm already maxed out. It's just, I don't see like another solution. They're just not budgeting at all. How old are your kids? One of them is eight and another one is five.

Okay. Is the five year old in kindergarten? Is anybody in daycare is what I'm getting at. They're both being homeschooled. Oh, that's right. Okay. Okay. There's part of this that and you and your wife are going to have to sit down. I mean, you're pretty much up against it and you could use all of the money that you can get. Right. Is there any way that because I don't know, I'm not going to pretend to know a ton about homeschooling, but I know that there's some programs where even though they're not going into school, they're going into a program that's outside of your home. Like a co-op type situation. Is there a way that you can still keep

the value of homeschooling, but it's not your wife that's actually doing it so that she can work full-time? That's something I haven't thought about. And I'm not saying forever but I think that you're in a you your back is against the wall and Unfortunately when that happens something you have to let go of something something has to change in order for you to change your situation and

Usually that is a sacrifice of some nature and there's just no getting around it All right, but I'd rather you keep control of this situation. Once you hit and Rachel, you can speak more to this, but once you hand it over to bankruptcy, you lose control. And I don't want you to lose control of the situation. I want you to make every choice and feel like you have a say in everything that's going on. have a say in everything that's going on. OK. For the house, George, give me some of the numbers around that. What how much how much do you owe on it?

How much is left on the mortgage? The house is right now. It's three ninety is what we owe. And five it's worth about five, almost six hundred thousand. Almost six hundred. OK. worth about five, almost 600,000. Almost 600, okay. You know, the car, I would probably, I would sell the car, George.

I know you're making payments on it, but that's something that can easily be swapped up to earn some money and margin back into the budget that you can go back and get later after all of this. But again, back to that sacrificial mindset, like what can you scorched earth do to have any means to be able to get ahead on some of this? Cause some of it is in collections

and keeping a car payment afloat is something that I would, because I mean, everything else is in collections. And if you get on that, I don't want collections and if you get on that I don't want even You know being repoed on like I don't want anything like that like you're in a little bit of that situation that Again back to that control that jade's talking about Um, how much could you sell the car for have you kelly blue booked it? Uh, yeah, I I think I can sell it for like maybe 18 18 grand around there Okay, thousand. It's I and I owe like about 18 000. So I mean I could sell it for like maybe 18 grand around there. Okay. And I owe like about 18,000.

So I mean, I could break even. Yeah, I'm great. That one, it's just, you know, I mean, that's not, I mean, I guess I could do something like that. I mean, what's the payment on it? It's just 500 a month. That's a lot. Okay.

I mean, $500 to have that freed up is a big deal. And if you are upside down, like this is one of those cases, if you're upside down, you go down to the credit union, get a loan for the difference and a little bit more in order to get yourself a beater if you need it. And I'd rather have a $5,000 loan than a $20,000 loan, agree? Plus you freed up $500, you know,

a little bit less than that a month when you take in consideration the new payment. Yeah, you're going to have to make some tough choices. Mama's probably going back to work. You're probably getting rid of this car and you might have to consider what's the equity. And a part-time job. And then the house, yeah, could be in play. But I just want your habits to change as well, George.

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and see how simple tax filing can be. That's ramseysolutions.com slash smart tax. All right, everybody, you're listening to The Ramsey Show. I'm your co-host, Jade Warshaw, joined by Rachel Cruz. And during the break, we were talking about non-negotiables. And so many of us face this, whether you are dating someone and you know, you have to bring up those conversations, Rachel, about money, about, you know, religious views, possibly political views. Like there's all these tough conversations to have. And when do you know when you're dating somebody, when you get to that point, that's like, OK, this is I've hit my point, right? Like we talked to somebody who was in a relationship for three years and it's like, okay, maybe now's the time to start looking at this, talking about this, but it's hard to know,

especially if you might see a little bit of progress and you're like, yes, this is progress. Maybe we're going on the right direction. But what would you say, Rachel, is, let's call out some red flags of if you see this, this might be pump the brakes. Money wise. Money wise.

I was like, I don't know if I'm not a marriage therapist. I don't know if I'm good. No, I'm talking about finances. Yes, I would say I always pump the brakes with people that feel like they have all the answers. Like when it's this idea that like, I don't have any more learning to do. Like I'm kind of just stuck in my, this is it, I'm good.

And you're like, you don't want to grow or stretch or like hear something different. Like to me in life right now, that feels so prideful. So with money, and we get this call a lot with people that, as we're talking about non-negotiable, so I guess there's a little bit on the other side of this but this idea that you know we we talk and they're like well you know he just tells me like he doesn't want to talk about it he's not going to talk about it or she won't even she won't even enter the discussion i'm like that's exhausting

like that's exhausting so you can have your non-negotiables but be but be humble about it it's the spirit that you bring to it um, let me be devil's advocate because there's somebody listening in their car and they're like, listen, I'm the one who my spouse keeps talking to me about Ramsey this, Ramsey that, and whenever I try to tell her my views on why I want to keep my mortgage payment and invest it instead, she's so close minded. Like she doesn't want to hear, she feels like she's found this plan and that's it. Like there's no, like, let's so close-minded. Like she doesn't wanna hear, she feels like she's found this plan and that's it.

Like there's no, like let's talk about it from that point of view. Yeah, so if I'm her, I would be like, okay, so talk me through that. Let's run some numbers, let's look, let's have a conversation, right? Not just you telling him, well, this is what it is, this is what you should be doing.

It's this like preachy mentality. Yeah. Being willing to listen. Very much so. And ask questions. And ask questions, be doing. Preachy mentality. Yeah. Being willing to listen. Very much so. And ask questions. And ask questions, be curious. Like that whole spirit as a person, I think is really important.

But when you're so closed off and you don't even want a conversation. That to me is the big. That's exhausting. Like, you know, that would be a red flag for me. I think. They won't even talk about it. They avoid it, you know, all this stuff.

And you're just like, oh man. Yeah, I think that's a red flag. I think if you're talking about the future, say you're dating and you're talking about, okay, when we get married, what are your views on combining money? Maybe they've been very open about their money up until this point,

and you're like, yes, everything's going good. But then when you start thinking about, okay, when we get married, how is this gonna work? Because my thoughts are that we would combine our money and kind of have our goals together. And if they're saying, oh, really? Because I've worked really hard for my savings and that for me would be tough.

Would be tough. And a non-negotiable. I think it's a non-negotiable, but there's part, I'm not gonna lie, there's part of me that wonders if there could be a journey there over time. So these are tough conversations, but I would urge people to start having them early if there's one thing that I can say

that I kind of feel like I learned in my marriage is we didn't talk about that dating. Like our dating time was very fun and not a lot of like, I mean we talked about heavy stuff, but somehow the financial stuff just wasn't really in there. And then after the fact it was like, oh, wait a minute. Luckily there were certain things that we just naturally aligned on, thank goodness.

But yeah, have those conversations. Yeah, and I would say debt would be one of those. I mean, it would be really tough to marry somebody and they're like, hey, I wanna go, you know, $500,000 in debt to do real estate. And I'll be like, oh no, I can't do that, I can't do that, I can't do that. It's like that would stress, that would be,

because then you live as the spouse and the stress will stay 24 seven, you know? And investment, I'm saying not just primary home, but it's like, because I see these people on Instagram, TikTok, and they're all about real estate investment. Leverage to their eyeballs. Yes, and I just watched that, but it's like, because I see these people on Instagram, TikTok, and they're all about real estate investing. Leverage to their eyeballs. Yes, and I just watched that. I'm like, oh my gosh, that would be so hard.

That would be a tough, that would be a tough marriage for me. That is, because on the one hand, and I mean, even if it's not real estate, even if it's just one person, like, I have this business goal or this aspiration, I wanna open a restaurant, whatever it is, but their viewpoint is, I go into debt to do this. And if you're the spouse who says, Hey, I don't feel comfortable with debt. I don't like debt. And they view that as you're not supporting my dream or you're

not, you know what I'm saying? Like, you don't believe in me. You don't believe this is going to work and we'll be able to pay it off. That right there. That's a very tough conversation to have. Yes. Yes. Don't get me wrong. I still stand my ground because I feel like I'm not, like can we do it over time? Is there a way to not leverage debt? Yes, yes. Oh goodness, all good things to talk about.

It's hard and messy. Good stuff, all right, let's go to the phone lines where we've got Anna in Houston, Texas. What's going on, Anna? Anna? Hello, how are you guys doing? Doing good, how are you? Sorry I said your name wrong. It's Anna, right?

You're okay. It is Anna. So I have a question and I'm hoping that you all can kind of help me out. I've been thinking about it for a little while. I am expecting to get a raise here soon within the next maybe two months at work. And it's about, I'm hoping like 20,000 extra a year. I'm not certain though, if I should save that amount every year

or use it to pay off my student loan debt. That's awesome. Yeah. I have about $65,000 of student loan debt that I just accrued here recently, going back to school to get my master's. And it's just me and my kids, I don't get child support. How many kids? And I have three. Okay.

One, my son is 19 though now. so he wants to go to school. That's a whole nother situation and needing a little bit of money for that. But I guess my question is just, should I save that extra 20 a year for me and my kids, just like for security type stuff, or should I just use it all to pay off this student loan debt? Cause I don't want it to go from 65 to $200,000. Of course. And that's a great way of thinking. Number one, congratulations on the raise. That's excellent. So if you're kind of new to the Ramsey show, we teach everything kind of through a series of baby steps, right?

There's these seven baby steps that you can take that build on each other to ultimately get you to this place of financial peace, right? And so the advice that I'm gonna give you is based on that. So the first thing that we want to kind of create this secure platform for you is you just need a thousand dollars saved, right? So if you can just out of that $20,000 raise

or out of your bank account or whatever you have of money now, if you can just set $1,000 aside and just, okay, I've got that there. And then the second baby step is, yeah, you pay off your debt because when you pay off debt, you're eliminating that risk, you're eliminating that financial uncertainty that's in your life. And that's usually the point of stress that people feel is,

oh my gosh, I've got to make these payments, or these debt collectors are calling me, or my payment is due, right? That's usually the source of stress that people feel when it relates to their money. So in your case, I would say, if you've got this extra money, congratulations, let's put it to whatever baby step you're on,

so that you can keep going in the right direction to get to that ultimate financial piece. And it sounds like in your case, you would be on baby step two where you are paying off the debt. Anna, how much do you make in your job now? So I make about $4,000 a month, about $60,000 a year. Okay. And then with the $20,000 will come, so that'll be about $60,000 a year. Okay. And then with the $20,000 will come, so that'll be about 80?

Okay, great. And I already, I have the emergency fund and I even have about $30,000 in a CD account that I put up whenever I sold my house last year. So I have that saved. Okay. That's great. I mean that. I would would put on a it's gonna make you nervous, but I would put that towards your debt. And that will take a huge chunk out of this debt.

And you're gonna make great money. I mean, you're gonna make 80 grand. So you have $35,000 left. I mean, you could pay this off in 1824 months. Yeah, and honestly, when that CD matures, I'd probably put that on the debt too and knock it out. 65,000, I would do that. And then once the debt is gone, I'd save back up that money. And I just keep it in a high yield to where it's like very liquid. But yeah, listen, I'm proud of you.

I think that you're doing all the right things. You've got good instincts and good intuitions. Yes, you're doing great. Taking great care of your family. This is the Ramsey Show. Hey guys, good news. Presale is on now for my new book, Build a Business You Love. If you're a business owner, you know running a business is hard. That's why I wrote this book, to share what we learned over the last 30 years so business owners can grow your business faster with fewer mistakes.

Pre-order your copy today and you'll get access to over $350 in bonus items only at ramsaysolutions.com slash store. ramsesolutions.com slash store. Pre-order today. Alright, you're listening to the Ramsey Show. If you want to give us a call, it's a live show, so you can do that. The number is 825-525-225. We'll get you on the line again. I'm Jade Warshaw. Next to me is Rachel Cruz. We're the ones that will be taking your calls this hour. So let's go straight to the phone lines where we've got Samantha in Phoenix, Arizona.

What's going on Samantha? Hi, thank you guys for taking my call. You bet. I am new to the Baby Step and I was technically on baby step too but I left an abusive relationship and I'm going through a custody battle right now so I've incurred additional debt for attorney fees. Okay. So I'm trying to figure out my next steps going forward. Should I pause making additional payments like towards my debt and just work on saving money for additional returnees that might come up. Yeah I would this is definitely a storm. I mean for sure. We I would categorize this as a storm and we do say that when you're in

baby step two especially there's a couple of things that would cause you to kind of pause and that would be a baby on the way or some sort of storm or major emergency that is causing you to kind of have to just hold hold tight for a minute. Yeah, that becomes more of a priority at that point than paying off debt, right? We're all about paying off debt, but your child is a priority there, right? If there's a health issue that you have to pause to make sure that you can get yourself in a healthy place that is, you know, pregnancy, like anything that is takes precedent, right?

Which is usually a relational situation or a health situation. We for sure say pause and get that in order. I'm so sorry, Samantha. I'm always so impressed with women like you that choose to step out of a situation like that because that cycle can be so hard to break out of. How long has this been going on just from the custody standpoint, fighting it with lawyers?

So going on two years, the first part was when he tried to fight the restraining order. So that was the first time I took on attorney fees. And then now he was in jail for a bit, for violating the restraining order, but now he's out and now he's trying to come for full custody. Oh my gosh. How many kids do you have? Luckily, I only have one. Okay.

Me and my daughter, but it's still a lot. How is your like financial situation? How is your home situation? So I currently rent and I am safe. Luckily, I'm with family and I make about $52,000 a year. Good. But my debt went from, I got it down to $12,000 and now it's back up at $20,000. And what are you, is that just the 20,000 as the attorney fees? No, so about 10,000 of it was attorney fees.

6,000 was about credit card, three about student loans and then about 2,000 left on my car loan. Okay. Do you have any savings right now that you're pulling from or are you just pretty much occurring the debt as the attorney fees come up? So I was able to pull from like 401k to kind of help with this because it was so I wasn't expecting it.

I know I thought after the restraining order was standing that that was going to be it. I wasn't expecting this. So I was able to get a little bit of help do that, but of course I want to pay all of this back as quickly as possible, but my biggest fear is I don't know what's going to happen three to six months from now to the next year as well. Right. Okay. So are you still in the middle of this then?

I am. Yeah. Okay. And has your lawyer given you any timeframe by any chance? Like do you know, I mean you're saying three to six months, you know, like does he have any conclusion of like when this will end? No, no, because we're still waiting on mediation. And then more than likely that nothing's gonna happen in there because my ex,

of course he's not gonna agree to anything. Does your ex have a lot of money? Is that why he's trying to, is he trying to drain you out on this? I, yeah, they think so. Because yes, he comes for money. So he knows that I would do anything to protect our daughters.

So he knows that I'm willing to, figure out ways to get the money because he knew, he knows that I'm not going to represent myself. I'm not in a position to do that, you know, emotionally. And so what, um, is there anybody around you that has the ability to help with this that wants to, cause the truth is, this is costing you money and it's costing you money that you don't have. And I do believe like I'm, I believe that the custody is going to end up with you because from what you're telling me, there's clearly track record that this is an abusive person,

especially the fact that he's ended in jail for trying to violate this. So I have a feeling that this will end with you, especially the fact that he's ended in jail for trying to violate this. So I have a feeling that this will end with you, but how long can you go down this track? Do you see what I'm saying? Yeah. Yeah. So Samantha, so I, yeah, if I were you, if I was in your position right now, I would stay current on everything.

I would not get behind. So I would say I would be paying your minimum payments on everything. And then on the side, finding that margin, month to month to be able to put some money aside. So as these fees come up, you do have an account that you're going to be able to pull from. And then I would also start to evaluate as much as you can the consistency of how often the bills are coming, how often you guys are using the lawyer, if there is mediation and all of it. Because I think a goal would be, small goals would just say, okay, there's some money set

aside for attorney fees. And the truth is I may have to go into debt for that. But if I can at least maybe knock out that $2,000 car loan in the midst of this, right? Because it's not something that's gonna be solved. It sounds like even maybe even in the next 12 months. So I don't want you sitting idle financially during that time,

but I do want you to put some cushion between you and life. So putting some money away kind of for an emergency fund that you can pull some of that for attorney's fees as they come up, but then also giving yourself a goal financially to start making some progress. Because honestly too, Samantha, I think making progress in this area of your life, it actually might give you, you know, that boost of confidence and there's something proactive that you're doing in your life that actually can start the wheels engaging in a positive way through the circumstance.

Absolutely. I mean, there's only $2,000 left on the car. What's the payment on that? What will you get back in your pocket monthly when you pay that off? So I pay about $296 a month for the car. Good. So another $300. That's great.

To Rachel's point, that's even more money that you'll be able to set aside so yeah Like no disguising the fact that this is tough and you know, you've got your work cut out for you in a lot of ways But I think just being really intentional still sticking to still creating a plan and sticking to that plan Whatever you decide that plan is is gonna be really paramount for you walking through this Oh, that's so so so so know. I'm so sorry, Samantha. Tough to walk through. All right. Do you want to try to take another call right quick? Let's try it. Caleb in Norfolk, Virginia.

What's going on, Caleb? Hey, thanks for taking my call. Merry Christmas. Merry Christmas. How can we help? So my question is regarding life insurance. I'm currently in the military, but I'm getting out in about three months. Um, I have life insurance through the military. It's called super service members, group life insurance. I pay about $31 a month for a $500,000 policy.

Uh, my question is whenever I get out, I have the option for a limited time, really, to roll that over into what's called veterans group life insurance, which is about $35 a month. And that will increase about every five years. I'm 26 now. I have no debt, but really I'm just unsure because I don't have a wife or children yet. I don't really have anybody relying on my wage but me. So I'm just kind of looking for some guidance here. Yeah I mean Kim I

don't think you really have to re-up this or roll it over I mean I I wouldn't the reason really you have life insurance is if someone it's dependent upon your income so that would be a spouse or children and as a single person I mean I would have some money you know set aside that if something were to happen to you, like covers funeral costs and that kind of thing, but I don't think you need a life insurance policy for that. So I probably would just end up canceling it once you get out.

I agree. I agree with that statement. And if you don't have to pay it now, I wouldn't pay it now. Forget the rollover. I would get out of it now if I could because you really don't need it. All right. That does it for that. Yeah, I think people forget all the time, Rachel, that there's a purpose to life insurance. It's not necessarily to make you rich

or all of these other things. It's for anybody who's dependent on your income. If something happens to you, how do they make life work? That's what it's there for, yep. Children, spouses. And term life is so inexpensive. It sounded like some of those rates. It's just not expensive at all. So yeah, if someone's dependent on your income, make sure you get life insurance. You can go to zanderinsurance.com and check it out there because that's a great place to get your term life.

I talk to people every day who want to know how to do better in two areas money and relationships that's why I'm pumped to bring the money and relationships tour to a city near you join me and Dr. John Delaney for a night that will challenge the way you think about this stuff and possibly change how you live forever starting April 21st will be in Louisville then on to Durham, Atlanta, Phoenix, Fort Worth and Kansas City. Grab your tickets at ramsysolutions.com slash tour before they're gone. Welcome back to the Ramsey Show. Let's go to Ann in Pittsburgh. Hi Ann, welcome to the show. Hi, how are you today?

Hi, we are doing well. How can we help? Well, I hope you can help that's my question is there any hope for our situation? We have been married 19 years we're in our 50s we have one special needs son we're both self-employed I have a business from home which has been very helpful with our son and being home when he gets off the bus all that kind of stuff. My husband has always controlled 99% of the finances.

I don't have, my name is not on the bank account, I don't have a login. His business and our home bills are combined on the same account, which I know probably should not be that way. We have a home loan of about 243. If sold, it might be worth $700,000. The big problem I came to realize

is that our credit cards are at $209,000. We have a car loan for $21,000. And some of the credit cards are his business only. But as far as I'm aware, in certain states, your debt is your debt and half and half debt and assets. So I guess I'm trying to figure out, I can't get through to him. He just blows up when I try to say, hey, let's try a budget. Hey, here's all the credit cards on an Excel spreadsheet that shows all the percentages. Like it's just kind of banging my head on a wall and I don't know how to protect myself, how to protect my son. The only good news is that I do have a

401k that is in my name from before we were married and then we also have I have a little bit of savings and then he does have a life insurance policy God forbid anything happens, but he's he's not well mentally and he's been you know, threatening a lot of things and I thought I should try and Get some advice. Are you thinking about walking away from this? At this point, I I really can't right now. I can't right now. My business is here on the property. And if I would leave, the other thing is I would be taking my autistic child away from the only home he knows. That he's had his whole life, his dogs, his everything that's comfort to him.

And your husband's not open. Is he, it's I'm guessing based on what you said. I think he knows that he's in the toilet. I think he realizes, I mean he's paying the minimums on the credit cards, that's it. And where's the revenue of your business going in? What account is that going into? It's going in with everything else. We I mean, I don't make much. Okay. Last year he had it written down here last year. Um,

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

He's an electrical contractor. So he's making $26,000 a year. He's paying himself $26,000. Technically, yeah. And it's just him. He doesn't have employees. And what about you? It's just myself. And what do you bring in?

What's your payment from your business? I'm lucky if I bring $10,000 or less. So you guys combined are living off of thirty six thousand and you've got the twenty one thousand in card debt and how much in credit cards? Two oh six. Two oh nine. Two oh nine. Okay. And is there anything else that you think might be out there, not including the mortgage? No. And all of that two oh nine forty K is his just for his business. But of course, I'm pretty sure I'm liable for that as well. But everything else. And so is he using these credit cards

to keep you guys afloat just month to month? Yes. Yep. And when you said he's not mentally well, what do you mind going into a little bit more detail on that? I mean, there's increased alcohol. You can tell there's depression alcohol, just, you can tell there's depression, upset. We'll even mention the debt, we'll mention,

my wife told me that we're this much in debt and she must be full of it, I don't believe it. And he'll say this in front of his best friends and it's like, oh my God, now he's sharing it with folks. But I think he's embarrassed, I think he doesn't know what to do. Yeah, I do too. Yep. So I think, you know, Anne, it just sounds like my first protection is for you.

And the fact that you don't have any access to anything, Anne, I mean, there could be, there could be a whole other life he's living, right? I mean, on different levels, on different scales, financially not. I'm like, you have no clue what's really going on because the money is kind of the paper trail to a degree on life and being able to see that. And you have no access to that, which is a hard line I draw. You have to be able to have access

and have everything visual that you see. I mean, it's one thing if you're like, oh my gosh, she's a spender, I'm a saver, I don't know what to do. It's a whole other thing. And you cross another line into another level of seriousness when you don't have the ability to access your money. So this is a, it's a more serious weight there

that I hold now in this conversation that creates more ultimatums and I hear you say like I can't leave all of that and but what I would do is is that there's other ultimatums in this marriage that has to change because you you don't you're not safe at that point right right how'd you find out about the 209? Just curious. Did he tell you or you discovered it? Oh he did not tell me. I discovered it. I started going through his files. Okay. And I made like the biggest Excel spreadsheet you'd ever want to see in your life. And I just you know tried talking to him and you know we were okay

there for a while. Oh I'm paying it down. I'm paying it down. And then, you know, once a year, I pull these files again and get everything sorted. And I did it again this year. And I said this is he's to the point now where everything is minimum. Yeah, for me, this falls into what I what I would call a level of financial abuse and infidelity because he's keeping everything on his side. He's making moves without sharing them with you and they're at the detriment to you and

your family and your son. And I would push back on the fact that there's nowhere for you to go. There's always an option. But I can guarantee you this, it is not going to be a comfortable option. There's going to be no piece of it that feels comfortable or easy or, you know what I'm saying? So I do think that you have to give yourself an ultimatum and you need to say, all right, what am I gonna do? What are my limits? What are my boundaries? And what is my time frame for me to, and what is an indicator that this is moving forward or that it's staying the same?

Does that make sense? You have to have something very real and very measurable for this situation. Anchor too, yeah. Yeah? Right, right. So whether that's, I'm gonna offer counseling and I'm gonna give him 60 days to agree to it,

or I'm going to ask him for these account passwords, and I'm gonna ask him for complete transparency, and I'm gonna give him 45 days to wrestle with that and get to that point. You've just gotta make it very clear, write it down on paper. If you have a friend, get a friend. If you have a pastor, find a pastor, but you need somebody who knows.

Does anybody else know this is going on besides us two girls on the radio? find a pastor, but you need somebody who knows. Does anybody else know this is going on besides us two girls on the radio? Yes. Okay. A few, a few friends, close friends and family members. What are they suggesting? What are they saying since they know the situation even more? And they know him and they know he's not, he's not right. He's, you know, I married a 37 year old man who was set in his ways and unfortunately he is a collector and that's where the money has gone. He collects things and up to the point I said, can we sell some stuff? So is he hoarding too? Are you in that sort of a situation?

No. Okay. No, it's just enormous collections of things that are really our only hope. These assets that could help us get out from under this, but he's not willing to touch them. I'm not selling any of my stuff, he says. Like, oh, great. Because years ago he did, he would sell a stamp collection or he would sell another collection. So you're just seeing a deterioration. And I would bring in a third party in that. And again, it's so hard to say this on this side of the desk, because now, Anne, we have to go,

but you're going to be living this life. But not only is it a secret, but you're also behind. You're trying to live on $34,000 a year as well. So there's two ends of this that are really urgent. So I'm so sorry. I hope this was helpful to give him some ultimatums, but I so appreciate the call. This is the Ramsey Show. Hey, you're still here?

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