Transcript of Break The Debt Spiral And Regain Your Life

Brought to you by the Every Dollar app. Start budgeting for free today. Normal is broken, common sense is weird. So we're here to help you transform your life from the Ramsey Network in the Fairwinds Credit Union studios, this is The Ramsey Show. I'm Dave Ramsey, your host, George Campbell, number one best-selling author and Ramsey personality, co-host to Smart Money Happy Hour on the Ramsey Network. He's my co-host today. Open phones at 888-825-5225. Elizabeth is in Seattle. Hi, Elizabeth. How are you?

Hi, I'm doing well. How about you?

Better than I deserve. What's up?

I have a question about debt transfer cards. I've been following you for years, and I know you always say, Don't do it, but I'm at a loss. I don't really know where to go because we're drowning and can't make even our minimums because we have a lot of debt.

How much How much debt do you have?

And some of our principals, we have 15,000 in credit cards.

How much other debt do you have?

I'd say probably just under 13 for our car and 35 for our school.

Okay. What's your household income?

Around 3,500. Okay.

You don't have a credit card problem. You have an income problem.

Yeah.

Who makes 3,500? Doing what?

Between the two of us, my husband and I, we both lost our jobs about a year ago. So we DoorDash, SparkDrive, and SubstituteTeach. We're both also applying for more consistent jobs with consistent income.

You don't need to apply for these jobs. You need to get a job. It's been a year. Doordash does not support a family.

No. What were you guys doing before?

My husband worked as a CEO for a realtor company, and I worked in the ministry, but my church closed down, and I lost my job right as we had our child the same month that he was born. Then three months later, my husband got fired from his job. So very deep dive. We were making over 6,000 together at that point.

Yeah, okay. All right. That's where we concentrate on, not trying to find some trick to cause $15,000 in credit card debt to go away. $15,000 will How does that to go away. That's what fixes it. We need to go get $15,000. That is about income. That's what's occurring to me as I'm talking to you. I think if I were you guys, I would step back from the debt issue and step forward into the career crisis and say, both of us have got to land something immediately that is a substantial real job. Why did your husband get fired?

They wanted to cut budget costs, and they hired a management company rather than paying a CEO. Okay. All right.

How large a company was he the CEO of? How many people were working there?

It was only him and one office staff, but they serviced, I think, 50 realtors.

Okay. So he was doing administrative work for the real estate company? Yeah. There's really more than... The CEO is not really a proper title. I mean, it's a title they gave him, but he's not running a huge organization, or he's not running an organization even with 40 people because the real estate agents all work for themselves. They're just running Helter Skelter, and he's just trying to keep the thing. He's herding cats. Okay. What was he doing before that?

Before that, he worked for another realtor company as a project manager. Then that role ended. They wanted to keep him on, but it was for a specific project, and it ended.

It sounds like he knows the real estate business, and I'm wondering if there's some place in the real estate business that he lands. And gets out of the door dash.

Even part-time real estate would be better than door dash full-time.

He's in the final process right now of a job.

I'm sorry, say again. Yeah.

He is in the final process. He has an interview tomorrow for the final process of a job that he's getting, but it's half of what he was making, so we will still have to DoorDash, but it's a job, it's something.

What will he be making?

60 is making.

That's an upgrade.

Okay, that's a good start. Then you've got to land something that you can do with a child and with a new baby and so forth that you can do from home and/or workarounds of some kind. But Elizabeth, the deal is this. The $15,000 in credit card is very easily overcome once you guys get your income back to where it used to be. Yeah. Then you just live on nothing. You don't go out to eat, and you attack these credit cards with a vengeance because you remember how pissed off you were and how stressed out you were, and you get rid of them. You can do that, but you can't do it on 3,500. You can, but it would take forever. 3,500 is really not your world. It's just the world you found yourself in after a couple of tragic career situations. And now you land back into good stuff and you look back in the rear view mirror five years from now and you go, Well, that sucked. That was a period of time that sucked. I'm sure glad we're not living there anymore. But you go and clean up everything so that you do that.

Don't use these credit cards for anything.

Yeah, they're closed. Good. The credit cards are closed. We're just trying to get out from under it now.

First thing is you take care of food, shelter, clothing, transportation, and utilities. Make sure your family's okay. Your shelter, you pay your rent, pay your house payment, pay your car payment if you've got one, you did have one, you had 13,000. You keep gas in the car and those kinds of things. The credit cards are down the list of things that we're going to do. They're the last people that get paid on the list.

It's an unsecured debt. Yeah. They can come after the car if you stop making the payments.

Yeah, and it's your transportation. Make sure you got the student loan on a hardship deferral temporarily. Let's get the cash flowing around here again and then just to clear these credit cards off as fast as you possibly can. Ben is in Salt Lake City. Hey, Ben, what's up? Not much. How are you? Better than I deserve. How can I help?

Hey, my question is more of a career question. I have been a driver for UPS for the last six years, and they have been tanking volume recently, dropping accounts and just driving volume down, and I haven't been working a lot lately. Now they're offering a $150,000 voluntary buy-out offer to leave the company.

That's exciting.

What were you making?

I'm 44, 73 an hour.

Okay, so about 90K plus a year.

What are you going to do with your life now that you're not at UPS?

That's the million dollar question because I'm 31.

$155,000 question.

Yeah. I don't know. Ups This has been great. They've had great benefits, great pay, and they've sure taken care of my family. But if I pivot and go to a different career, I'm going to take a significant pay cut.

Why?

Just because I've been looking and applying for jobs and had interviews and just anything pivoting from what I'm making currently is just going to be a pay cut right off the bat.

Well, what do you want to do with your life that makes $100,000 a year? Let's go be one of those.

Yeah, I've always had a drive and passion to go to the Police Academy, but hearing ride-alongs and talking with local officers, it's also not a guaranteed thing because a lot of people with military background, degrees in criminal justice.

Let's not figure out what we can't do. Let's figure out what we can do.

You got a little launch pad here if you take this buy-out, but let's not sit on it like a hammock.

I'm not going to go take a dumb-down job. Let's use this as a chance to go live your dreams. What is the dream you want to be? Now go be that and use some of this $155,000 to get tooled up to do it. Murphy's law means if something can go wrong, it will. It usually happens when you're not prepared. That's why a big part of what I teach is staying prepared for whatever curveballs life throws. Have a fully funded emergency fund, buy term life insurance, and get a will from Mama Bear Legal Forms because the last thing your family needs is trying to figure out what you wanted after you're already gone. I've seen families torn apart because no one wrote things down. A will spells exactly what you want to happen after you've passed away. No questions, no court dates, no family fights, just clear directions and peace. It's one of the most loving things you can do. On mamabeerlegalforms. Com, Completing your will is fast, easy, and affordable. Peace of mind for your family takes about 20 minutes with Mama Bear. And unlike a lot of other online will companies, the price you see at the beginning is the price you pay at Mama Bear mamabeerlegalforms.

Com. Go to mamabeerlegalforms. Com and use the promo code Ramsey to save 20%. Mamabeerlegalforms. Com, promo code Ramsey. Bruce is in Columbia, South Carolina. Hey, Bruce, how are you? I'm good. Thank you for taking my call. Sure. How can we help?

Well, I'm 64 years old and I've been working for 46 years, and I have a little different alignment on retirement than my wife does. I have a lot more debt than I should have for somebody that's made the money I have. I am trying to figure out how to pay down over $230,000 in debt within the next year and possibly get retired by '65.

Okay. Where are you going to get $230,000?

Well, my income is... I make around $60,000 a year. But the problem is My wife's income is around $30,000 a year, and we have $20,000 plus in credit card debt and $12,000 on a car. My mortgage is 118,000. I have a second mortgage at 36,000. I've been paying down the credit cards, but every time I turn around and look, it's higher than it was six months ago.

How did that happen?

Well, not enough boundaries, not enough conversation. I'm trying to get myself in a position.

Have you guys Do you have money saved? Do you have a nest egg?

I have a 401k with about 310,000. I have an IRA that's Between my Roth and my traditional IRA, it's 425,000. The Roth portion of that is only about 55,000.

You're not going to retire with $230,000 paid off in one year, you don't have the money. And your household spending is out of control. So even if you did retire debt-free, the debt is going to come back.

I'm coming to that realization.

Yeah, you guys can't live on 160,000. How are you going to live on retirement income? What would be your retirement income?

Well, Probably about half of that.

You can't live on 160, you can't live on 80. Agreed?

Right.

The nest egg is not big enough to support retirement at 65.

No, it's not. I mean, it's a good nest egg, but it's not a great one. It sounds like you guys have never really addressed the issue, and the two of you are going to sit down and go, Hey, we're up a creek here. We've got to cut up these credit cards, and we got to get rid of these card debts, and we got to get this mess cleaned up, or we're going to be working until we're 80.

The only other income I have is I do have an annuity.

Why do I think you're not going to do that? Because you just completely changed directions after I told you what to do. No, 100%-How long you been married? Thirty-six years. Now, this is a come to Jesus meeting I'm talking about. We're going to sit down and go, This is broken We are going to fix it starting now. That's the meeting tonight. No television's on. Nothing in the background. No This is being washed while we're talking about it. This is we are screwed, and we have screwed and we have screwed ourselves and we have to fix this now and never go back to the old ways. We're going to We're going to get on a budget. We're going to open that Ramsey Every Dollar app, and the two of us are going to start acting like grownups, not like a couple of children in Congress spending money we don't have. We're going to cut up the credit cards, and we're going to clean up this freaking debt so we You don't have to work till we're 80. Then you get yourself used to living on $80,000 a year while you pay off all this debt. Then when you retire, you can live on $80,000 a year because you've got a couple of adults in the household instead of children.

Children can be 64, by the way. But you keep thinking you're going to treat the symptom rather the problem. The problem is that you guys spend more than you make and you don't have a system and you're not aligned and you're not agreed in your marriage after 36 freaking years on how we're going to do this. This is going to run off until you're 90 and you're going to be eating dog food. This is where this is headed. You got to go back. You got to go to the source of the problem, which is not her, it's both of you, but it includes her. She's going to get to hear a word that you haven't told her in a long time. Here's the word, no. We're not doing that. We are broke people. You have to start acting that way, or this thing's going to fall in on you. That's what you're starting to feel, and there's a sense of desperation is creeping up inside of you. The good news is you got a year, maybe you work two years, maybe you work three years, and you clean this up and end up with a half million dollars in your nest egg instead of 300,000, and you got no debt house, and everything's paid off in three years because the two of you got very, very serious starting tonight, ready, set, go.

I don't know if you're going to do it or not.

I keep thinking about that old Dave quote, You work too hard to feel this broke. 46 years of a career making six figures, which is way more than most Americans, and you got nothing to show for it. That breaks my heart because we know retirement is not an age, it's a financial number. I wish you could just ding a, Hey, I'm 65. Time to retire. Not if the math says you can't. That's the hard truth. It's been 36 years of compounded bad decisions. It's going to take a little while to clean this up, and you guys need to be unified.

Emma's in Los Angeles. Hi, Emma. How are you?

I'm good. Thanks for helping me out today.

Sure. How can we help?

Yeah. My husband and I were wondering if it's a good idea to pull from a Roth IRA to pay off the rest of my student loan debt. No. Okay, that's what I thought.

You don't sound like you're of retirement age.

It's going to cost you millions and millions of dollars in the future of you. How much student loan debt have you guys got?

It's about 9,300, and that's just my student loan. It's our only debt we have left.

9,300?

Mm-hmm.

Like $9,300?

Correct.

What do you guys make?

We are on a variable income. My husband is a steady income, so he makes about 5,600. Then my income varies from anywhere from nothing to 12,000 a month. I'm a wedding videographer, and so it just depends on the season that I'm in as far as if I have a wedding or not. Okay.

How many times do you have a $12,000 a month?

Last year, I had about three or four of those. This year, I haven't had one yet.

Can you guys live on his income and just pay off the student loan the next time you have a good month?

It's possible, yeah. My work is very slow right now, so we're in a tricky season with that.

I know, but as soon as you get a $12,000 a month, just pay the stupid thing off.

Yeah, I think we could probably manage that.

It sounds like your spending has just been high.

You can't be counting on your income because it's too volatile.

Correct. Very correct.

Where does your income go when it does come?

Our expenses are not covered fully by my husband's income.

Okay, so you can't live on his income. Okay.

Not fully. Why are the expenses so high? Is it your mortgage or rent or Because it's not the debt.

Yeah, I mean, our rent is high. I mean, not ridiculous for the area, but it's about 2,800. And then between just insurance, we have two kids. Yeah, it just adds up. We're in the process of refining things and trying to get really, really serious, especially since my income has been so scary lately.

I would make a budget and pretend like you have to live on his income and cut the expenses down until you I can fit that.

Yeah, I would. I'd get your every dollar budget out. Then that takes the pressure off of your business. When your business starts making a loan, you have one of those good months again, you just blink path student loan. But no, I would not. The student loans are not your problem. The problem is that you're not living on his income and your income is not dependable. That's what's throwing you guys into a tizy. Finally, mortgage rates have dropped. You know what that means? People who've been sitting on the sidelines are about to jump back in to the housing market. If you've been waiting to buy, this could be your window, but you got to be prepared and do the Ramsey way. You need to contact Churchill Mortgage. Their Home Buyer Edge program gives you peace of mind in a wild market. You can cap your rate for 90 days. So if rates go up, you're protected. If rates go down, Churchill will drop yours automatically. And get this, Churchill will even back your offer with a $10,000 seller guarantee. So if your loan falls through due to financing, the seller still gets paid. That's how confident Churchill is.

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Ever wanted to see the person who's calling to ask a question? Ever wonder what they look like when they're calling here and asking? Be interesting, wouldn't it? Yeah. Well, you can experience this. The Ramsey show is going back on tour. We're going to do live Q&A with the audience and tape one of these shows, Raw Confessions, Crowd Debates, Local Debt Free Screams, Charlotte, Denver, Phoenix, and Anaheim, all in April. These are small venues. We're only having about 300 seats because we want to be able to talk to you guys and take questions from you. Last time we put this out last year, it sold out in 72 hours. So get your tickets at ramsey solutions. Com/events, or click the link in the show notes if you're listening on a podcast or on YouTube. Again, Charlotte, Denver, Phoenix, and Anaheim in April, just in a few weeks here. We're going to be in those cities and taking questions, live studio, audience. It's a different vibe, I'll tell you that. But it's also fun, isn't it, Jorge?

I love being out there. We've got some even more fun interactive stuff planned for this next run.

Kelly is in Raleigh, North Carolina. Hi, Kelly. How are you?

Hey, guys. I'm good. How are you today?

Better than we deserve. What's up?

I have a I listen to your show all the time and get some of your feedback that I internalize, but my fiancé and I got engaged last November, and we planned our wedding for April of 2027. We were looking to buy a house, hopefully in the next couple of months, we have the money put away for it. We plan the wedding for her.

Why are you waiting to get married so long?

Couple of reasons. One, we wanted to focus our money effort towards the home first. Then my brother and his brother are also both getting married. One in April this year, one in September this year. With the help from our parents for our wedding, they're both gifting us a little bit of money to have a bigger and more fun wedding.

We-how old are you two?

I'm 26, and my fiancé is 29. Okay.

I would beg you to not to buy a house with someone that you're not married to?

Would it be worth it then to go to a courthouse and get married before we buy a house? Yes. And then just have the wedding next year? Yes. Okay.

That's what my thought was before I left. It changes so many things because sitting in this seat, taking calls from people that have problems with their money, have run into so many different ways that it can go sideways. Because basically, from a From an legal standpoint, you've just got a general partnership with no partnership documents. If something goes sideways, I'll give you a horrible one, this is not going to happen to you guys, okay? But a guy and his fiance bought a house together, and she died in a car wreck, and so without a will. Now he owns the house with her mother. Okay. Because he's not kin to her, so her half was left to her only remaining Ken. And by the way, her mother was crazy. So my crazy future didn't happen. Mother-in-law is now my partner in a house. That makes me throw up just a little bit in my mouth, right? You follow me? Yeah, that's a little scary. That's the crap we've talked to over the last 30 years. And so we don't want that for you. And so, yeah, I do the courthouse and do the celebration later because now we've got a situation.

It's also okay to wait after you've married a while to buy a house. You guys maybe not. You've got this plan unfolding here. I'm with you. But we always laugh and say marriage is different than shacking up, and it takes about a year being married to know how close to your mother-in-law to buy.

Yeah, and I hear that because I live with my future in-law right now.

I think that's driving this decision. You're like, Get me out of here.

I want a house. Okay, yeah, courthouse- Part of it, yes.

Part of it, no. We were going to consider renting.

We didn't want to throw our money away. You could go rent something. But courthouse and rent for a year and then buy is ideal. Courthouse and buy after the courthouse is next best thing. Please do not buy a house for someone you're not married to people. It is a disaster. There's just no way you can break up. At least when you're married, the divorce, there are laws that dictate how things are split up, and judges will dictate how things are split up in a divorce situation. But when you're shacking up and you own a house with somebody you used to sleep with, it's just really a pain in the behind.

Never seen it be a blessing to somebody when they call in.

Yeah, it's just a problem, problem, problem. There we go. Good stuff. Spencer is in Boise, Idaho. Hi, Spencer. What's up?

Hey, Dave. My question, so I'm 24 years old. I'm in college, and I unfortunately have about $15,000 in credit card debt, which I am planning to pay this summer with a good internship I landed. Good. The problem is my parents are pretty adamant that once I pay off this debt, they want me to rebuild my credit and dive back into the debt world to build up my credit, and I'm worried about that.

You want to fight off the lion, and then your parents are saying, Hey, jump back into the lion's den. It's good for you.

Pretty much.

Makes sense.

Yeah. Are they paying your way through college?

They are helping, yes. Okay.

All right. Well, there's a couple of things here. One is if they're paying for your school and you live with them, you have a different level of obligation to honor them and to be kind and so forth. If you're standing on your own and you're out of school and you're doing your own thing and your mom and dad still have an opinion, they don't get to vote anymore. That's not how this works. Then the second part of the discussion is what's wrong with their theory? Their theory is based in the idea that you need to go get credit means that they believe that the best way to have a wonderful life is to purchase things and stay in debt the rest of your life. That that's the best way for you to get things and to have a good life. They believe that. Their theory is wrong. Their belief is wrong. That's at the core of the discussion. They're not bad people. They're not trying to punish their son or do something bad to their son. They actually do believe a lie that the best way for you to have a good life is for you to have good credit so that you can buy anything you want anytime you want on payments.

Right. Well, then, so how do I have this conversation with them? Because I think, and I obviously agree with you, and I think they would normally agree with you. They're not terrible With their money, they're always telling me to stay out of debt and stuff, but they just- There's only one reason to build credit, mom and dad, and that is to go into debt.

I really don't like debt. I really am not going to I owe my credit because I really don't want to be in debt. It's the only reason to build your credit. It has no other value.

If you want more info on this, I wrote a whole chapter on this in my book covering every single objection. You can read that and then have conversation with them. Say, Hey, I know you're worried about me getting an apartment. There's easy ways around that. I know you're worried about me not being able to get a mortgage one day. There's a way around that. You just have to realize you can rise above the system instead of being stuck in the hamster wheel.

Yeah, hang on. We'll send you a copy of that book and read it. Might be fun thing. Say, Hey, listen, I just read this chapter. You guys read this chapter with me and tell me what you think. Because I just don't want to be in debt, Mom and Dad. Because here's the whole FICO thing is 100% of your FICO score is based on your interaction with debt. It's an I love debt score. If you don't borrow money, you don't have a FICO score. Just like that.

I've lived it. I paid off my debt, didn't have a score, still was able to rent apartments all over town, even ones with a landlord, not an apartment complex. I was able to get a mortgage through manual underwriting. Everyone told me, Dave, Oh, it's going to be so difficult. You're going to have to jump through so many hoops. You're going to be exhausted. It was a nothing burger. It was just like, Well, you don't have a criminal background. Can you pay the deposit? All right, you're in. You have the money to pay the mortgage? Great. You got a tax return in 12 months of rental history? Great.

It's not that difficult. No problemo. But the only reason to get credit is so you can get into debt, so that you can get credit, so that you can get into debt, so that you can get credit, so that you can get into debt, so you can raise your FICO score, so you can get into debt, so you can raise your FICO score, so you can get into debt, I think it's a scam, boys and girls. It's Brownhog Day, and only the lenders win.

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It is in Jacksonville, Florida, Hi, Ed. How are you?

I'm good.

Mr. Dave, how are you? Better than I deserve. What's up?

So my question is, I've got around 300,000 in equity in my home, and I've got a total of 240,000 in debt, with 140 of that being the mortgage. Some pretty bad debt within that $100,000. Should I sell my house to get out of debt? Start over. I'm 43. I have zero retirement. The house is my retirement. I've had a really rough couple of years. Some pretty tough events have happened. Trying to get out of this financial prison, if you will, and there's no money left over to save, and I just don't know what to do. Should I sell the house, refinance the house, stay put, and just try to do the bit, snowball.

What's your household income?

Combined with my wife, it's 140, with me bringing in 100 and her bringing in 40. The only caveat to that is After my employer paid health insurance, which is 1,700 a month, I'm taking home about 5,000 after taxes.

But you're getting a tax refund?

That's another thing. I owe the IRS 7,000 that I'm making payments on that I have left from my wife being self-employed all the way back to 22 that we're making payments on. So my tax refund goes to that. But that should be paid by this year's tax refund with my monthly payments. I'm really hoping to have that paid off by the end of the year.

Yeah. Okay. How much do you owe on your truck?

39,000.

And that's of the 100?

Yes, sir.

Sell the truck.

I'm 10,000 upside down. I would have to come out of pocket to be able to sell it now. I just don't have it.

Still beats selling a house.

Yeah. You borrow. Go to the credit union, borrow the 10,000, and then get $2,000 car to drive while you get this mess cleaned up. But 40% of your problem is the truck. Okay.

So find a way to get the 10K to get out of the truck.

Yeah. I mean, go the credit union and borrow it. Or who do you owe the money to on the truck?

Ally Financial. The only problem with that, Dave, is my credit take a hit. We had a house fire in '23, and the insurance paid 80 less than what it cost to build, and I had 40 of that. But I had to beg bar Rob Peter to pay Paul to find the other 40, which I did. But my credit took such a hit during that time that I'm in the rebuilding phase of my credit.

I don't want you to rebuild your credit. Allied is a subprime lender. They're screwing you. You have a 16% interest rate, don't you?

It's not that bad. It's 9. 5%. Only 14. It's 9. 5. They do prime as well. They have a subprime program. I work in automotive finance.

Well, you're getting destroyed buried by that car and by the nine and a half. You can't keep doing that in the name of, quote, rebuilding your credit for the opportunity to borrow money again. I'm trying to break the spiral without selling the house. I'd sell a car 14 times four. I'd sell a house.

The house isn't the problem, and it doesn't change the behavior if you do sell it. That got you into this mess. Then you still got to go rent somewhere, don't you?

Yes, sir. That's horrible, too, because it's going to cost double what my mortgage is. It's just getting my hands on the 10K.

Let's get a hold of this amazing income you guys have and just clean this mess up. You sell the truck, you got 61 left, make it 140. Now it's an easy math problem.

Let's live like we're broke for you. But you're right. You do have to scratch up the 10 grand, but you scratched up 40 grand to get a house fire redone. That made part of this mess as well. I would rather you have 10K on a credit card than I would have 40 on a truck. That's moving in the right direction then. Again, get you a hoopty. That's not real popular when you're the finance manager at a new car dealership, but I don't really care. I don't care what your buddies think about what you drive. I care about you and you winning. Appearances are not something I'm willing to invest in at any stage of wealth building, but certainly not where you are, Ed. You've got to do something to break the cycle. I think selling the house is awfully desperate when you're sitting on a $40,000 truck. So I'm finding a way to get that 10K, and I'm getting rid of that thing. Austin is with us in Nashville. Hey, Austin, what's up?

Hey, Dave. How are you?

Better than I deserve. How can we help?

Good deal, yes. So I'm recently engaged. My fiancé will graduate from grad school in May of this year, and we're getting married in May of '27. My question for you is, is Together, currently, we have about $50,000 in savings, and we'd be going into our marriage with about $100,000 worth of debt. 50 % would be her student loans, and 50 % would be on a fairly low interest rate piece of equipment for my business. My question is, is it smart to use some of our savings or all of our savings X, Y, or Z to pay off one of the loans, or should we hold on to the savings and pay the loans off?

There's not a we or an hour. You're not married. Okay. You don't pay somebody's bills that you're not married to.

Well, I guess I'm looking next year when we are married.

Why don't you just get married? What are you waiting on?

Well, we're waiting. I guess we're waiting to get married.

Why?

But well, we're going to have- You're already playing house and acting like you're married.

What's the big deal?

Oh, no, we're not playing house.

Well, you said we have savings.

Oh, I was just saying collectively.

Okay.

Well, you guys individually- Individually, if you want to continue to live separate lives until May of '27 when you're married and you work on you getting your debt paid off, she works on her getting her debt paid off, she would use her savings towards that and you would use your savings towards yours until there's a we.

At the point there's a we, we combine everything and we attack it together. Combine income and everything else. What's her degree in?

Speech therapy.

Good. Okay, excellent. She'll be able to make some good income to offset the student loans she took out, right?

Correct.

Yeah, good. Let's get that done.

That's what we're looking at. My business is going well, too. But I guess just the big thing is how, obviously, we want to knock our debts out as quickly as possible or individually. That's the goal. But should we take out a savings to do such?

Yes. Okay. And you should stop adding to savings until you get the debt cleaned up because the debt is sucking the marrow out of your cash flow. Your most powerful wealth building tool is your income. You're writing checks every month to other people instead of to yourself.

Okay.

That keeps you from building wealth. So your first impediment, your first blocker for building wealth is the debt. When you clear the debt, you don't have any payments in the world. Now we got money. Then we build an emergency fund of 3-6 months of expenses, and then we start putting 15% of our income away towards retirement. Pretty soon, you'll be a millionaire doing that. But you've got to get rid of all these stupid payments and talking about interest rates. I don't give a crap about the interest rates. My interest rates are zero because I haven't had a debt in 30 years. That's my interest is zero. I got you beat.

That risk on the business is bigger than you think. All it takes is a few bad months. Now you can't pay the equipment. We get that call a whole bunch. Hey, the business failed, but I still owe a bunch of money on this equipment. What do I do? You're selling it for pennies on the dollar trying to clean up the mess. I would move forward, cleaning up this debt. Maybe by the time you're married, you both are debt-free. How cool would that be? That's an idea.

Okay.

Use some of the savings and future income.

But only after you're married do you combine everything. When you come home from the honeymoon, now we have debt, and now we have savings, and now we have a dog, and now we have... Until then, it's your dog. Until then, it's your problem. Of course, the dog pees on the floor, then it's your dog. It doesn't matter, even if you're married. That's how that works. I know that life. Look at what your dog did. To which I say, Look at what your daughter did.

Now, who's cleaning up the mess in the Ramsey house?

Bella the Bear Dog is my responsibility.

And Sharon made that clearer.

Yeah, just because Bella the Bear Dog eats Sharon's stuff. Oh, that's definitely your problem. Bella the Bear Dog stays on serious probation at all times.

You got a line item in the every dollar budget.

I think I'm on the fourth or fifth set of ear buds for my wife recently. Oh, no. Would you please put those things where the dog can't get to them?

Is it still in the dog?

At what point is it the dog's It's your fault.

Is it passing through or is it still in the dark?

I have. No, I don't want to talk about it. Dave doesn't want to know. I don't want to talk about it.

That's someone else's problem.

Statistics show that half of Americans don't have enough life insurance, or they don't have any at all. I don't understand this, John. Why don't people want to take care of their family? They think they're going to die or something?

Well, I used to be one of those guys. I didn't even think about it. One of my buddies said, Hey, the only reason to not have life insurance is if you hate your wife and kids. I immediately went and got term life insurance.

That's a gut punch.

You're telling me for decades, Dave, I've sat across people who've lost a spouse, they've lost somebody important to them, and they don't know what to do next.

Me too. You're going to have a crisis here. You You got two options while you're sitting and talking to a young widow. She's concerned about how she's going to invest all this money properly and not mess this up, or she's concerned how she's going to eat tomorrow. That's exactly right. These are the two options. Take care of your dadgum family, man.

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That's exactly what it's supposed to be. It's saying I love you to your family. Term life insurance. Jeff Zander and the team at Zander Insurance makes it easy and affordable. I've used them personally for 25 years. They're the only people I trust. Go to zander. Com or call 800-356-4282. Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. I'm Dave Ramsey, your host, George Campbell, Ramsey personality, number one best-selling author and co-host of Smart Money Happy Hour on the Ramsey Network, is my co-host today. Nate is in Nashville. Hi, Nate. How are you?

I'm doing good. How are you?

Better than I deserve. What's up?

I'm an independent songwriter and music producer, so my income is very inconsistent, and I've had a lot of good years and a lot of bad years. Me and my wife have been okay with that inconsistency in income. Until last year in December, our baby had to be delivered extremely prematurely, and at the same time, my wife was diagnosed with lupus. Both Our baby and my wife have been in the hospital pretty much all throughout the beginning of this year. With all of this medical uncertainty, basically, that we're going into with this, I am trying to figure I have the option to do something called a catalog sale, which in music is selling a business. It's just getting a lump sum for all of the songs that I've made. I have the option to do that, and I'm wondering if it's a smart move to just take the sale and invest that money and live off of the interest, or if I should just keep working and try to maybe find a way to make my income a little more consistent.

Nate, I'm sorry you guys are going through this. It rocks your world when the baby's sick. When mama's sick, too, it's double. That's a tough thing. When you're an artist, it particularly is rocky. As you know, I'm in Nashville, and so I've got lots and lots of friends in the business that have sold catalogs, and so I'm fairly familiar with it. Typically, what happens in your world is that the money that you make from the songs is the value that the catalog has, right? Right. What typically happens, as you know, and everybody else knows if you think about it, is when a song comes out, particularly if you get a good hit, it'll peak within a few months. Then depending on how big a hit it is, it'll continue to feed out and pay out. But gradually, the payout deteriorates over time on every song. Agreed? Yes, that's correct. Okay, so it goes up. Big nice thing, big splash. Everybody's smiling, everybody's happy. We collect a statue or two, and then we go on and start. But then the income associated with a hit from five years ago is way different than the income associated with a hit this year.

What you're trying to figure out is, and that's how they value the catalogs. They value them based on what they think they can make on it over time. Right? Yes. They're looking at that deterioration. Anything you write the year after you sell the catalog is yours. You're not selling your future hit. You're only selling the past ones. That block of income starts at one level and goes down every single year when they buy that catalog, right? Right. Yes. That's how they're valuing it. That's also how you make decision as to whether you want to keep it or not. Some artist friends of mine want to keep it just because those songs are like their babies. They don't want to let them go. They're very attached to them emotionally.

It's like a legacy for them.

Yeah. Others view it on a pure business factor and go, I can get X number of million dollars for this thing, and I'm going to keep on in the business, and I'll make my future there. But this gives me a lump sum to stabilize my life, which sounds like how you're thinking. What are they offering you for the catalog?

It would be around 4 million.

Good. Oh, you've done a great job. Congratulations. You've had some good stuff, man.

All right. How old are you?

I'm 33.

What was a good year for you? What are you normally making in a year?

Well, my last year was my best year, and I made just about a million. That's why I'm a little bit not sure, because if I do a deal with an LTM dealers for the last 12 months, I would get about a times four on my catalog sale. But I'm also I'm not sure. If I continue to write, maybe I can make that number go up, and then my catalog sale could be worth-There's nothing to say you could have another catalog.

That's true. This is one block of songs, one library. But here's the deal. If you got four million a day, but you would get a million next year and 800 the next year, would you rather have that stream of income? Because that stream of income is going to be there.

Right.

What I would is if you project that you're going to make a fourth of this in the coming 12 off of this catalog, I'm probably keeping that.

Okay.

Because you're going to get a million of the four million right now. We're only got a $3 million swing. What have you got $3 million for? You're going to get that $3 million in the next five years.

Yeah. I think just seeing how crazy these swings can be in music and just not having that certainty, especially with-Well, it's not a horrible deal, and it's a fairly standard process.

Like you said, they're doing about 4X on the LPM, so that's a fairly standard formula, and they're not ripping you off. The question is, what do you want? It sounds like with your family situation that you can restart your career fresh with $4 million in an investment, which if you put it in a good investment, it'll make you $400,000 a Right. And forever.

And that's without you- Forever. Producing future income.

Yeah. And on top of that, then, and you've got that for your baseline to operate your household on and relax, and then you still go to work every day. You still go down there and sit and write every day like you were desperate and broke and hungry. But you're not desperate and broke and hungry anymore. But you still write like that. You still work like that. Because my experience with the songwriters is you have to go to work every day. It's not random. You guys grind those things out most of the time, right?

Yeah. I haven't been able to do as much this year. I really haven't been able to do much at all just with the medical situation.

That's another thing I want to be- I'm not shaming you about that. What I'm talking about is just because you got $4 million in a mutual fund doesn't mean you can quit work. Right. Absolutely. When mom and baby are healthy and you're ready to go back to work, go back to work, Nate. If you've got a talent, go use it. Okay. Don't get lazy because you got $400,000 or $4 million and you're making $400,000.

Do you believe you're talented enough to go create another million-dollar year in the future?

No question. If he built that catalog, he can do it.

Yeah, I think I would be able to do it.

I'm just putting myself in your shoes. I'm taking the deal.

Yeah, I am, too. I like what it does for you. It stabilizes your life. You got a family to be responsible for. You're not just a kid with a guitar in a room with too much coffee. You've now got other stuff going on. So I'm with you, man.

I'll take the volatility of the stock market over the volatility of the music industry.

It's not that volatile. It's very predictable. It's going to go down.

Yeah, exactly.

It's very predictable. We just talked about the stream of income deteriorates.

The S&P 500 has only gone up over time.

I'm going to take 400K a year off of that 4 million, live on that, or 300K and live on that, and let that sit there, get with a SmartVestor Pro, Click at Ramsey Solutions, Nate, and sit down with one of the folks we recommend. They'll sit down, put together. Believe me, they're in Nashville. They've worked with catalog sales before, too. They know what it is. In our community, we're in a music community It's a fairly common occurrence.

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Tax season is upon us to get free checklists and guides that will help you file. Go to ramseySolutions. Com brandyis. Com/taxis. Brandee is in Tulsa. Hi, Brandy. How are you?

I'm good, Dave. How are you?

Better than I deserve. What's up?

My husband and I, we together have about $65,000 in debt. $50,000 of that is our auto loan, which is about $1,000 a month, and we're barely staying current on it. We are behind on rent, which just started in February. The deal with that was that we were working a job where we got the house for free, and now But the job only paid $1,000 a month. So obviously not sustainable. Our bills are about $3,800 a month. He does have a new job now that is bringing in $300, $600 a month as of February first. So we're behind on rent, barely staying current on the car. We have not filed taxes yet. We should be doing that this week. Our plan is to get current on rent, and then about half of that we owe the last boss we had about half of… We're expecting about 5,000 to 6,000 return, so we're going to owe him about half of that.

For what?

We're just wondering, how do we- Why do you owe him thousands of dollars, the guy you worked for? Well, my husband accidentally broke a piece of equipment that resulted in about that much to fix it.

Yeah, but that doesn't mean your husband is… Had he borrowed the equipment or was he operating the equipment while he was being employed?

He was operating the equipment while being employed. My husband is- Why does that make your He's been liable. He feels bad for breaking the equipment because the owner is a small business owner.

That doesn't make him liable.

You're broke.

I don't care how bad he feels. If George drops his computer that I own on the way out of the studio today and breaks it, George does not have to pay for it. Yes. Okay. That's how it works when you have employees.

Did he sign some agreement saying that he's liable for any accidents or damages?

Not yet. He did tell him that he wants to pay him that, that he feels that he's owed Why? He did come to us with an agreement. Why?

On what basis does the employer think the employee has to pay for broken equipment? What's the moral foundation of this? This is cray-cray.

I think it was just my husband's- Stupidity.

This is a month of his pay.

You guys, okay. Number one, the landlord is on hold, period. I mean, the former boss, if you ever pay him, it's not going to be anytime soon. Number one. Number two, sell this stupid butt car. This car is insanity.

What is this thing?

I do have a question on that now that you bring that up. It is a 2025 Dodge Durango.

I I bet it is.

Yeah, we bought it last year when we were making about $5,000 a month, and we had that job for about a year and a half.

That doesn't mean you need to be stupid.

I know.

$50,000 Dodge Durango for $1,000 a month? It's killing you.

How far underwater are you on this thing?

It is worth, by Kelly Blue Book, about 26,000. What?

How is that even possible? Do you guys drive this thing to the ground already in a year?

We drive about 35,000 miles a year.

Why?

During that time, we were traveling more for work, and we travel about a round trip, 240 miles.

Did you trade a car that was upside down into this deal? I'm sorry? Did you trade another car that was upside down into this deal?

Do you roll over negative equity.

Because even at 35,000 miles, a Dodge Durango should not have lost half of its value in one year. They suck, but they don't suck that bad.

Yeah. We had about $10,000 of negative equity on the old vehicle that we rolled into.

Okay, That makes more sense.

It was 40 down to 26 because you drove it to the ground. Okay, that makes more sense, at least. Is there any other debt?

We have about 9,400 About 5,500 of that is personal loans, and the rest is credit.

Okay. All of that's on hold until you get your rent current and keep your truck current until you figure out a way to get out of this truck. The ex-employer does not They don't need any of your tax refund until you are out of debt. Even then, they probably don't get any money. You do not pay for broken equipment when you work for someone. That's not how life works. If I If I own a heavy equipment operation, I got six bulldozers, and one of the guys breaks a bulldozer, he doesn't have to pay for it. I have to pay for it. I'm the owner. That's how it works. The owner is taking the risk here. The owner takes the risk. That's what owning a business is. Even if the guy made a mistake and tore it up, it's still on the owner, not on the employee. What you guys are engaging in, I don't understand the moral code by which you've come to this decision or husband thinks he's liable. He's not. There's no code I've ever been around that says he's- He might feel guilty, but he's not liable. He feels bad for tearing up the guy's stuff.

That he should do. That's an honorable man, but that does not make you need to pay for it. For sure, you don't pay for it when your rent is not current and you can barely pay your car payment. You guys got to get rid of the car and get current on food, lights, water, transportation, and rent. Don't get behind on those things again. Never again, never again buy a car on debt. The rest of your life, this should be the last one. Because you guys are handcuffed. This thing has a gun to your head. You have nowhere to go. I'm not sure how you're going to get out of this truck. It's a mess.

You're going to need to save up the difference.

You got two bad deals tied together here, and you're at 50% sub.

I don't know how you're going to do that. He's going to need to make a whole lot more money. I don't know if you're working outside the home, but I think you're going to need to get a job as well.

Yeah, you guys are all going to have to be working all the time for the next three years and clean up a lot of this mess. Because everything you've touched has gone backward for the last two years. You've gone deeper in the hole, deeper in the hole, deeper in the hole, and you got to turn that around. And income turns that around and then stop doing ridiculous decisions turns that around. If you go near a car lot to buy a car on payments again, I can't help you. You've got to stop that. It's just destructive. Oh, man, what a mess.

We're seeing a higher and higher percentage of people taking on car loans over $1,000. It just keeps going up.

Let me also tell you guys out there, this is the second or third time today that we've taken these calls. Here's your order of priority, and you do not violate this order of priority. The first thing you do with money that comes into your household, without exception, you buy You buy groceries. Not restaurants. You buy groceries for your family. Your family eats before you do anything. The next thing you do is you keep the lights and the electricity on. You have to have that to operate. Almost everyone, even in a horrible crisis, can put the money together to do those two things. The next thing you do is you stay current on the rent so you're not freaking homeless. You stay current on your mortgage, you stay current on the rent, period. The next thing after the rent is current is the car, not the car and then the rent. You did that backwards, Brandee. You keep rent current because if they take the car, you at least got a place to live. If they take the house, you're living in the car. We don't want to do that.

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Today, we've got two related questions. First is from Craig in Georgia who asks, What will the market do based on what's going on in Iran? And Alan in Indiana asks, My daughter is going to college in August. With the stuff going on in Iran, should I change her 529 plan to an age-based investment? So Dave, people are spuked by what's going on. It obviously affects the economy, at least temporarily. And so they're wondering, Should I make any changes to the way I'm investing right now?

No.

That was easy.

You should not change a thing. If you go back throughout history, every time there's a burp in the geopolitical world, every time Donald Trump burps or Joe Biden burps, or there's an October seventh attack by Hamas and they kill innocent babies in Israel, or there's the Israelis now and the United States bombing the crud out of Iran for a few days. When you go back through history, you're going to see that generally what happens, there's a one or a two day, sometimes a 30 day period of time that the market will go down. Those that ride roller coasters only get hurt if you jump off in the middle of the ride. Give me an example. Anybody remember that little thing, COVID? There was a little thing we had called COVID-19. It was a little problem we had a few years ago. It was going to crash the entire world economy and everything. The market dove when everything started sheltering in place and everybody had to go home and everything starts shutting down and all this. The market dove, and it went down and down and down and down and down It was back up to where it started.

When the bombs first started falling on, I ran the other day, the market dove. It went down a couple of points. It's been a week or two. It's back up. The market's basically flat as of this recording for this year. Net, net, net. Out of all the ups and downs and backs and forth. If you jump in or jump out every time you see a bad report on CNN or Fox, you are never going to stay invested and you're never going to make any money. No, you don't do age-based investments for 529s, for God's sakes, and you don't ever do that. And you don't sit and fret about what the market is going to do based on a war, if you even call it a war, based on a series of bomb runs. Again, the markets just are not that tender. Here's the thing, you should never put money in mutual funds that you're going to leave a a week. You should never put money in mutual funds that you're going to leave alone for a month. You should never put money in mutual funds if you're going to leave it alone for six months.

You should never put money in mutual funds unless you're going to leave it alone 3-5 years. Over three to five years, all of these problems that drive the market down become a distant memory, and all you will see is a trend line overall up.

Here's my investing strategy. Time in the market beats timing the market. What you're doing when you get spooked by this is you're timing the market. What you're really doing is you're selling low, and then you're going to buy high because you don't know when the bottom is. What do you do? You cash out hoping that you're going to avoid this big dip. Then what happens is when you get back in, it's already back to record highs. You're really lost out because the best days usually happen after the worst days. What Dave and I are doing, we're not changing our investing strategy at all.

Yeah. Your daughter goes to college in August. By August, it'll be a memory. By the next August, and by the way, you don't need all of her 529 money the first year she goes to school. If you do, she didn't have much in the 529 to start with. You're just going to take out enough to pay for that year or that six months or that semester. That's all you're going to use. The vast majority, let's say you got enough for four years in the 529, the vast majority of what you need is not going to be used for 2-3 more years. Over the next 2-3 years, the bombing of Iran will be a distant memory, and it's a much smaller blip on the radar, no pun intended, than COVID was. Covid was a real thing in terms of what it did to the market, but it recovered dramatically fast after that. You go back and look at March of '20 and watch what the stock market did. Go look at the chart for March of '20, and you'll see it come right back up in April and May and June.

These Age-Based Investments Day, for people that don't understand, what it's doing is moving your investments to more conservative things like bonds as your kid gets into the college phase so that it stabilizes. But what you're missing out on is the returns. Look at the last three years. It was up 23%, 25%, 17%. If you were half in bonds, you're not going to see those returns.

Yeah, and you've affected your kid's ability to go to college at that point. No, no, no, no, no. If every time you get afraid by watching the news, quit watching the news. Because it doesn't matter. We were going to Cabo the other day, and some of my My friends and wives are like, Oh, they have problems in Mexico. You can't go to Cabo. I'm like, It's in Cancun. They got to take a geography class. They got to take their problem in Chicago, so I'm not going to Nashville. That's just dumber than crud, people's perception of stuff. I'm canceling. What are you canceling for? We're not a thousand miles away. They burned a car in Chicago, so you're not going to Nashville. I mean, that's just dumb. It's the same thing here. It's overreaction, the fear that the news media just spreads all the time. And so turn off your television is a good idea for your investing strategy, and just get off the Fox website because it's just the world's coming in, the world's coming in, the world's chicken little lives there full The sky is falling, the sky is falling. Open phones here at 888-825-5225.

James is in Raleigh. Hi, James. How are you? Good. And yourself? Better than I deserve. How can I help?

So I went through my financial transactions the other day, and on my wife's phone, I found that she has spent a minimum of about $5,000 sending to one person because she has an addiction to pain pills that we're currently trying to get under control. And she has dealt with five or six people over the course of the last year, and I've been noticing more and more money group missing. I had about $600 saved up, and that went missing Every time that I asked her about it, where the money went, she can't give me a straight answer. Well, I finally figured it out.

If your wife is addicted to drugs, take her off of all of the accounts.

Well, I did. The problem is that she will grab my phone while I'm asleep. I'm a truck driver, so I'm home two, maybe three nights.

Put a passcode on. Put a passcode on your phone, man. If she's an addict, she cannot have access to funds.

Okay. At this point now, I don't want to leave her because we do have two kids together. They're both getting ready to start school.

That doesn't mean she has to have access to funds. She has no access to money, period, if she's an addict. It's not good for her, dude. She'll kill herself.

I've tried to explain that to her.

I don't care about what she thinks. There's no explaining. I don't have to explain it. You get no money until you're a clean of drugs, period. I'm not explaining, I'm I'm protecting you from yourself, and I'm protecting us from you until you get off these pain pills and you're dry. And so we got to get you some help for that, Baby doll. I love you, and we're going to walk through this together. But you got no money. I'm not giving you. You have no access to no money, no how, no where when you're doing drugs. Period. That's a nonstarter. You just got to start with that and end with that and make sure she's actually getting the help she needs to get healed, man. Then when she gets healed and becomes trustworthy again, worthy of trust, then we start working this like two functioning adults together. But until then, no. Angela is in Phoenix. Hey, Angela, what's up?

Hi, good afternoon. Thank you for taking my call. I'm excited to see you guys next month in Phoenix.

Yay. Glad you're coming. How can we help?

I was in a car accident in April of 2020. I'm okay and went through several physical therapy sessions, maybe eight sessions. I was represented by law firm Fast forward in 2023, the case closed and I only got $4,000 settlement after everything said and done. And they told me everything was settled and was asked to find the client director. And I was only 24 at that time and nothing No, it's nothing, anything better. Fast forward to 2026, last week I got an email from physical therapy that I owe them 3,800 because the law firm didn't pay them and I have to pay for it. Here, six years from now, I was able to confirm that everything was legitimate, and I just don't know what to do. Do I just pay them?

Have you talked to the law firm?

No, not law firm, the physical therapist.

I know. You said the law firm was supposed to pay it and they didn't.

Yes, they didn't. And when they said- Did you call the law firm that was supposed to pay it and didn't? They didn't. They told me last week when I was there- Did you call the law firm that was supposed to pay the bill? Yes, I did.

What did they say?

They told me that at that time, they said they cannot get- No, I'm talking about this week. Yes.

This week, you got a bill that they were supposed to have paid. Did you call them this week and say, How come I got a bill that you were supposed to pay?

It's not even a bill. It's just an email from them.

Honey, did you call the law firm?

I did call the law firm.

Okay, jeez. What did they say?

They said at That time in 2023, before they close the settlement, they cannot get a hold of the physical therapy. That's why they asked me to find a directive client that I have to take care of everything. But from what I can remember, they told me everything was settled, even the medical bills from the hospital.

Okay, so you signed off knowing at the time, they have a piece of paper in their file that says you knew at the time that they had not paid the physical therapy.

No, they told me at that time that everything was settled and I don't have to worry about anything. And come six years after, the physical therapy was emailing me last week about it.

I got that. What I'm trying to figure out is what the law firm is, what's their excuse for not having paid this? And how did they say it was your fault?

They said at that time, they cannot get a hold of that physical therapy. That's what they told me last week.

That doesn't matter. They still They'll have to pay it, whether they got a hold of them or not.

You're telling me for three years, they haven't been able to get in touch with the physical therapy place?

No. From 2020 to 2023, they didn't settle it.

Yeah. Okay. Well, I think I'm going to be talking to the lawyer that was supposed to have paid the bill, and I don't really want to hear any excuses about why they didn't pay the bill, and they need to call the a physical therapy company and get this settled. Because that was their job originally. They withheld money from your settlement to pay your bills, and then they didn't do it.

Yes, the settlement was 14,000, and I only got 4,000 in total.

Which means you got nothing by the time you paid this bill. So the only person who made any money on this was the lawyer. Oh, there's a shock. Okay. Oh, my gosh. All right, well, I'm going to be all up in the business of this law firm saying, You guys are supposed to have paid this bill, and you didn't, and you need to contact them, and you need to negotiate this. If it does land back on you, Angela, you probably can settle it for four or $500. Just tell me, it's a six-year-old bill, and you haven't gotten it so far in six years, and I'm not paying you. The law firm was supposed to pay you, but I will give you $500 for settlement in full, and then you can go after the law firm that's supposed to have paid it if you want to do that. But if you want to settle it, that's fine, or you want to dump it back in the lap of that law firm. I'm dumping it back in the lap of the law firm. I'm going to have some real stern conversations with them about how they should have taken care of this at the time.

I'm not sure I understand what your deal was with them completely, but it sounds like they were supposed to have taken care of this and didn't.

I'd find some documentation. Right now, it's well, they said five years ago that they were going to do this thing. I'd get some, What did you sign in writing?

What did it say? Yeah, but a medical bill, regardless I love what the story is, a medical bill that has been unpaid for six years, you can settle it for pennies on the dollar. Just make them a $500 offer to go away, and they'll go away and give them $500 and get it in writing and keep the piece of paper forever. Once you settle this. That's probably your easiest route. But there's something about the injustice of the law firm being the only one that actually makes any money on this transaction. Oh, jeez. Don't get me started on that.

Is it one of those billboards that she caught one of those numbers? They took her to the cleaners on this one, getting 70% of the payout.

No, they got it all.

Well, she said she got 4,000.

Yeah, but now she has 3,800. Which It takes it down to zero. That they were supposed to have paid. If they had paid that, she would have got nothing. So they got it all. That's my point. That thing's net sum of zero.

I'd be the squeaky wheel.

Yeah. I'm getting up in some folks' business here at a minimum just to have some fun with this. Because there's nothing more fun than yelling at lawyers. That's about one of my favorite things.

That pastime for Dave.

Sorry about that. Sorry you're facing that. If you want the easy way out, I just settled it for 500 bucks. Call the physical therapy people and say, The lawyer is supposed to pay it. I don't owe it. I'm going to turn it over to them. Or I'll give you 500 bucks for settlement in full, but I'm not giving you 3,800, period. Not going to do it. Sue me. Laura is in Washington, DC. Hi, Laura. How are you?

Hi. Thank you for taking my call.

Sure. What's up?

My question is, how do we navigate wanting to start a family, but still being in baby step two?

Just start a family. I don't wait to get out of debt to have kids.

What are your concerns? What are you worried about?

I think we just feel anxious and fearful. Everyone says having a kid is a big expense.

It's not. They don't eat much. They're tiny.

Yeah.

They really don't.

Do you guys have any money saved?

No, they're in Baby Step, too.

You got a thousand bucks? Yes. Okay, so let's just stack up cash once you're pregnant and go, All right, for the next nine months, we're just going to save and save and save and save. And once you and baby are home safe, we can push play on the debt snowball. But for now, just make your minimum payments.

No, for now, you pay full debt snowball. You pay everything on the smallest debt. When and if you get pregnant, then you push pause on your debt snowball and pile up cash instead of reducing debt until baby comes. Okay? And then you use that cash to pay on the debt if pay becomes… I mean, I'm sure you've got health insurance, don't you? Yes. Okay. Covers labor delivery, right? Yes. Okay, good.

You can find out your deductible, your out-of-pocket max.

What's your household How much does it cost?

$240 gross.

$240,000?

Gross.

Yeah, well, it's not gross at all. That's pretty cool. How much dead are you guys at? I think you can afford a baby kid. Okay.

People have babies all the time.

Or six. I don't care. I mean, you're in good shape. You're fine. There's nothing to be anxious about. But you do have to focus and be thoughtful. But children do not cost $300,000. It's not that big a deal. I mean, little money on some diapers and formula, and they don't take up much room. Unless you go crazy, go spend $100,000 redoing the nursery that the kid doesn't even know it's there. But that's you going crazy. That's not the kid. That's you. But I mean, they just need a place to sleep. I was with a guy the other day. Where was I? He was telling this story. Oh, I know where I was now. He said when he was born, his parents lived in a one-bedroom studio apartment, and they had a Chester drawer that they bought at a garage sale, and they opened up the top drawer, and that was his bassinet.

That's incredible. That's old school right there.

That's how he started out life.

He doesn't even remember.

He had to tell him about it. He's a wealthy guy.

That's incredible.

Kids don't cost much. You just need a dresser drawer.

Just 31.

Welcome back to The Ramsey Show in the Fairwinds Credit Union Studio. I'm Dave Ramsey, your host, George Campbell. Ramsey personality is my co-host today. We're so glad you're with us. Open phones at 888-825-5225. Marie is in Philadelphia. Hi, Marie. How are you?

I'm good. How are you?

Better than I deserve.

What's My husband has committed financial infidelity three times, and every time that he was caught, we had to refinance and all of that.

So he runs up debt behind your back and lies to you?

Yes, 100%. I told him the third time, If he does it again, we will divorce. I'm not doing this anymore.

So he did it again, and are you divorcing?

I don't know. It just happened two weeks ago.

The third time was two weeks ago?

The fourth time was two weeks ago. That I found out. He did not come clean. I found it. My friend does financial whatever for a company, and she helped me do a credit check on him, and we found it.

Are you divorcing then?

I checked in yesterday online to see how to get divorce papers. I'm still going back and forth. We've been married 41 years together. My question is, I home-schooled our five children. We have 11 grandkids. I started a cleaning business. It's just me after our youngest son graduated. I've been taking that money and we put it into a savings and we consider it like fund money, so we use it for vacations, house projects, whatever. My question is, do I go and get his name off of that account?

You need to go see a divorce attorney and let them advise you on what you're allowed to do in the state of Pennsylvania while filing divorce, whether you can take names off of accounts or not. I don't know if you can do that there. But you've got to protect yourself in any way that is legally allowable. But you certainly need to take pictures of the account so that you know that that money is there. If it disappears, then you've at least got something to hold against him while you go through the divorce. For instance, how much is in that account?

My My account, 7,000.

Oh, so it's not much, okay.

And he's never touched it thus far.

Well, we used it for him.

I mean, he's not stolen from it and lied about that account?

Not Not that I know of because... Okay, so I'm dyslexic with numbers. He knows that. But he always has paid our bills. He's always on our finances. I put my guard down last year. I should not have done it. He went and started using a credit card, and I was just like, Son of a gun, I just can't believe that you did this for the fourth time in our marriage. I don't know because I- Well, the $7,000 is probably going to be used as your attorney's fee. Okay.

Do you have any assets? Do you have any money in the marriage?

We have nothing.

No, we have nothing.

You own a We own a house. That's it.

What's it worth?

No. My daughter's mother-in-law, she's a realtor, and she said she thinks she can get between five and six, 100,000.

What do you owe on it?

It's an acre lot.

What do you owe on it?

Nothing. It was paid off five years ago.

Okay. Have you guys attempted marriage counseling?

We did When he did this the last time and it got better, the problem was so… He said no more credit cards, so we had no credit cards, and we took a trip for our 40th anniversary last year to Utah, and they would not let us rent a car unless we had a credit card.

No, that's not true.

Well, I don't know. He said he tried. They won't take debit cards, they won't take checks, they won't take cash. He said, If you have to rent a car. You have to have a credit card. So he tried. I think it's Capital One. And so he did, and I should have taken it. And I asked him the other day, I said, I want the credit card, and he said, no. And I was like, Okay, well, there's that.

Is your name on any of these debts or cards?

The ones that were paying $80,000 off. So we consolidated, so they take out $600 every month from our checking account. I guess they barter with the companies to pay off whatever they say they're paying at all.

Did you work with a debt settlement relief company, one of these scummy companies out there?

Yeah, that's what she did.

Yes, that's what we're with.

Okay.

Yeah.

She have $80,000 in debt on credit cards, and you have a $500,000 paid for house. Do you make enough to live on?

I do not. I only work two days a week. The other three days, I babysit four of our grandkids. How are you going to eat? That's my… I'm going to have to work full-time. That's the only way.

How old are you?

Me? I'm 60. Okay.

Maria, I'm so sorry. I wish marriage counseling would have fixed this, but it sounds like your husband is just whatever. I don't know what he is.

Do you know where he's spending all this money? Is he an addict of some sort?

No. That's what I checked on. My friend, he finances for Armstrong, she said everything shows it's just gas and food and one will on lows. It's all like petty stuff. It's like, I don't understand. I don't know.

What does he make?

It's frustrating. He almost made 60,000 last year. He had a job, the same job for 35, 36 years. They closed It was a printing company, and of course, computers took over that. He got a job, and he doesn't have to work clean ship anymore. He doesn't have to work weekends, but he took a big pay cut.

So Well, Marie, I think you need to get in touch with your pastor, get in touch with your marriage counselor, and you need to sit down and have an initial discussion with a divorce attorney, and you need to look at the reality of what this is facing here. I'm sorry you're facing I wish your husband, wish I could yell at him and make him behave, but I can't, and you can't either, obviously. I can't believe 41 years down the toilet with grandkids everywhere and everything else. That's just devastating. But I don't understand a guy who's willing to give up all of that either just simply for the use of a credit card. It doesn't make any sense at all. And lying to his wife. Yeah, some pathological lying. As a freaking habit. Some pathological lie. Horrible. Just horrible. I guess it's proof that integrity matters even after 41 years.

Yeah, that's brutal. We see a lot of this with couples that have been married so long, kids are finally out of the house, and then they have to face the spouse and go, Oh, my gosh, this misbehavior. I've been dealing with it and putting up with it for far too long.

Hey, guys. Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now, you can get that same help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to ramseysolutions. Com and try Ask Ramsey today. That's ramseysolutions. Com. Well, we wish we could get to every single call and every single question here on the show. If you have a money question and you want an answer for your situation, head on over to our website and use Ask Ramsey. Ask Ramsey is our free AI tool that is built and trained on hours and hours and hours and days and days and days of this show on Proven Ramsey principles. You're going to get an answer, pretty much the same answer you get exactly here on the air, because that's who trained it.

Maybe even nicer.

It's almost guaranteed to be nicer. You'll get the answer the same way we do it right here. Ask Ramsey. You can ask your question today at ramseysolutions. Com. Completely free. Just click the link in the description if you're listening on podcast or YouTube. Ask Ramsey. George, this little project has exploded. I was meeting with one of our leaders today, and he was telling me the bazillion people, the numbers are crazy. The number of people that are going to ask Ramsey, it's working. It was a good idea, but I didn't know if it worked.

Yeah, well, you put a tool out there and you go, Well, people use this instead of trying to search the internet for a random answer, and it's working.

Well, and you don't have to ask your question in front of 32 million people, which you do on the show.

That helps, too.

Sharon is in Atlanta. Hi, Sharon. How are you? I'm good.

Just fine. Uncle Dave, how are you?

Better than I deserve. How can I help?

Okay, this is my question. I have almost $200,000 in consumer debt.

Good Lord.

I know. $252,000 on the mortgage. And so My question is, should I stop my Roth that I have? Yes.

You should stop everything and clean up this mess. What in the world do you owe $200,000 on?

I owe about 71,000 credit cards, $35,000 in finance companies, and $61,000 in taxes, and $20,000 on a car.

Why did you not pay your taxes? Well, I am paying them. I just haven't paid them all. No, you didn't pay them. That's why you have $61,000 in debt.

I'm working on it. Look, I just... Look, Uncle Dave, I found you at the end of last year, and I have turned my household upside down.

I'm working on it. I'm glad. I'm glad. But I mean, why did you not pay your taxes?

I haven't paid them in full, but I've been paying on them on a monthly basis.

I know. I'm asking why you didn't pay them originally. I'm serious.

Okay, the reason why is because with my husband's job, he's a contractor, and you know if you don't lay that 25% to the side- Yes.

That's right. But you've not been doing your quarterly estimates and you got behind because he's a 1099 guy.

We got behind, but we're cleaning it up.

That makes sense. Okay, so what's your household income, Sharon? 286 before taxes. That's good news. So when you decide to turn this house upside down, you can shake this 200K out pretty quick, can't you?

That's what I'm thinking. But that's what I'm planning on doing. But this is the first question, one of the first questions I have, the taxes come first, correct?

Yes, ma'am.

Okay.

Because the interest rate is unbelievably and the penalties are unbelievably high. And more importantly than that, they have almost unlimited power to screw up your life. Got you. They can just show up and take all the money in their checking account. They don't even have to ask a judge. They just do it.

Okay. So this 6,000, I'm thinking is that probably in the next 1, 2, 3, 4, maybe 5 to 6 months, I can have the 6,000 paid off.

That's good. You don't have any money in savings that's not retirement?

In savings?

Well, about $3,000 or $4,000. That's about it. Okay. That needs to be $1,000 and we throw the rest of it at the taxes. Then let's get the budget done, and you and the husband sit down, look at that budget, and go scorched earth, no life, and we're Getting these taxes gone. Once the stupid IRS is gone, and we file quarterly estimates from this point forward so we never get back there again. Right. Definitely. Good. Then we're going to work the rest of the debts off, smallest to largest, using the debt snowball. Stop all investing, stop all savings, and let's focus on this because you make enough money to not be this broke.

Right, definitely. Well, you know what?

I didn't realize I was this broke until I started listening to you. That almost It sounds like it's my fault.

If I had listened to you, Dave, I wouldn't be here right now. Oh, my goodness.

You know what? I turned this house, I turned these bank accounts that we have upside down for the month.

Good. Shaking the nickels out of it.

Is he on board, too?

Oh, yeah.

Well, he had no choice because he had been doing the budget for 43 years, and I'm like, Okay, we're going to do them together.

So it's somewhat my fault. But as of right now- Where did he learn how to budget, Congress?

No, I love it. You guys are great. That's wild. You're going to do good, Sharon. I'm proud of you. Keep it up.

You probably have 18, 20K slipping through your hands every month. Now we just got to get control of it.

Yeah, you're going to be able to knock some stuff out fast. Hang on, we're going to send you a copy of the book, The Total Money Makeover, to make sure you get all your questions answered. It takes you the baby steps on steroids. As you're working through this, you're going to want to know a few of those odds and ends. You call me back anytime, kiddo. I got a feeling you're going to do good. She's on fire.

Yeah, she's spunky. She's on fire. I like that. Fired up about it.

Turn these bank accounts upside down, shake all the nickels out of them.

She's flipping the couch cushions up, looking for some change.

I'm telling you, this is going to happen. Ty is with us in Milwaukee. Hi, Ty. How are you? Good. How are you, dad? Better than I deserve. What's up?

I'm new. I have been new to listening to your show. And by the way, it's a great show.

Well, welcome. Good to have you.

Yeah, I had a question. My fiancée and I were getting married October. Good. We have a wedding to pay for. And then we also have some student loan debt as well. We have some money saved up.

How much do you have saved up?

We have about $50,000 to $60,000.

Okay. How much are we spending on the wedding?

The wedding is going to be a little pricey. It's going to be around that $50,000 to $60,000. It's going to be a big wedding, both of our dream weddings. We both want all of our family members and friends there.

What's your income?

My personal income or my fiancé and I? Or both, yeah. It's around I would say, 180.

Yours is? And what's hers?

190. Mine's… Well, mine's…

No, that's yours. You make 200,000 a year, roughly. What does she make?

No, I make 120, a thousand a year.

Oh, and she makes 80?

She makes around 80 to 90. She just got her raise. Okay. So I think she's more on to that.

How old are you guys?

My fiancé is 26, and I'm 25 turning 26.

You're right. That is a pricey wedding. It is not in the range of insanity based on the fact that you have such a wonderful household income. But it's getting close. You need to put together a detailed project management budget for the wedding because otherwise, you'll have scope creep and you'll spend 70 grand.

Right.

You need to say, listen to me, you need to lay this out and say, this is how much we're going to spend on the dress, this is how much we're going to spend on the hors d'œuvres and the reception, this is how much we're going to spend on the videographer, this is how much we're going to spend on the venue, and detail it out and then stick to that plan and then put the number at the bottom. Let's call that number 50,000. That's plenty. Then manage to that number and then take that 50,000 and set it in a separate account right now for the wedding. Wedding is off the table now. Box is checked. Now we start moving with everything between now and the wedding of your income that you can free up to throw towards your debt, and she starts throwing any money she has towards her debt until you're married.

Okay. So you would pay off the wedding in cash?

You have 50,000. Move the 50,000 to the wedding account. That's over. It's done. Now we focus on the debt with all of our income, and we don't let the wedding creep above 50,000 because we manage a budget. The two of you sit down and plan it like two grownups instead of two people wanting a fairytale, because that's where They wouldn't end up spending 100 grand when they meant to spend 50.

You got a big wedding. It just gets bigger. Mom and dad just started throwing people on there.

I wouldn't know anything about that.

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Com/careers. Jay is in San Francisco. Hi, Jay. How are you?

Good. I'm well, Dave.

Thank you for taking Can I take my call. Sure. How can we help?

Well, how do my wife and I change our mindset after we've been spending, practicing, really, the baby steps for so long? And now we're retired, and we lives frugally. How do we change the mindset to want to spend some of this money and enjoy the fruits of our labor?

Good for you. What's your nest egg? What's your networth?

Networth is about 2. 5, about half of that in our home, and half of it in retirement fund.

Way to go. What do you live on a year? What should take you to live?

We have a monthly income with two retirements, two Social Security, and an annuity of about $9,400. We usually can live pretty comfortably each month on that. We don't really touch the retirement fund much at all unless we're going to do a big trip or something.

Yeah, well, good for you. Well done. Very well done. How old are you guys?

We're 66. We've been married 44 years and been practicing the principles since we got married.

Way to go. Proud of you. Very good. You started with nothing and you're a multimillionaire.

Yes, we are. Praise God for that.

Way to go. Very good. Good work. Baby Steps Millionaires. All right. Well, a couple of things Sharon and I have learned to do. One is, even though you've been living very responsibly and very adult-like for a long time, one of you is more of a spender than the other one. Yes. Who's that?

That would probably be me.

Okay. At my house, it's me too. Sharon's the natural saver. When in doubt, she saves. When in doubt, I have fun. You can lean into that a little bit and say, you need to initiate some of the things that we're going to enjoy Waste some of this $2 million. We're 66. One of the things we instituted around our house is when we have a fun idea, like a trip or something we want to do with some of the money we've worked hard for, we say, Why wouldn't I? Why wouldn't I? I like that.

You have to prove to yourself that it's a bad idea.

Friends call up and they've got a house in Telluride, and they say, Hey, come up and go skiing for three days. And we say, Why wouldn't I? And we go. That stuff. That's a good thing, the way of looking at it. The next thing is that learning to enjoy the money is an underdeveloped or atrophied muscle. You got to work it out. You got to start working out the spending a little bit. You have to... Responsible spending muscle has to be built up. When you say, Okay, we're going to take this trip. Oh, that didn't kill us. We're going to upgrade Mama's car. Oh, that didn't kill us. We're going to put $10,000 in each of the grandkids' accounts for their college. Oh, that didn't kill us. When you do a few things like that, you got to go, Oh, I didn't die from that, and I'm not homeless and penniless, and I've still got $2 million after I did all that. So your brain starts to reset and go, I can do a few things, and it doesn't kill me. The next thing is, as we increased our generosity, which removes any guilt from enjoying some of the money.

Yes.

If I put $100,000 over here and help this situation with this ministry, I can spend 10 or 15 on sharing it with me and not think anything about it.

Right.

It's not technically an offset, spiritually, morally, mathematically, it's not an offset, but your generosity muscle seems to be attached to your spending and enjoyment muscle.

Yes, I appreciate that.

We've been fairly generous, and I think that that's not as much of an issue as just maybe going over the top on an over-the-top type of vacation where we spend 30 or 35 on a cruise and say it's one of those cruises where you have to wear something besides flip flops, board shorts, and tank top to dinner. You know what I mean? I'm with you. But again, 35 You got a million two sitting there in the 401k. It's making 120,000 a year or 150,000 a year in growth if you don't even touch the nest egg. The 35,000 is not damaging you. You start spending 350,000 on something, now we got to stop and think about it.

Yes, sir.

But that's not usually what we're talking about in these conversations. Just develop that out and say, Okay, why wouldn't I? What happens If this goes wrong, if I just burn this money in the middle of the floor, does my life really change? You can burn 35,000 in the middle of your floor, your life won't change. Yes. That gives me permission then to enjoy that much without… Because I'm not being irresponsible. If my life changes when that amount of money is burnt in the middle of the floor, then I'm starting to be irresponsible.

Yeah.

Have you and your wife sat down on a nice date and started dreaming about, here's the annual plan, here's the vision for what we want to do this year, and just mapped it out?

Well, we have a map for this year. We got invited by some friends to go on this trip for 2027, and so that's when this all came up, and I thought, Well, why wouldn't I?

Why wouldn't I?

There you go.

Now's your chance to ask that question. Yeah. Yeah. I love it. What I do, Jay, because I'm real frugal, and it's hard to break me from that. What I do is I force myself in the every dollar budget to put a line item that makes me a little bit, throw up a little, where I Oh, gosh, I got to spend that on myself. I'm going to give that much money away. Then you guys keep each other accountable. You guys get to come up with your own. Over time, it'll be a nothing burger. Over time, Dave, as you've spent more and more money, you go, Oh, that didn't hurt as bad as I thought.

Yeah, and I'm just looking, okay, I'm 66. I got maybe, what, 20 years or something? God willing to pre-delize. How bad can I screw this up? I really can't at this stage. Like Jay, we did so much that you'd have to really concentrate to mess it up in the next 20 years.

Well, there's a part where the compound growth and the math takes over, where you'd have a hard time spending all that before you go.

The goose is laying a lot of eggs, and you'd have to eat a lot of omelets in that 20 years. I mean, I have to really bust some stuff up. That would be the thing. Congratulations, Jay. I'm very proud of you. Tom is in Louisville, Kentucky. Hey, Tom, welcome to the show.

Hi, Dave. It's an honor to speak to you. Thanks so much for taking my call.

Sure. How can I Can you help?

Yeah. My wife and I need help with a real estate decision. We've made some mistakes in the past when it comes to real estate and hoping not to make a mistake this time around. I'm active duty military. We currently live in Kentucky. I actually have an upcoming PCS. We're going to be moving to New York this summer, and this will likely be my last move before retirement. So we're only going to be in New York for about five to six years at the most. So my main question is, we have a rental in San Antonio. We owe about 120. It's worth about 270. We're trying to decide whether we should just continue to rent that house or sell it and use it as a down payment to buy a house in New York. But my concern with that is the fact that we're only going to be there for such a short amount of time. I'm not sure with the current market and the uncertainty if that's a good decision or not.

Well, first we decide if we're going to buy in New York. If we're going to buy in New York, then yes, I would liquidate the San Antonio and put it as a down payment. If you're selling and sell the house in Kentucky, if you own one there and put it as a down payment, if you're going to buy. Now, if you're going to buy is answered by this. The community What community is it that you're moving into in New York, is it a military-only community or is it a community that has some military in it?

Yes, it's actually West Point, New York. We have the option of living off-post and just taking that BAH, that monthly housing allowance, applying it towards a mortgage, or we could live on-post, in which case we would not receive that amount of money. It would essentially be like renting while we're there.

Right. Okay. If you're off post, are those homes only, is most of the people living in those areas military? Because that's a small community, isn't it?

Yeah, it's a pretty small community, smaller towns and villages surrounding West Point.

I'm thinking if you get ready to resale, you probably have a lot of competition because of the other people that they're moving out that are military. So you may not get great appreciation. Study the appreciation and study the speed of sale. If the appreciation is good and the speed of sale is good, then go ahead and buy. But because there's a lot of competition, if it's slow to sell and slow to appreciate, then I would not buy.

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Our scripture of the day, Psalm 84: 11, For the Lord God is a son and shield. The Lord bestows favor and honor. No good thing does he withhold from those whose walk is blameless. Al Bernstein said, Success is often the result of taking a misstep in the right direction. June is in Grand Rapids. Hey, June, how are you?

Good. How are you?

Better than we deserve. What's up?

I am just calling. My husband and I bought a business this year in January, and I am just wondering I'm wondering if it is time for me to quit my corporate job and strictly just work for the business only that we purchased.

What's the profit on the business?

It's going to be $400,000 to $500,000 a year.

This year? And we're tracking that already?

We have profited $80,000 already for January and February together, and we have paid $40,000 on the note so far. We're trying to pay it off. We have a note through the owner.

What's how much is your note to the owner?

It is $780,000.

Okay. What do you make in corporate America?

$75,000.

Okay. If you quit and go to work at the business, does that lower payroll at the business?

I'd be making $45,000 because I'm currently making $45,000 at the business now. I am working for both corporate- What are you doing in the business? I'm doing AP and AR.

Okay. All right. Have you got other people doing that as well?

Nope. It would just be me and my husband doing it together. He currently works for the business, and we have county and me. It would be six employees.

Okay, but my point is you're not saving the business any money by going to work there, and you're not making the business any money by going to work there. Correct. It's a net loss of 75,000 to your household?

Yes.

Why is it your itching to do that?

Well, we got married in 2013, bought a house, paid that off in three and a half years, sold Held it after eight, bought a new house, paid that off in three years. We're completely debt free except for the business loan. We have a five and eight-year-old, so corporate business is just getting really, really stressful on working 12, 13-hour days, not eating lunch, not taking a break.

Are you wanting to work part-time in the business and stay home with the kids, essentially? Yes. That's worth the 75,000 reduction in household income for you to have that?

I would be making 45.

You're making 45 now?

I'm making 75 corporate.

But you're making 45 out of the business now? Yeah. The net loss is 75,000. Yeah. Yeah. Well, I mean, you're going to be making the same money as the business and your husband's, and the profit is both of yours, and you're plowing most of the profit into debt reduction, so you can clear this debt in two or three years, right? Yeah. That's your idea. We have 15,000 in a money market account, and we have 45,000 in our savings.

Good.

Okay.

And 250 in retirement. Okay.

I wouldn't put anything else in retirement until you got this debt cleared, but it's a baby step six debt. So you're in the right place. As long as you guys are able to keep your lifestyle really, really low and reduce that 700,000 very, very quickly, I don't quite think you can do it in two years, but I think you could do it in three.

That's like 268 a year toward the debt. A little over 20 grand a month would clear this.

Yeah, that was our plan is try and pay it off in three years.

Yeah, I like that.

Our household monthly expenses about 3,200 a month.

Yeah. It changes the equation Knock a year off if you kept working. You could do it in two years if you kept working. So your trade-off is one year. You're going to be in debt one year longer because you come home.

Okay.

You put that in one hand and put home in the other hand, and there you go. That's your Balancing Act, right? That's the scales of justice, so to speak, right? What tips the scales here? I think I'm coming home because I But I think you're burn out on the corporate crap.

I am.

Yeah. And I think you've got the margin. Is this business really stable, very predictable environment?

Yes. My husband's were working there for 15 years, and the gentleman who's selling it to us is giving us a heck of a deal on it for as much profit as it brings in every year, I believe.

But the field… I didn't ask what the business does, but whatever the business does is a predictable environment for the coming three years?

Yes, it's an electric motor shop. So do operations for factory motors that go down, refrigeration, motorcycle down, air, AC units that go down. Yeah.

Okay. All right. Very cool. Yep, I would quit.

Okay.

That was easy. Well, it wasn't easy, but thanks for talking it through with us. That's interesting listening to all the different variables that go into that decision and to try to say, Okay, what would I do? That's where we are. The quality of life when you've got that income coming in, the quality of life starts to be a big decision. Her being able to not work 12 hours a day and not put up with the... They're using her up for 75 grand. That's just crazy.

It's a small portion of their now household income, so it's an easier decision.

Chase is in Kansas City. Hi, Chase. How are you?

I'm doing great. Thank you for taking my call.

Sure. What's up?

First off, I'm 20 years old. I own an income about like 600 a week. I got about 800 to my name. I don't have a whole lot going on right now. But my dad killed himself when I was 16, and I was battling my stepmom to get his pickup truck that he had because that was about the only thing he had to his name. I didn't get any inheritance or nothing from him. But now I've got this pickup that I put a couple grand into to get running. Kelly The book says it's worth about 30 grand, and I don't know if I should get rid of it or keep it.

You should keep it.

You think? Yep. No questions asked? Nope. You seem very confident. Yep.

It's just simply this. There's only one of those. This is a monumental event in the landscape of your life. You were 16 years old and your father committed suicide. That's a defining episode. You can use it to define it for good and say, I'm going to address whatever he didn't address in my life so that I go on and I'm victorious moving forward, and I'm going to go be somebody. But There's only one of these trucks, and so you don't have 30,000 in it. You don't have 30,000 dead on it, right?

I'm down about two grand on it, but like I said, I don't I have about 800 to my name right now.

But that's a different set of issues. Selling the truck does not fix your career problems. You need to go get a career, get some work, start working like a crazy man, working 40, 80 hours a week and start getting some money coming in so you don't have to ask the question about selling this truck. But this truck is an emotional item. The 30-year-old version of you is going to look back at the 20-year-old Chase and go, I wish you hadn't sold that truck.

Yeah, I think you're right.

That's why I decided that so quickly. But having said that, you also have got to get these other parts of your life together really quick. I mean, by the end of the week, I want you to have six jobs. I want you working like a crazy man, where all you do is work and stack cash. Then when you get a little bit of wiggle room, you can start to pick a better job and pick a career field once you get up off of survival. You're You're not even surviving, hardly, right now.

What are you doing for work?

I work at a building material delivery company. I'm making about 20 an hour and living on my own.

You hang on.

I'm going to send you Ken Coleman's get clear assessment in his book, Find the Work You're Wired to Do. I think you just need some soul searching right now and get that purpose.

Chase, if you're not going to go work 60 to 80 hours a week and work six jobs starting right now, you do need to sell the truck. But I would rather see you, as your older brother, say, Keep the truck, because when you're 30, I think you'll be glad you have it. That puts us hour of the Ramsey Show in the Book. 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.