Transcript of Debt Isn't a Tool, It's a Trap New

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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 studio. This is The Ramsey Show. I'm Jade Warshaw. Next to me, Dr. John Delony, taking calls about your life and money for the next couple hours at least. Let's go to Jackie, who's in Milwaukee, Wisconsin. Wisconsin. Hey Jackie, what's going on?

Hey, thanks for taking my call.

Absolutely, how can we help?

All right, so my question is basically how do I stop sabotaging myself and my family and actually stick to a plan? Um, a little bit of story. My husband and I, we make about $220,000 a year, but we have about $313,000 in non-mortgage debt. Wow. Um, we have 3 kids, we're almost 40, we have no retirement, no savings. Um, I make a plan. We've been through Financial Peace, so we make a plan every month, and I just blow it by like the 5th or 6th of the month. I have no self-control when it comes to telling my kids no to activities, trips, experiences. Um, my husband says he's on board. He doesn't really help at all, so all of it really falls to me, and I have no self-control, so I'm just kind of struggling here.

Oh, why is that? Why do you think you have no self-control? Because there's got to be a basis for that. Is it that you just have this fear of losing out, like missing out, that you're feeling like, man, the time with my kids is short, I gotta get it in? Like, what's the base of that type of impulsive spending?

Yeah, and that's how I grew up. My parents, my mom was the same way, um, and now they're at retirement age and they have no retirement. And I'm really worried for them. But that's kind of how she's always lived, is just, you know, experiences come first and we'll figure it out later. So I just, I feel like I need to get it in while they're, you know, my son's almost 16, so I got, you know, short time with him left and I just feel like now, now or never kind of thing.

Interesting.

John, I know you have so much to say about this. You know what? Go ahead and go. You go.

Well, I was just going to ask you, did you shower today?

Yes.

When you go out, do you like put on deodorant? Maybe fix your hair? So, yep.

What?

And here's what I want to— I'm saying something ridiculous, right? On purpose. I want to introduce to you that you do have self-control over certain parts of your life. And those are things that you've affirmatively said, this is important to me, this matters, and I'm gonna do these things. And where anytime you're trying to change an action, right? And really live into a new identity. I'm a person who... It has to matter. There has to be a reason why I'm doing this. Because right now, what you just painted the picture for us is you wish you were like this. You wish you had retirement. You wish you had a budget. You wish you were a person that, that you could count on, but you're not going to because your mom did it. It worked out. It's, it's, you're worried about her, but it's fine. And you only have 2 years left with your son. So we're just going to do it.

And you're certainly not going to do it just because John and I tell you to do it.

Yeah. So if, if you don't want to do it, then, then go do your thing. The internal war you've created inside your own chest is tough. If you want to get control of this thing, man, we can help you there. But what I don't want to do is I don't want to just sit here and you're like, no, I'm staying in this fire pit and you keep holding the gas and the matches, like you're just going to burn yourself.

Mm-hmm.

I'd rather you just make peace with the path that you're on. My kid's 16. I think the best way to love him is to give him whatever he wants, whenever he wants, to always say yes to everything he asks. And if that's your path, I disagree with it, but man, you go do that.

Well, I think there's something that we can help you with in that today, which is to challenge even the validity or the truthfulness of that way of thinking. Um, because I, I do— I think that sometimes we think that being there for our kids is buying them what they want, And doing all of these, it's like more is more, but it's not always more is more.

It's almost never more is more. I mean, like, think about just gift number one. If you and your husband lock arms here, and by the way, y'all make a ton of money and y'all had 2 years that were uncomfortable. A, you'd give your 16-year-old the gift of seeing his mom and dad like lock arms and do something really hard together. That's a blessing because the world he's inheriting is going to take a lot of transition and change and hard work. And you would also like go out to 40-year-old him and he would never, ever, ever have to worry about his mom and dad. You would, you take that from him. That'd be a gift. And I would, I would wager those gifts are way more important than What, like another trip? Exactly. And it's not like you're not doing any trips. It's the 10 of them. And I can also imagine a world where your husband is like, I'm not, I'm not going to get on. Why would I keep getting on board? Because me continuing to get on board is just a— I'm sowing the seed of resentment because I'm going to get on board.

My wife's going to get off and then we're going to have— we're going to fight about it. I'm just— do whatever you want to do. So let me ask you this. Are you done? Are you done, done, done?

Yeah, I really am. It's, it's very stressful and I'm tired of it.

Okay, the first place I want you to go— and then Jay's going to give you a clear path— the first place I want you to do when you get off the phone here, and we're gonna hook you up with some free resources to get you started, I want you to make an appointment with a local therapist in your, in your area. Because you got, you got history here, right?

Yeah.

Okay, I think it's time, and I'm telling you Your kids having a ringside seat to watching their mom walk the gauntlet will be one of the, if not the, one of the greatest gifts you'll ever give them. Okay?

Yeah.

You're worth feeling at peace in your own skin. Cool.

Yeah, I needed that.

Okay.

All right, Jade, give her a path.

Uh, well, dang, John. Uh, yeah, we're, I wanna make sure that you do get Total Money Makeover. I'm actually gonna send you my book too, What No One Tells You Money, because it definitely approaches this from a non-dollars-and-cents side. And I sense some of the things that you're saying, uh, I talk about in the book, and I think it could really help, uh, just underpin whatever you get out of counseling and things like that. Um, the debt— there's a lot of debt here. Uh, I don't want to try to rush through it in the time, but can I offer you something? I feel like I'm supposed to offer you something else instead. What I want to offer you is something that I think will help you with your kids. And I don't say much about this, but I lost my mom. And I'm gonna tell you, the things that I remember about her are not the trips we took or the things we did. I think about how her face looked when I'd walk in the room, or if I hadn't seen her in a while and I knock on the door and she opens the door and she, how her, I think about things like that.

I think about what her handwriting looks like. I think about little inside jokes that we had, things that made us laugh. I'm not thinking about an outfit she bought me or didn't buy me. I'm not thinking about the trip we didn't take. Do you see what I'm saying? And when I think about my kids now, the most intentional things that I can do are if I just tackle my son, you know what I mean? Mom's not supposed, a 42-year-old mom's not supposed to tackle her son, but he loves wrestling. So, if I do that, I didn't buy him something. I didn't show up to another game 'cause maybe I couldn't show up at the game. But the intentional thing I did was that night when I, Tucked him in bed. I tackled him and I wrestled him down, 'cause he likes that. And I just wanna encourage you that your kids just want you. They just wanna be around you. They want you to whisper something funny in their ear, you know, make a poopy joke, whatever. And I know your kids are older too.

They need a well and whole mom and dad.

That's what they want, so.

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Back to the phone lines where we have John, who's in Houston, Texas. Hi, John. How can John Delony and I help?

Hey, yeah, I have a— trying to be quick. I have a $184,000 car loan debt in my name.

What?

It got signed into my name. I didn't know the full details when my dad made the emotional financial decision, thinking he would make a lot of money. He's a black SUV driver and his car, last car, transmission blew, whatever. Um, and I thought it was going to go into his name and my truck would go into my name, but it didn't. Um, it was doing fine for the first year, but now he's having to take care of his mom that has dementia, and he's been having trouble making payments, and he's looking for an investment. So I'm trying to figure out— I'm 21 years old— how in the heck am I going to raise a family with all this debt and missed payments in my name?

Let me just clarify. I do— I just need to clarify. It's $184,000 worth of car loan debt But it's not just one vehicle, it's multiple vehicles.

3 vehicles.

3 vehicles. Can you tell me what they are?

My truck's a GMC Sierra 1500.

Now, can I ask, your truck, that's not part of the discussion, right? Because that was— you signed for it. That's you. That has nothing to do with your dad.

Technically, yeah. Like, it would be my truck if his cars were not in my name. Yes.

Okay.

Just when you— when you look at the title of that truck, is your the only name on it or has it got his name on it?

Yes, sir.

Yeah, I'm the only name on all 3 of my vehicles.

That's yours.

You're the only name on all three of these vehicles?

Yes.

Oh, that makes sense.

Dude, this is cut and dry.

That makes this way easier. Yeah, brother. It's going to make things—

I can give you all this story and hopefully help someone out struggling with this.

Listen, it's not in your favor.

It's going to make Thanksgiving tough. It's going to make Christmas tough. But this is a pretty cut and dry solution here.

Yeah.

I had this in February of last year.

No, I'm saying what you're going to have to do to make this right on behalf of you and your family and deal with the fallout of your dad taking advantage of you, um, or it— you know what, But let's, let's don't say that. Like you saying, I'm 21-year-old man and I signed my name to this thing. But the fact that your dad put you in this situation is— That's the problem. Dads don't do that to their sons. It's not supposed to happen like that.

And what should be very simple, it, it, it, if he hasn't come to you and been like, let me make this right. I never should have done this. That's the, that's the problem.

That's right.

And the fact that you're called— He's been trying. What has he been doing?

Like, he's, he's, he's making the payments, he's doing all that, and he's trying to— he's waiting for an investment for foreign exchange rate crap.

And see, that's, and that's what I'm talking about. He's still waiting on a get rich quick for it to—

yeah, he's playing games, man. Since all 3 of these cars are in your name, the call will end with us telling you that it's your responsibility to go sell all 3 of these cars.

I can't cover the upside, like $15,000, $12,000 upside note. So how would I do that?

So let's go through these one by one. Okay. Let's go through your truck. How much is it worth? Or what do you owe and what's it worth?

Yeah, it's like $62,000.

God almighty.

And what is it worth? It's worth—

I'm pretty sure they would give me $40,000 for it at the dealership. 42.

No, if you put on Facebook Marketplace, what would you get for it? You need to look at Kelley Blue Book private sale value.

Shoot, I did not look into that. Like 25 on Facebook Marketplace. Okay, maybe 30.

Let's—

that, that's your homework. So piece of homework number 1 for you is you've got to get the value of these on Kelley Blue Book private sale. That's the number that we want. So for now, just give us your best ballpark. So your truck, '62, maybe you can get 42 for it. Fair enough?

Yes, sir.

Yes, ma'am.

Okay, what about the next one?

Chevy Tahoe. That is right now $76,000.

Oh gosh.

And it's worth?

Yeah.

And I guarantee it has 80,000 miles on it. So I guarantee you ain't going to get more than— no way it gets more than $45,000.

Okay.

No way. But it still looks brand new. It's just miles on the vehicle.

Understood. Okay. So, well, again, that's part of your homework. And then let's estimate the third vehicle.

Buick, I can get 40. No, I can't get 46. I can get 36 from it and there would be a $12,000 upside note for sure. I've already tried doing that.

So you're upside down $12,000?

Yeah, for sure. Okay.

So I would start— here's, here's, here's the thing you have to keep in mind. The purpose here is to go down in debt. That's the purpose. We don't need to drive these vehicles anymore. We don't need to— these are not our point A, point B vehicles. So if we go to the credit union, like, like John said, if we go get a loan, a personal loan for the difference on these, even though the differences are high, it's still less debt. Does that make sense? If I get a loan for the $12,000 difference on car number 3, if I get a loan for the $30,000 difference on car number 2, if I get a loan for the $20,000 difference, right? We're still going down significantly in debt. And it doesn't feel good because there's still debt to be paid off. But at least we have eliminated a higher monthly payment payment and we've eliminated the amount of actual balance owed. Does that make sense?

Uh, yes, ma'am.

Yes, ma'am.

So that's gonna be our first thing is we gotta offload these vehicles and then we're gonna be stuck with a bunch of personal loans that we have to pay off. And that's not fun. Yeah.

And, and I think you, you don't have many other options other than to go to your dad. And this is gonna be hard cuz your father has put you in an incredibly difficult situation.

Yep.

But you tell your dad, you can buy this truck, this, uh, SUV with 88,000 miles that you've put on it at this price, and I need the money in one week or I'm gonna sell it. You can't do that to me. I've got— no, Dad.

Yes, I can.

This truck is in my name and I have $180,000 in depreciating asset debt. Every day the assets you hold go down in value, but that dollar amount you owe stays the same. So, Dad, you can buy this from me. You can go— you can go take a loan out if you want that burden. But I'm guessing that his credit is so bad, that's why he had you sign for all these.

For sure.

Yeah, because I was going to suggest to you, I mean, what you could do— I don't think your dad is going to do this, but you could have your dad say, hey, we're walking down to the bank, you're getting a loan for $62,000, and then you're going to turn around and give it to me so I can pay these, right?

Yeah.

But he clearly— he clearly can't do that. That's why he said to you, son, put these vehicles in.

Let me ask you this, how did you How much money do you make a year at 21 years old?

Uh, I make $4,500 a month, so plus overtime I'm probably gonna push around $7,500 at the end of the year this year. But I get— I'm at a— I'm really blessed where I'm at. God has definitely put me in a really good position at work. But obviously it sucks because it's the only thing is that when I go trade in these vehicles or trade in one, it's like, how are they going to give me a loan when my debt-to-income ratio is way overscaled?

I would be talking to the bank about that.

Like, this is the problem.

These continue to go down in value and we're going to keep going more and more upside down. This is going to help you and me out because the end result here is one of these gets repoed, or all of them. And if these get repoed, then you're hardly getting nothing because you're going to sell it for whatever you can get for it, which is going to be, you know, far less than what I can sell it for, you know, Kelley Blue Book private sale.

And just so you know how repo works, like let's say you take that car where you're $12,000 upside down on, you go sit down with somebody at a local credit union, you say, here's the deal, I'm 21, my dad took advantage of me, I got a huge mess, and I'm doing the next right thing and clear this this up, and I know my name's on this. I want a $12,000 private loan to— so I can take this, pay the difference, and get this thing sold. If you don't get that done, they're going to take that car, they're going to repo it from you, and they're going to sell it. And then you're responsible legally for the gap between what they auction it off at to their friends—

auction—

and the balance owed. So they're going to auction it at $20,000, and you're going to owe $40,000 or $50,000 instead of $12,000. So what we're telling you is this day of reckoning is coming, is— and if they say, sorry, sir, we can't give you a loan, say thank you so much, I fully understand, I'm trying to do the right thing, and then go to the next place.

And go to the next place.

And I have to ask this question, I haven't borrowed money on a car in a long time, okay? So I'm naive when it comes to this.

How—

I can't wrap my head around how somebody, a bank, would give you this much this much debt against 3 depreciating assets like this with your income?

It was a crazy salesman. Yeah, but he was doing it for like 30 years.

I know, I know, but the interest rates have to be terrible.

I'm talking about fraudulent.

Uh, praise God, the other 2 cars are only 8%. My truck though is 18%, so that's why my car loan is not freaking going down.

Hmm.

Hey, I know I'm trying to stay strong. It's so hard.

Yeah, it is hard.

Face it, go right— you have to go right through it, brother.

That's it.

And I hate that this happened But the thing that you have to accept from this is there's not an easy piece to this. There's no part of this process that's going to be easy or comfortable or light or fast. This is going to be you leaning into something that's really tough and really frustrating and hard for a while.

And I think that for you.

Mm-hmm.

But it's just, this is how we learn.

There's only one way and that's through it.

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All right, everybody, if you're working the Baby Steps, just know that the best and fastest way to do that is by using EveryDollar. And EveryDollar is more than just a budgeting app. It's now the plan that we teach here built right into it. Okay, so you can track your progress. You can get personalized recommendations and coaching specifically for your situation. That's going to help you free up more money and work the plan faster than ever. It's like having one of us walking with you every single day, showing you the next right step and holding you accountable. So start EveryDollar for free by downloading it in the App Store or Google Play today. Let's go to Avery, who's in Tampa, Florida. Hey, Avery.

Hello, thank you for taking my call.

You bet, what's up?

Um, so me and my husband are debt-free. We would like to be in a better neighborhood and a slightly bigger house, but we want to keep our current house. The other goal that we have is to retire early. Um, can we get a mortgage for a second property, or would that sacrifice the potential to retire early?

It might. What— why do you want to keep— you said it's not a great neighborhood. What would make you want to keep the house?

Um, well, we could.

It would be additional income, um, so there's that. And then also later we would probably move back into that house, um, when we're older.

Why?

If it's a bad neighborhood?

It's not a bad neighborhood, it's just we could be in a better neighborhood, but for like better schools and system.

But okay, so it's for schools. Schools is the—

yeah.

Okay. I was just trying to get down to the nitty-gritty of what's the point if the neighborhood's not that nice. Okay. Um, so tell us what you owe on the house and tell us what the house is worth and then tell us what you're thinking about buying. Like, let's get a sense of what's going on. I already have a sense of what I think, but I wanna hear more from you.

Yeah. Um, our house is valued around, uh, $266,000 and we paid off our mortgage, um, a couple years ago. So we're debt-free there. We don't have any car loans. We don't have any student loan debt. We don't have any credit card debt.

Um, so you are mortgage-free. That's great.

Yes. Yes. We're very happy about that.

That's awesome.

So you have to be happy enough to go do it again though, right?

So we have a little bit, um, we have some cash on the side for, um, a small deposit, but If we have the incoming rent and we also have some cushion fund left over after every month.

How much? Um, so it's real numbers. Tell us how much you have cash and tell us how much your cushion is.

Um, cash we have around $50,000 and then every month we have between $1,000 to $2,000, um, left over every month.

Okay.

Okay. So what are, I mean, again, give us some numbers. What are you thinking about spending? And what are you thinking about? Because you're kind of like reversing, you're kind of reversing the method. Most of the time it's like, okay, I want to buy my current, like my primary mortgage outright, and then I'm going to turn around and buy a rental. And you're like, well, we already have a piece of property now and it's not our primary. Now we just want to buy a primary residence. So I want to know if there's a way that we can do that in cash, because here's what I wouldn't want to do. I would not— not me living in a house that has a payment and renters living somewhere that doesn't have a payment, right? They're getting the benefit of your peace.

Yeah, right.

That peace was meant for you, and now you're sitting up here in a house with a mortgage and the renters are in the scot-free place. Like, does that, does that sit right with you? It doesn't sit right with me.

It doesn't.

Um, and That's kind of why we haven't pulled the trigger on it, on, on anything. But we were thinking if we have the renter's payment and we throw all of our cushion fund to it, it would, we would be able to basically pay off that mortgage pretty quickly.

But who's, who's gonna pay for the fence repair and the AC repair and the light bulbs and the roof repair on your house that you live in now that you'll be renting out?

That would probably be, uh, so in addition to that, we'd probably have to set up a fund specifically for that house to maintain it.

Correct.

Um, well, let me go, let me go, let me go Dave Ramsey on you for a minute. Let's pretend, let's pretend, buckle up, buckle up. Let's pretend whatever house you have in your mind in the, in the new, in the other neighborhood that's a little bit better, let's pretend you have that house today and it's it's paid for and you're sitting there and you go, you know what, let's get a rental property. Would you pick a rental property in the neighborhood where that current house is and would you go into debt for it? No.

Are you there?

No.

Yeah, no, I wouldn't. Probably not.

I mean, I'm glad that you were really thinking about it. You were like, you were Jeopardy on that. I don't think you would, right?

Yeah.

No.

So that's the way— that's how we need to think about this. I get what you're saying. We have this house. It seems like an asset. Why would we get rid of it? It's paid for. Like, I see your line of thinking, but what's, what's missing there is the actual intentionality of creating the life you actually want and not just letting things fall into your life by default. What you actually want is this house in the other neighborhood, is it what it sounds like? And from what I can tell, what you actually want is a paid-for house because you went on and paid off this other house that you were living in. So those are the country roads. That's like, that's what we need to get to. So I think if you took this current house, took, went ahead and sold it and got the $266,000 or the $270,000 for it, then turned around and put it with whatever extra cash that you have, would that get you close to the house that you actually want?

Yes.

I like this.

I love it. And then in a few years, if you decide, hey, we're going to move back, there will be a house for sale and you can sell the one you have and you can use part of that money to write a check for this house and pocket the other couple hundred thousand dollars.

Yeah, I like that.

But what Jade said, I think, I think double-clicking on what Jade said, I want y'all to ask yourself, you and your spouse, like, the idea of rental property sounds good. I totally get And like for Dave, it work. I mean, he's got a whole bunch of properties. It's, it's awesome. But I want you to ask yourself, do we want to be landlords?

Mm-hmm.

Do we want to get calls on Thanksgiving morning that the sewer's backing up and we have to get somebody out there and pay for that? Do we want to get calls about the air conditioning going down while we're on vacation? Like, or do you want to pay 10 or 15% of that money that's gonna be coming in? That's supposed to be cash flowing the other house to a management company. and they're supposedly gonna take care of it. Like, right. So it's just, it's a different kind of life. And if that's the life you want to have, that's one question. That's one path. But I'm not hearing that y'all are really want to be landlords. I'm, I'm hearing that y'all paid for this house. You like living there actually, but life has, has happened and you need different schools and different support systems and all that's great. And you even wanna move back one day. That's all awesome. Just do that in order. But it's all like what Jade said in service to what kind of life do we want to have?

And the good news is if you, if you do this, Avery, if you take my advice, I'm not saying you have to, but if you do, you'll end up with a paid-for house, which is exactly what you wanted. You'll end up in the neighborhood that you wanted to be in, which is exactly what you wanted. And because you don't have a mortgage payment, it seems like you're interested in building some kind of wealth. Otherwise you wouldn't have considered a rental property to begin with. So instead of paying a mortgage payment somewhere, you can take that money and you can either invest it in the stock market and build wealth like that, or you can save up for a rental in cash one day. So if you do this, you're getting the best of both worlds and you're getting it in a much more secure way that's filled with peace. And you get to be the benefactor of it, not some tenant.

Okay. I mean, yeah, that makes a lot more sense.

I like that.

Okay.

I feel like, John, I feel like we solved the world's problem. Did we solve the world's problems, Avery?

Yes.

Good.

Good, good, good. I love that question, John. I love that because I think that the buzzword out there is real estate, real estate, rental property, passive income. And don't get me wrong. Like, I think if you purchased a house and it's a good— you purchased it the right way, the way we teach, and you messed around and did what she did and you paid it off, like your first thought is like, I got to keep this. I got to hang on to it. And you're about to do something she did, which is you're about to enter back into a situation that you worked so hard to get out of.

And it's, I think it's always asking that question. What do you want your, what do you want your life to feel like? What are you, what are you aiming for here? Right? And if you're aiming for peace and paying off our house brought so much peace to our house, then don't go back into an unpeaceful situation. Right, right. Let's, let's, man. And, and I also wanna point this out, Avery, because of the way y'all chose to do this thing, not owe anybody any money, get this house paid off, y'all could do whatever you want now. And that's a cool thing. I know when you have multiple options, it can feel heavy. Be grateful. Y'all have put yourself in a position to have multiple options.

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Right on back to the phone lines where we have Dane, who's in Denver, Colorado. Hey Dane, what's up?

Hey, how's it going?

Not bad. How can we help today?

All right. Yeah, so I have a question. It's about a home purchase. I currently save 32% of my paycheck. That's because of, I guess, diligence, but also I kind of have to. I work for the state and they require that they pull out so much and then it's met. So, that's the reason it's a little high like that. But in addition to that—

The state requires you to take 32% of your income?

No, no, not the total 32%. They require 10% and then they match 10%. And then I do another 12% on my own through Roths and stuff like that.

So where's the other 10%?

That's 22%.

Yeah, where's the other 10% gone?

No, uh, they take 10% out of my check, they give me 10%. Oh, I— oh, okay, I see what you're saying. So you're taking 22 that they're matching? I get 22 out, but as a total I'm saving 32.

Understood.

Okay. Okay.

Got it.

All right.

I'm sorry about that.

No, you're good.

So I have the ability to reduce that savings because I do, I max out Roths and stuff like that as well. The whole reason I'm questioning this is I'm trying to build a home. It's a second home. My current home is paid for and it's just a small cabin up in the mountains here in Colorado. And it's going to, the price tag, is about $225,000. I have, um, $60,000 saved. I already have the land paid for and all kinds of other stuff. Um, so I'm gonna need a loan out for— I'm estimating by the time I build it, about $150,000 is what I'm gonna need. Um, I could cash flow this, and that's what y'all are going to tell me to do, but in order to—

you're not gonna—

in order to You're not going to sell the paid-off home?

No, this is the second home.

Second home.

Yeah, it's a little cabin.

Yeah. Yep.

Um, so, uh, I'm kind of— I feel like I'm rushed against time here.

Why?

I have a, uh, because I have a 13-year-old daughter. In 3 years, she's not going to want anything to do with this.

Not true.

Building this thing.

Not true.

Yeah, why are you making that assumption?

Well, I'm just being facetious, I guess.

Okay.

But, you know, it's, it's going to be a little bit harder to get her to go up there on the weekends and all that kind of— I have a younger son too who would enjoy it. But I just feel like I'm rushing it. I mean, I feel like I should wait, but by the time I get this cash flowed, it's going to be probably 5 years down the road is what I estimate. And she'll be 18 years old going off to college and kind of defeats the point in my opinion.

Can you—

okay, so what I'm hearing is— what I'm hearing in a more abstract way is what you really care about is creating memories. So, and you do care about the location. So, as you're saving for a place of your own, is it possible that we identify the Airbnb that this is the Airbnb that we rent when we go into the mountains? And it's not ours, but we go as often as we can and we create memories there. And then when the time comes that we're able to buy our own place, no time was lost. We just now go to a different place to create memories.

That's a great idea, Jade. I'm glad I called.

Wow.

Yeah.

I'm glad you called too.

Like in, yeah, I mean, it's making its way around the internets that like, you know, kids when they turn 18, they don't wanna be around their parents, whatever. Dude, I've worked with teenagers and young adults and their families for more than 25 years, for a quarter century. That's simply not true.

Right.

Mm-hmm.

They don't wanna be around parents that are not, that they know are not on their team.

Right, right.

They don't wanna be around parents that aren't well. They don't wanna be around parents who are financially stressed and strapped and the home feels so full of tension that their buddy's couch feels less, less tense.

Right.

Even though it's grosser and more uncomfortable, like, like logistically, it's still, I can just drop my shoulders there. And so, yeah, man, create, I, I was gonna suggest get a, get a camper out on y'all's piece of land, get a silly camper that makes some memories with. Um, and here's Here's the other side.

And, and yeah, we do that.

And, and dude, I'm wrestling with this myself. I have, um, a dream of getting a big— I want a ranch is dramatic cuz ranchers are like hardworking people and I'm not when it comes to this stuff, but I'd love to have a place that was just mine with a bunch of acres on it that I could go out and goof around and fish on it and do all that stuff. Um, and I got a 16-year-old and I have that same clock that's ticking down, but here's the other side of it. I, and it just occurred to me a few months ago, so I'll just pass this along, just me and you and a couple of million people listening. What if my son goes to college somewhere else? And what if he meets the love of his life and they decide to settle down in on the other side of the country? And now I've got this big piece of dirt that I'm responsible for that I gotta take care of, but I want to go, I want to go see them. I want to be involved in their life. And if they start having kids and they, you see what I'm saying?

And so I know it definitely makes, yeah, I can see where this might work against you. Yeah, yeah, yeah, you've got that core home. Yeah, yeah.

I mean, I— yeah, and you know, I feel like— I feel guilty even having this problem, you know?

Like, yeah, don't— you, you're a guy who works really hard, and I've done everything.

I mean, we're multi-millionaires. I've saved up, you know, everything's good. It feels like I've done everything right. Like, why can't I just go get another mortgage and do this. I know I can pay it off.

Here's the thing.

I make—

here's the thing, brother.

You can.

You 100% can.

No, it— yeah, let me tell you something. Um, you could go do that. There are worse things you could do in life. If you did that, it's probably— like you said, you're a multimillionaire. It's not going to nail you to any wall. You're not. But you have decided an identity with money, and you have decided that I feel best with money when I handle this way.

Yeah.

When I'm debt-free, when I don't owe. And that's, you chose that for a reason. You chose it because it feels good in your body. Yeah. It gives you complete autonomy. I'm guessing, 'cause I know that's why I chose it, right?

No, and by the way, Dane, if you said go, if you went and got a loan today and you met with the GC and handed them already completed plans, let's pretend you already have completed plans. And they put a shovel in the ground, what, in 60 days? Like you're talking a year before y'all can even use this thing.

Yeah, you're right. Yeah.

It's already 14. All of, I, I, if to me, honestly, brother, it feels like you, your eyes have been open just like mine are to one of my favorite people on the planet, my son, in your case, your daughter.

Like, yep.

We're, we're raising them to leave. And dude, my days are filled with random outta nowhere grief that I've never expected. There's days that like I just look over and I'm overwhelmed by how much I love this, my son, right? Like, and trying to run around and anxiously do something, especially like Jade said, that violates who I am and how I've raised my kids. I gotta be, I gotta, I gotta protect against that. And I gotta just sit in the grief like, man, 3 years, it's gonna go quick. We're gonna triple down. I don't even Right?

Yeah.

No, 100%. I feel like I'm in the position I am is because I lived a life of patience. You know, I don't— I'm like you. I drive a crappy car.

I did get a nice one recently, and it's pretty awesome. Dan, I did get a new car, and it's pretty sweet. I'm not going to lie.

I got to lie.

You know what this is like? This is kind of like taking the high road. Have you ever been in a situation where somebody's, like, really disrespected you and you have the right to go off on them? But you don't, 'cause that's not who you are. You're like, "I'm just gonna stand here and they're acting crazy, but I'm just gonna be me." And I'm just gonna go, "Okay, I'm sorry you feel that way." This is like that. You're in the situation and it kind of feels like, "Man, I could really just go on and get this more." You could, but it's just not who you are. And it wouldn't feel good probably later on. And so going back to your original question, which is, should I cut back on investing to save for this build?

You could.

I mean, you're doing extra. We would say 15% of your gross income to go towards investing. Right now you're at 22%. So you could pull back, you know, 7%, and that would, it would help you go faster to get towards this goal of paying for this thing in cash. And I would do that. And I think that you should. It sounds like you've got plenty in your nest egg. And this is the time for you to do these sorts of things. You're in Baby Step 7. Now is the time that if you wanted to choose to invest more, you could, or if you wanted to choose more to take that margin and put it into other properties, you could. And so this would be you putting that money into other properties.

And Dane, um, here's a fun thing I want you to do, okay? Say, yes, I'm going to do this.

Yes, I'm going to do this.

I want you to take your daughter out to—

let me see what it is first.

I want you to take your daughter out to breakfast, um, in the next week or two, and I want you to say, hey, you're one of my favorite people in the world, and I love you more than life itself. I got 3 years left with you. I want you to create create a list of things, of adventures you want to have with me over the next 3 years, and I'll make that same list, and we're going to put it together, and we're going to go get after the next 3 years.

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All right, back to the phone lines where we have Jared who's in Cincinnati, Ohio. Hey Jared, how can John and I help today?

Hey, I was just wondering, should I— sorry, should I step away from my job to escape the toxicity, or should I stay in order to finish Baby Step 2?

Good question. Tell us about toxicity. What does that mean to you?

Yeah, right now the big thing is psychological safety. I work at a church, surprisingly, but there are times where I wonder if I'm going to come into work and somebody's going to blow up at me.

Like blow up, like a senior pastor or a staff member will scream and yell at you?

Yeah, like a supervisor. I've had a moment where I did make a mistake and, you know, mistakes happen. But I got like a call on the phone when I was at a rehearsal and it was like, "Hey, that was stupid. Why did you do that? You ruined my day." Like, I'm so pissed off right now. I can't believe that. Like, it's so stupid. And then when I would ask like, hey, uh, what could I do to help? Like, oh, nothing. Like, you just ruined my day. I'm so pissed off at you. Like, okay, I'm sorry.

So I, I'll tell you right now. Yes, you need to leave.

And it shouldn't be, I mean, if you're working, I'm not guessing that you're making like buku bucks or anything. I gotta believe. Do you know what I'm saying?

Are you?

Yeah.

Uh, for, for the position that I'm in, how much, how much are you making?

It's about $50,000.

Okay.

$50,000 pre-tax.

Right now you could run down to your local school district and say, hey, I want an emergency certification. I'm good with people and I wanna be a teacher. And you would make more than that tomorrow.

Mm-hmm.

Yeah.

And it might not be your dream of being a musician or whatever ministry, your thing you're doing, but you would be in service to people, something that you're good at, you have a passion for, and at least there, hopefully there's responsible adults that don't treat you like crap. But here's the thing I was going to say. Yeah, I think you should leave, and Jade, push back on this, um, but I think you should do it wisely. Meaning, if you don't have any money tomorrow, then you're in a way worse off situation. You get what I'm saying?

Yeah, I would not— I would not run from something. I would run towards something else.

Well, occasionally you have to, I think occasionally you have to run from something and an immature, and by the way, you're at a values-laden organization anchored into like, it's such a gross violation of just human dignity. But on top of that, it's a gross violation of what this whole thing's supposed to be about.

Right?

That's facts.

And so, yeah, absolutely.

It doesn't. And by the way, we all make mistakes. I've made multiple mistakes today.

Right?

That's just life. But nobody's running here and screamed at me, right? So yes, I think you're in a not safe place, not a good place.

Jared, is it just you?

Yeah.

Are you married?

Do you have kids?

Yeah.

So that's where the— that's where the fun begins. So, uh, we, we're almost done paying off, uh, a quarter million in debt for, uh, student loans. Uh, we, we have enough in savings to pay it off today. Oh, but we just had a newborn, our first child, so that adds a little bit to the complication. I was telling my wife I would love to, I don't know, take up a trade, maybe do CNC machining since there's so much of that around here. I'd love to do a trade or some kind of certification, but like we could cash flow it, or I could stay in the job and secretly take classes if I wanted to, to get a certification.

I'm not doing anything secretly.

Yeah, and I don't think you have to— I don't think you have to make this jump from this thing that I really hate to the thing that's perfect. I think that there's a gradual transition that can happen here. I think the first thing is we're getting into the weekend. So my homework for you tonight would be, I'm going to go online. I am going to sit down with my wife and I'm going to have some quiet time as well, where I'm brainstorming all the jobs that I might be able to do in the interim, because there is going to be a period between here and the perfect thing, right? So I'm going to brainstorm. All the things that I can do in the interim by myself. I'm going to sit down with my wife. I'm going to get her input. I'm going to get on ChatGPT. I'm going to generate ideas there, and I might call up my best buddy as well.

I'm going to call somebody who's a machinist. I want to see what that life is like.

Uh-huh.

So that's what the next couple of weeks is devoted to. You being able to think about what I can do in the interim and then go after it. Maybe I heard my buddy said I could do Amazon Flex, and if I did that combined with this, I can make the $50K just like that. That, right? So figure out what you can do. It's not going to be the be-all end-all job. It's just going to be, right now I need to replace the $50K. It doesn't have to be what makes my heartbeat, right? And then while you're doing that new job, now we can start, okay, what will it look like? Let's go ahead and pay off these student loans because we need to get debt-free. Check that off the list. And now I can start saying, what does it take to get into this trade? Now we can start saving up to make that happen. So So there's a timeline here that I want you to walk down. I don't want you to feel like you have to do this all in one swift motion. Does that make sense?

Yeah.

Instead of, uh, zero to 100.

Yes.

And here is the, um, here's the, the psychological medication I want you to take. Not real meds. Okay. I want you to catch yourself and commit over the next few weeks to not having imaginary conversations with people that you work with where you just finally let them have it and you get these mic drop moments and you win? Because I know you do that, right?

Um, sometimes I do it a lot.

Okay, but here's the thing. Your body has a hard time telling the difference between a real fight and one you have— you're spinning up in your mind, but your body wears the stress either way. And when your body wears the stress, so does that newborn, so does your— so does your wife, so does your— the people you're trying to love at your church who have no idea that there's some kind of awful person, you know, leading that place. And so commit to, I'm going to do what's the next right move for me and my wife and for my new baby, for us. And I'm not going to give one second of my precious time with my family, with myself, with my job search, focusing on these imaginary conversations. I have to ask, is there somebody at your church you can go sit down with, or is this like an executive?

Um, that's another one of the toxic things. Somebody who is, uh, like HR, I was encouraged by my supervisor not to talk to, even though that's their job. So like, it's— I can talk to somebody, but yeah, dude, get out of this mess.

Get out of this mess. So far away from it.

Yeah.

And it's, it's a—

it's—

this is how crap gets swept under the rug. This is how people get hurt and it just kind of goes away. People don't want to talk about it. It's this kind of madness that blows up faith communities. So, get out of that mess, man. Get out of that mess.

And let me just recap, 'cause we talked about a lot. So, the first thing that we need you to do is, we're not gonna quit this job until we get another job. There's no point to do that to your family. And there is something that you can do pretty quickly.

Another job might be going to work at the grocery store, working at Walmart, working at Starbucks, find another job.

But fast, right? We wanna get you out of there fast. So, that's thing one. Thing two, as we said, you need to brainstorm all of that this weekend so that you can get out of that job fast. Thing 3 is you do need to take this savings that you have and you need to pay off your student loans.

Keep—

make sure you keep $1,000 saved, but something tells me you've got a little bit more than that. And then that way, once you start getting in this job, now we can start building up the 3 to 6 months of expenses, and now you can actually start funding whatever trade it is that you think you might want to go to school for, and you can start working on that. So that's the order of events in which this needs to take place. And I think if you do that, you're going to look back on this situation and go, man, Man, I handled that the right way.

I stood up for myself and my family.

Yeah.

I did the next right thing for us.

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Today's question comes from Grayson in Mississippi. Grayson writes, my wife and I are in our late 20s and we've been married for 5 years. We had our first baby this year. I work in construction and make $120,000 a year. My wife is a stay-at-home mom, which we both agreed upon. I have a Roth IRA that I've been contributing to since I was 20 and a pension through my local union. We have $6,000 in savings and add to it every month. I also have a side hustle which I use to fund my hobby, which is race cars. I don't ever spend any of my salary on my hobby. My wife gives me grief about how much I spend on my cars, even though it doesn't affect our personal bank account. Am I being selfish for spending the extra money I make on my hobby when I could be putting it towards our savings? Interesting. It's an interesting frame of this question, which I actually understand what he's asking, and I understand with the lens he's wearing, um, why he, like, he feels this is a noble path. And I, and I get what he's trying to say here.

And I also get that his wife is probably less concerned about the cars and more concerned about the way that they're running parallel in their own marriage.

I'm gonna tell you what I picked up on in this.

Okay.

He was detailed about everything except how much he's spending on the hobby. It's like, you're telling me how long you've been married, down to the dollar on everything else. But when it came time to say what you're spending on this hobby, there was nothing there. So, I have a sense that that there's probably something in this equation that's being left out, whether it's the rate at which they're currently saving. The wife is like, hey, I listen to Ramsey. We need to be putting aside at least 15%. Maybe they're not. Do you see what I'm saying? And maybe he's, maybe he's spending a little bit more than is the right amount. I think that there's a way that all of this can happen in the right balance.

Let me tell you what I picked up on. I see 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13. 13 times he wrote mine, I, me, right? And again, What I'm saying, Grayson, is I want you to go through this question you sent us and replace every one of those with ours. We, we are in our late 20s. We've been married for 5 years. We had our first baby this year. We make $120,000 combined income together, plus I work a side hustle and we make an additional $5,000, $7,000, $10,000. And we have a plan for how much money we want to safe. And we both know that we have our own hobbies that the other person hates, right? In my house, my wife doesn't think stand-up comedy is fun at all. I would live there. I do live there. I love it. And she loves, loves gardening. I like it for like 7 minutes, and I'm like, all right, let's, let's move on. Itchy. That's great. And we decide how much we are going to put towards those different things. And So brother, it sounds like you are trying to do the right thing in your marriage and in your house, but it's all about you, what you're doing, how you're doing it, and what you should have on your own that you're allowed to do whatever you want to do.

And man, you're married. It's all of it is y'all, your goals, your dreams, your retirement amounts, the vision y'all have for y'all's life. And my guess is the cars is the proxy where in the house, like you said, wife probably didn't know how much he spent on cars. And his excuses or his responses, it's mine. It's not touching the main money.

Right.

And she's, that's the proxy war for, we are not united building this home, this marriage together. You are telling us how this is going to go. And then you go have this other secret thing that I'm not a part of.

Yeah.

I listen, I agree with that. And just to frame it out for somebody who's listening, because I do think that that when you have done the things that he has said, when it's like, hey, I don't have any more debt, I have savings, I have money in retirement.

Oh, that's great.

When you've done all these things, there is a certain feeling of like, I feel like I should be able to have XYZ. So let's kind of, I'll tell you something that has worked for me, and I think this can work for Grayson. I think this can work for anybody listening to kind of determine, is this a fair amount to spend? 'Cause I think that's, let's pretend all the other kind of weird things in the conversation weren't there. Where the crux of the conversation is, what's a fair amount that I can spend on the things that I like to do?

You know?

And I think that it really is just a checklist that you can go over in your mind. And I, there have been times that Sam and I have literally sat down and done, gone over this to make ourselves feel right about a purchase. Number one, and it's based on the things we teach. Number one, if you're a person who is on a budget, like every single month you are consulting your budget, you are planning for every single dollar that you're spending, If you are doing that, like, that's your first green check. All right. The second thing is, are you a person who's out of debt, right? If you're in debt, now is not the time to be doing some crazy thing with your money, right? So if you are a person who is out of debt and the thing that you want to do is not going to cause you to go into debt, right? If that's true, give yourself a green check. The third thing is, okay, am I a person who is carrying the proper insurances? And I know you didn't see that coming, but that's something that makes you a financially responsible adult.

If you don't have a will, if you don't have life insurance, insurance. Don't do anything else until you have that, until you have the right health coverage, until that makes you feel secure in the things that you do financially going forward. So if you have that, give yourself a check. If you don't, pause and go do that before you try to go do something crazy. The third thing is, am I valuing— am I saving money in the proper areas? So we would say, hey, gotta have Baby Step 1, gotta have 3 to 6 months, you need to be saving 15% right, for investing. And if you're beyond that, you need to be paying extra on your house, which is a forced savings account. If you are doing those things, okay, give yourself a check. And then finally, you need to be a person who's practicing generosity every single month. Every time I do, I'm doing something for the community, something for my local church, something for, you know, the orphans, whatever that is. If you are doing those 5 things, John Have a blast.

That's right. And so let me speak to Grayson's wife here. Not to Grayson's wife. That's not fair. She's not even a part of this thing. Let me speak to spouses. There's this illusion, Jade, and I found it while doing research for this other book. I'm, I just realized I'm super privileged when it comes to this. I have a wife who has always had her things and I've always had my things and just the, the way our chemistry works, we've always celebrated that we each have our own weird things that we're into.

Mm-hmm.

But I, I was unprepared for how many people told me my spouse resents the fact that we don't do this thing together, that, that you like this thing and I like this thing.

Oh.

And so if Grayson, y'all sit down and y'all create this, and the thing that brings you life and joy is fixing race cars and driving really fast and doing all that kind of stuff, and you're willing to go above and beyond and work for it, and we're putting this money in the account and your spouse just says, I don't like it, I don't want you doing it, that's a deeper issue. And that's not a financial issue, and that's not a reason for you to just siphon off and say, well, fine, then I'm taking my ball and going home. This is my money, I can do what I want with it. You all need to get to the root of that concern, that conversation. Um, and it's much more common than I thought it was.

Well, yeah, I mean, you and Rachel, you do your Money and Marriage, uh, getaway weekend every year, and I gotta believe this is part of that conversation, which is, who do we want to be?

Yeah.

And you have to let your spouse, even financially, be themselves. Like, just because you're married, you don't erase who you are and the things that you like to do and the things— and it's okay if your spouse doesn't care. Do you know my husband right now? He's into 3D— he'll print something on the 3D printer and then go in the garage and use his airbrusher and paint it.

What?

I have zero interest in— like, when I say I have zero interest, I have none, but it gives me joy that he's doing something that gives him joy that has nothing to do with me. And I told him that. I told him yesterday, I was like, you wanna know what, Sam? I think it's so amazing that you found something to do that has nothing to do with making money. It has nothing to do with career and it has nothing to do with me or us.

Well, and good for you. Yes. I, I remember a few years ago when I had a comedy thing going and a music thing going, and I was like, hey, this is too too much, I'll quit. And my wife said, no, no, no, no, because when you're gone those two nights, I get a way better version of you on the other five. Go do those wild, weird things that you like because then you're fully you when you get home.

Yeah.

And that was— I remember being like, I married well.

Yeah.

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If you want that, go ahead and go to RamseySolutions.com/market or just click the link in the show notes. Alrighty then. We've got Dan who's in Philadelphia, Pennsylvania. What's going on, Dan?

Man, I'm too blessed to be stressed, too anointed to be disappointed. How are you guys doing? Okay.

I know that's right, Dan. Dan, dude, what's up, dude?

Uh, so been married for about a year and a half, and my wife and I tried to start having a kid about 6 weeks ago, and she's 5 weeks pregnant.

Hey, that's what I'm talking about! Way to go, congrats, man.

Thank you. So question boils down to, what do I need to look at putting into a sinking fund for just medical expenses that are going to be approaching us for the next 9 to 12 months?

I love that, Dan. Thinking ahead, good dad already. Um, I love that. So around here, the way we teach is, uh, if you, if you're currently walking the Baby Steps to pause them and stack up cash, which is what you're trying to do right now. And a good rule of thumb there is to look at what is your deductible and what is your out-of-pocket max. That's a really great thing to aim for because then you're saying, hey, no matter what, I know this is the amount that I'm on the hook for, and I know this is the maximum amount that I could be on the hook for. You see what I'm saying? And so let's say your out-of-pocket out-of-pocket max is, I don't know, $4,000. What do you think it is?

I believe it floats a little closer to $7,000.

Okay. $7,000. Yeah, that feels about right. So that would be my goal. If I, if I can get that, that's a very good goal. Let's say you knock that out very quickly and you go, okay, what else? Well, the things I'd be thinking about are, you know, if, if there's a NICU stay, if there happens to be an extended stay in the hospital, God forbid, I'm not putting that on you, but if there were, we'd need meals, maybe there'd be some transportation, those sorts of things, right? So those are the types of things that you want to save up for. And yeah, ultimately stack what you can, stack as much as you can. And then once this baby gets here, you're going to have a pile of money sitting there and hopefully everybody gets home safely. And then you can take that pile of money and throw it at whatever your next goal is, whether that's paying off some debt, stacking up 3 to 6 months of expenses, or even a down payment for a house. Okay. Thank you. I appreciate it. You are very welcome. Congratulations. Absolutely. All right. We've got Ashley up next.

She's in Tampa, Florida. Hey, Ashley, how can John and I help? Yeah.

How are you? I'm Ashley.

I'm 31 and I'm trying to decide whether I should sell my townhome or keep it as a rental.

I bought it for $107,000 in 2019 and it's worth around $160,000 now. But the HOA, it has basically doubled from $378 to $632 a month. Oh, Lord. Yeah, it's a lot. And, and, um, uh, it's not, it's not the best HOA, I'll say. Um, and they're planning to increase it again in October.

So, um, gosh, if with that HOA, even if you sold it, why would you keep it as a rental?

Don't rent it, just get out of there.

Okay. Yeah, that's what, that was my thought because, um, I've, I've, it's empty now and I've been like either putting it for rent or for sale and I can't even I seem to get what I want for it as a rental. Why isn't it selling?

How long has it been on the market?

I haven't had it on the market yet, but someone I know might be interested. Okay. In the property.

If that doesn't work out, call a Ramsey Real Estate Pro and have them list that house and get it sold for you. Yes. Because right now it's weighing on your soul more than, more than the financial weight. It's just killing you. And it makes you mad every time because you probably like living there and the HOAs kind of run you out. Like, just get that— cut that cancer out of your life.

Yeah, absolutely. My life has moved on a bit. I've, um, when I used this as my primary residence, I, I— it was really good for me because I house hacked and had a renter in the second bedroom. So that was paying my complete mortgage and I basically got to live like mortgage-free, which is Where are you living now? Um, so I'm living with my, my boyfriend and, um, uh, yeah, I just, I don't see us living in here again. And due to my business, I, uh, being more downtown makes more sense for me. So let's say even if it didn't work out, I'd still probably want to try to find a rental downtown, like a one-bedroom apartment downtown or something. Yeah, you're a roommate, you know, anything to save money. But the goal is, um, you this person I'm with, I see an upward trajectory for us. And my goal is to be debt-free by the time we have children so I can be a stay-at-home parent.

Gotcha. Okay. Yeah, I don't want to get into a topic that's not, that's not part of it. But yeah, just, you know, just make sure you guys do this in the right order is what I would advise. You know, make sure you're looking out for— Make sure you're safe. Yes. Thank you. You're not exposed financially.

Yeah.

Oh no, definitely not. So the money that I would use, that I would take from the sale of this property, I would immediately put that into investments, you know, for like retirement and make sure I'm okay there.

You wouldn't put it in a high yield? Because I'm thinking, let's pretend if I hear what you, what you're saying, which is eventually it sounds like you're going to marry this guy. Yes. At least that's your plan. We haven't heard from him yet. Yes. So if you guys think you're going to get married, which you think at some point you're going to want a home together, hopefully he's contributing or he's got something to offer financially on his end. Now you've got this pile of cash too. If this horizon is less than 5 years, I don't know if it is and I'm not rushing you, but if it's less than 5 years, I'd probably keep it in a high yield instead of investing it.

That way you can put it in either to help pay off quote unquote y'all's mortgage, or if y'all want to buy a house. House, um, that maybe somebody else used to date used to be in this house and you don't want that anymore, which I wouldn't blame you. Y'all want to get a place or y'all want to get an apartment or whatever, then you've got that, that accessible right there.

Okay, yeah, that makes, that makes fun of— since I have a high yield already, so that would be easy. Yeah.

And then if, you know, beyond that, if something, you know, you guys finally get stabled and there's a big chunk sitting there, yeah, then you could turn around and invest that.

Or let me, let me go dark just because That's what you do. I wouldn't have a job if, if, if, if everyone's plans worked out, I wouldn't have a job. And so I have a good job because very few people's plans work out. Um, also if you have this money in a high yield savings account and y'all do break up and you have a, I have to get outta here this weekend, then you get to spend that next weekend, um, grieving and being sad, not also wondering where you're gonna live. True. You know what I'm saying? So it will be some peace. And also, what other debts do you have?

Um, so I don't have any credit card debt. I have right now this house, which I have about $85,000 left on it. If I sell it, then, you know, profit that, um, about $50,000, $40,000 after everything. Um, and then I have a $40,000 student loan. Done. Pay that off. Pay that off first. I should be getting some inheritance in with that exact amount, and that would go exactly straight to my student loans. If that doesn't work out, as plans don't always work out, I will, you know, put everything I can monthly toward this student loan until it's knocked out completely.

Well, but if you get a $50,000 check from selling your house, I would take that money and put it towards my student loan.

I want to know about the plan of the inheritance working out or not working out. Is this based on you don't know if you're in that person's will, or what's that based No, it is.

It's the weirdest thing. So my grandparents had a property in the Hamptons, and it's on an Indian burial ground. And so I think the city and the state are fighting for this piece of land.

Okay, so there's a lot going on here. But what John is saying is exactly right. Take that equity from the house as soon as you get it. Take it, pay off your student loans. Student loans be free and clear. That's what I would do immediately.

Be debt-free.

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Hey, be sure to let us know what you think about the show in the comments. Uh, and if you haven't subscribed, be sure to subscribe. You can do that on YouTube, wherever you listen to podcasts, and be sure to send this episode to somebody who you think needs it, somebody who needs a little hope, a little inspiration, a little kick in the pants. Pants. All right, let's go to Ethan who's in Nashville, Tennessee, right here in our backyard. What's up, Ethan? Hey, what's going on? Not a whole lot, talking to you. How can we help?

Okay, so thanks so much for helping. I am a youth pastor. My wife, she also works in the same church as I do. We get to— we really get the privilege of working alongside the next generation. She's a worship pastor for the next gen and I'm a youth pastor. And we have over $100,000 of debt And one of the things that students have been asking us, you know, going out of high school, going into college is like, hey, should we go to college? Should we go into debt? Is that something wise to do? And we're really kind of feeling this tension between like faith and wealth and talking about it. Can you help me maybe give good advice for that?

Yeah, I can. I love the question. I'll look at it from just the facts of the situation, which is over here we believe that the borrower is slave to the lender. Lender. There's just a piece of that that is not only true but biblical. So I hope that kind of ties in with, you know, where you're at. And so that's why we teach that way. We teach that ultimately it's better for you to have control over your money and that your income is your biggest wealth-building tool. Therefore, if you can avoid the pitfalls, you are going to launch yourself into a life that's full of financial peace, a life of financial freedom. You're gonna be able to build wealth. You're gonna be able to build healthier relationships. You're going to be be better in your career because you're not going to be stressed by financial strain.

And insanely generous.

Yeah, right? Yeah, definitely.

One of my friends tells me, uh, you don't have to have money to be generous. You have to be generous to be generous, but also it helps to have money to be generous.

Absolutely. I mean, I— no one's going to dispute there's different ways of generosity, right? You can be generous with your time and your talents and all these different things, but people want cash also. So like, there's that part of it. Um, so now that being said, we're not, you looking down on or hating on someone who has gone into student loan debt. But I think that if you can get ahead of the problem, you can prevent it altogether. And we do teach that the best way to avoid student loan debt is to pick the right institution for your education. Yeah, right. Don't go out of state. Try to do your gen eds at a community college. Be willing to do the work, the full-time job of getting scholarships be willing to work part-time or do some, a little bit of work while you're on campus to add, you know, to the cost so that the student can have some skin in the game because then you actually feel like, hey, I'm not, this is just not some free ride that's provided to me. There is a little bit of a difference when you have a little bit of skin in that game.

So that's the way that we teach. I also think using your own experience, Ethan, I mean, what's yours?

Yeah, so I mean, my wife and I, like I said, we have over $100,000 of debt. The majority of that is her schooling, some of it is mine as well, and then the rest of it is just the vehicle that we bought her about a year ago. Mm-hmm. And I grew up with parents that taught me a lot about debt and stewarding my finances, and she grew up not having that. So she went to school somewhere where she couldn't afford and just believed that it was normal to go into debt. And now And now we're trying to figure out how to get out of it. And we're just feeling this tension right now where we're leading students and we're trying to help them figure out how to follow Jesus ultimately. And they're asking us questions like, hey, I'm feeling tension between wealth and with faith. And I have a hard time answering that sometimes as someone who is trying to figure it out too. If, if, if there's—

I think you're conflating two separate challenges.

I was just going to say those are two different issues.

So yeah, number one, the greatest gift you can of those young people is for you to be an authentic, honest human being and talk about the challenges you and your wife face as being, being interested, called, whatever word you wanna use, to, to ministry. And also this $100,000 albatross hanging around your neck. Yeah. Right. And that's gonna, that's gonna depend on how far away you have to live from your church. That's gonna depend on whether y'all can buy a house that you can have tons of, of you have youth group events at or not. It's gonna impact how you give because you've already committed $100,000 of those dollars plus interest to a bank, right? And so I think there's that, that's conversation number one. And I would just plead with you to lead with authenticity and honesty there. This is the hole we dug ourselves and we might get called, but we've already chained ourselves to this fence back here. We get this chain caught, we can't, we can't make this other call. Do you get what I'm saying? So that's number one. Yeah, I totally hear that. Number two, I, I, man, that's it.

What you're talking about is in the ethos now. And I get that tension. Jesus talks a ton about money and the love of money, right? And I think to me, that's where, when money becomes something that is an idol, when money becomes my destination point, when money external, some sort of external number becomes the proof that I have value. Now you got a problem. Now you got a drug. You get what I'm saying? Or think in our culture, think how insane it is. We answer the question, what are you worth with a number? Yeah. Right. That's madness. Right. And so, but that's, that's, that is the air we all breathe. And the temptation is, is to burn the idea that some guy who started, um, who started a porta-potty company and then happened to be here in Nashville where you and I both live. And Nashville started exploding as a city. A lot of people wanted to move here. And now suddenly this guy has a ton of resources because he honored his contracts. He took care of his customers. He pays his employees well, and now he's really successful. The temptation is let's go burn him down and let's call him a bad guy or not a godly man, because the thing he does, the help and support he provides, is somehow unbiblical and ungodly.

And I just think that's not true. I mean, I think it's patently untrue. And for me to sit around and look at everybody who has a business, has resources, who's done well, and just make up stories about them so that I can villainize and demonize them, man, that, that, that to me feels counter to the message as well. Right. And so there is always going to be a tension between wealth and faith. There's always gonna be a tension. I feel it personally, um, between wanting more and when's enough enough. All those things are actually spiritual questions that I try to solve with dollars sometimes. That's where I would focus a lot of my conversation. Who do you want to help? And if in the process of helping people, you end up really wealthy, then that, like your buddy said, generosity is generosity, man. Then now I can have the opportunity to help so many more for people. You get what I'm saying? Yeah, I do. Jade, I just said a lot there. What do you think?

Uh, I, I think that you got it. I mean, the only thing that I would say is if— I don't know how old these students are, but if you want to distill it down and make it pretty simple, I would go with money is completely amoral. It really just is its own thing, and it highlights what you already are. So if you are already someone who is a tightwad, when you get some money, you're going to be even more of a Or if you're a jerk, it's gonna make you a super jerk. Yeah. But if you were generous with a little bit, now you suddenly get more money, you're gonna be ultra generous. So the key here with money is the character piece, I think. And that's kind of on the, is it good or bad side? And I think just on the practical side, I would just lean on, hey, the borrower is slave to the lender. And that when it comes with money, it's not just about student loans, it's in general. You have to decide your philosophy on money. I, and, and use your own story. That's what I do on this show every day.

I use Sam and I's story of being, you know, in "$460,000 of debt," and they're gonna learn the most by you talking as a real person and saying, "Man, my wife and I, we had student loan debt, and this is what it's caused. And this is what we're—" Yeah. "This is ultimately what our goal is. We wanna get out of debt because it's stealing from us. And we wanna be able to be in a place where we can be generous and do—" And I think that people are gonna relate to that far more because it's coming from a genuine place, and it's coming from a guy, a lady and a guy that they trust. Um, have your students—

would be cool if you did a series, but have your students, um, invite them over to your place and y'all watch the Borrowed Future documentary that we put out a few years ago about the student loan crisis. Um, I think that would be eye-opening for them and it would give you and your students a lot of talking points. Um, but there's a lot of messaging in the world right now about how like the idea of wealth is inherently evil. Evil instead of the use of wealth can be evil and it can also be really, really good.

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Welcome back to The Ramsey Show in the Fairwinds Credit Union studio. I'm Jade. Next to me, John Delony, taking calls about your life and money. And we've got Tammy, who's in St. Paul, Minnesota. Hey Tammy, how can John and I help today?

Hi John and Jade, I'm so excited to talk to both of you.

This is Awesome. Can't wait.

Yeah, my husband and I are on Baby Step 6, and we've been working really hard toward the goal of having our house paid off by my 50th birthday. You know, it's such a major milestone. That's cool. That's, that's coming up this February. Our budget and all my fancy spreadsheets and everything showed that this was totally doable. And whenever we've had unexpected expenses before, we were able to adjust and like stay on track with that goal. But now we've, we've had a bigger issue. Um, I was diagnosed with breast cancer last month. I'm so sorry. Yeah, yeah, you know, it was caught early and I'm gonna be fine. Like, I'm very confident I'm gonna be fine, but my budget didn't account for us meeting like our yearly out-of-pocket max in these few months, and it didn't account for me losing all my overtime when I go through like surgery and 6 weeks of radiation and all that. Yeah, so we're going to end up just about $22,000 short of the goal by my birthday, and I'm, I'm kind of devastated by it. You know, we've worked so hard and been really careful, followed the budget. We don't on extras.

But like, on top of that, I also feel bad about feeling bad about it, and that, that doesn't do any good, right? That does no one any good, because the mortgage is going to be paid off next year anyway, right? But it's going to be hard enough to hit 50 as it is, and before I was kind of looking forward to it, you know, with the mortgage payoff. Yeah, yeah. But now it's like hitting a brick wall.

So, all right, let me jump in here, Tammy, because like, I, I feel myself rising up here, okay? Hey, I'm going to tell you, uh, I'm gonna ask you a question and I'm gonna tell you something that maybe has never been said on the Ramsey Show ever, okay? Okay. Here's my question for you. What did the paid-off house signify for you?

Oh, freedom, stability, a lot of, you know, less stress in my life. Just a major milestone, the finish line at the end of a marathon. It was gonna be just a great event.

And is that— is— are all those things gonna not happen in April when you pay it off instead of February?

It will, but in the meantime, I'm hitting 50. Yeah.

So, so here, here's what grief does to us. Um, and I say grief, I'm holding it loosely, and there's some very acute grief, like big heavy stuff. It, it tends to kind of act like an ooze and it just takes over everything. And so you are right. I'm in my late 40s. I totally get it. I'm excited to turn 50 one day in a few years. And also I've got some miles on my body. I know I'm over halfway done and I don't like that. Mm-hmm. Especially my kids are getting older, like the thought of that. Right. And so there's grief involved with that. And you have, um, a lived experience that everyone I've ever sat with who who was faced with some sort of cancer is this strange terror that my body tried to kill me. Mm-hmm. Right? From the inside out. Right. And so pull— that's a, that's a grief. That's a fear. That's a, like, that was not on our bingo card. That's a frustration. And then, man, when you put that in, in context and you have an honest conversation with yourself about how have I lived these first 50 years?

Am I the person I want to be? What are some great experiences? What are some things I want to do differently in my back half? Who do I want to be when I'm 60, when I'm 70, when I'm 80, and start looking that way. And then you have an honest grief conversation and not conversation, but season with the cancer. Like, like health-wise, you're going to be okay. Financially, you're going to be okay. But there's still that lingering betrayal. My body tried to kill me. right? And being there, man, then suddenly, all right, so my mile time's gonna be a little bit slower, but you know what? I ran a freaking mile. Like, y'all gonna have that paid-off celebration. Y'all gonna have the freedom and have the peace. You get what I'm saying? But right now it's all jumbling up into one big bucket. And so spending time kind of pulling that apart and saying, what, what am, what am I actually grieving here? And we had a goal. We're gonna hit that goal. It's not gonna be as fast as we did. Cool. I guess you can be disappointed about it, but man, now I want to say the thing that I don't think has ever been said on the Ramsey Show.

You ready? Yeah. In your particular situation right this second, I don't care about your budget. I don't care about your spreadsheets. You, my sister, beat cancer.

Yeah.

And I'm going to leave today's show and I'm going to smile all the way home because I got to talk to somebody today that beat cancer and that had done the work for years before cancer. Cancer so that when it hit, it didn't completely upend everything in your life. And you've worked hard enough on your marriage that you had somebody that was ride or die with you through this thing, right? Yeah, yeah, you won, you won, you won. Like spreadsheets, who cares? Budget right now, who cares? Sister, you beat cancer. Okay, okay, that's freaking amazing. Thank you. You get what I'm You get what I'm saying? Yes, yes, for sure. All right, now budgets matter, blah blah blah, but you beat cancer, right? Yeah. Yes. Every day is an open your eyes and throw your fist up in the air and say, bring it.

Yeah, okay.

You get what I'm saying? Yeah, yeah, I do. All right, I appreciate that.

Thank you so much, dude. It's been a high honor to get to talk to just a straight-up gangster.

You're awesome, dude. Tammy. Absolutely. Wow. That's, I mean, John, I don't think you could have said it better. There's points in life where it's not about the money. No, man. It's just not, you know, and this is one of 'em.

Well, and, and can, can we say, let me just take 2 seconds on this. I don't wanna compose my thoughts 'cause I get all emotional when I, when I talk to somebody like that who's, who's awesome on 50 different levels. I think when we talk about the baby steps and we talk about getting out of debt and we give people a roadmap on how to do that, that works 100% of the time if you just do it. And it can very easily— the road markers are paid off house, paid off credit cards, right? And that's by design. It's that way. But what we— we kind of blow by it a lot. We don't spend a lot of time on it. But man, the big win here for her, yes, it'll be cool that she pays her house off. It'll be amazing. It'll be a moment of freedom, whatever. The big win is that years ago, Tammy and her husband decided we're gonna take control of our finances and our house, and we are gonna be in the driver's seat of our own life. And then cancer happened. And to me, the big win for this family, it is the— it will be a big win that they pay off their house, but the big win is that they weathered a major storm.

They had great doctors, they were blessed, they had each other, they had family support, whatever, and got them through this season, that to me is the win. That 10 years ago, 15 years ago, they said, "Hey, let's make a plan for when, not if." And man, they did it. They did it. They did it.

Yeah, I think that's fair. I mean, that's the whole point. Life is not when something happens, it's like, it's gonna happen. It's gonna happen. You just don't know what it is. Is it a job loss? Job loss? Do you break your leg? Is it a diagnosis? Is it a, you know, infertility, whatever? Yeah, yeah. There's just all this stuff that happens, and the best thing you can do— you can't stop the things from happening, you can't make them less painful or less disappointing in her, you know, right? It's still disappointing, it's still not what you expected or planned for, but it just— you can relieve some of the stress, some of the anxiety, some of the pain to be financially secure so that the money part of it is the least important thing that you're focused on.

Now we can go to war on the thing. Yes. We can go solve the thing. Exactly.

You can be a human being and, and just see the person in the moment. Okay, I'm gonna go visit whoever's sick. I'm gonna be there. I'm gonna do this. I'm not worried about bills. I'm not worried about loss of wages. I'm not worried about all these other things because you did the things to make sure that your financial footing was secure.

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Guys, one of the biggest mistakes that people make is thinking that they can skip having a will, whether it's because you're too young or too healthy, or you just don't own enough stuff. But the truth is, a A will helps protect your family. It gives clear instructions and can even keep your loved ones from having to guess what you wanted during a difficult time. That's not fun. So if you're ready to create one, go to mamabearlegalforms.com, mamabearlegal.com. If you're not sure where to start, text quiz to the number 33789 and we'll help you figure out which option fits your situation. Alrighty then, we've got Renee who's in Denver, Colorado. Hey Renee, how can we up today.

Hi John, hi Jade, thanks for taking my call. You bet. Um, I'll just jump right into it. Um, I would say for the last 2 months, every day, almost every day, I tell myself, call in and pay off your car because you have the money to pay it. And then I get this knot in my stomach that I'm like, the minute I pay this, something's gonna happen where I need that Okay.

How much, how much do you owe? How much do you have left to pay? What's the amount?

$16,300.

And how much do you have in savings?

Um, so I have two different savings. Um, in one I have $16,500 and in the other one I have about $20,000. Okay. And they're both in high yield savings accounts.

So here's the thing that I've realized about about certain types of financial fears over time. 'Cause you're talking to somebody who once had almost half a million dollars of debt and no savings. So you wanna talk about scary times, like, that is scary. And one of the things I learned about fear is, you know, you can have a fear that's totally rational and it's okay to feel that way. And then you can have a fear that is totally irrational. And sometimes you're not realizing which is which in the moment, you're just scared. But it's so good to test those and find out, first of all, Is this, is there even any rationale to this? So in your case, I would look at this and go, okay, let's pretend that you took the $16,000 that you have saved and you turn around, you paid off the $16,000 car and left. You have $20,000. So now your brain is freaking out, warning, danger, danger. I'm scared. Like to quote you, something's going to pop off this next moment. The moment I do this, something's going to happen. So let's actually play that out. What could be? And this really, really, really helps me, Renee, to figure out if something is— if there's even any validity to it.

So in your mind, what could happen in the next— the— let's pretend the moment you hit send on the payment, what could happen that's going to cost you $20,000?

Uh, in my mind, like, our furnace goes out and winter's coming up.

How much does it cost to fix a furnace?

Well, to fix it would probably only be around $1,000. Okay. To buy one would be— is your furnace acting—

is your furnace acting up? Is it acting up? Is it on its last leg? No. Okay, so that's not— we can now clear that out and say it's not valid that it would just up and pass out, right? It might need— it might need a repair, but you're not going to need to replace it. That is absolutely true that you will not need to replace your furnace completely. So what's the next thing that could pop up that's $20,000?

Um, well, I have a— we have a special needs daughter. Okay, now we're getting somewhere. I had that money before in the account, even though I knew I had the money to pay it off. So about 6 months ago, we had to put a stairlift in our house because she doesn't— she can't walk. Okay. And carry her up and down the steps. So there went $16,000, but thank goodness I had in my savings account because I, I didn't want to finance it.

So if we look out over the horizon, let's— so I love that you said that because this is a great place to start. Now if we look out, knowing that, if we look out over the horizon, we go, okay, just like we would do with the budget, let's think about all the things that we might need to spend money on. We need to do that with the special needs child. What are all the things that might pop up suddenly that we would need to spend upwards of $20,000 on? And you can do that. That's your homework to do Tonight, because that's going to give you peace. Then it's no longer an unknown. Is it a van? Is it, uh, care? Is it some sort of therapy? If you— the more information you have in this, in the face of fear— John, this is you, facts or friends. I'm just stealing that right now. The more information that you can put in front of this is really going to help you, because the truth is you'll probably have more security if you pay off this debt. Now you don't have debt weighing on you, because I promise you that's weighing on you more than you realize.

And you got $20,000 saved, and nothing's stopping you from adding to the $20,000 at this point because you don't have any debt. You can actually stack up more savings. What about that? Yeah. All right, John.

I know, and my mind tells me that. My mind keeps telling me every day. I tell myself that, right? And it's like—

so Renee, have you had a moment in your life when an emergency happened and you didn't have the money to cover it? Has that happened to you? Oh yeah, of course.

Okay. In my younger years. Okay.

So here's what I don't want you to do. Don't go to war with your body. It's just trying to keep you safe. Its job is to overreact and make sure you're always okay. Even if being okay right now is not the best thing for you long-term. Okay? So, like, when you feel that knot in your stomach, I want you to exhale and smile and say, oh, thank you for trying to take care of me. I'm good though. Because you feel that knot in your stomach, and then that sends you on a whole other trajectory, right, of anxiousness and worry and why am I stressed and what if this happens. And if you're like me, you start making up stories, and then you start responding to those stories instead of just being grateful. Oh man, my body's trying to take care of me. It's been down this road before. And here's the second thing. If you have put your identity as a mom, as a wife, as a human in, I have $36,000 in cash in the bank, then it's hard to untangle that. So I want you to do this weekend, spend some time asking yourself, am I a good mom?

And the answer is going to be Yes. Am I a good wife? The answer's gonna be yes.

Right?

And let's untangle our identity from this, this safety net, this, this imaginary safety net. I am good because I have this dollar amount. Now here's the third thing. I wanna play a fun game with you. You ready? Yeah. Two weeks ago, let's say 2 weeks, two Fridays ago, you went to hit to send on this final payment to pay your car off completely, and then your gut told you— it went, got in knots, and it said, 'Something bad's gonna happen if you do this. Don't do it, don't do it.' Has anything bad happened in the last 2 weeks?

No. Okay. No, it hasn't. No. And this is the last debt, uh, well, besides, you know, our home. This This is it. So in my heart, I know I need to do it because I need to start concentrating on putting more into my retirement. Yes. You know, because there's always that. Um, and I've done it before. Oh, so, you know, of course I made the mistake of buying another car. Um, but I, I do know once I do it tomorrow, I'm going to be like, hey, I don't have a car payment. That's right.

There you go. There you go. And I would even go further. Instead of saying, I need to do this because I've got all this other stuff I got to do, I'm going to do this so I can drop my shoulders and laugh in my own house.

Right?

Yes. I'm going to do this because I'm going to be free of every financial burden except for our home. I'm going to have peace in my house. And here's, here's the crappiest thing. Here's the worst part. Here is the worst. You could hit send this afternoon and something could happen tomorrow. You're right. And because you've busted your butt, you have $20,000 in the, in the bank already. Yes, you've already done the work.

Good at saving money. That's, you know, the easy part is for me is saving the money. It's spending it. I have a hard time I'm, you know, spending.

So feel the discomfort, feel your body trying to take care of you, and say, thanks, I appreciate it. I'm driving today, and we are going to be free. You get it? Yeah, game on. I get it.

I just— I'll work on it.

Don't work on it. As I get off the phone, don't work on it.

Walk right through it. Yes. Pay this off as soon as you get off the phone and feel it, feel it, and then I want you to run out in your front yard and do your debt-free scream so all your neighbors can celebrate with you. I don't owe anybody anything.

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 kind of 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 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.

All right, guys, Ask Ramsey is our free AI tool that's built and trained on Ramsey-proven principles. So today we're going to break down one of the questions that we received this week. The question was, how does the rate of return on a 401 actually work and what is it that I should look for? So first off, it's important to know that your 401 doesn't have a fixed rate of return like a savings account would. Okay? Your, your return is based on the market, right? And it's based on your investments inside of your account that's invested. The 401 is just the tax-advantaged container that that money is sitting in. What you put inside it is determined— is going to determine how it grows. So your savings rate— so your savings rate matters. Also, most 401 plans offer a menu of mutual funds. When those funds grow, your account grows right along with it. When the market drops, your balance dips. That's normal. Ramsey uses 10 to 12% as an estimate. That's an expected average annual return for good growth stock mutual funds over the long term. And we do that for planning purposes. We use 11% as the working number.

You'll hear us say that all the time. Now, that's a long-term history average for the stock market. It's not a guarantee for a single year. Again, it's just an estimate. Some years you'll see it upwards of 20% or more. Other years you'll see negative returns. That's just the truth. The key word here is average over decades, annualized rate of return.

And let me say this. That's why, honestly, this is me just being transparent. Be transparent, I don't look. I don't know because I am an over-emotional person. And I also like to think I'm smarter than I am on things sometimes.

I think that's good. I think there's a fair balance though, because what you don't want is you've invested your money, you thought it was a good—

No, I keep tabs. You want to keep tabs. Thank you. Yes. And I talk to my advisor and I get the quarterly reports and all that. Yes. But I'm not checking this every month to see what the rate of return is.

No, you should not check your investment accounts like you check your checking account. There you go.

That's— And because it, because if for me it'll make me nuts. Mm-hmm. And if it dips a little bit, my body's like, it's all coming down. Yeah. And I, over the past, I have a bad track record of either stressing myself to the point of no return for no reason., or, like doing something dumb. And so for me, it's a roller coaster I got on and you're staying strapped in. I'm, yeah. Any of, any choice I make to get off this roller coaster is gonna end in me getting hurt. So I'm gonna stay on this roller coaster. If some point in the roller coaster, just if it breaks, I will deal with that problem then. But I chose to go on this roller coaster, so I'm just gonna ride. It's gonna go up, it's gonna go down, it's gonna go way, way, way up. It's gonna be fun. We're gonna have a good time. You're gonna have a good time.

And if you feel like John, if you have questions about how much you are contributing in your 401, or maybe just want to learn more about investing, use Ask Ramsey. It can really help you. Ask your question today for your situation at ramseysolutions.com, or just click that link in the description if you're listening on podcast or the YouTube. So we've got Jennifer who's in Mobile, Alabama. Hey Jennifer, how can we help today?

Hi. Yes. Um, my family's active duty military and we have saved quite a bit of money. Um, so we could potentially buy a house, but we don't know if it's smarter to invest the money. Instead of spend it on a house when we don't know how long we're gonna be there. When we leave this duty station in 2 years, we'll have 8 years left, um, for my husband to make 20 years in service.

Okay. So that's a 10-year play. How long are, how old are you guys? Uh, 32. Okay. Is there any, let me ask this. So you know for sure after 2 years you're move, you're leaving where you are now within that 8-year period. Is there any chance that you could be in that same space for 8 years, or do you move every 2 years?

No, there's a minimum of 4 years. So, we could potentially live at the next duty station for 4 years and then PCS somewhere else, or we could just— he could finish and stay there for 8 years, but it's not his choice.

Okay. You know, there's part of this, and I'd love to hear John's take on that. You might know a little bit more about this than me, but I'm looking at it kind of from a purely from the dollar side of it, which is the truth is since there's so many unknowns in this, every time you buy and sell a house, it's expensive, right? There's realtor's fees, there's moving companies, there's boxes, there's money going out of the door left and right. And so obviously it's not a great thing to pick up and move every 2 years, every 3 years, or really even every 4 years, right? There could potentially be, uh, 2 to 3 more moves in, in this span of 10 years. And that's a little bit like, uh, I don't love that. Uh, I also don't love the fact, I mean, I'm sure there's part of you that's like, I, I don't wanna be 42 buying my first house. I also understand that. So where my mind goes to this is when we pick our careers, when we pick where we live, when we pick our spouse, when we pick all of these things that are major parts of our life, we kind of choose the things that go along with it.

And I think that part of this, when you choose the military, there is a piece of that where you're going, all right, that's what this means. What it means is it's going to be a few years before I get to settle down. And that's different from the folks around me. In some cases, that might be different than my sister or my aunts or my friends. They got to settle down as soon as they had the money for the down payment. And I think that that might be the battle selling this, um, more so than maybe the dollars and cents. Because I think you guys can save up and gosh, yeah, in 10 years you're going to be able to buy what you want in cash. But I think until then, that's probably going to be the struggle.

Do you want to buy a house, Jennifer, or do you just feel like I need to or I should be doing it?

I think it depends on where we go. Okay. Because there's a good—

like, my husband's in good communications with people that are like choosing where he goes next. And so like, if we were to get stationed quite close to family, close-ish, like, you 5 hours or less, like, I'd be more inclined to buy a house. Or if it was a place where, like, housing was more affordable, I'd be more inclined to buy a house. Um, but if not, like, if we don't buy a house, I guess, like, the money's just sitting in a, in, like, a savings account. It's considered high yield, but it's not really high. It's like a 1.5%, uh, percent.

Yeah, that's true. But if you committed, but if you committed to, we're gonna ride this thing out, then you could invest that money and you could have a higher annualized rate of return, which is what we just talked about in that previous segment, which now you're not talking—

open a brokerage account and just drop it in there.

Yeah. And now we're not talking about 4%. We're talking about hopefully 11% or more depending.

And what I take, so I have like, we have like 6 months, 6 months of expenses and savings. And then we have probably like what we would want to spend on a house for like 30% down right now. So we would just move the 30% over to like a brokerage account and then take it out when we, um, when he's out of the military.

If that's what I would do.

That's what I would do too.

If I were in your shoes, I would sit down with your husband tonight and say, here's, I mean, you can say your point of view. I'm not say, here's what I've been thinking about and here's what I wanna present and this is why. And that's what I would do because anything less than that, you are, you're, you're playing a, a, a risk game. With putting that money in the stock market. I wouldn't put it in unless you're going to leave it in 5 years, right? 3 to 5 years for sure. So that's what I would do. And again, the real estate play, I totally get it. It's like, well, gosh, waiting 10 years, that feels like a lot. And I'm not going to— I won't hold you. I believe that having a personal residence is a major part of building wealth. We know that here. And it's not to say that you're never going to do it. And it's not to say that you're not investing and saving up that money. You've just chosen the route, well, now we've got a 10-year span, which now we can do it likely the best way, which is we should be able to put cash down, like almost full cash down on something, which is pretty awesome at the end of 10 years.

And Jennifer, I, I'll tell you, this is a biased answer, okay? I just have had students and graduate students. I've lived in a couple of communities that had a lot of military servicemen and women and the number of folks that were stuck in a house and then they got deployed out or they were stuck in a house and they were promised it was only gonna be, it was gonna be 6 years and suddenly it's 18 months and I gotta move you over here. Yeah. And then they're gonna, they have 2 or 3 trailing houses 'cause they just bought a house in every town they got stationed in. I've just sat with those folks. They've been my friends, they've been my students and the stress they have not only dealing with the move, not only dealing with school, not only dealing with their kids and their spouses, but also trying to deal with selling a house 4 states over. My bias is until you are in a place where you get to decide what you're going to do next, um, that you hold off as long as you can.

Yeah, and I think that's really, really good advice. And just frame it as a wonderful thing. When you signed up for this military life, it's a life of service. And guess That's what you don't have to worry about doing. Replacing your roof, replacing the AC, that's a really, really great thing. So just focus on the positives of renting while you can.

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All righty, guys, The Ramsey Show scripture and quote of the day, my favorite, John 1:5, "The light shines in the darkness and the darkness has not overcome it. Never will." I added the "never will" part, by the way. All right, Joe Girard said, "The elevator to success is out of order. You'll have to use the stairs one step at a time.

I like that, Joan.

Gosh, that's nice. All right, let's go to Jake, who's in Chicago, Illinois. Hey Jake, you're on the line. Hey, how's it going? Doing all right, how you doing? Not too bad. How can we help?

Um, so I have about $20,000 in unsecured debts, um, and I'm trying to figure out how to get out of it with what I have in the best way possible.

Okay, I like that question. So what do you have? Tell us about your income, if you have any money saved.

Uh, do you want gross income or do you want—

uh, tell me what you make every month. That's, that's a good place to start.

Yeah, $7,200.

Okay, so $7,200 a month. Do you have any cash saved?

Uh, yeah, about $14,000.

Okay, so I mean, we're more than halfway there. Okay, so Yes. Tell me, what, what are you thinking about doing? And then we'll take it from there. What do you think the best route to getting this cleared up is?

Um, my brain usually goes to like trying to figure everything out to like maximize stuff, and I'm kind of a minimalist about like, for example, the type of car that I have. I have a paid-off car. I can sell it for a decent amount of money and get a cheaper car and help use some of it to help pay off the cash.

I like to use all the cash that I I have.

I don't have like— it's like more of an emotional thing. I can't really like force someone to spend all that money. But are you married?

That's my— I am married. So does she have her money and you've got your money?

It's one of those deals.

Yeah. Have you all had that conversation? Yes, sir. And she's no-go?

I've tried to do the Baby Steps before. It hasn't worked.

I haven't been able to. No, I'm talking about the pre-Baby Step conversation, which is we are going to be a couple that we do everything together. We don't do part of our life together, we do all of it together. She's, she's out on that.

Yeah, I would say, um, as every relationship, there's always, um, imperfections. Um, that—

I wouldn't call this an imperfection. I would call this an issue because I think it's a trust issue and it's a values issue.

So I can't really hear— I, I don't know if I can because I want to guard my wife on that. Absolutely.

No, I got you, bro. No, she's not the villain.

I'd want to make that super Super clear.

Yeah. I, I, it, it, it's, if you, if you and your wife are married and you've got your debt and she's got hers and you get your salary and she gets her salary and you got your savings and she's got her savings. A, you and I both know that's not optimal. Two people working together, pulling the same direction, you get there faster and it helps us give you a path forward. Right. All right. So is that the case? Pretty much.

Okay. Okay. Um, I agree with John. Um, this is something you, you, and I just want to acknowledge this, you're like, hey, I just want to pay my car off. I didn't call in for all this. But it's very hard for us to not solve a problem at the root. Otherwise, we're just putting a Band-Aid on it. So we really care about that. And we care about you guys and, and your marriage too. So I would, I, I love what John said. I would just approach this and go, you want to know what I was thinking? Thinking. We're keeping things separate and it's just setting a precedent that I don't like. I really want to be all in on this with you. I want full transparency because if we start keeping things like this separate, like, where's the line? And that doesn't sit right with me. Right? And I think if you frame it like that, and then we can start to learn about each other. I think this is a curiosity play. Thank you, John. It's a curiosity play. Of, "I wonder why it feels so hard for us to combine money." And I think if you say it like that, it's not, "You're the bad guy, I'm the bad guy," 'cause the truth is, we're all bringing in stuff to our marriage, all of us.

My husband and I have been married almost 20 years. And you bring stuff in, and things follow you, and it causes you to do certain behaviors. And sometimes, you don't even realize what it is until you start to unwind it in a conversation. And so, I think that that is such a good thing for you guys to— how long have you been How long have you been married?

It'll be a year on Sunday.

Perfect. I love this so much because this is the time where you start having those types of conversations. And it's not a negative thing. It's not a bad thing. It's all building and it's all growth.

Okay. But lemme say this, like, to double-click on what she just said, the conversation does not start with baby steps, with money, with dreams, with retirement accounts. Starts with, um, we're a year into this thing, here's a dream I have, here's what I would love. I love to do all of my life with you and you do all of your life with me. And you might have a partner that looks at you and says, I will never do that. And then you have a choice to make. Okay, cool. Or, um, like much harder choices. So you, you live your life and do, do your thing. I'm just telling you, and you know this, I've looked at all the data, man, and couples who share second account who go all in together, their lives, and they, and they are married well, man, their lives are extraordinary. It's just, it's, it's amazing. Okay. It's hard. Mm-hmm.

So let's talk about then, let's, let's be totally realistic and say, let's pretend you're all on your own. You're all on your own because the truth is, and even folks listening, this happens, you know, you, you get bit by the Ramsey bug and you're like, yes, let's go. And your spouse has nothing of it. And they're not changing today or tomorrow or in the next 6 months, or maybe in the next year, they might not. So, what can you do in the meantime? And I love this. I talk about this in "What No One Tells You About Money." I have a, a really good friend of mine who ran into this situation. And it's not to say that just because your spouse is not really moving doesn't mean you can do nothing. Mm-hmm. The truth is it's gonna go a lot slower because it's easier to work together. And if you've expressed, I would really like to work together, then all you can do, and I, I call, this is not fancy, but I call it share, do share. It's, you're keeping, you're doing your part of being transparent, which is saying, hey, I'm going to call your wife Sally.

Hey Sally, I got $20,000 of debt. And this is just over a casual conversation. You know, I'm thinking I'm going to pay my car off. And I'm just, whatever extra margin I'm going to do it with that. And so you're letting them know, you're sharing your philosophy. You're letting them know what you're doing. You're doing everything on your part to bring them in. Every time you make a payment, "Man, I paid off another $700. Man, I paid off another $1,000." You're letting them know. And then pretty soon, it's gonna be gone. And you're gonna say, "Man, I paid—" And you're sharing, you're doing the action you said, and then you're sharing the result. And that's the best way you can do. The friend of mine paid off over $90,000 that way. And it was crazy because at the end, that's when the spouse got on board and was like—

Oh, I'm sure they did. Yeah.

You know, You know, but is that ideal? No. Is it the way that we say ideally it should be? No. But life happens out here.

Is the reality sometimes?

Yes. That's the reality is it would be wonderful if you had one conversation with your wife and like I Dream of Jeannie, she said, you got it, dude. But that's likely not the case. And I just also wanna normalize this conversation for a lot of other folks. When you have this conversation, it is rarely gonna be a one-time talk. No, it's over and over again. It's over and over again. And the other truth is, Jon, there might be a couple of arguments. There might be a couple of parts where it's like, oh man, like this kind of rose up some other stuff. It's like you are kind of waking up the sleeping giant a little bit. And I just want people to know that it's not perfect. It's not like a family.

It's not a Full House moment. So Jake, if you want to sell your car, sell your car. Mhm. And you want to pay off and buy a cheaper car and pay your debts off, do that, man.

You guys think that's wise to sell it? I've been going back and forth. I'm praying about it for about like a month and a half.

I like that idea because the $14,000, that's a shared savings that you guys have, or is that just your savings?

So it's our savings combined.

Okay, then yes, I would say I would, and I would share it with her. I'd say, I really want to pay off my car debt. In order to do that, because I don't want to offend you, I don't want to overstep and take too much of this $14,000, I'd like to take this much. And then on my side of the sacrifice, I'm going to sell my car so that this— you know what I'm saying?

What's the net difference going to be?

Oh, in the car? Mm-hmm. Okay, so I can sell it for, uh, around $14,000. Okay.

And then can you take $7,000 from the saved? Money and clear it?

So I'd have to ask, and I would, and I'd have to ask because if we did that, that would, that would, because then I'd have to get a new one, obviously. I have to get a new car, obviously. Um, and I drive like an hour, 2 hours every day to work, so I need something a little bit more reliable. So how much do you make? Maybe how much, like, me alone or us combined?

I'm talking about margin you have.

Here's what I do. Here's Here's what I do. I would say ahead of time, I'd come up with a plan and I'd say, I'd like to be able to take $7,000 from this to pay off the car, and here's what I'm gonna do. And I think that's fair for everybody. Hey guys, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.