Transcript of Don’t Let a Lack of Boundaries Turn Into a Money Crisis

Brought to you by the EveryDollar app. Start budgeting for free today. Normal is broken. Common sense is weird. We're here to help you transform your life. From the Ramsey Network and the Fairwinds Credit Union studio, this is the Ramsey Show. I'm Dave Ramsey, your host, number one bestselling author, host of Front Row Seat. Ken Coleman, Ramsey personality, is my co-host. The phone number here is free. and some say the advice is worth what you pay for it. The number is 888-825-5225. Erin is with us in San Francisco. Hi, Erin, how are you?

Hi, I'm good.

How are you guys? Thank you.

Good. How can we help?

So I just kind of want to know what to do in my situation and if I'm just being a brat. Um, so my boyfriend and I, we've moved in together into his house. His house is fully paid off. Um, but it's managed in a trust by his mom. I have my own house as well that I got a mortgage on before we met, and I pay $3,000 a month. We want to move into my home and rent out his home, but his mother is stopping us from doing that, and, um, she's not going to allow us to fix up his home or anything to get it rental ready. I just, I just feel bad because now I'm paying a mortgage on a home and it's just sitting empty. I'm not really sure what to do.

Hmm. Well, so it's not really his house. No, it's really, it's really owned by, it's owned by a trust. His mother is the trustee.

Yes.

Yeah.

Um, if she ever sold it, he would always get the proceeds. I think it's written in that way.

Yeah.

Um, from the sale, but I just feel stuck.

No, I don't think you're stuck. I think he's stuck. How old is he?

He's 39.

Hmm. Well, at some point you have to become a man, my son, and decide if your mommy's going to tell you what to do.

Yeah.

Yeah. You're married. You're shacking up with a mommy's boy.

Um, definitely.

Yeah, yeah.

She wants us to live in the home.

I don't care what she wants. He's 30 freaking 9 years old. She don't get a vote. So, you know, I mean, geez, this is like underdeveloped psychology.

Yes.

Yeah. And I mean, number one, I would not recommend that he completely trash everything over a girl that he's not married to.

You.

Fair enough.

And so, but if he were married to you and the two of you are trying to set up a life and your mother is this controlling, I would just wash my hands of that house and say, Mom, good luck with that house. Hope it works out for you. You no longer have a vote and we're not gonna live there.

Okay.

And so it would be better for us to move into my home, right? And not have it sit out there.

It'd be better for you to do that if you were married. If you're not married, then he's taking a big risk. Yeah, now he's living in his girlfriend's— now he has a roommate that's his girlfriend and she owns the house. He went from one lady owning a house to another lady owning a house. This guy's yet to get— he's still homeless.

Yeah, no, definitely, you're not wrong there, sir. Yeah, at all.

Yeah, it's just, it's a bad, it's a bad thing for all of y'all. I'm sorry, it's And controlling people just piss you off. I mean, they just do. And she's obviously got issues, right?

Yeah, I mean, I feel like that's the reason why I don't want to get married though, because until they can resolve whatever it is between them, I don't want to cross that finish line.

He's not marriage material until he decides his mom doesn't get a vote anymore. I would tell my daughter not to marry him until he grows a backbone. His mom tells him what to do and he's 30 freaking 9 years old.

What's the penalty that she's holding over his head that she's going to take him off the trust, getting the house if he moves out? What power is she really leveraging here?

If I understand all the details correctly, there's a few other rentals in the trust and he receives income from those rentals. We both don't have any consumer debt. We follow all your steps and we try to do our best to live a debt-free life, but he does receive income from those rentals and his current job.

She doesn't have a choice in that. The trustee has to execute the terms of the trust, and the terms of the trust are the rental income has to be turned over to him. She can't take that away from him.

And so that's what I'm getting at. For you all in your relationship, what he is really facing is her disapproval. She's not threatening him with anything else, and Dave just took the teeth out of the any kind of a property threat. That's what I'm getting at. What is he so afraid of? And what he's afraid of is upsetting mama, which is back to the core issue for your relationship and everything else. But he can leave anytime he wants to leave. He's just afraid to piss mom off. That's what's going on. So that's the bigger relationship issue.

Okay. Yeah.

And honestly, there's 4 things that you have to be in agreement on. And one of them is how we deal with extended family. Before you're married. And we're not in agreement about that, 'cause this has got issues. So yeah, I'd suggest you guys sit down and see a therapist. And I guess he could move in with you in your house if you want, but he's really still not dealt with his core issue, which is he needs to be an independent human being man-child and actually do stuff like man stuff instead of just, you know, going from mommy to girlfriend. And scary stuff. So, uh, yeah.

Has he ever been married before?

Yeah, she's gone.

Oh, she's gone.

Yeah, never mind. Yeah, I don't—

I didn't see the butt.

I'm guessing there's a pattern. I'm also guessing mom doesn't like girlfriends.

That's exactly right. That's exactly right.

Yeah, yeah, yeah. Stuart's in Little Rock, Arkansas. Hi Stuart, what's up?

Hey Dave, thank you for taking my call. Um, so I'll try to be brief. My father had a heart attack in 2024 and he started taking his estate a little more seriously and how he would hand it down to my sister and I. And he was advised by a friend of his who was a lawyer for a very prominent American family, but is retired, not an estate lawyer, that he does not need a trust.

Probably doesn't. What's his net worth?

I would guess it's somewhere around $1.2 to $1.5 million. He owns a business. Uh, he owns all the equipment in there, the building. About a half million dollars.

For tax purposes, he does not need a trust unless he's trying to control something from the deathbed or from the grave. The trust will help him do that, but, um, he probably doesn't need a trust. It's probably accurate advice.

Well, one, one kind of screwball in this whole thing, curveball, is that we have a special needs brother, my sister and I, and he's been taken care of by the state basically since he was about 10. And we were hoping to avoid probate in any way possible. We just have a transfer on death benefit at the current situation.

Well, probate's not evil if you've got a good will. You walk right through it. And you're— what he does need is in his will, he needs to form a special needs trust upon his death and the death of your mother to take care of your brother. A special needs trust is funded at death, and then you name a trustee maybe you or your brother, to manage that lump of assets, and the income created by that lump of assets takes care of the special needs person. But that can be formed at death. That's not rocket surgery. A lot of people do it. And so, yeah, just sit down with a good estate planning attorney and work on a special needs trust to be part of your dad's estate plan. But he does not need a trust today. And there's no big thing on avoiding probate in Arkansas. Arkansas has not got a huge probate tax. It's not a big deal.

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

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

That's a gut punch.

And oh, you're telling me, and for decades, Dave, I've sat across people who've lost a spouse. They've lost somebody important to them.

Me too.

They don't know what to do next.

Me too. I mean, you're going to have a crisis here, and you know, you got two options while you're sitting and talking to a young widow. She's concerned about how she's going to invest all this money properly and not mess this up, or she's concerned how she's going to eat tomorrow.

That's exactly—

these are the two options. And take care of your dadgum family, man.

Term life insurance can replace income, pay off debts, cover funeral expenses, so your family can actually have the opportunity to just be sad. Yeah, to just miss you.

That's exactly what it's supposed to be. It's saying I love you to your family. Term life insurance. Jeff Zander and the team at Zander Insurance makes it easy and affordable. I've used them personally for 25 years. They're the only people I trust. Go to zander.com or call 800-356-4282. Have you ever wanted to see the person who's calling in to ask a question or be in the room when we answer it? Well, now's your chance. The Ramsey Show is going back on tour. Experience live Q&A, raw confessions, crowd debates, and local debt-free screams. The gang is going to be doing live tapings of this show in Charlotte, Denver, Phoenix, and Anaheim in April. There's only around 300 seats a night. Better grab your tickets while you can at RamseySolutions.com/tour. Events or click the link in the show notes. Scarlett is in Boston. Hey Scarlett, what's up?

Hi, to get straight to my point, my parents, through a series of recent unfortunate events, have disclosed some financial mishaps that have occurred in their life, and it basically means that they have no retirement or savings plan beyond the immediate future. My husband and I are Baby Steps Millionaires, and I wonder what my obligation is if and when it comes time for them to be taken care of.

How old are they?

When it becomes— they're in their 60s, early 60s.

Are they still working? My dad is.

My mom is on disability. She was unable to work.

Okay.

And what were the mishaps? Would they— how'd they lose all their money?

My dad had a financial blowup post-2008. His company was bought by an overseas company and basically stripped, the result being he was sued by many, many people, eventually filed bankruptcy. He's now out of that and has worked just a job since, but it's never been to that level of success he had when he owned his own business.

Hmm.

How long ago was the— oh, 2008 was the blowup, right?

Yep.

Hmm.

Okay.

What does he make?

Six figures. I don't know too much about his salary because a lot of it—

but they've saved nothing since 2008.

Correct. Um, there have been some medical bills. My mom had a stroke and they don't have—

they don't have health insurance.

They did.

Um, the health insurance covered— there was a delay, so they had to front some money. And then the insurance company kicked her off the disability, um, when she was approved initially for it, which is how I came by their financials. I helped them file an appeal, and then we went to court to try and with the insurance company, you don't really win, but, uh, there was a small settlement and that settlement has been spent. Um, so that's how I know through that process with my dad, what their financial situation has become.

Yeah. But the bottom line was after 2008, their heart was broken and they've never been really diligent about saving.

And I think they also kept up a lifestyle that was, that they couldn't sustain.

That's exactly what I'm saying.

Yeah.

Okay.

Yes.

So yeah, they're going to stop that, aren't they?

I don't think they have any intentions of doing that.

No.

Well, it's— so I don't give a drunk a drink. I'm not going to enable them. And no, you have no moral obligation to take care of anyone. There's no moral obligation that's not your husband or your children. Minor children. Grown children, you don't have a moral obligation either. But you have a want to. I'd like to help my parents, which just means you have a heart and so forth. But I also have this paradox of while I want to help them, they've not done a good job themselves, notwithstanding the couple things they've run into. They're just not very diligent about handling their money, and so they're broke. Well, hello. And so it makes it taste bad to have to give them money or to feel like I need to support them. So what I might do, I mean, it depends on how frank and how much you want to get up in their face on it, but it's, Mom and Dad, I'm worried about looking down the road here that somehow you guys are going to be broke and you're going to be coming to me to take care of you, and I need to go ahead and tell you upfront how that's going to go.

If I end up having to put money into, or needing to put money in so that you have food, it's going to involve us selling everything you own and you will be on a budget that I create and you won't like it. So I don't want you to think you're going to be— that you're going to maintain this current set of habits with my money later. In other words, I don't know how blunt you want to get, but the closer you come to delivering some kind of a message like that, then sets them up to— gives them maybe a reason. And I'll coach you guys on how to start saving because you've still got some earning years left and some potential left, and you can roll up your sleeves and you guys can build a nest egg. There's no reason for you to retire and eat dog food. But if I'm in charge, we're selling everything and you're in a one-bedroom apartment, and I will buy the groceries and pay the rent, and you will not like your life. You will be able to exist and you won't be homeless, but I am not going to send you on Caribbean cruises.

And you've got the ability to do that for yourself if you guys will roll up your sleeves now, and I can coach you on how to do that. Now, I don't— again, I don't know how much, how far down in this you want to get. It sounds like this stuff has been kind of dribbling out to you. You've not been involved, you've not been involved, and then finally on this one insurance thing you got a little more involved. And I don't think they're asking your help or advice. Advice right now. You just see it's coming, is that right?

Correct.

Yeah, I think this is great advice. And I, I think Dave gave you the financial advice, and, and I would just add to what he said. You need to create some emotional boundaries, uh, to where you are prepared for their reaction if this situation plays out as you fear it might, so that you've already made these decisions like Dave just laid out. But you now are emotionally, mentally ready for any pushback. And there's no guilt that comes in because that will be the hardest part of this, is to actually execute on what Dave said, because there's a powerful pull with the parents.

You know, your generation, all that junk, your generation, we call them the sandwich generation because there's a pull from entitled parents and there's a pull from entitled grown children. And then what the trick, the way to undo that sandwich is just remove the word entitled. And it changes everything. You're not entitled to spit. Neither one, neither of you. Grown kids, you're not entitled to spit. Well, my children want to go. I don't care. Get you a job. There's an idea. You know, go to work. And mom and dad, you know, you've had a— you went through this horrible thing with the business. Some of that was your making, some of it wasn't. You went through this horrible thing with the insurance and you didn't take care of that properly. Let me tell you the number of times I front for an insurance company. Zero. And then hope I recoup out of them. No, I'm gonna turn everybody loose on everybody and then I'm gonna stand back and watch them all fight. Let the insurance company and the provider fight. You guys figure it out and then I'll clean up what's left. But I'm not writing a check and then somebody's gotta come in and borrow money and then I try to recoup out of the insurance company.

Not a chance. Instead, I'm going at their throat right now. And that's being proactive rather than just kind of gliding along. And there's a lot of gliding along in this. It's a very hard thing to decide. Now, you also can decide you've got enough money, you don't want to deal with it, and I'm just gonna write whatever check I need to write and then just take care of them, and I'm just not gonna worry about it. And if that's the case, you probably wouldn't have made this phone call. So you've just done it, and I'm just gonna be an enabler, and I'm comfortable with that, and that's what I want to do. Mom and Dad took care of me, I'm gonna take care of them, and it's no big deal. It's not morally wrong either way. But when you call up and ask, that means that you don't want to do it. That's what it means. So how much preemptive strike do you want to get involved in is the next decision you got to make. How much preemptive conversations?

Dave, I was going to ask you kind of a follow-up. What are your thoughts? Because I think there's probably several hundred thousand people that could be listening right now that are in these shoes and they feel a sense of burden to take care of their parents. And when you say there's no moral obligation, I agree with you. What advice would you give to them to get over that emotional hump, that sense of guilt or shame that they ought to take care of them, and if they don't, they're bad kids? What would you tell them?

Well, I think you just need to decide whether it's your responsibility or not. If it is not your responsibility, then there shouldn't be shame or guilt. The only reason you have shame or guilt is if you feel like it's your responsibility and you didn't do it. That's the only reason it would be there. And so, like, You know, if my buddy calls me up and says, "I need some money," I have zero shame or guilt about either giving it to him or not giving it to him. 'Cause I don't feel an obligation. I don't feel like I have to do it. And honor your parents in the Bible does not mean honoring misbehavior. If Mama's doing cocaine, you're not honoring her by giving her $10,000. That's not honoring your parents.

Hey guys, George here. Listen, 99 times out of 100, when people say, I don't know where my money goes, it's not a math problem, it's a behavior problem. They're not budgeting, then they're shocked when their bank account hits triple zeros. Well, here's the deal. Winning with money is about doing the boring stuff consistently, and that includes banking someplace that helps you stop guessing with your money, like Fairwinds Credit Union. They're not going to fix your habits. That part's on you. But they do support people who are ready to take control of their money. At Fairwinds, you get a high-yield savings account with a great rate to help grow your emergency fund, a checking account that won't nickel and dime you, and up to 10 free savings accounts so you can organize your money on purpose. Because when you stay disciplined, your money gets predictable, manageable, and boring in the best way. So if you're ready for a bank that helps you be intentional, open your Smart Bundle today at fairwinds.org/ramsey and get the Ramsey Be Weird debit card to go along with it. That's fairwinds.org/ramsey, insured by the NCUA.

Frank is in Toronto. Hey, Frank, how are you?

Not bad, Dave. I finally got through to talk to you.

Well, we're glad you did. How can we help, sir?

It's an honor for you to be there, you and all the personalities. I was just wondering, I'm looking for future planning purposes here of once I get to Baby Step 4, which I believe is saving 15% towards retirement, that I could have to maybe have to go a little more gung-ho than that because I'm 54 and don't have anything saved for retirement. I'll have $215,000 worth of retirement investment room when I get to that stage. Um, I'll be debt-free in 8 months.

Good.

I've actually set the date for November 6th, and then I'll have my emergency fund of $10,000 saved. Um, I have $3,000 and I just did a budget. I got $3,000 each month.

What's your household income?

Right now it's just me. I'm the household. $5,600 net per month.

Okay.

All right.

So if you save 15% of your gross annually into good growth stock mutual funds inside of your retirement plan— now you're in Canada, so it's a little different, but still you can do all of that. And you do that for 10 or 12 years, you're 55 at the point you start, and you do it to 65, 67, you're gonna be a millionaire. You're gonna be fine.

Wow.

And no, you don't have to do it out of order. You do need to get your house paid off during that time as well.

I don't have a house. Okay. That's the other thing too.

Okay, you start talking about how we're gonna do that and what we can get paid for, because when you go into retirement, your most expensive line item in your budget is always housing.

Yes.

And if you don't have debt on your house, obviously it does— it's no longer the most expensive line item in your budget. So you've got a lot of room then, but you're gonna be fine if you just continue to follow through. And it sounds like you got it really dialed in, so congratulations, keep it up. If you need more help, call us anytime, brother. Nick is in Madison, Wisconsin. Hey Nick, what's up?

Hey Dave, just calling. I hope you can hear me well enough. I'm in a rural area right now.

Um, okay.

I got a couple of questions. I've got a couple of questions here on, uh, I'm sitting— well, first off, I'm only 27 years old. I got $123,000 in debt here. Uh, $81,000 is about the house, $81,000. Uh, $28,000 is my car, and then personal loans around $6,000. Uh, medical bills sitting around $8,000. My main question today is, uh, I always hear you say sell your car if you— because the car is worth about $12,000 today.

Who said?

I looked at Kelley Blue Book and then I also looked at the dealership, a couple of different dealerships.

On private sale or trade-in? That sounds like a trade-in number.

I believe that would be— that would be just a, just a sale because I'm trying to get out of this loan and not get a new one.

Mm-hmm.

Okay. So if my math is correct, I think we're sitting at like $17,000 underwater right now.

Um, so you owe $32,000 on this thing, $34,000 on this thing?

Yeah. Yep. Because we originally—

did you roll a negative— did you roll negative equity from another car into this deal?

I did. Yep.

Yeah, that's how you got there.

Okay.

And what's your household income?

So I, I, we do $70,000, uh, before the taxes, and then taxes come out, we get about $56,000, $57,000. Okay.

All right. Well, I mean, you're stuck in that car. Selling it is of no benefit because it's not worth anything compared to what it's owed. So, okay, you know, it's not much help. But what, what that does mean, sadly, is, is that you're gonna work 6 extra jobs and you're going to sell everything else in sight. Everything's on— put the cat on Craigslist and the dog on eBay. I mean, we're going crazy here. And beans and our beans and rice, man. No, no life. You've got to lean into this and start throwing grenades at it harsh, like your life depends on it. It's not— you can't wander out of this mess. You're going to be extremely intense.

Okay, so the, the monthly payment right now is $647. Yeah, and I, I have been the past few payments doing $1,100.

Um, that's not what I'm talking about. I'm talking about coming up with $34,000 extra. Okay, so you need to be making like an extra $2,000 a month and squeezing every dime out of your existing budget too. So you are— you're married, I take it?

Yeah, I am.

Yeah, everybody in the house is working. The children are going to the salt mines. Everybody's working. We're all making more money. We're all gonna throw it at this mess, because this is not gonna go away with, you know, just sitting down and tightening up the only budget you have right now. Because you've tried that, and, you know, and an extra payment is not getting you out anytime in this century. Because you probably also have a high interest rate on this thing, don't you?

Yeah, it's, it's about 10, 10 right now.

So you got screwed coming and going. Yeah, you don't need to be on a car lot for a while, do you? What a mess.

Yeah, I, I, you know, if I'm sitting in this situation, I have any cash, I'm, I'm going to go ahead and move this thing and I'm going to drive a clunker because of the loan.

If you can get the cash.

If you can get the cash.

But it's $17,000 upside down. If that number's accurate and the thing's worth $12,000, what are you going to replace it with, a $5,000? You only got a $7,000 move here. So, you know, getting rid of that thing and getting rid of the debt on it and getting rid of these other debts so that you can attack it with a vengeance is absolutely necessary here. So any money you can scrape together that's not in a retirement, anything you can sell that's not in retirement, and any extra work you guys can do, and I'm talking about work that makes money, money, not just out there moving around. I'm talking about Uber. I'm talking about really making some money. And I want you working weekends, nights, overtime. I want your wife doing the same. Y'all got a mess, and you're gonna stay in the mess unless you throw some money at it. And so that's what it's gonna take. It's gonna take this crazy intensity, and then you can move the needle. Isabella is in New York City. Hi, Isabella, how are you?

I'm good, how are you?

Better than I deserve. What's up?

Um, I need your opinion here cause I need you to act as a tiebreaker, but I just got a new job with a higher salary and my parents are really pushing me to buy an apartment in New York City. Obviously New York City, it's one of the most renter-heavy cities in the country. I've really never thought of buying or considered it, but my parents are not letting it go. Um, I'm happy renting right now.

Why do your parents have a vote?

Because they're my parents.

That doesn't give them a vote. You're supposed to be like a grown woman and stuff.

Um, I do take a lot of like what they say into account.

Well, that's nice, that's sweet, but they don't really get a vote.

Um, I do, I do see where they're coming from. I think for me it's—

How old are you?

I'm 24.

What do you make? What's the new salary?

Uh, $95,000.

And what's the cost of the apartment?

Um, with $95,000, I could reasonably look at anything between $300,000 to $400,000 in the city.

That's not in the city. That's in an outlying borough somewhere.

Um, if it's in a co-op, I would have to— it would be within that budget, but there would be co-op fees on top of it.

In Manhattan?

Correct.

You're talking what, 400 square feet or something?

My own apartment right now that I'm renting is pretty tiny, so I see where they're coming from, that I could upgrade while owning at the same time, but I don't know.

I'm not sure you can. That number doesn't sound right to me, but okay, I'm not a Manhattan expert, but all right. I mean, you might be out in the Bronx or Queens or something and do that, but I'm not thinking you're gonna be on the island doing that. So here's the thing. You're 24 years old, you make $95,000 a year, and you don't really want to buy right now. Is what you told me. That's kind of what you said.

For me, it's just, I don't see, I don't see how I can buy.

I'm not sure how either. I don't think you buy right now. I agree. I'm okay with you waiting. Someday you want to buy, and maybe you're still in New York City, maybe you're still in Manhattan, but homeownership when you don't want to is a bad idea. Homeownership when you can't afford it is a really bad idea. All homeownership is not good. Only when it's done properly is it a blessing.

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Colton is in Atlanta. Hi, Colton, how are you?

Doing good. Hey, I got a quick question for y'all. Um, I have a small business and I'm wondering how I should do profit sharing with my 2 team members?

Okay, that's a great question, and I think it's really important that you start thinking about that at your size. We did then when we were that size. Now there's 1,000 of us and we have 14 core values. One of our core values on the wall is share the profits. So we share with everybody in the building in one way or another, all kinds of different ways. Now it's somewhat complicated because there's so much, um, The first thing I learned the hard way that I will teach you is to make sure that the two team members know that this is Colton's money and I am sharing it. That's different than corporate profit sharing that's part of my comp plan that I'm entitled to. This is you out of the goodness of your heart setting up a culture inside my little company here that I believe in sharing with the team, and I am doing that voluntarily. You see the difference in the spirit? Yeah, it's like, like when you're in kindergarten, sharing, you know what I'm saying? This is not like profit sharing is part of my comp plan and they didn't pay it, and so I'm pissed.

No, you don't get that option. You're not entitled. This is me being kind and you smiling when I'm kind. That's how this works.

Okay, so I've probably been doing it wrong.

Yeah, that— me, I did. I screwed it up when I was your size and I had to go back and reset. The second thing I do, and we still do this to this day, is we pay out profit sharing here once a month and our CFO gets on the stage and says, hey, profits were up over last month, down over this month last year. We had a good month. Here's a couple of bright spots in the company without going into details and numbers. Here's how many people are involved in the profit sharing plan this month. And so your profit sharing check's going to be a little better than last month and not as good as 2 months ago. And here's why. And then we close that talk out with here's where profits come from. And everyone in the whole room All 1,000 people say, profits happen when revenues go up, everybody says up, and when expenses go down. So your job is to make revenues go up and expenses go down, and then you get more profit sharing, 'cause I'll have more to share with you. And we say that like we're in kindergarten or something every Wednesday, or every Monday morning that we do once a month when we're doing profit sharing announcement.

So, 'cause we want everybody to remember this is not, Santa Claus is not delivering a bag of money. This happened because we all work together to keep expenses down and revenues up. And you have to reset that in people's minds over and over and over again, because people forget and they're like, oh well, the company didn't give me any money. No, that's not how this works, honey. You're self-employed like the rest of us. We as a group sucked, so your profit sharing is down, because there's less profit to share. And so, you know, we talk about it and when it's up or down. And so those are two things you want. You reset the entitlement and the ownership aspect, and then you can figure out from after those two things are in place how to do the calculation. I used to do ours when I was your size once a quarter because it wasn't much money, and it'd be like $500 or something after a quarter, right? And so, because there wasn't a lot of profit, wasn't a lot of revenue. And there's 4 of us, you know, and so, and I wanted it to be a little bigger check, but what I figured out was that people weren't, they couldn't count on it because they only got it every so often, and so it wasn't connecting in their brains.

And so once we figured that out, we went back, we went to a monthly. What you could do is not do any of that, and you could say, hey guys, every so often, we had a great month, I'm taking all of us and the wives and the kids out to dinner, and we're all going to a movie and I'm gonna spend some company money just to say thank you 'cause I'm gonna share some of our profits with you that way. Or, hey, here's a $100 handshake. We had a good month. And it's not formal and it's not a bunch of math calculation. And you can keep it fairly primitive and simple that way when there's 3 of you without getting into some kind of freaking spreadsheet analysis. And by the way, our team does not know how profits are, how their portion of profit sharing is calculated. That way they don't have to back into and worry about what's going on. All they know is we share with them, and it's pretty dadgum sweet these days. So does that make any sense? What'd you say you did wrong?

Well, so what I've been doing is we do commercial residential remodeling.

Mm-hmm.

And so by the time I take all the expenses out and after I pay myself and there's some left, then I, I, I usually what I've been doing is just giving them 3% of that. I didn't tell them this. I just told them that they're going to get, um, some sharing in the profits we make if there's a successful job.

That's a good, that's a good move. I like that. What's wrong with that?

Then they don't get in it. They don't get any. But then I'm also trying to figure out what percentage should I save back for retained earnings? Because sometimes we don't work for a while, and then I'm like, don't have enough there to save.

Yeah, the profits that we use to calculate, the number we use to calculate profit sharing is after we have set retained earnings aside.

Okay, that's what I was kind of wondering.

Yeah, so we set retained earnings aside, and that creates, we have several layers of profit, net profit NP1 through 7. I have 7 different layers of profit before or after certain expenses. And the only one that gets paid off the actual NP7 is me and a couple of our senior leaders. But everybody else, there's different layers in there as to where we're cutting profit in and out. 'Cause I've got some of the VPs, some of the vice presidents that get paid a percentage of the profits in their area as part of their comp. And that's not technically profit sharing. I've got profit sharing in addition to that. So I've got all that complicated bull crap in there, but yeah, it's after retained earnings. So you have to run your business, and when money's left after you run your business, you share with them.

Okay.

And I think it's smart to say, hey guys, if we can keep the cost down on this job and keep our estimating sharp and estimate the job properly so we get the proper price on the job, and then we don't, you know, we don't buy 73 tools that we don't need in order to do the job because we're all tool addicts and everything else in your world, then we're gonna have some profit left, and I'm gonna make sure some of that goes home with you. And I'm making it up as I go, but I'm just— promise you, the spirit is I want to share with you.

Okay, so you think it's okay to do it by job like I've been doing?

Oh, I think it's smart.

Okay, because there are jobs at times when we don't— we don't profit. Yeah, I mean, like, I profit, but they— the business doesn't profit. And so then we just say, hey, we need to talk about why this didn't profit.

Exactly. We're all self-employed. And if the job doesn't make a profit, we don't have anything to share. Hello. Okay, that's perfect. How old are you?

Thank you. Uh, 24.

Man, you're sharp. You're doing a good job. I'm proud of you.

Very—

you thought you spent some time thinking about this.

Yeah, it's really good.

I read your book.

I read your book.

So tell— I want, I want the audience to hear how your team members reacted when you first gave them some profit share. What was that reaction What was the price like?

The first time it was like $6. Oh. And they were kind of making the joke that they could go buy an ice cream.

Right.

But it's been up since then and they really, it really surprises them every time.

Yeah. And so that's what I wanted to just emphasize by asking you that question is because that is the key to building loyalty. They appreciate, even though it was $6, they still appreciated—

That you put thought into it.

The thought. We've all heard it's the thought that counts. Drill that into us husbands. You know, it's the thought that counts. Get the birthday card, write a note, you know, the whole drill. But I just want to make sure young leaders catch this. This is how you build a business on core people, is fundamentally showing people how much they matter to you. And I think that's going to serve you very well. So I wanted to applaud you as well. That's really good.

Yeah, you did a great job. Very well done. So yeah, building a business you love, one of the things we talk about in there is the importance of being able to to, you know, share. It's the beauty of small businesses. Most small businesses are not greedy people. They're not like corporate America. They don't piss on their people. Most of them take care of— they're like family. They take care of each other. And so, you know, that guy's like that right there. That's pretty cool. He starts with $6. That's pretty fun. I like that a lot. Owning a business can be a heavy load. You want to serve your customers well, make a healthy profit, and grow. And your team, family, and customers are all counting on you. And now everybody's talking about AI like it's magic, and you're wondering how to keep up. You're carrying a lot. A lot, but you don't have to do it all alone. That's where NetSuite comes in. Over 43,000 businesses, including Ramsey Solutions, use NetSuite to lighten the load by bringing all their numbers into one system. Accounting, inventory, CRM, payroll, the works. And now NetSuite's AI takes it further, automating busy work, flagging inventory issues, spotting cash flow problems in real time, and catching risks before they hit.

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Doing good, Dave. How are you?

Better than I deserve. What's up?

Well, I'm calling. Thank you for taking my call. First of all, I've been listening to your show for quite a while, and it's primarily me that listens to your show. My husband doesn't at all. My question today has to do with the cash-out refi. My husband and I are almost to the retirement age. He will turn 65 next week and I will turn 64 in the summer. We have no savings, no retirement. Our joint income is around $116K. We have debt, personal loans, credit cards, and automobiles of $83,000. And we have a $28,000 mortgage lien that we disagree on, but we do have it against our primary residence. Um, so my husband looked into getting a cash-out refi to roll all of our debt into, um, one loan to free us essentially of all the debt.

Well, it doesn't free you of it. It moves it onto your house, right?

It moves it onto the house.

You're not paying off anything. You're just moving it, right? Okay.

And so I was trying to explain that to my husband. I said, look, this is a 30-year loan and we're— our mortgage is at $53K right now. What— why would it make sense for us to roll all this debt into another mortgage loan. We're almost at the finish line. So the loan officer is tag-teaming me with my husband, trying to get me to agree that it makes sense to finance this loan again and put all the debt into one pot. And he's saying that I would be walking away with an extra $3,000 a month if I were to go this route. And if we added an extra $2,000 a month, we could pay off the mortgage in 6 years. I don't know if that makes sense to me or not. I need you to help me to sort this out.

Well, what's bothering you is that nothing changed in your habits when you do this, right? And so when you're 70, you're gonna be back in debt.

I don't like that idea.

I know, but that's what you're gonna do because the system y'all are using now puts you here, and you're not changing anything in the system. You think— and your husband thinks he can borrow his way out of debt, and you can't dig your hole, dig your— but you can't dig out the bottom of a hole and get out. That's not how it works. So how much of the $83,000 is his truck?

$32,000.

Hmm, isn't that weird that I knew that?

I'm prepared to sell my truck and just drive the other one.

How much do you owe on the other truck?

No, the Jeep is $24,000, and we have an F-150 that we paid cash for that he drives occasionally when he doesn't drive the more expensive truck. And I told him—

how many cars do y'all have?

We have 3 vehicles, 2 trucks and 1 Jeep.

Okay, and truck number 1 that he drives occasionally that's paid for is worth what?

Maybe $6,000.

Okay, and the other truck is worth $32,000 and owes $32,000 on it, right? And then there's the Jeep that you owe $24,000 on, right?

Correct.

Mm-hmm. Think I found the problem. If I was going— if I was 65 years old and getting ready to retire and I was stone cold broke, I'd be scared. Oh, well, I am not looking for a 6-year plan that some freaking loan officer gave me. That gives me chills. So y'all probably aren't gonna do this because I don't think you and your husband are aligned on this, but mathematically what y'all ought to do is sell both these cars. Both of Yeah, and not refi— and not do a cash-out refinance. Instead, pay your way out of debt and be debt-free sooner than 6 years.

That's what makes sense to me. That's what I've been trying to—

I think you could pay off the house and everything in about 3 years at 68 years old, but you're going to be not driving these 2 cars.

Well, I tried to explain that to him. I said, look, you know, we, we Owning two vehicles with two notes didn't make sense to me to begin with. We have a concession trailer that we use occasionally, and that's why he bought the truck to move the concession trailer around. But now that we have one spot, you know, I don't see us moving it all the time. I see us trying to use it to get out of debt.

Yeah.

So I really feel like not giving up the $53K that we have left on the mortgage and sacrificing for $185K.

Yeah. So $85,000, if you sold these two cars, gets you completely out of debt, mortgage and everything. And you make $116,000, you can do that in 2 to 3 years. And you should, because you're freaking retirement age and broke.

Can you say that one more time? Because my husband is not here, and I want to make sure that I got it written down.

Well, I mean, you said you had $83,000 in debt, right? Not counting the mortgage.

Yes.

Okay. And if I take $32,000 from that, if I take $32,000 from that, I have $51,000. And if I take $24,000 from that, I have $26,000. $26,000 and $53,000 mortgage is $78,000. You make, okay, $116,000. How fast do you pay off $78,000 making $116,000? If you paid off $35,000 a year, you're done in 2 years. If you pay off $25,000 a year, you're done in 3 years.

Okay.

And that's no 6-year plan that makes your banker rich.

That's what I told him. I said we could do this in 3 years.

Yeah. The last financial planner you need is a loan officer.

That's what I thought. And that's why I've been listening to your radio station. So I don't get into these.

I don't, I don't know if you're going to get hubby to do all this.

So, well, you know what?

I think it's time to try.

Yeah. And by the way, the timeline Dave gave you speeds up if you guys are working extra. Yeah.

You could do it in 2 years while you got health. And if you got no house payment, no payments at all, yeah, I got your $3,000. Now it's $4,000 freed up to start saving some money. You start saving $50,000 a year and you do that for 4 or 5 years, you're gonna have a decent nest egg in your 70s and you won't be retiring eating dog food. Alpo, the breakfast of champions. It's like, oh my gosh, you know, I mean, yeah, but here's the thing. We've been buying crap we can't afford because we wanted it and some loan officer told us it's a good idea. The guy at the car lot said, look, I got you approved, and like we're supposed to celebrate that? Hello, you owe more on your cars than you do on your house.

Oof, ouch. Fact.

Pinch me. It's true.

What is wrong with this picture?

Right? Yeah. Well, she's been controlling the house thing and he's been doing the other stuff, and now he's tinkering with the thing she's been controlling.

That's right.

And that's why she rose up.

That's right.

It's good for you, kiddo. Yeah. I'm afraid I'm going to cause some marital discord, and I'm happy to.

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Charles is in Sacramento. Hey Charles, how are you?

Doing well, how are you, Dave?

Better than I deserve, sir. What's up?

Hi, I was wondering if, um, pulling out an SB lock for an investment property would be the right move for me. Okay, well, um, I'm guessing you're fairly new to our I've been listening for a while, but my financial advisor presented me with the option of an SBLOC. He's not pushing me towards it, just, you know, presenting me options.

But I mean, if you've been listening to this, you know I don't borrow money or tell people to borrow money, right?

That's right.

Okay, so the answer would be no.

Okay, gotcha.

Yeah, I mean, that's— I love real estate and I love investment property. I hate debt on it. And I really hate the Small Business Administration. They suck. And for you to get tied in with them and what that's gonna do to the rest of your whole portfolio, and all just to get a rental property, is the risk level that you just took on, neither one of you two are thinking about what you're doing here. The risk level is through the roof. So your investment guy's risk meter's broken. Because the SBLOC is always tied to other assets as well. And so you're putting all of that at risk to screw around with a rental property in California.

Well, that's. So that's the thing. The rental property actually isn't in California.

Well, that's worse.

It's a lot further away in the island of Guam.

Oh, that's really bad.

It's my wife's grandmother's house.

No, no, no, no, no, no, no, no, no, no, no. We don't, we do not have rental property. That's long investment property. That's long distance. And we certainly don't buy grandmother's house for rental property in Guam. No, no, no, no, no, no, no, no, no. This guy, you're trying to figure out a way to do something you can't afford, and this guy's presenting you an option to finance something you can't afford to do. And really it's God just yelling at you, don't do this.

So true. It's a long distance headache. That's what you're looking at.

Well, as foreign country, hello. I mean, if you're going to invest in real estate, You want real estate to be a very predictable environment, okay? And so if you're gonna invest money in a foreign country situation, you've completely left the stability of the US economy. And so you can do that, but you need to be able to burn that amount of money down. And so if you wanna buy a property in Mexico, you wanna buy a property in Guam, Costa Rica, I got a friend of mine bought a place in Costa Rica the other day, that's fine.

Fine.

Nothing wrong with that. But somehow we Americans think that everywhere else in the world still functions the way the United States functions, and it doesn't. It's a freaking banana republic. Hello. And so, you know, they may just come over there and take your property. So you need to be able to just abandon that amount of money at any point if you're going to do that. And I'm not saying Guam is going to do that. I'm not saying Costa Rica is going to do that, but we cannot make the assumption that there their governmental processes, their ownership, private property rights function the same way in that culture, in that country as it does in the US.

It doesn't.

And so, you know, these things turn socialist or communist in about an eye blink and all of a sudden, yeah, you're one of those evil property owners. So you just have to think about these things. You need to be able to burn that amount of money down and you don't borrow on a small business line of credit. To buy in a foreign country. No, for sure, for sure. So you do whatever you want, but you called and asked us, and we're always going to tell you the truth because we love you and we, we don't want you to get hurt. And you're going to regret that one if you do it, I promise. Albert's in Phoenix. Hey, Albert, what's going on?

Hey, hey, doing well. So I'm 25 and my girlfriend's 23. Friday is our 5-year anniversary, so happy for Um, with that timeline comes marriage, and I do want to propose to that girl.

Good.

But my main concern really isn't that. It's what comes with that marriage. So the potential in-laws, and they're fantastic people, don't get me wrong, love them. But I've noticed that their finances are all out of whack from like the last 3 years. So they're in their early mid-50s and they have nothing saved up for retirement. They owe $178,000 on their house, and they make a combined household income of $70,000 to $75,000 depending on overtime.

Is your girlfriend sane?

Um, yeah.

Is she going to be a wife that wants to do what they've done?

No, no, no, no.

That's what I mean.

We're definitely financially on the same page, so we're good there.

Okay, so the two of you are going to be okay. The only question is, is you've got this potential liability off in the distance.

Yeah, so they're going on 3 to 4 vacations a year while we're living—

Honey, you can't fix them. If you're gonna start out your marriage trying to fix the in-laws, you're gonna have a long life.

Okay, gotcha. It's just that we're in the situation where we've been asked for money personally for the most basic necessities.

And I would just say no.

Groceries.

Say no. And if she doesn't get comfortable and you don't get comfortable saying no, then we've got other problems. But it's the two of you that are the problem, not them, because they're a known quantity. We know what they're gonna do. They're gonna piss away money and ask you for money. That's a given.

Has your girlfriend given in and given them money?

We lost you. Did she, did she give them money or not? Say it again.

Yes.

Okay.

Yeah, now that's the—

so that's what I'd be worried about. This is, this is the person we need to be talking to, not them. Yeah. You're not going to fix them. The only thing you're going to determine with her is the two of you are going to hold hands, lock arms, and say, "This is how we're going to handle life, and life includes your crazy butt parents." Gotcha.

My only concern is I don't want to be a pocketbook for their retirement.

Don't be.

It's hard to say no.

Don't be. Just plan on it. I'm planning on saying no.

This is the premarital counseling stuff. This would be issue number one for me based on what you've presented. That's what you called us about. Yeah, I agree, you should have a concern, but you gotta hear what Dave said. The concern is with your girlfriend, potential wife.

And you.

Yeah, you both have to be locked in here to say, "No, we're never gonna say yes again. We made that mistake once, we're not gonna do it again." These are not poor pitiful people.

These are people who don't manage their money well. So it's hard to feel sorry for them when they need money, right?

Correct.

And you need a new phone. Okay, it's about the fourth time I've been through that. So guys, learning to set boundaries with your in-laws and with extended family of any kind— and extended families, anyone that doesn't live inside of our home, you, your spouse, your personal minor children— you have to be able to set boundaries with them and create quality, kind, compassionate boundaries to say, "We're not able to do that. It doesn't match with our goals." "Sorry, we're unable to do that." And about the fourth time, they'll get mad and they'll say, "But I deserve—" "No, I'm sorry, we're not able to do that. I'm so sorry, we're not able to do that. We've looked at our budget and we just don't have room for that." "Well, you're a millionaire." "I know, but we looked at our budget and we don't have room for that." So, you know, you just got to be kind about it and go, "No." "Listen, I'll be happy to get you into Financial Peace University, and I'll help you sell your car, and I'll help you get an extra job, and I'll coach you, I'll be your biggest cheerleader. I love you, I want you to win, but I'm not able to enable." Yeah, I love that.

That's really good. I would say, "Hey, let me tell you about these Baby Steps. I'll walk with you, I'll hold you accountable. You up for that?" But that's only after they ask for money.

You don't just go marching in there and suggest that. They're not gonna hear it. I mean, you know, we're not able to do that, but I tell you what I can do. Yes. And even if you want to go super crazy, you could go, listen, if you get on a plan and you're real intense and you're starting to work, I might even throw in some towards the plan after I see the plan working. But the plan right now is you just spend— piss away money, and then you come over here wanting some. That's not a plan I'm in for. You pissing away money and then tell me I got to make it up, that's not— that's not something we do here. So, you know, And but dude, this is you and your girlfriend being grown-up stuff and setting boundaries with people that you love but don't respect. That's hard.

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One of our favorite things to do around here is a debt-free scream in the lobby of Ramsey Solutions. We even have a debt-free stage in the lobby of Ramsey Solutions so we can see the people and talk to them when they're doing their scream. And our super favorite thing to do is when it's one of our own Ramsey Solutions team members, which would be true of Josh today, and his wife Holly are with us to do their debt-free scream. Welcome, guys. Thank you.

Thank you. We're so excited. I guess.

Very cool. Very cool. All right, Josh, tell people what you do here and how long you've been with us.

Yeah, I've been here at Ramsey for about 5 and a half years, and I am on the Ramsey Education team. I'm a relationship manager for our sponsors.

Okay, and that's the high school curriculum primarily, and we get sponsors that pay for that to go into the high schools, and you help get that done? Yes, sir. Very cool, 'cause the high school curriculum's had about 6 million students through it now, I believe.

Yes, sir, and counting.

Yeah, there we go, good stuff. Well, congratulations. All right, how much debt have you two paid off? How much have you paid off?

We've paid off $175,000, just north of that.

Goodness gracious, in what period of time? 18 months. Whoa! Okay, now we don't ask incomes because your team members are all standing around, that would be unfair. Otherwise, we always put everybody else on the spot. But how in the world do you pay off $175,000 in 18 months? That's like $10,000 a month.

A lot of Chick-fil-A, but then also like working here, working our jobs, but it's been so fun.

Yeah, when she says Chick-fil-A, we picked up some side hustles. We worked at Chick-fil-A. It's been super fun. I've always done Instacart, so did Instacart on the side. And yeah, when we first got married, I had been saving up money while we were engaged to put down, you know, once we got married, we wanted to start knocking out the house.

So you had a chunk to throw at it. Exactly. And how long y'all been married? A year and a half. 18 months. 18 months, that's right. So thus this begins. Yes, sir. Okay, so this is starting to sound like Holly brought this debt in.

I did, I did. I came with a lot of baggage, which was the mortgage.

But you're worth every penny. I hope so. So this is your mortgage?

It was our mortgage, yes, sir. You paid off your freaking house?

Yes, we did. Oh, I was thinking student loans. Oh my gosh, so you married a woman with a house. I got it, okay. That's a lot better. That's a lot better deal, okay. Good job, man. Man, wow. And you pay off the house. How old are you two? I'm 27.

I'm 29. And you have a paid-for freakin', what's this house worth?

Just under $300,000. Geez, so you guys are gonna be millionaires in no time.

Yeah, we're excited.

I'm so proud of y'all. It's been awesome. So you just, you got married and then just went, we're game on, we're knocking that. You went gazelle intense on the house.

We did, yeah, yeah. We treated Baby Step 6 like Baby Step 2. And that's kind of something, before we got married, we went through FPU and we just wanted Said, you know, we dreamed. We said like, hey, what could life look like if we had no payments? And so—

And so neither one of you had any consumer debt coming in? That's right.

No, I, when I first started working here, that's when I— You cleaned all that up. Cleaned all my, I had about $40,000.

And she's obviously responsible because she had no debt and a house.

Exactly.

Yeah, yeah, yeah. So that's a shout out to mom and dad for—

Yeah, thank you guys.

You know, she was listening to Dave Ramsey growing up in the car.

In the backseat of the car, asking lots of questions that I didn't know what I was asking, but she was answering and got us here today.

A Financial Peace baby and a Financial Peace employee. There we go, that's how this happens. Wow, look at y'all, I'm so proud of y'all. Way to go, man. Your mom and dad gotta be proud too. I think so, yeah, they're all happy. I mean, y'all went kind of freaky though. I mean, you went after this mortgage. Were people making fun of you outside of here? I know in here they cheer you on, right?

They weren't making fun of us, but they were definitely like, you know, this isn't the wisest decision on paper. And I was like, yeah, but it's like the best decision for us. Yeah, it's always, you know, the answer is always just we're solving peace. Yeah, yeah. And that was important.

So yeah, how many hours a week at the height of all of this were you guys putting in?

Um, total probably like 70, probably 15 to 20 at Chick-fil-A. Yeah.

And so you guys were working together at the same Chick-fil-A?

Did you work in the back of the house? I worked in the front of the house.

So it was, it was so fun.

It was, it was a blast. So shout out to our Chick-fil-A.

Why was that, why was that so fun?

Oh, well, I've never worked in food, so I was like, They just seem so happy. Like, whatever they've got going on, I want to be a part of that. So on our honeymoon, I was like, can we please get jobs at Chick-fil-A? And then we did. And it was so fun.

I think that's fantastic. I got to tell you, of all the couples we interview—

This is a strange honeymoon question. It really is. Baby, can we get jobs at Chick-fil-A?

Yeah, sure. But you guys, that cuts your food budget, I imagine.

Yeah, they feed you every time you work. So like Thursday, Friday, Saturday, like meals were checked off the list.

Amen.

Yeah, yeah, I knew that was part of it. I could just tell.

What are you—

are you saying something about, you know, no, no, I mean, you look, you look like a great diet to me.

No, I'm just saying when you, when you both decide to work at Chick-fil-A and you're gazelle intense, you have figured out that there's some free food in here. That's right. And that's a really good deal. That's better than rice and beans. No offense, Dave. Chick-fil-A chicken is— that's pretty good.

Jesus chicken trumps it for sure. That's true. You guys, amazing. Way to go. All right, now, um, so when people say, how did you pay off your house at 27 years old, what do you tell them?

Yeah, I mean, there's the obvious, uh, you know, get on the EveryDollar budget. Uh, that was something from the get-go we had to make sure we, we knew where every dollar was going, otherwise this doesn't happen. Um, so that was— yeah, everybody says that, but I would say biggest thing for me is just, uh, taking time to be grateful throughout the journey. Uh, looking back on how blessed we are, how blessed we're able to have jobs, we're able to have side gigs. And we hit a milestone, and we were just thankful to God that, you know, he put us in a spot where we can do this, you know. So yeah, that was big for me.

But yeah, I think it was really fun to like lock arms in the first year of marriage. And like, we are naive, like life's gonna get hard, but it does feel like we can accomplish anything together. So that was kind of like being on the same page was really, really fun together.

It's obvious that you guys were really dialed in together, and there wasn't one of you dragging the other one along. And that's— you're right, you can take on anything if you do that. You can do anything you want to do. So I'm so proud of y'all. Very, very well done. Very well done.

What was the hardest part? Yeah, we were thinking about this question. There were definitely some nights, like when you're in the grind of like Thursday night, we're eating chicken again, and we're like, I've got to go make chicken after this. He's gotta go sell chicken after this. And we were just exhausted, so we were looking at each other and we were like, we're shells of humans, like, is this worth it? So there were moments of really, really hard, but you get a good night's sleep and you wake up and you can go again the next day.

Yeah, I can handle that, but I think the biggest, the hardest thing for me was I am traditionally a spender. So when we have most of our budget going towards throwing it at this every month, I'm like, ah, dang it. I can't go buy a new pair of shoes or something like that. So it was hard to have that disappointment to just say no to a lot of things.

But you got there. You did. And it's so worth it. What's the first big thing you're gonna do to celebrate? I mean, you got your company.

I think have a cheeseburger, huh? Yeah, no more chicken.

No more chicken. In-N-Out Burger, baby. We're going across the street.

Yeah, well, we kind of already celebrated.

We went to, we kind of redid our honeymoon. We went to Universal Studios in Orlando last month. And so we, we had that kind of, we like cashflowed that and did that before we even, you know, um, had made the last payment. Exactly. So, uh, we did that, but yeah, we'll, we'll save up for a new car. My car is getting old and, um, you know, boost up everything outside of that.

What are you driving?

I'm driving a 2008, uh, like little Infiniti SUV. It has 250,000 miles on it. Yes.

So awesome. And he wants a Ford Raptor, so that's next.

Okay. So, okay. That's great. So here's what I want people to hear this. How long is it gonna take you to save up for the Raptor now that you're debt-free?

8 months to 12 months, I would say.

Yeah, it'd probably be a year.

Yeah, 'cause we'll let off the gas. We'll not work as much at Chick-fil-A. Like, we'll relax a little bit, but we'll get there eventually.

You say that until he wants that Raptor a little early.

He's identified that he's driving a piece of crap, so that's good. Yeah. That's good.

I like that.

Obviously, it'll be a used one, Dave. You know about these, these cars.

I've heard about them, heard about it, heard the rumor. Yeah, yeah, I'm proud of y'all. Way to go, guys, you're rock stars. This is absolutely amazing. Very well done, Josh and Holly, Ramsey Solutions team members and apparently Chick-fil-A team members. $175,000 paid off house and everything at 27 years old and 18 months of marriage. Man, don't tell me you can't do it when you're Gen Then these guys are just going, "Mic drop. Count it down. Let's hear a debt-free scream." 3, 2, 1.

We're debt-free!

Yeah! Woo-hoo-hoo-hoo! Man. Makes me proud he's working here. Yeah. What a sharp guy, man. No question. We knew that already, but you put all that underpinning, all that foundation, under it.

My gosh. And let me point out that when you marry someone that is aligned with you financially—

and that is sharper than you—

well, that's true too. I wasn't going to say that part, but hey, that is really cool to see their values align. And now look at them.

Boom.

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I came home and I handed it to my wife and I said, "Look at this thing. This thing is amazing." And she read it and she said, "Uh-huh, uh-huh. That's what's wrong with you." No, that is me. Wait a minute. So there's a lot of ways you can assess and tell what the way people think and the way they tick. None of them are perfect and none of them are a fix-all, but if you know how someone is wired, it's easier to communicate with them. And if you think through for a minute, you'll know how they're wired. And this book will help you do that. Stop Talking, Start Communicating. You can preorder today at RamseySolutions.com/store, or if you're watching on YouTube or podcast, you can click the link in the subscription. The Ramsey Show question of the day is brought to you by Yrefi. Defaulted private student loans don't fix themselves, but you can fix WhyRefi helps you refinance into a low fixed-rate payment that fits your budget so you can get back to the Baby Steps and move forward. Go to whyrefi.com/ramsey. That's the letter Y-R-E-F-Y dot com slash Ramsey. Might not be in all states.

Today's question comes from Kyle in Kentucky. My wife and I have been told by our financial planner that it's better to invest in the market than to pay off your mortgage if the interest rate is less than your average rate of return in the market. He explained that market gains can be used to pay lump sums on the principal of your mortgage to pay off your home sooner that way. Is this the best course of action? Well, Kyle, I don't know if you've been listening to us for a while. If you have, you know our answer. If you haven't, there's a reason why Dave developed the Baby Steps many, many years ago, because of the momentum and the strategy actually pays off because it's disciplined action. And so the answer is we disagree with your financial planner. That's a numbers game. It's a manipulation, some fancy math to try to make you feel good to invest with the financial planner when the discipline of the old— Dave, you've used the adage so many times, the tortoise always beats the hare, right? The idea of just disciplined action. And so—

Well, then there's the other thing that the financial planner's math is just, it's not fancy, it's just wrong. Okay, so a lot of gymnastics. If you make 10% on your investments and your mortgage is 4% or 5%, he's saying you make 6% difference and that you're gonna get out of debt faster. Well, that's wrong because he left out a key mathematical figure in this equation. This equation is very naive and very primitive and very simplistic. If you did a sophisticated analysis of this, you would factor in risk. And risk is not factored in here. You just took risk. You put money in the stock market, which is risk. You didn't pay off your mortgage, which is risk. And so you've— if you take— if you adjust for risk and taxes, because you do pay taxes, by the way, on that investment returns, those investment returns that you're gonna lump sum and throw at this are taxable investment returns. So you didn't— he didn't adjust for taxes and he didn't adjust for risk. So your financial planner's full of crap is the problem. And it's typical financial planner. Too many of them are this naive, this primitive, this unsophisticated.

And so when you adjust for risk and taxes, there is no benefit. And here's the way you know this in your heart, Kyle. Let's pretend your house was paid for and your financial planner says, hey, you should go borrow $300,000 on your house. 'and give it to me to invest in a good mutual fund, and I'll make 10, 11, 12% on it.' And you can borrow that money at 3 or 4%, and you'll make the difference. It's the exact same discussion mathematically. But when you say, 'You want me to borrow on my paid-for house?' You know what happens? Your heart jumps, which is where you measure risk. You do math in your head, you measure risk in your heart. Your heart skips a beat and goes, not just no, but hell no, I'm not borrowing on my house. It's paid for, you idiot. Why would I borrow on my house to invest with you? And it's the exact same equation. So when you reverse it that way, it makes you realize this guy's not playing with a full deck. He's not got all the parts of the math equation in there. So yeah, you need a new financial plan.

Financial planner. This guy's more worried about what you invest with him than he is what you're going to end up with at the end of the day. You're going to end up with a lot more with a paid-for house and increased cash flow that you can invest in good mutual funds, which is what I have done, what Ken has done, what all the Ramsey personalities have done, what millions and millions of people have done that became Baby Steps millionaires, and they didn't have your financial planner. So you need one that can do math. You got left out. God, man, the arrogance of these guys. Guy. It's unbelievable. Tim is in New Jersey. Hey Tim, what's up?

Hi, um, how are you doing? Good, how can we help? So I'm at Baby Step 5 now, so I'm debt-free. I do have a car lease. That's the only thing that I— my— that—

well, then you're not in Baby Step 5. You have debt on your car.

You're right. So So I have two questions. One, if I should pay it off. But then my main question is, the reason why is because I would like to have a nice car. I can afford it. But it's gonna come out more money. It's gonna be a bigger headache for me to have to sell it and everything like that. And I don't have a big payment on it compared to what I make. But my main concern is my wife is very concerned when it comes to spending. So we used to be, we didn't broke, We had a lot of debt and I paid everything off and, um, no, you paid off everything but the car. True. Okay. So let's say I fail on the car. I will fail on the car, but, um, I make enough for my wife to be able to spend nicely for like for stuff, personal stuff. I work at night as well, so I do music and I work at night. What's your household income? So I make $170,000 after taxes roughly.

So it's not good for you. You work hard. Card. Good for you. And you have no debt except the car lease, and you're paying it off. Good. Okay. And what is it— how much is it your wife— how much is it your wife has trouble spending? How much money?

Um, it comes like any, any purchase that is like, like $250, $300 for clothes or something like that.

Well, if you do a detailed— if you do a detailed budget where every dollar has an assignment before the month begins, and she's in agreement with that budget, she'll be able to look at that budget and say, if I spend this $250 on some clothing, we still have the money for groceries. We still have the money for investing in retirement. We still have the money for X, Y, or Z. And as long as she knows she's okay, she can spend it. But when it's all discombobulated and it's just kind of swimming around in your head, and you don't have a detailed plan, she doesn't know it's okay to spend it. When we were broke, Tim, Sharon, and I would go to the grocery store, and when we're buying groceries to feed our family, we wondered, because we didn't have a budget, we didn't have a plan, we wondered if we just spent the money to keep the lights on at the house. So it was stressful to buy groceries. That's what your wife is experiencing. But once we had a plan, we said, "This much is for groceries." this much is for electricity, this much is for the house payment, and we have that plan laid out, then when we spend money on groceries, we're not stressed because we know it's a part of an overall plan and we're gonna be okay.

She needs to know she's gonna be okay if she spends this money, mathematically. Yeah, and hang on the line.

We're gonna give you Rachel's book. It's a number one bestseller, Know Yourself, Know Your Money. My guess is your wife's background, in other words, the environment environment she grew up in plus her experience with money to this point is shaping some of that fear. I think that book will help.

Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. Ken Coleman, Ramsey personality, host of the Front Row Seat show on the Ramsey Networks. He's my co-host today. Josh is in Charlotte, North Carolina. Hey Josh, how are you?

I'm great, Dave.

It's a pleasure to talk to you. You too, man. What's up?

Uh, so I had a question. We're in okay shape financially, the wife and I, uh, we have combined finances. Um, and I've got some extra side hustle cash that I've got coming in. And usually I just use that to play golf or buy some beers or whatever. And, you know, no questions asked, but I want to start like surprising her maybe with a trip here or there, just something that's a little bit more than just a, you know, you don't pay for it in cash. You might need a debit card or something like that. That. So I guess my question is, without opening another account, what's the best way for me to go about doing that, surprising her while also, you know, making sure our finances kind of stay together and in one place? Yeah.

What's your household income?

Right now we're at about, you know, $140,000, $150,000, I would say.

How much debt have y'all got?

Nothing but the house.

Good for you. Well done. Done. Okay. All right. Well, I mean, you certainly can do whatever you want to do. You're not doing a bad job. You're managing well. What Sharon and I have done and what we teach is, is that all monies are combined. Okay, now then, that begs the question, how do you surprise Sharon with something? Okay, or how do you surprise your wife with something? And if it's all in the budget, it's kind kind of boring. It's all, you know, surprise, there's your surprise fund, you know. And so, um, you know, the way it ends up working at our place, honestly, um, we do a lot of travel today particularly. It's kind of one of our things we're doing at this stage of our life. And, um, so, uh, in, in my case, I've actually figured out my wife does not like surprises, so that's a little different. But aside from that, she does not want to do all the detailed work of planning the trip. And so, we would have, in our case, maybe a modified way of our thing into you would just be that you could have a surprise line item in the budget.

This is money, a sinking fund, that is for me to surprise you with, and I'm going to do different things. I might buy a trip, or I might buy you something else, or whatever. The fact that the money is in the budget is not a surprise, but the item or whatever I buy is going to be a surprise because it's a surprise. It's a surprise fund. That's what it's for. And you guys are grown-ups. You're not 4 years old. So, you know, that probably will work good enough. If she has to be like tricked into thinking you have money you don't have, I— that one, I'm not good with that idea. It's not an idiot.

It's less about tricking her.

It's just— I know, but I'm just saying, you know, you got to hide it from her so she's surprised. Yeah.

Well, is the surprise when you reveal that you have booked the trip, or the surprise when you just put her in the car and say, hey, we're headed to the airport? What level are we talking about?

Well, I mean, like, yeah, it'd be nice that, you know, I don't think we'd get as far as— because we have, you know, a child and all that, it's like, we can't— I can't just put her in the car and say, hey, we're headed to the airport. But it'd be nice to have something booked a few months out and then go to her a couple weeks in advance and say, hey, you know, that free weekend that we have, it's not free because we've got something. That's great. You can do it.

Yeah, you can do that with an anonymous category. We can name it whatever we want to name it— anonymous trips or surprise trips or surprise for this. I like doing this for you as husband to wife, and so I'm going to put it in the budget. Yeah. And I'm going to give it a name. I don't care what it is. I mean, we got—

we have so many friends, like, you know, we've talked about about it, Sam and Jade Orshaw. I mean, Sam, we talked about on the show recently, Sam, they put money in their budget away for each other. And it's just, this is Jade's fun category, it's his fun category. Well, Sam never spends his and he just stacks and stacks and stacks and he does something really awesome. So you could do it that way too, where as long as it's in the budget, we're communicating and it's like, this is the old blow envelope is what this is. And if it stacks up, then you can surprise her with that.

So there's a lot of ways to do it. But I'm always putting side hustle money budget. Oh yeah. Period. I'm not going to run it as a side deal. No, not a separate account. I'm saying it's a line item. I know. That's what he was doing. I'm not going to do that. Oh yeah, yeah, yeah. No. But it's certainly up to you, Josh. And again, we've been married 43, almost 44 years. And so there's very little that surprises us.

Right. That is a different deal. I agree.

She's not 4. It's not like, you know.

It's hard to surprise them even for a birthday gift.

She doesn't even like a surprise birthday party, I understand, this woman.

What about a gift? Does Sharon tell you what she wants for her birthday or do you surprise her with that?

I surprise her with that. And most of the stuff that we do on a trip, I mean, she may know the location and the date, but most everything else, she's like, "Yeah, surprise me." Oh, that's fun. That's okay. So she wakes up and you're like, "Here's the agenda." Here's what we're doing. That's great. Here's the plan. That's right up your alley. And you know I got a plan. Oh, believe me.

From sunup to sundown. It's ridiculous.

But it's fun. Jack is in New York City. Hey Jack, what's up?

Hey guys, thanks for taking my call. Sure, how can we help? So about 3 years ago, I took out an SBA 7(a) loan to purchase a specialty coffee roasting business. And now that I'm about 3 years into this loan, there's about $100,000 left. It's a 9.75% interest rate. And I feel like I'm finally catching my breath a little bit with this. So I'm trying to figure out where I should start putting any extra money I have.

Catching your breath, meaning you're just now profitable? Uh, yeah. So what kind of profit are we expecting in the coming 12 months?

Um, it's about 20% of our revenue. Uh, our revenue last year was $660,000 and we're projected to do about a million this Okay, so you may make $200 grand.

And is this a side hustle or is this your full-time gig?

Full-time gig.

Okay, and so what are you all living on? What's your— what's it take for you all to live out of this?

Yeah, so last year we brought home about $77,000.

And you lived on that? Does your wife work outside of that? This? No. Okay, so you lived on $80,000 last year? About, yeah. So if you made $200,000 and you lived on $80,000 this year, you could pay off the loan.

Uh, yeah, yeah, I guess so.

$200,000 minus $80,000 is $120,000. The loan's $100,000, right?

Right. Okay, so do that.

Why not? Why would you keep this loan around?

It's not a Yeah, yeah, no, I get what you're saying. It's— yeah, okay, that makes sense.

So hold on, weigh that really quick with what you were thinking about doing.

What were you—

what were you thinking of? Well, we're actually looking to move into a new space. The spot that we're in right now is very small, and that's obviously going to be another expense. It's going to cost about $60,000 to get the new space built out. So what I was I was potentially refinancing this loan because the interest rate is so high. I could get 6.5% if I were to say to take out another $150,000 loan, and then I'd have $50,000 of capital to put towards the build-out.

And then the more, the more debt that you have in business, the more unstable and unsustainable you are. The less debt you have, the more sustainable you are. So I would go with everything you're talking about doing, only I would just pay the loan first, and then I would cash flow the move.

And wait till you feel how easy it is to breathe then. Yeah.

And if you got this move completely cash flowed and you, you've expanded, now you're making $300 grand and you got no payments in the world, and we're what, 24 months, 36 months from now? It's a lot better place to be in business. It's too volatile out there, man. It's that time again, folks. Tax season is here. I know some of you would rather bury your head in the sand until April 15th than face your taxes, but here's a better idea. If your tax situation is complicated, get in touch with a Ramsey trusted tax pro today. Day. That way they can take the stress off your shoulders once those tax forms come in and teach you how to keep your tax bill as low as possible. But don't wait, Ramsey Trusted Pros can book up fast. Go to ramsesolutions.com/taxpro to find one who serves your area with excellence. That's ramsesolutions.com/taxpro. If you're working the Baby Steps, the best and fastest way to do it is by using EveryDollar. It's more than just a budgeting app. It is now the whole plan. The Ramsey Plan built right in. You track your progress, you get personalized recommendations and coaching for your situation that'll help you free up more money and work the plan faster.

It's like having one of us walking with you every day, showing you the next right step and holding you accountable. Start EveryDollar for free by downloading it in the App Store or Google Play. Adam is in Seattle. Hey Adam, what's up?

Oh, hi Dave. Um, thank you for taking my call. I appreciate it. Sure. So I just feel lost in life, you know. I am 26 years old. I have no degree. I'm unemployed and I haven't been able to hold down a job since I graduated high school. I've had 10 jobs and yeah, yeah.

What is your assessment? And give me a single one or two words at most Well, what has kept you from holding down these jobs? What is it?

Just a lot of— a lot of— I think it was a learned helplessness, and then also just a lot of anxiety.

And did you self— did you self-sabotage? Yeah. Yeah. It's— yeah. Okay. So what's it— what's at the core and again, don't worry about how you word it, just be as gut-level honest as you can. What do you think's at the core of all this anxiety, this fear, this worry?

It's, it's my fault, you know. I, I took ownership of it. Um, I just don't know how to move forward.

So yeah, well, the first way to move forward is to realize that you're not a failure. And I think it would make a lot of sense for somebody in your shoes at 26 who's never had anything stick— doesn't feel like you've had much stick in your life. Is that a fair What was the last one?

Things haven't really been— it hasn't been sticking. And yeah, um, I think it's just the severe anxiety, um, that I have. And I am, I am in therapy for— okay, for that.

So are you making progress? Do you feel like you're making progress in therapy?

I want to believe that. Yeah.

So let me tell you right now, instead of this big philosophical and big strategy answer, I think you just need a win. And I think you need to redefine what winning looks like. And I think winning, if I were going to prescribe something to you, is go get a job and go get the hardest job you can get. I mean that. I don't mean something that pays you very little. I mean hard working, maybe some manual labor, work in the trades, and have one clear win. And that is, I'm going to keep showing up. I'm not going— I'm not a screw-up. I'm not gonna screw up. And I got one thing, I'm gonna show up and I'm gonna keep a clean nose. I'm gonna do what they tell me. I'm gonna learn. I'm gonna learn how to do more. I'm gonna be hungry and I'm gonna keep showing up and I'm gonna put one month and two months and three months. And while you're getting this therapy, I think you need to do something really, really hard because I think you need to prove to yourself that you've got grit and that you're actually tough and that you're not a victim.

But I want to bring Dave in because I know he's got some great insight on this too. But I'm trying to simplify for him to get him a win. Dave, what are your thoughts?

Where's your family?

Um, so I, I, I am with, um, a relative of mine. I live with a relative of mine.

And, um, yeah, what relative? Uncle, aunt, brother, sister?

What? Yeah, um, uncle.

Okay, where's your mom and dad? Um, physically, where are they located?

Are they located like in the same city? It's just where, you know, I failed and I haven't been a really good son. So, um, yeah, I, I, I'm not— I don't really talk to my mom. Much, but yeah.

What did you call for today? What did you— what did you want from, from Dave and I?

I just feel— I feel lost in life, and I like— because I'm 26 and, um, you know, I have no degree, and, you know, it's— I'm just trying to—

no, listen, I can tell you right now, you're so ashamed of yourself. You are just covered in shame. So Dave and I aren't therapists. I'm glad you're with a therapist. I cannot preach that enough. Do the hard work, keep digging in, don't stop that. But I'm going to go back to what I think. I think instead of— I don't think someone who's in your state of mind can have great clarity. But I'm going to give you a resource. I'm going to give you my book, Find the Work You're Wired to Do. I want you to take the assessment, but I'm going to caution you that I think you're so down on yourself and you are so loaded down with shame that I think you're going to have to do a few little things at a time to build up up a belief in yourself. And that's why I'm prescribing hard work. I mean, like brick crew working on a construction site to where your body aches all day and you just get some confidence to go, I'm showing up doing the hardest work possible. I really believe that's what you ought to try. Try for 90 days and get that back stiffened up to say, I just did the hardest work on the planet.

For $18, $20, $22, $25 an hour. Hard work. Work 2 jobs. Don't do anything but work and stack up some cash. It will— for the whole purpose of beginning to believe that you're not an utter failure. That's what I'm— that's what I think you ought to do.

Yeah. So this is a real hard assignment. Get a job doing anything that's tough and show up every single day and work your butt off. Yeah. You can do that. Okay, you can do that.

Yeah, to build, to build and stop partying.

Yeah, build some grit. You're partying your butt off, aren't you? Yeah. Yeah, that's got to stop. You're killing yourself, man. Yeah. Okay. Yeah, it's, it's dripping off of you. So if I was you, I'd plug into a great church and get some men that are walking with God that are clean clean, they're sober, and they'll walk alongside you, put their arm around your shoulder, and kick your little butt, and get you in a job, and hold you accountable for staying clean and working your butt off. And you got to get a community that's different. The community you're running in is a bunch of losers. Amen. And you're going to become who you hang around with, so you need to change who you're hanging around with. And you're going to— that's a mess. So yeah, the thing is this, Ken's prescription, I think, is exactly right. You need some wins. You need some confidence and some dignity. But that means you gotta walk away from the stuff that's been taking it from you. And that's the partying. And the reason you're not showing up at work is you're hungover, you're strung out, you can't wait for happy hour.

Can't wait to smoke another joint while I'm on the job. Well, of course you're getting your butt fired. No kidding. You can't pass a drug test. Best. And so that's what's going on. I mean, so you step in there and you stay clean, dude. And I'm telling you, get a whole new crew to run with. Get into a good church. And that's why I was asking about family. And so the reason your family is upset with you is not because you're a bad son. It's because they love you and they hate watching you destroy yourself with your bad habits. That's what they're— they're not mad at you, that they love you, and they can't stand watching you kill yourself. So what I would just walk away from that stuff and go completely clean and just let's go for a whole new direction. I mean, we're going from drunk to monk right now, man. I mean, game on. Time to make a move, right? You got to make a shift here. And if you do something radical like that for 90 days, you can do all kinds of stuff.

It's absolutely right. Absolutely right. And I can't say this enough. At some point after the 90 days, I want you to do something that you're afraid of doing. Yeah, something that you're afraid of that's like really a stretch. I don't mean something stupid financially.

I just mean something you're afraid of, which right now is everything. It is.

But I cannot tell you how much hard work will do for the soul. Oh, yeah. You know where— and by the way, your only goal, by the way, is stack as much cash as you can in that 90 days.

Stay in clean.

Yeah, get a goal.

Staying clean. I think you can do this, Adam. I know you can. I really don't think it's as bad as your brain has told you it is. But yeah, you're gonna have to walk away from some stuff and towards some new stuff. Yeah. If you want a different recipe, if you want a different thing, you gotta change the recipe. Keep doing the same thing over and over again, expect a different result. That's the definition of insanity. That's what the 12-steppers say. And they're quoting Einstein, by the way. 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. In the lobby of Ramsey Solutions, one of our own Ramsey Solutions team members, Brandon Ray and his wife Madison, to do a debt-free scream.

Welcome, guys.

Hey, how's it going? Good, man.

How are y'all? Doing well. Cool. So how much debt have you two paid off?

$118,000. Wow. And how long did that take? 4 years.

Good for you. And you've been here about 4 years, right? Yes. Okay. Tell folks what you do here at Ramsey.

Software engineer on Trusted.

All right. And so if you're getting a tax— getting help from a tax pro or real estate agent, it's very likely that Brandon and Ray might have written the code that caused you to be able to do that. So that's how it works. Now, way to go, guys. Well, congratulations. What kind of debt was the $118,000?

So we had 2 cars, student loans, 4 credit cards. We also owed some family some money. Money.

So you were normal? Normal, yeah. How long you two been married? Almost 10 years. Okay, so where did you move? Did you move from somewhere to come here 4 years ago?

No, we're from here.

You're from here? Yeah. Okay, and so you join the Ramsey thing, and around here the peer pressure is all positive to get you out of debt. It's the opposite of most places. Yes, um, like it's kind of over the top. It's like, like a cult or something. So yeah, but the, uh, uh, Yeah, so we're pushing you because we love you to get out of debt. Everybody in the whole team's cheering you on, right? Yes. And so you didn't have a choice hardly but to get on the plan, right? Exactly, yeah. Okay, and so Madison, did you know what your husband was getting into when he joined this place?

No. No, I didn't know we were joining a cult. But it's okay, it's the good kind of cult.

It's a good one. Yes. There's good ones, there's bad ones. We're one of the good ones, yeah. That's awesome. So you guys decided about the time you came to work here, okay, we're gonna attack this debt.

Yeah, it was kind of a little bit before that. It was like, hey, I've been— well, I'll go back a little bit. My mom actually introduced us to you when we were— when I was like a little kid, we were listening to you and Suze Orman, and we were doing all sorts of stuff there. And she introduced me to like the envelope system and all sorts of stuff. But like a kid, you know, I didn't listen to any of it until until well into our marriage. And I was like, hey, you know—

And by then you're normal, you got all this debt.

And I'm like, oh crap, we're starting to have kids and things are starting to stack up and we need some room. And then I was already starting to look into the Baby Steps and then I was like, hey, I really wanna work here too. So that kinda went hand in hand. Okay. Yeah.

All right, so Madison, how did you play into this story? He suggested and I followed.

That's simple, huh? Yeah, I love my husband.

Could you teach a class on that, please?

So no questions at all, no struggles with it? You just were like, okay, well, I did a little bit of kicking and screaming.

Oh, okay.

When he told me I had to stop ordering the cheese dip at, you know, the Mexican restaurant, I got a little frustrated.

But yeah, because she's more of a dreamer and I'm I'm more of a realist, so it's like she comes to me with dreams and I'm like, there's no room in the budget. So we need to like do some work to make those dreams come true.

Dreamer and dream killer.

Yeah, and apparently queso killer as well.

Queso killer, whoa, that's worse than dream killer. Wow. It is.

Hey, but we're debt-free, so we can have the queso.

Yeah, now we can get the queso.

She's bought in.

Now we got it, okay. So what do y'all tell people the secret to getting out of debt is? $118,000 in 4 years, so you We did like $25,000, $30,000 a year, right?

Yeah, it's pretty substantial. It's doing lots of late nights. We did— I did two side jobs to make that happen. So it was a lot and you gave up a lot because you had to like get the kids to bed, do different things. It was, it was a lot of sacrifice. Queso. And queso.

Yeah, a lot of missed out queso.

So there was just a lot of, a lot of sacrifices, a lot of late nights, a lot of coming here eating beans and rice. The taco bar looks really good on Tuesday, but lots of beans and rice. We ate a lot of beans and rice. Lots and lots and lots, yes. Yes. So that was probably the hardest part too, is like giving up time with the kids, giving up time with family at night, and giving up just— we like food, so it was a lot of food.

Was it worth it now that you're free?

Oh yeah. Oh yeah.

Oh yeah. How's it feel now that you don't have any debt except the house?

It was weird at first, 'cause it's like, oh, is it Is it actually over? It doesn't feel real yet. And then, yeah, it's still kind of getting to that real part, but it's like, hey, wait a second, we can actually— the kids want to go do something, we can do it, right? It's not a no immediately. It's like, yes, we can go do that.

All right, for a guy who works here, you know it, you've lived it, you've done it now, what do you say to people that this is the key to winning on this debt-free journey?

Well, you got yourself into it, you got to get yourself out of it. Just do it. Put in put in the work. Get it done.

Love that.

What about you, Madison? What do you say the secret to getting out of debt is?

A lot of patience and a lot of trusting your partner. A lot. There has to be good communication between both of you about where your money's going. All those random subscriptions that you forget you have have to be canceled.

Exactly. Yeah. Yeah, it's a constant thing. Way to go, guys. I'm so proud of you. So proud of you. I know your parents are proud of you. I tried to get you to do this 20 years ago. Now you're really doing it. That's good. That's good. It's very good. Very good. Well, congratulations, y'all. Congratulations. And thanks for being on the team. We appreciate it. And when the taco bar's open, you get all the queso you want, okay? Okay. And it's your birthday. Yes. No way. Yeah. Well, happy birthday.

Very nice. Quite the present. Yeah. Yeah. How are we celebrating tonight?

We're going to ice cream after this.

Oh, there we go. There we go. That's good.

2 scoops.

2 scoops are okay today.

There we go. Maybe a waffle cone. Yeah. Oh, easy. Let's go crazy. That's it. I like it. Very well done. All right, Brandon and Madison from the Ramsey Solutions team living right here in Nashville, $118,000 paid off off in 4 years. Oh, what are the kiddos' names and ages?

We got Beckett, he's 5, Cecilia, 7, and Adeline is 5 months.

Oh, perfect, very cool. And they look like they've been practicing their debt-free scream. Oh yes. So y'all ready to do your debt-free scream? Are you ready, Adeline? You ready to do it? All right, count it down, let's hear a debt-free scream. 3, 2, 1, we're debt-free!

That's how it's done.

Wow, man, that is fabulous. Congratulations, you guys. Well, and the team's out here cheering them on. Yeah, it's fun. It's the good news about the team here. They love each other and they're always praying for each other, helping each other, you know, passing on tips and encouragement and everything else versus tearing you down. Down. And it's one of the beauties of the culture at Ramsey. I'm real proud of our team and how many of them came out. You can see them if you're watching on the YouTube, man. That's a huge number of people come out to cheer them on. So very cool stuff. And isn't it interesting that you can grow up right here in the shadow almost of this building, and Mom telling you to do this stuff, and then you look up and you're $118,000 in debt and you're married, and we've been married 5 years, and oh, this is not Oh, I gotta do it too. And then joins our team 4 years ago and actually applies the stuff and goes crazy. So the interesting thing is with all this stuff, it's just a matter of a decision or 3 to decide I'm not gonna do that anymore, I am gonna do this, I'm not gonna do that, I am gonna do this, and this is, I'm identifying what works, what doesn't work, and I'm gonna plug into what works.

I'm gonna walk away from the things that don't work. And this, using these credit cards to get my airline miles, bull crap. I'm not paying attention to what we're spending at restaurants. I'm not paying attention. And then all of a sudden, boom, it gets serious and everybody turns their life around.

It was interesting when I asked Brandon the key to get out of debt, he said, you got yourself into this, now you gotta get yourself out. Really ties into our last call, that young man who had done some things where he created all this shame and guilt and, and he's telling us multiple times he's lost. And it's very similar to people that feel lost financially because they just do what the culture kind of tells them is normal to do, and they wake up one day and they feel lost, stuck financially. Oh yeah. And the advice is so great. You got yourself in it, you got to get yourself out. There's a lot of empowerment there. So, uh, great message to a lot of you that are new to the show and are in a lot of debt and you're just feeling like this is a pipe dream. It's really Probably not. It's that simple, that mindset and crazy discipline that you heard there.

So you can do it. Larry Burkett used to say it takes you about as long to get out as it did to get in. So if you spend 3 years making the mess, it takes you about 3 years to fix the mess. And my experience has been different than Larry's. I think maybe because we've got the whole gazelle intensity thing going. It's roughly about half. So you figure if it took you 5 years to make the mess, it's probably going to take you 2.5 to get out. Of intensity. And so how quick do you clean up the mess? In their case, they cleaned it up in 4 years. Took them about 6 years to make the mess. They've been married 10. So that's how it worked out. Very interesting. Proud of you guys. Well done.

Hey, good folks, Dr. John Delony here. Don't you think life is too short to hate Mondays? Listen, you're worth loving the work you do and where you do it. So guess Guess what? Ramsey Solutions is hiring. If you're ready to join an amazing team that's all about changing lives and spreading hope, we want to see your application right now. We're hiring for technology, sales, marketing, writing, copy editing, and creative roles. Check out all our job postings at ramseysolutions.com/careers. That's ramseysolutions.com/careers.

Our Scripture of the Day, Hebrews 10:23-24, "Let us hold unswervingly to the hope we profess, for he who promised is faithful. And let us consider how we may spur one another on toward love and good deeds." John F. Kennedy said, "Too often we enjoy the comfort of opinion without the discomfort of thought." Yeah, that's really good. Ouch. Uh, Ronnie is in San Jose.

Hey Ronnie, what's up? Hi, thank you for taking my call. I've been listening for you guys for years. Well, thank you, and I really appreciate your words of wisdom. So I'm gonna be 59 in July, and I'm trying to think how I'm gonna retire. I'm working right now part-time as a teacher and I own my house, but I don't think I can maintain the house here in California. I have a little farm and there's always something happening, you know, the septic system and then the well is going bad. So every time there's something else, so I'm not sure I can, I can keep this house for retirement. And I was thinking to renovate it Uh, I don't have enough cash to renovate the house, and I was offered to take a HELOC. And by listening to you for so many years, I know that you guys are not pro-HELOC or taking any, any loans. So at this point, I just don't know what to do. What's the best way to go? What are you thinking of doing? Uh, I'm thinking to move to a different state, so either Nevada or Arizona or somewhere I can and all, you know, this— it's too expensive here.

There's no way we can stay here with the taxes and everything else. It's just crazy. We— we— are you married? I'm not married. I'm single right now. My son lives with me and my adult son is going to finish his studying and is going to move out. But right now he's still with me. Yeah, I'm thinking about moving to a different state because I don't think there's no way I can— I can retire where I am.

So what is your property?

What's your property worth? Uh, my property is about $1.6 million.

Okay. Well, that'll buy a nice property in another place for sure.

Yeah, but I still need to leave me some nest egg for retirement because I don't have, except the house and I have some money market.

How much do you have in a money market?

Right now, uh, it's still collapsing, but it's about $600,000. Mm-hmm. Okay.

So if you sold your property, I'm just thinking about the math only, not the emotions, but if you sold your property for $1.6 million and you bought a property in another location for $600,000 and you paid cash and that would give you $1 million to invest for your nest egg, how would that sound?

I'm not sure. I'm only 59. Yeah. I'm not sure it's going to take me all the way.

Oh, it'll take you all the way. You don't make $100,000 a year now, do you?

I am definitely not doing $100,000 a year now. What do you do?

No. She's a teacher. A teacher.

I'm a teacher, but part-time, yeah.

So what do you mean? Why are you just working part-time?

You know, I've been working for so many years full-time and I want to do other stuff, so I'm working part-time.

Um, how much does it take for you to—

right now, about $5,500 per month. Yeah.

How much did it take for you to live?

$3,000.

Okay, so you can work part-time as a teacher somewhere else. So if you had a paid-for house in another market and you put $1 million or whatever, $800,000 in a good investment, and you're working part-time from 59 to 69 $69,000, you'd be in great shape, wouldn't you?

Yeah, but I don't want to work to $69,000.

I mean, you're going to have to make some money somewhere.

It's too much. Yeah. Yeah.

So I think your plan will work. It's just you're just going to have to be limited on what you spend on the property that you're going to move into in the next state.

Yeah. I mean, look, if any— if the whole place is your oyster, if you can go anywhere, then I would go to a state that has no state income tax. I'd go to a place where I could buy something something. That's more than enough room in the $300,000-$350,000 range. Up to $600,000. I mean, yeah. Up to $600,000. But I'm saying you don't have to spend $600,000 and invest of that. That's going to do fantastic for you. It's going to double every 7 years and you're going to be fine.

Yeah. Just don't touch that nest egg and let it grow and you continue to do a little work. It won't kill you. You're not dying. You're 59. It's not like you're 89. And so Yeah, there's a lot of stuff you can do here. But yeah, I got a feeling though that it's very emotional for you to leave that farm and leave California after all these years. And so the math says to do what you're doing, but then you've got to decide if that's where you want to live. And then the next place, whether it's Idaho or Nevada or Arizona, wherever you're going, you know, you need to go house shopping over there. You need to buy an airline ticket and go over there and look at houses and start talking about where will they accept your teaching credentials so that you can teach part-time over there, create some income, and then sit down with a SmartVestor Pro. Go to RamseySolutions.com and click on SmartVestor and sit down with one of them and say, gosh, if I put $800,000, $1 million with you, what kind of an income would that generate for me to live on in my retirement years if I paid pay cash for a $500,000 or $600,000, $400,000 house.

Now you're gonna have some taxes on this probably too. I don't know what you paid for that property, what your basis is, but either way, that's still— that all makes a lot of sense. But I also have a sense that you're kind of stuck there emotionally, and you're going to have to unstick. And what's kind of the process you're going through right now of going, this is smart, it's going to make me sad though to leave this farm after all these years, it's going to make me sad to leave California after all these years, but their I'm from Texas and the cost of living is driving me out. And, you know, it's sad, but that's a reality and people do it all the time. As a matter of fact, people have left California and New York and Chicago at record rates and have navigated to low-tax states in the past 8 years like never before in the history of the US. Pretty crazy. It's like a reverse gold rush. You know, in the old days there was all this migration to California in the 1800s, right? The gold, the famous Gold Rush. And now it's like a reverse thing.

They're running away from— running back to the gold, which is no longer there apparently. But yeah, or if it is, the government takes it. Yeah, so there's that. And that's what's happening. Nicole is in Boise. Hi Nicole, how are you?

Hi, how are you?

Better than I deserve. What's What's up?

I'm trying to figure out if my ask to my husband is one, realistic, and two, reasonable right now, financially.

Well, spit it out before we run out of time.

What is it?

So we— I'm trying to figure out what we're doing is not working and we need a parent home with our 3 kids. Kids. I just don't know. I, I, after paying for daycare for the 3 kids, we, my income's $1,500 a month. I don't know if it's realistic to ask him or if we can even financially afford for me to—

Can you live on his income if you didn't have a daycare bill?

We're $500 a month short. Okay, what do you do for a living?

I do finance right now. I am finishing my master's.

I am done next month with my master's, and you got to stay home with 3 kids.

Yeah, um, well, the goal is, is to work remote from home teaching at an online school.

Why would that not make more than $500? It would. Okay.

The problem is, is that that wouldn't start until July, without a paycheck until August. Um, we have a $1,000 rainy day fund right now, and that's it. Um, we don't have car payments, but we do have a little debt. And basically, um, my last day of work is in April.

Oh, you already quit? No.

Um, they need a full-time person. I cannot do full-time any longer. And so I had to step back because of medical issues with my son.

You already quit?

You already quit? Yeah, okay.

And so, so you got to find some way to stopgap the difference between now and August, right? Yeah. So how many hours extra is he gonna work to cover that?

He has offered to work 1 to 2 extra days a week. He doesn't have a choice.

Somebody's got to feed your family. You all just made a decision. You just quit your job to go be with the kid that's sick, which I don't blame you. That sounds like the right thing to do. So you just got to find a stopgap, and then you can make it work from there. That puts this hour of the Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.