Transcript of Don't Let Debt Steal Your Future

Brought to you by the EveryDollar app. Start budgeting for free today. Normal is broke and common sense is weird, so we're here to help you transform your life. From the Ramsey Network in the Fairwinds Credit Union studios, this is the Ramsey Show. I'm Dave Ramsey. Dr. John Delony, number one bestselling author, host of the Dr. John Delony Show, and Ramsey personality. He's my co-host today. Our co-host today. Jenny is with us in Orlando. Hi Jenny, what's up?

Hello guys, um, I'm just kind of tired of this financial dynamic that I have with my spouse. For context, we've been together 15 years, we're almost 40, and I'm the breadwinner. I make about $170,000 a year and he makes $65,000. I'm more so now getting passionate about not carrying debt, making smart choices, and possibly buying a business, but I can't seem to change his mind about these balance transfers and buy now pay later programs. So I'm just trying to figure out how to navigate that dynamic with someone that views money so differently. And I typically am the one to rescue, and at what point do I stop rescuing from these, what I consider to be very poor long-term financial choices?

Does he have a seat at the table with you?

He does. We talk about finances every single month, and I express kind of my displeasure about these things and It's always the same thing. It's 0% interest for 18 months and buy now pay—

Let me, I didn't ask a good question. That was my bad. Do y'all have a co-created vision that y'all are both working towards? Or does every month he come to the table and get taken to the woodshed by the breadwinner, the boss? You get what I'm saying?

Yes, I say we're working toward the same vision and he has gotten a little bit better, but I can't get him to understand, like, even though it's 0% interest, it's still money. He sees it as, this is 18 months, it's a scot-free deal, it'll be paid before then. We just view it so differently. I'm kind of now learning, if you can't pay it cash, you can't afford it.

Yeah, that's a great lesson.

Thanks to you guys. Yeah, we just view it so differently, and it's just building up a lot of resentment, and I don't want to like you said, breadwinner, bring them to the table, give me the credit cards, I'm going to cut them up. But also, I just am not in alignment with opening more stuff just because of the bells and whistles that they're dangling on the front end.

The only way I've seen this be successful— and Dave, you've got way more experience with this— the only way I've seen this be successful is you opening the hood to your heart and your spirit, and you telling him not, hey, when you do this, and you need to do this, and this was dumb, but you saying Debt scares me. Debt makes me feel less safe. Debt makes me feel like somebody else is controlling our lives, and I want you and me to be in control of our life. And now he's getting to the source. He's not getting lectured. You get, you get the difference?

Yeah.

Yeah.

I'm not okay. I'm not okay with either one of us. I'm not okay with either one of us making a large money decision without the other one. Or in perpendicular to the values of the other one. And you keep doing that. And I'm not okay. This is not okay.

But do you see how— what do you think?

It's harmless and it's harming me.

Yeah.

I'm not okay. This is scaring the crap out of me. I worry about our future because of this, because we're not aligned.

And if you've made a bunch of expensive purchases, you go out and buy yourself a car, you like You lead with that. I've made purchases without even talking to you about it. I got excited about this thing without even talking to you about it. And I'm gonna own that, but I want us to start to do this together.

We've gotta build a thing together because, you know, us being on different pages is harming our relationship because it's terrifying me.

Yeah, I think because of how much I make, like he doesn't see $10,000 or $15,000 as a lot of money.

I see it as that's irrelevant to the feeling. Yeah, it doesn't matter who makes more, it doesn't matter who makes what, it doesn't matter how much the income is versus the behavior. It's the behavior that's causing me to be terrified, right?

You introduce yourself to us as, I'm Jenny the breadwinner. Does he walk around getting told that a lot? I make more money, I make a lot of money?

No, but I think it gives him that safety of, oh, it's only $10,000, it's only $15,000. Like, it just seems like so because I make so much, but to me, every dollar I make, I want it to grow and multiply. And he's still doing that.

This makes me feel the same way as if you brought home a half a pound of cocaine.

That's a lot of cocaine.

And I'm not going to go this way.

Okay.

This is a violation of my values and it terrifies me. And it's not a matter of the money. It's a matter of, us doing things that are directly a spear point sticking in my arm every time you do this or every time I do something that does that to you. We're not going to do things that we're not aligned on. So Sharon has— my wife has some things after 45 years that she loves to do that I frankly do not understand. There are purchases we make that I have zero emotional investment in, but I can come alongside because I get the point that it's It's important to her to do that thing. And she gets the same thing with me. "Why do you need another gun?" Well, because somebody made one. So it does not emotionally— but she goes, "Okay, it's within our— and it's within my emotional tolerance to do something with money that I don't understand, but I know gives you joy." Same thing with her buying whatever, X, Y, or Z. Putting some money in savings a certain way makes her feel different than it does me. That kind of a thing.

And so all we're doing is serving each other rather than ourselves. It's selfishness versus, you know, submit yourselves one to another, Scripture says. And it's the other one that's hard. You submitting to me is easy. Me submitting to you, that one's hard. And by submitting, it doesn't mean I do what you say. It means I care what you think so much that we're not going to do something that terrifies you.

Yeah. And she brought up a great point here that I see couples get sideways on, which is it really matters. She said, I want every dollar to be ROI, multiplying and growing. And it sounds like she has a husband who wants to kind of just enjoy the life he's in. And that is money just becomes the proxy war where everyone wants to fight. The real issue is y'all aren't aligned on this core value.

Yeah.

And what you, I don't want the audience to miss what you just said, cuz it's important. You make a wee bit, wee barely more than $175K a year. I think you sneezed that this morning, but like you and Sharon still talk about purchases.

We do not make large purchases or gifts without the other one being approved. And sometimes the approval is laughing. It's like, but there's knowledge ahead of time and we don't get a, It's like, "Oh, you know, well, let's sit on that a week and pray." Okay, that's a fair answer too. "Yeah, I don't understand. Why are you doing that?" And explain. "Okay, I still don't understand." All right, let's wait a minute. So, yes, no, or wait. These are 3 possible answers. And all tightwads and nerds can't have every dollar behaving with no fun involved. The other person's there to bring the fun. So, I think he's your fun person. So, you use him for that.

He's good for that.

And fun people have to realize bills have to be paid every month, which is annoying, right? And we need the other side too.

Yeah, there's all that thing that the grocery store wants money for those groceries. Who knew? 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 gonna 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.

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Cody is in chat.

Anuga. Hi Cody, how are you?

I'm doing good. How are you doing today?

Better than I deserve. What's up?

Great. Appreciate you taking the call. Hey, I am a first-time homeowner. I bought my house about 6 months ago. Um, I got it on a 15-year doing biweekly payments, but I just got— I'm going through the process of switching to an ARM loan. So a 7-year adjusted rate mortgage. Um, I closed on it today. I've got 3 days to cancel it if I need to, and I feel kind of in my gut like I might have been making a bad decision, and I wanted to chat with you about it.

Okay. Um, what was the interest rate on your old mortgage?

5.625.

And the interest rate on the ARM is?

It's going to be 4.99 for the next 7 years.

So 5 What was the one you got rid of? Was 5 what?

Is 5.625.

Okay.

All right.

So it's less than 1% and your loan balance is what?

It is when I got the house, it was $192,000.

So what's your loan balance today?

I've managed to pay it down to $168,000 in the past 6 months. Okay.

So 1% is $1,600 a year.

Mm-hmm.

Is the difference, and it's not even that, so it's probably $1,400 a year is your difference. And what was your closing costs on this?

My closing costs are going to be about $8,000.

So you're not even going to break even.

That's, that's what I'm looking at too, and my goal is to pay this off in the next—

Doesn't matter.

Either—

your goal's irrelevant on this. It's just a simple refinance calculation. If you save $1,400 a month and you pay $8,000 for that purpose and the loan's gonna be paid off in 7 years, you're not even going to make your money back in interest saved that you paid out in closing costs. Your breakeven analysis sucks.

Got it. So my, my payment right now is $1,800. It would drop down to $1,167. I need to cancel this?

Yes.

Cool.

Yeah. Well, you see why? Regardless of what your payment change is, it's the interest change that matters. The only real savings savings is the interest savings, the difference in 5.62% and 4.99%, which is what? 0.75%, 3/4 of a point, right? 3/4 of a point. 1 point is $1,680, so 3/4 of a point's around $1,400.

Got it, got it. I think I had done my math wrong towards the front end of doing this, and in closing, I think I kind of started to figure that out.

Can I pile on now? Are you okay?

Please, please buckle up.

Which is really just to go back to the real reason that this thing— let's pretend that we had not found that mathematical problem and instead you just had signed up for an adjustable rate that adjusts one time in 7 years. If you don't pay it off in 7 years, it's going to adjust dramatically. You know that, right?

Yeah. Yes. Okay.

And so if your plan doesn't work out You've got a problem.

Yes.

Never put together a financial formula that, that you have it— everything, your plan has to work for it to work. It also, it has to work when the plan doesn't work too. Yeah, because they— that's the, the stuff that we teach is the only stuff, common sense stuff, the biblically based stuff. Get out of debt, for instance. Okay, that's the only plan that works when things are good and the plans work out, and when the plans plans don't work out.

Yeah.

So you did a deal here that only works if it works, and those kinds are the ones that'll come around bite you in the butt later. And so you probably would be okay because if it adjusted to, you know, 9 or 10% or something crazy at the end of that 7 years, it wouldn't be much of a balance because you would have paid it way down. But you would not be able to refinance if you were unemployed at that precise moment, which I've gotten that call. I plan to pay off this balloon in 5 years, and in the 48th month, 6 to 12 months before the balloon pops, I lost my job and my wife got a cancer diagnosis. And, and so we're just— now our house is being foreclosed on. Welcome, because you built a plan that only works when things work, right? And that's, that's what— that we wouldn't have a show if there wasn't.

I was gonna say, like, doctors and, uh, lawyers, like, there'd be way fewer of them And guys like us, if everyone's plan worked all the time.

Yeah, yeah.

Like, the one thing is your plan's probably not going to work.

Like, functional families, we wouldn't need people with PhD in counseling.

That's exactly right. It's like if people used a calculator.

Most families put the fun in dysfunctional. So I mean, it's, you know, including mine. So there you go. All right, fun. Victoria is in Austin, Texas. Hi Victoria, how are you?

I'm doing well, how are you?

Better than I deserve. What's up?

Hi, um, I am, um, looking to see, um, I am $300,000, $227,600 in debt and I'm sorry, I didn't understand that number.

That was a number. I didn't know.

What was that number?

$300,000.

Yes.

Okay. And how much of that is your home, ma'am? $255,000.

Okay.

What is the other $45,000 in debt?

Um, it is student loans. And then I have a car that's $12,000 and then my air conditioner went out. That is $2,000.

Your air conditioner went out and you borrowed to get another one?

Yes, sir.

That's the $2,000.

Okay.

All right. The air conditioner go out, doesn't put you in debt. It's the buying the other one that goes into that.

Okay.

So the, um, and what do you make, ma'am?

How much do you make a year? I make between $100,000 to $150,000 a year.

Wow.

If I didn't work any overtime, it would just be $100,000. If I do add overtime to that, it would be $150,000.

Good for you. Good for you. Okay, I'm caught up with you now. And your question's what?

Like, would it be smart for me to open up a Roth IRA now even though I'm still in debt and I'm paying off my debt, or should I wait till I get all my debt off of me first before I open up a Roth IRA?

That is an excellent question, and the good news is you're smart enough to know you need to be investing. That's very smart. Okay, how old are you?

I am 32 years old.

Okay, so you're already looking out into the future. Good for you, well done. So what we have found is, after studying this for many, many years and helping millions of people get out of debt and build wealth, and tens of thousands of them become millionaires, is the fastest way fastest way to become a millionaire, the fastest way to build substantial investments, is to first get out of debt because your most powerful wealth-building tool is your income. Now I'm not talking about your house, but we want to get rid of the student loan and the car debt and the air conditioner debt as soon as we can. And the good news is it's only $45,000, and if you work overtime, you can make $150,000 and live on $100,000 and be debt-free in 1 year.

You'll be 33 with no debt.

Yes, that'd be pretty cool, but you got to buckle down more than you ever have. Yes, sir, because you've been a little sloppy. That's how we got here. Yes, that doesn't make you bad, it just makes you normal, but normal sucks. We don't want to be normal.

That's right.

Okay, so let's buckle down, get on beans and rice, rice and beans, get on a budget, get that EveryDollar app downloaded off the web. For free. Get your budget going and let's knock these debts out ASAP. And lay it out on paper where you're done in 1 year or less, okay?

1 year or less? Yes, sir, I will.

That's $45,000 from $150,000 leaves me $105,000 to live on, not counting taxes. You can do that.

Okay.

Once you focus, because you're a person that focuses, I can tell. But now that you're paying attention, now that you're awake, Game on. Okay.

Game on. Okay.

All right. And you can do this. And so then what's going to happen is, is that what you used to pay on car payments and student loan payments, when you start putting that into an investment, that amount alone will make you a millionaire before you retire.

Yes, sir. Pay the 45 off and then open the Roth IRA.

Yes, ma'am. We teach a process for getting out of debt and then building wealth. We call it the baby steps. And again, millions of people have done it. I'll send you a copy of the book The Total Money Makeover as my gift, and it shows you exactly how to work those baby steps. And don't make up your own plan, Victoria. Do the one we have that works. It's proven. It's proven. It's not because somehow we just dreamed it up. It's millions and millions of people have done that. I've sold 20 million of those books, so we know this is moving the needle. And you're, you're awake now. So game on.

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So I'm really starting to— I mean, I was mildly amused with AI to start with, but I'm really starting to love it. Once I understood this one basic thing about AI, here's something you got to understand. So AI obviously generates an answer for you. You pose an answer for it. But the only thing it can answer from is the data that you give it access to. And so if you control the data inputs, you're controlling the outputs. So for instance, when Google has lost its stupid mind and actually is, when you ask Google a question, it's searching Reddit Reddit, as if Reddit is some source of truth on anything. 90% of what's in there is bullcrap. So why you would search that for the answer to a question is beyond me. So the AI database is completely screwed up, and so your answer's screwed up. So, but we understand this now, and I— our team has built the Ask Ramsey AI tool. And what's in it? What's the data that publishes Well, we put 3 years of the answers from this show in there. We put all the Financial Peace University in there, all the books we've written here in there.

We put all the articles that we've written in there. So there's nothing in there except Ramsey. All the answers from anywhere we've given, one of us has given, you know, Dr. Deloney, me, Rachel, whoever, and it drops in there. So when you hit the Ask Ramsey AI app, it's going to give you an answer that sounds It's even as smart, Alec, as you're going to get here on the air. I mean, it's even got some of the sarcasm in it. It's awesome. I want them to turn up the sarcasm a little bit more.

They took all my jokes about George out though, and that kind of bugged me.

Did they really?

Yeah.

Aw.

He got his feelings hurt.

Ask Ramsey about George jokes.

He drove home in his Tesla in a huff, except there was no huff because there's no huff coming out the back of his Tesla.

See, there's a good George joke right there. All right, so here's some— we get questions, and we always go down, because you need to check this app out. It's at ramseysolutions.com. Free, Ask Ramsey. If you can't get through on the air here, which nobody can because these lines are jammed all the time, you can just go over there and ask Ramsey. So here's the number— and we always come in and give you the number one question of the day, of the week. So the number one question this week is, what are the top pitfalls to avoid when budgeting? So I read an old Zig Ziglar quote this weekend that said, no one accidentally got to the top of Mount Everest. I always say no one accidentally won the Super Bowl. Winning is an intentional act. And so if winning with money is an intentional act, what are the tactical things you do? Budgeting is the main one. You tell your money what to do instead of wondering where it went. You give every dollar an assignment every month before the month begins. And that's how we even named the app, the budgeting app, EveryDollar. Okay, so top 8 pitfalls to avoid when you're doing your budget: make sure you give every dollar a job.

Now, this is not your checking account balance. This is your budget. And so there can be no money left over. If it's left over, you need to have a category that's called leftover money. So at least then it's got a name. But it should be going to miscellaneous or fun or debt reduction or to something, right? So no money left over. Now, money left over in your checking account is good. You need to leave a little slush in there. But your zero, your budget should go to zero every month. The second one is then you guess at it. You do a budget and you don't follow it. You just go, "Ah, I kind of thought I—" No, you got to go like, "This is how much we have for groceries and we're not buying more groceries than this. We run out of groceries after this day." And so, period. Then the other one was we ignore the four walls. We don't take care of the important stuff first. The important stuff is groceries and utilities and housing and utilities and transportation. Another one is you let debt steal your momentum. Letting more debt in, or refusing to sell something that's got a bunch of debt on it that's got you stuck, and so you can't get the math to spin and start to, you can't get any margin to start to make some process.

You need a miscellaneous category. Everyone needs a miscellaneous category. You need a his and her spending category that's small, but it's unaccounted for, it's just money you can blow, money you can get rid of. You need to be budgeting, and this is the biggest one, with your spouse. So the two of you sit down, even if it's for 15 minutes, even if it's for 2 hours with the kids in bed. We go over the budget, we both agree to the budget, and then we freaking stick to the budget. This is our contract. This is an agreement with each other. We pinky swear and spit shake we're doing this. When you budget with your spouse, you are agreeing on your fears, you're agreeing on your values, you're agreeing on your dreams, and when you agree on that much stuff, you're gonna have a level of unity in your relationship you had no other way. Another thing is if you make a mistake and have a bad month, people quit. Don't quit. Get back on the horse. Go ride it again.

I have a, I have a buddy who talks about that in the nutrition space, about you have— you're on a diet and you have one bad day, and then you're just like, I blew it. He said that's like walking outside in the morning heading to work and you see you have a flat tire and you pull out a knife and deflate all the other tires too. He's like, fix that tire and get on to work. And when he said it like that, I was like, oh yeah, that's dumb. Okay, so I had pizza. I'm gonna get back on in the morning.

Yeah, yeah, just get back with it. So you messed up, you're human. Oh no, oh no. And here's the thing, you have to adjust for irregular expenses. When you first do your budget, you suck at this. You've never done it before. It's not going to be right. Your first 30 days, you're probably gonna have some emergency budget committee meetings and adjust and raise one category and lower some other ones by the same amount because it's still got to equal zero. And it takes about 90 days, about 3 budget cycles, to quit fighting about it, to get on the same page about it, and to actually get your numbers right. Because you— we think we're doing one thing with food and we're actually spending twice that. We think we're doing one thing with whatever and we didn't realize, oh, we forgot I forgot children's activities. Like, well, let me just help you. Children have activities.

Or a doctor bill that's 7 months old just comes out of the blue and you gotta pay. Like, it just shows up and who knew?

Yeah, I forgot about it. Forgot I went. Yeah, that's all there. So these are the top pitfalls to avoid when budgeting and straight out of the Ask Ramsey tool, almost like we said it because we did.

Can I tell you something? This is a very personal, private experiment I've been doing. N equals 1. And I gotta tell you, you and I haven't, we haven't hung out in a while. And I'll just tell you right here on the air. My wife and I, March 1st, canceled Amazon Prime. And the second thing is I said for the month of March and the month of April, I'm just gonna use, I'm gonna go old school and just use cash. And at every transaction. At every transaction. Wow. In fact, today was the first thing I've spent with a card to get cash.

Because it's April.

Yeah. Um, well, I didn't, I just, I was like, oh, I forgot cash. Like I'm, I'm still practicing. It was my first, first one that I didn't keep up my end of the bargain I made to myself. Yeah. I gotta tell you two things. One, the ability to just click it and buy it versus I'm gonna plan and go to the store. Has so insanely reduced the number of things I buy. I, I never in a million years would've, would've thought that. The second thing is, I, I just thought like, oh, I need those socks or I need that thing or I need those light bulbs, whatever. I'm just gonna click, click, click, click, click. And they just mail 'em to my house. When I have to get out and go to the store and plan, I just buy less. Like, we don't need that right now.

Oh, you forget it.

This, or the socks I got. Yeah. The second thing is you've taught this for years. As I'm just putting over cash, it is painful. Yep. It sticks in a way that just waving my phone over the little beepity beep thing, it is causing me to rethink all the stuff I buy.

What gas costs in a very visceral way.

And it, it's, it's, it's just, it, it's a reminder at how the credit card companies, the tech companies in an effort to make everything comfortable, and quote unquote reduced friction have taken away our, our, our internal like metric system for this hurts. Yeah. Do you really need this? Do you want this? Yep. And man, I do this. I'm, I, I'm with you on this show and I've been shocked at how my spending habits, frictionless habits have, have taken over.

Well, and your, your psychology brain is probably in overdrive.

Oh dude, it's cooking.

You're melt, you're melting down analyzing all this.

Well, I'm, I'm trying to connect what I'm feeling versus what I'm doing. And man, that bridge is, I need a lot less stuff. And man, using cash—

and then the other thing is you cannot replace the weird looks you get when you pay cash for things.

I, I did have one exchange where I— and they're like, they're looking around at me like I was handing them a snake. And I said, hey, I— that's all I got, so if y'all don't take like money, I'm gonna have to— and they're like, no, no, you can, you can do it, we just gotta— I don't know how to open the drawer. And I mean, it was a whole thing. I felt like I rode up to like a store on a Worse, you're dead.

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Hi Zach, how are you? Hey, doing wonderful. Appreciate y'all taking the call. Big fan. Sure, how can we help? Yeah, I couldn't ask for a better duo. I was hoping you could help resolve a disagreement between me and my wife. Yes, I love these. We're probably going to be right. I'm sure you are. Um, she would like to move back, um, to where we're from, where more family and friends, uh, for her We've got an 18-month-old baby girl and she'd like some more help. And, um, where's that?

Charlotte. And you're in Wilmington. How far is Wilmington from Charlotte?

About 3, 3 and a half. Not bad. Okay. All right. Um, versus, um, I've built a, um, I'd say fairly successful real estate career over the past decade here. And, uh, just trying to resolve that issue and trying to, trying to figure it out. Um, cause starting over in a different market is, terrifying and, uh, just doesn't sound feasible to me. And trying to find a middle, maybe a middle ground, or just get walked through it, if you will. What would a middle ground look like? That's a great question.

I don't hear, I don't hear a middle ground here, so I'd love to hear if you've got one.

Well, I guess I'm looking for a— How old are you guys? 33. Yeah.

33. And you've been, you've been in this market for 10 years? Uh, yes, sir. 13. Wait a minute, has she been there 10 years?

Uh, 6. We've been here—

how long y'all been married?

6? We're both from— uh, yes, yes, sir.

Okay. All right. So the baby is the, is the thing that caused the change? Because there was probably no, no big deal before that, right?

Well, Mike, Mike, I would bet the opposite. Has this been brewing for a while? We don't have any friends. I'm kind of all, all alone while you're out running deals. And then the baby just brought that all to the surface.

Yeah. You pretty much hit the nail on the head. Okay.

All right. Cause, cause that's still like, there is the draw. I want to be around family. I want, I want all my, all of the family's chickens, you know, in the same roost like that. That's common. I totally get that. But just listening to you talk about your career and like, that makes me think she is is rapidly feeling like, um, she is living a life that she doesn't like living. She doesn't— y'all have created a life that's mostly about you, and she doesn't like what y'all have created together. Yes, sir.

Yeah, we've got, uh, we got my folks here, but that's not enough, and she doesn't have the village that she needs. So, okay, um, just having a hard time with that.

Okay, so is the, is the fear all, all market-based? That you have this job, it's comfortable, you know how it all works, and the thought of starting over again at 33— which, by the way, you're not going to be starting over, but it feels that way, and I get that— that is that what makes you nervous? Or do you also not want to live there? You don't want to be around her family, you don't want to be around her old friends. Is that part of it too, or not really?

Well, a little bit of a combo. Not that I don't want to be around them, but I just, I don't know, it's just taking It's taken so long to get where we're at now. And just starting over is extremely overwhelming.

I would, A, sit down with a good marriage counselor and keep talking about this for a while to keep yourselves from getting too entrenched. And then I would probably throw out the challenge of two things. And this is just old guy talk, and then I'll let the real psychologist over here answer the question. Number one, going back, you can't ever go back home. I drove through my neighborhood that I grew up in the other day. It's not the neighborhood I grew up in. Yeah, it just is the neighborhood I grew up in, but it's not the neighborhood I grew up in. You know what I'm saying? Things have changed, and her old friends have changed, and the comfort she thinks she's gonna get from being near her mother is not as much as she thinks it is. And so she's painted this romantic picture of how she's going to step back into all of this connection that she used to have, and none of those people are the same, and most of them aren't still there, and some of them you don't even want to be connected to. And so it's a false picture to a large degree.

This romance of this is going to be, it's all unicorns and Skittles over there is bullcrap. Trap. Okay, um, that's my opinion. Um, you just can't go back. And so, um, I mean, I visit my old whatever— school, church, whatever— it just— I walk in there and I'm going, what were we doing here back then?

It was a common, a common refrain that you're not saying to people is wherever you go, y'all are going to go with you. Exactly. And so if y'all have built a life where she thinks she worked too much, she feels alone inside her own house, y'all sit by each other on the couch and you're scrolling on your phone checking deals and she's trying to connect with you, but she's on her phone, that—

that code doesn't matter.

That same dynamic's going to end up there.

The second thing I would propose is with the help of a therapist that's keeping you guys nimble and flexible and talking and understanding each other's needs as you're going into this is I would go on a hardcore 6-month experiment to build community. Plug into a church, invite people to your house, invite neighbors to your house, invite church people to your house, invite work people to your house, have dinners, develop some friendships. You're not friends with anybody because you've not been friends to anybody. And no one initiates in this stupid digital culture anymore. And if you all would initiate, you're probably going to have more friends in 6 months than you would ever have in any other location. But you need to work at the friendship and community building thing because you've spent zero calories on it so far. Both of you.

John? Agree. Yeah. And the, the layer underneath that one is I think there's some real power in sitting across the table from your wife and saying, if this is true, don't say it if it's not true, but over the last 6 years, the market's been up and down. 6 years ago you were living high, right? And then the last 4 years it's been, you've been grinding it. I've put this ahead of you and I want to build— essentially, I want to build a new marriage. What does it look like for me to walk in the door and put my phone down and be present with you? The deal will wait. What does it look— how can I love you better? And by the way, I don't want to make this all one-sided. There's stuff about her that you miss. And you're able to say, here's what I, here's ways you can love me right now, but I want you to go first. Use the word I. I haven't shown up. I have made my life about business. I've been really proud about this. And you've been telling me for 2 years, 3 years, 4 years, I'm lonely.

Can we go hang out? Will you put your phone down? And I haven't done those things. That changes today.

Yeah. Have you protected her from your mother?

I have. I think a lot of it has to do with, we're in a, we're in a secondary vacation, primarily home market. We're not in Wilmington. And, Probably the course of the city, and she's got her sister and her kids there who are the same age as our daughter, and her best friend of 20 years is there. It's just harder to make friends here than it is there. I think that has a lot to do with it, plus lack of sleep and blah, blah, blah.

Yeah, and I think you get into all of that, but I really would explore some new attempts at building the life there before I left there. And then, and then if you can't and you decide based on that, the only place we can build the life we both want is I'll, I will make the sacrifice to rebuild my market in another place.

And here's what that's gonna cost is, is, is gonna be a, a, we're gonna have a cut in income. Like we're gonna plan for this. We're not just gonna be emotional and reactive about it. We're gonna plan for it. So it's not gonna be tomorrow. But Dave, I, I always want to tell, especially young hustlers like this guy that's just out there grinding, the proof of your future success is often your, like, past. You've shown yourself you can get in there and grind and build it. You can. And so to say, I won't be able to, it's not going to happen, I don't think that's true.

Terrifying. It doesn't feel like he needs to. He doesn't feel like he has to if she just had friends or her sister or her cousins or her nieces and all that kind of stuff.

But, but I love the idea of y'all two sitting on the same side of the table and putting the problem on the other side of the table and making sure, like Dave said, y'all don't come to seem at the part, come apart at the seams at each other. It's you versus me. One of us is gonna win this. It is how do we build the life we want? And that includes how do we want this house to feel? Where's this gonna be? What's it gonna look like financially? Who do we want running around our house?

So we did, we did this, Jon. Okay. 45 years ago. What's that? When I got married, my wife came 3 hours from her family. Huh? Yeah. Moved into a city where she knew no one. We did this. Yeah, we did. We did exactly what I said just then. That's exactly what we did. And she's never one time said she wanted to go back home, but we built community.

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Welcome back to The Ramsey Show in the Fairwinds Credit Union studio. I'm Dave Ramsey, your host. John Delony, Dr. John Delony, Ramsey personality, number one bestselling author, is my co-host today. Ruth is in Nashville. Hi, Ruth, what's up?

Hi, um, so I'm calling because my husband and I built a multi-generational house with his parents. Now, only less than about a year and a half later, my mother-in-law has moved out and will soon stop helping with the mortgage payment. So we will either have to lose— have to sell the house with very little equity in it, or we will lose the house. She says she wants part of the sale of the house But how can I move forward without feeling as much hurt or animosity towards my mother-in-law?

Could I venture a guess that before any of this was done or signed up for, you had a bad feeling about it? Yes. So you're really mad at yourself.

There's a good part of it that I am mad at myself, yes. Yeah. What happened? Um, so my husband and I, um, came up, um, to my in-laws with the idea to build a multi-generational house, um, back in probably late '23, early 2024. Um, his dad had had a stroke back in 2008 and was in poor health. So we were talking and we talked about how important it was for him to be with his dad when the time came. When time came. And so we brought up this idea with them, and we were very clear we had a budget of $1,500 for our half of the mortgage. So whatever we chose has to fall within that. It ended up— life was building, ballooning a bit— and we ended up with a $3,600 payment, rounding up. And so they said that they would cover, you know, whatever we could not cover with the $1,500. Um, we moved in in September of '24 and by last June, so '25, my father-in-law passed away. Um, and it was very, as hurt, as painful as it was to be there, it was also, I would never take that time back.

It was kind of what you signed up for. Yeah, that's good. That part's good. Yeah, exactly. So did you put equity into the house?

Um, me and my husband put about, um, $100,000, maybe a little over $100,000 into the house.

And it won't bring enough for you to get your $100,000 out?

Um, we may just get our $100,000. So we put in $100,000, his parents put in $100,000, but it was like a $660,000 house. So would there be enough to get her $100,000 and your $100,000 out? Probably not both of our $100,000. Um, she has— yeah, um, we're hoping to get close, but, um, she has since started dating a guy, um, in mid-July and moved in with him in August. Um, and she was— she first that she would cover the normal part of the mortgage. She wasn't, um, taking that away from the picture. And then January, she said, no, I have to go 50/50, which I was a little annoyed, but I mean, I dealt with it because it was fair. And then just last month she said, no, I'm not paying half. Um, I will only be, I will only be paying $1,500 and soon I will not be contributing to the house.

Um, so I assume there's no written, there's no written agreement, right? No.

Okay. Just her text messages saying this is what is happening.

So the reality is the house is gone. Yeah, so sell it immediately and deduct what she— she promised to pay everything above $1,500 originally, and whatever she doesn't keep her promise on, deduct that from her half of the proceeds. Okay, to make the deal fair, to make her— she's going to honor her word. I'm just taking it out of her hide. And but there's so much to be disappointed in with this lady, but none of it is your fault, and none of it is anything you can do about. But and really, I would be so disappointed with her in all things except the house. There's just so much that she's— that is wrong about what everything is. Just sad. It is. So, and then, and here, let's, let's walk away. Let's walk back Then the house is gone, you have roughly your $100 in your hand, and you go start the next chapter of your life. And then the way I would quantify that, and I may be overcompartmentalizing so that my psychologist over here may correct me, but the way I would do that is I say, "Okay, whatever money I lost, whatever tears I have shed over the stupidity of this deal was worth it for that precious 6 or 8 months and to be there when Pop passed.

Yeah. And that was the cost of that. That's what it cost me for to have that. I traded this for that. And then leave it there and walk away emotionally, put it in the rearview mirror. And then you've got her to deal with and her misbehavior, which is just a separate issue. But I You know, she's just out of control and is grieving in a weird way and a dysfunctional way.

Well, she's met somebody and he's whispering in her ear 'cause he wants that money in his pocket, not in y'all's. Yeah. Okay, Ruth, can I use your situation, your original question, as like a miniature teaching moment here? Sure. 'Cause you asked a really powerful question and I think this question is drowning us as a culture. How can I do these hard things that I gotta do that were not what we agreed upon and not feel sad, resentful, all these other feelings? Mm-hmm. All feelings are, they're just, they're, they're digital billboards as you're driving down the highway of life. They're giving you information. Mm-hmm. And if you think of 'em that way, They are powerful and they're important data, but their job is not to tell you the truth. It's to keep you safe on this road you're driving on called life. And if you were driving down I-65, we're all here in Nashville. If you're driving down this main artery highway that goes through our town, our city, and you said, I want to avoid all signage, right? That would be a nightmarish ride. You would never get where you actually want to go. And so what I want to tell you is And, and everybody listening, and I'm, I'm, this is the pot talking to the kettle.

I'm a big emotional, big feeling guy too, is I, I, I want us to all collectively stop trying to build lives where we try to work around feelings. Let's go right through the stinking middle of 'em.

Yeah. If you're going through hell, keep driving, right? Yeah.

So I'm gonna feel, I'm gonna feel sad. I'm gonna feel frustrated. I'm gonna feel X, Y, Z. This is what maturity is. This is what emotional regulation is. If you wanna be a nerd, it is, can I feel this thing and then do the next right thing after that feeling? And it doesn't mean that your feelings are wrong, bad. It, I, I don't judge feelings anymore. Have all the ones you want. What I'm gonna look at is what's the thing I did next after that feeling? And so be heartbroken, be sad, be pissed off, be all those things.

And still sell the house.

And still sell the house. Yeah.

And still execute on the proper way to handle the money at the transaction, at the sale of the house. Right.

And all of that. Still choose to, I, I, I'm gonna draw up a contract with this woman as we sell this house or whatever.

Still, next time I have a bad feeling about a deal, I'm going to listen to it. I'm going to listen to my bad— when the— my dad used to say, when the bell rings, the bell's ringing for— listen to the bell, it's ringing.

That's a great— that's a great line.

Yeah, listen to it, listen to it, listen.

That doesn't mean it's right, but I'm going to at least listen to it and talk to it.

When in doubt, don't.

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Thomas is in Dallas. Hi Thomas, how are you? Good, how you doing Dave? Better than I deserve. What's up?

Hey, so, um, I'm basically a subcontractor working for, um, a company. Um, I have to be doing a lot of driving, need a personal vehicle right now. My boss is lending me one of his I currently have a broken-down truck that needs an engine, probably around a $5,000 fix. If I get that fixed, my boss will give me the equivalent of a 20 to 33% raise across the board on my job. The question is whether or not to take out a loan to do that. And then since right now the income that I'm getting fits pretty good, so I can literally— What are you doing? What's that? What do you do for a living? I'm a— I clean swimming pools. Okay. All right.

And so a $5,000 or $6,000 truck will get the job done as long as it runs and gets you there, right?

Well, so I currently have a vehicle that is broken down. It needs an engine.

I know you told me that. I don't want to fix it. It's crap. I'd rather just buy one that's already running. Okay. So what can you sell that piece of crap for, that salvage? $1,000? $1,500? Not quite sure.

I haven't priced that yet. Yeah, okay.

What, um, what, what kind of— what kind of year model and what truck is that that's sitting with no engine?

Uh, 2001 or maybe a 2003 Ford F-150.

Okay. Yeah, so you can buy that car with an engine running for 5 or 6 grand. Yeah. Okay. Um, And what are you making? How much do you make before he gives you this 20% or 30% raise?

Net is $33,500, gross is $30,000 after my 1099 taxes.

$33,500? Yes. Okay. I'm making about, yeah. Yeah, okay. And so a 20% raise is $7,000.

That sound right? Yeah, 20% of $33,000.

Okay. And so, yeah, the— so you break even after 1 year if you spend $7,000 to get a truck and he pays you 20%. How long have you been working for this guy?

Well, so, so he's the one that trained my dad. I've been working for my dad for ever since I'm 20. I'm 28. I've been working for my dad off and on since I've been 15. Um, I, I recently had a life destruction event and have been literally have started working last week back in this job that I have.

Like, what's a life destruction event?

I, I, um, had a mental health crisis. During the mental health crisis, I— there was fin— there was, uh, family violence happening between me and my wife. I got put in prison for that, um, even though in Texas there's supposed to be provisions for preventing— for helping people with mental health to not just put them in prison. But that didn't happen with me. So how long were you—

how long were you away?

Uh, 2 years and a month, and then I got a violation and was back in for another 5 months. So I'm back out a week now. So, okay.

No. Yeah, don't borrow money, please. You do not need to borrow any money. You're coming off of a highly unstable situation and you haven't stabilized yet. At least we don't know that. We hope you have, and you hope you have. Okay. If you told me this was all 3 years ago, it might be a different discussion. It wouldn't be a discussion about borrowing money, would be a different picture. But instead, we're 3 minutes into this. Not 3 years into this. So you need to sustain a life with very little stress, and adding debt to this is not the thing. So thank you, boss, for the new job. I'm sorry, I'm a minute out of prison and I don't need to be borrowing money right now. I'll have to drive your truck for a while longer, um, until I can save up and pay cash for something.

How long till you can save up $6,000?

Um, that's kind of, that's kind of the issue. The, all my money is basically kind of breaking even in my EveryDollar zero budget.

Where is it going?

One second. Most biggest expense is $300 in gas, and so spending about 105, I'm purchasing about 105 gallons a month. Come on, load, please. Cool. How much is your rent? That's it. Me and my wife are currently separated. She has a $500 rent. I have a $250 rent.

You have to pay the $500 rent? Yes. Why?

Uh, currently because we have, we have 2 kids. She's basically stay at home. Her family sometimes helps, but if I'm paying this stuff, she doesn't ask for the money. Um, and currently because of the family violence, there's a no contact order, so I cannot coordinate anything with her. Here, so I'm kind of defaulting to doing everything, basically.

Yeah, well, um, I'm gonna help you. You don't have to do everything. You need to make sure the kids have something to eat, but she also is going to have to make a life without you. And so she— and, and that means she has to develop a way to live sustainably without you feeding her. Okay, so I, um "Right now, we've gotta get you up and stable, so your $250 rent, even $500 going out for her, still not used up all your money. So you've just started, this is real fresh. Thomas, please don't go borrow money to buy a truck to work for a guy that you've been working for for 10 minutes, even though you've known him 100 years. This whole thing, everything in your life has been quick and sudden and fast, impulsive. And I want you to slow down and just be boring for a while. That's no excitement. You've had enough excitement to last you the rest of your life. Just be boring, Thomas.

Can I, can I paint you a picture, brother? All right, the last 2 plus, 2 and a half years, somebody told you when to get up, when to eat, when to— you could go outside. What you were going to eat, right? Yep. When you borrow money, that bank tells you, I don't care how you feel, you're going to work tomorrow because I want my money. You already took my truck. Oh, you got— you lost that job? I don't really care, you're doing this because— right? And so what I don't want you to do is walk out of prison and then walk right back in voluntarily. And that's what borrowing money does. Stay free. Yeah, that's good.

Good, that's good. Stay free. Hang on, I'll send you a copy of The Total Money Makeover and we'll help you as you rebuild your life. And just steady, steady and slow.

Christian, send him Building a Non-Anxious Life too. I want to give him some tools for walking through the ups and downs that are going to be the next 5, 10, 15 years of his life as he steadies himself and builds a new version of himself from the inside out.

We'll send him both of those. Yeah, very good. That's good. I like that. Mike's in Detroit. Hey Mike, how are you? How are you?

Doing good, I think. Oh, I need a little bit of help. Okay. How can we help? So I got my dream job in September of 2023 working for a friend's company. Everything was going swimmingly up till about November 2024 where I had to leave his company and pick up work with a competitor. While I was working for him, I was working to get myself out of university debts, education debt, and get my feet underneath me and be as independent as possible and, and save up money and everything else. Unfortunately, I had a lawsuit that I had to file against that employer, and it took everything out of my money.

The old friend or the second one?

Old friend.

Old friend. Why? You only worked for him for a year.

Well, I was working for him on and off for about about 9 years, kind of.

No, but the dream was— the dream lasted a whole year. What was the lawsuit for?

Um, he did not pay an invoice that I billed him for, for work that I performed for him after you left.

Yes. Why did you do work for him after you left if you got fired?

I'm sorry, I'm sorry, I'm sorry.

Before, before I was hired on full How big was the invoice? $8,000. Okay. I'm sorry. So how, how much were you making working for this guy?

$65,000 a year. Okay.

So have you been able to replace that income?

Uh, I was working for another company, a competitor of his, but they were only paying half of it.

Now, so I think what I'm gonna concentrate on is not being angry at him and always this quote dream job stuff that never was really a dream, and instead be working on the future.

Get out of the grief and get to get, get, get after something moving forward.

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Hi, good, how are you?

Better than I deserve. What's up?

Thank you for taking my call, first off. Sure. So my husband and I have 3 kids, and our oldest, she's 16. We share her with his first wife, and she's 16. And we want to know, our question is, should we help pay for her driving school?

Who's paying for her insurance?

Uh, mom.

Okay, so you paying for driving school gives mom a discount? Yes. Why is mom not paying for it?

So that's kind of where we're at, and we, we also want some advice on how to navigate that conversation.

Um, how to navigate the ex? Yeah, we're not that smart.

I didn't have that class in grad school. That's a tough one.

Well, her mom did kind of this shady thing last week. She had our daughter text my husband and say, "Can we talk?" And then when they finally got to talk, she said that they were waiting on us to start driving school. But we are going through our own— we just started the EveryDollar app. We're trying to get debt-free. We pay her child support. Like, I, I just don't know how to navigate this because we've paid for her braces and we were supposed to go half on that. She never once called and made a payment to the dental office even though we told her this was the office. Let me jump in on this, Leslie.

Okay, let me jump in.

Yeah. Yes.

I want you to take— like, imagine you're sitting at your kitchen table and you have a shoebox on the table. Yeah. Inside that shoebox is the people in your life that get a vote. Okay. Take her out of that box because you're still trying to— like, she's doing these things and you're spending a ton of energy trying to get inside her head and why did she do this, and I bet it's because of this. And then you're making up a bunch of stories about why she did or didn't, and your stories are probably right, but they aren't affecting her one bit. So you're drinking the poison, the ex-wife, hoping the ex-wife is, is feeling pain, and you're the one sick. Yeah. And so, yeah, let's just focus on you and the kid.

Your husband needs to do the same thing. My ex-wife does not get a vote. She does not get a vote in our house. Okay, now what our house— what you and your husband sit down and decide to do for his daughter that he loves, regardless if she's married to a woman who's a test pilot for a broom factory, okay, regardless of that. All right, so all that, that's a gift given. Okay, that's a constant in the equation. So, we just set that aside and we go, "Okay, there's the kid. What do we want to do for the kid?" In one case, you said, "I'm gonna do braces. She's supposed to pay half, but she probably won't because she never does, but we're gonna pay for them anyway." And that's what you did. So, just let that go. You made that decision. You made that decision. You and your husband made that decision.

Any energy you give ex-wife is energy you're taking away from your home, from your marriage, from your relationship with your kids.

Don't give that. Yeah, it's done. So then as far as the driving school goes, you guys look at it and go— how much is it, by the way? Is it $300?

It's, uh, $1,200. Oh geez. And yeah, we pay child support, we pay her $275 a month.

Doesn't matter, doesn't matter, doesn't matter. None of that matters. That's all set. We don't have to rehash all the things we do. And we paid half the braces and you didn't. None of that matters. All that matters is, do we want to do this? "yes." That's all that matters. And we can decide that in context of all these other things, but the two of you just sit down and look at that. Do we want to do this? You don't. That's your vote. Yeah, I don't. That's your vote. And your husband, I don't know. He says no too. Okay, then because the test pilot for a broom factory is teaching her 16-year-old to be a travel agent for guilt trips, Daddy, I can't get a driver's license because you won't help. Bullcrap. You could get like a job and stuff, kid, or you could talk to your mother who could pay for it. There's an idea. And so now we're not able to do that right now.

I'm sorry, but I, but I would tell the kid, it's— we have reasons for you. We don't think this school is necessary. You're a great driver already. We've been driving with you for a year with your learner's permit. We, I Like, or we think you need to have some skin in the game. Somebody else is paying your insurance. Somebody else is buying you a car. Somebody else is paying your gas. We think you should own this one. But, but have the reason be you and your husband looked at this young 16-year-old girl in front of you and said, we made this decision for you and here's why.

And by the way, if the ex-wife was completely outta the picture and she lived in your house 100% of the time and it was your actual kid. Yeah. It needs to be the same decision.

That's it. Okay, okay.

Otherwise you're gonna end up penalizing this kid trying to get back at, at X. You're going to become the person that you're frustrated with right now.

Yeah, that's exactly right. That's exactly right. So yeah, I think you and your husband just sit down and say, do we want to do this? And if the answer is no, then how can we help? We can coach you, we can cheer you on, but, um, you know, your mom's paying for the insurance and She's the one that's actually gonna get the break on the insurance because if you'd go through driving school, you get less insurance for a 16-year-old. So it cuts the insurance premium. And so it didn't go cut it by $1,200. Good God, that's expensive.

Well, here's what's funny. I'm sitting here in real time. $300 is what I paid when I was 16.

Oh, well, so that, there were dinosaurs on the road.

Oh, I exactly. I know I had to pull a rope to start the car I drove around in. and I just realized my wife, when we paid, we paid for my son, he turned 16 soon to go to driving school. I, the number in my head, I was like, of course. Yeah. I thought it was $300. I didn't know it was $1,200. Like we, she just said, you have to go now.

You gotta go look up and see what you paid.

I gotta go see what I just paid for this thing. Yeah. It sounds like it's being taught by a Formula One driver, but that just may be what the cost of that.

Well, that's the difference with $300 back then and $1,200 now.

Yeah. That's how that works. Blasted inflation.

Yeah, that's it. So yeah, but the thing is, John, the teaching is everyone, you have to stop in the middle of these things and go, instead of replaying all these scenes over and over and over in your head about the braces and everything else, and just go, and she, you know, we didn't hear from her, and then she texted us, and she got the kid to text us, and all that really doesn't matter. Matter. None of that really matters because the kid doesn't even get a vote. It's me and my wife, we decide. And we decide that for our kids when they live at our house, you know. I mean, matter of fact, they don't live at our house now and they still don't get a vote. Yeah. And the grandkids don't get a vote. They get a wish. Sure, they can have a wish. They can have an opinion. That's different than a vote. That's right. Papa Dave, would you? I might, but I'll have to think about it.

And I think a sign of great, like, sturdy parenting is there's seasons when your kids don't like you. That means you're doing it right. If you're parenting so that your kids always like you, you're gonna find yourself in some real dangerous territory, and worse, your kids gonna find themselves in some dangerous messes. Like part of parenting is saying, here's why we're doing this, and it's okay. I'm strong enough to withhold your dislike from me right now.

It's part of it. And in addition to that, if they're teenagers, your job is to also embarrass them frequently.

Your—

yeah, with all possible energy, embarrass them. Exactly. Find some way to give them a ridiculous hug and a kiss at the— in front of all their friends.

On behalf of mental health practitioners across this great country, embarrass your kids a lot because we need your future business. Yeah, it's good. My— I, Dave, I, I don't know what to do. My daughter's in 4th grade. I You can embarrass her by just smiling. My son is seemingly impervious to embarrassment. He has this— it's— I wish I could bottle it up and sell it because I would be richer than these AI guys. It's amazing. I make a joke and he's just like, I hope that felt good, Dad. And I'm the one like, hit the ball back across the other night at the dinner table. I made a crass joke, but it was a good one. And you don't know game until your 15-year-old looks at you without a smile and goes, Dad, when are you gonna grow up? I was like, oh man, well played, son, well played. And he was right too. That was the worst part.

Ramsey Show question of the day is brought to you by Why Refi. Defaulted private student loans don't define you, but dealing with them does. Yrefy helps you refinance into a low fixed-rate payment that you can afford so you can take control of your money and get back to working the Baby Steps. Go to yrefy.com/ramsey. That's the letter Y-R-E-F-Y dot com slash Ramsey. Might not be in all states.

All right, this is an awesome question, Dave. Today's question comes from Megan in New Jersey. Megan writes, I was recently in a car accident and my vehicle was totaled. My emergency fund paid for my hospital bill and my parents lent me $5,000 so I could buy a reliable used car. Car. Most of my remaining debts are smaller than their loan to me, but I hate owing them money. They've said to pay them back, quote unquote, whenever I can, but I feel terrible whenever I talk to them. I have $25,000 left in student loans and another $5,000 on credit cards. Would it be okay to just pay them first and then resume my debt snowball? I like that question because I, in my guts, it's out of order from how we teach but owing my dad money feels worse than owing the IRS. You know what I mean? He can't garnish my wages, but man, I get that feeling she has.

Yeah, I understand. That's an honorable person too. No kidding. That's good. Yeah. So Megan, we list our debts smallest to largest, pay minimum payments on everything but the little one, and attack the little one first. So that would, and you know, I'm guessing you're, you said credit cards and $5,000, so I'm guessing there's lots of little ones, or a few little ones that total up to $5,000. So you would knock those out first, and then you would knock this out. The good news is that $10,000 from now, you're done except for student loans. And so that's a really, really aggressive part-time job for just a few months, just to like, like, and channel that. Yeah, just channel all of that discomfort, discomfort right at those credit cards first. Cut them up and then list them and get yourself on a super tight budget, like beans and rice, rice and beans, and, you know, and then add income and look around. What can I sell? What can I sell? Here's another thing I will throw out that's not asked here, but it's a $5,000 car, so the answer might be that she didn't have insurance on it.

But I want to remind all of you that when you get a you get in a car accident and your car is totaled and you have insurance that pays the car, pays for the car, that is not a reason to upgrade, replace it, and go further into debt. So I'm guessing though that maybe she did not have collision on a $5,000 car. And so when it got totaled, it was just lost. It sure just lost the money.

And I want to add something else that's not in here. And this is coming from a parent who's— my son's about to turn 16. Like, there's a chance this is me, right? I hope not. But it can feel like you're helping bail out your kid when you loan them $5,000. I would much rather her parents give her $5,000 than create this tension in there. If they feel like they want to help, they want to support their kid or whatever, I would much rather that be a gift. And I don't, obviously, who knows what happened here and there's so many different things, but yeah. So, but dad participates in making this an awkward relationship too.

Yeah. I, I'll just jump in on that side of this equation and say, From our perspective here, from almost 40 years of doing this, helping people with their money and, and clean up money messes that they have made, I'll make a bold statement: parents should never, under any circumstances, loan their children money. I second that. Period. As a matter of fact, you should not loan any relatives money. Money under any circumstances. Period. If you have the money to help them and you want them to have the money, give it to them. If you're not willing to give it to them, shut up. But I want to be paid back after I helped you with your misfortune, and I'm gonna feel good about me when you pay me back after I helped you with your misfortune. That's bass-ackwards, people. So no, you know, if you want to help them, help them. If you don't want to help them, don't help them. But don't make them owe you money, because Thanksgiving dinner tastes different when you eat with your master, and the borrower is slave to the lender.

The interest payment on that is your relationship.

Oh, that's the interest. Leaves notches in the belt at a minimum. Yeah. Wow. James is in Lynchburg, Virginia. Hi, James.

What's up? How you doing, gentlemen?

Great. How can we help?

Um, I have an interesting dynamic going on. So, um, we own a small rental home that we are close to having paid off and it's probably worth about $175,000 at the current market. Um, we owe about $15,000 left on it, um, on our current home. And land that— the land that the current home that we live in is on, we owe $15,000 left on that. And we cash-rolled and self-built the home itself. So we don't owe anything on the house. So 12, 15 months or so, we'll be done paying on both of these things. Now, I put all eggs in that basket for the last 10 years. All cash we had went into that. That. So with the hope that in the plan that— How old are you? 10 years. I am 44 almost. Okay. All right. So, um, you know, with that, we wouldn't have to worry about paying for a home ever again because we've been doing it for long enough.

I wouldn't have done that, but we're there. How can we help? Yeah, no, no doubt.

Um, so I have no appreciable retirement savings, uh, obviously for putting all those eggs in that basket. Yeah.

Which is why I wouldn't done it.

Okay, right, I understand. Um, obviously that's some level of stressful for me. Mhm. And, uh, um, you know, here soon enough there'll be, you know, wide open rental income that will come in associated with that. We'll have, you know, freedom from the mortgages and things like that.

What does the, what does the house rent for?

Um, currently it's at $1,000. I have a— it's, it's valued at more, but I have a, uh, I have a widow in there and I can't charge her any more than we currently are. So, um, okay.

So you've got an asset that's not maximized. Okay. That's fair.

Yes, correct. Yep. All right. Correct. And, um, you know, I'm looking, I'm just juggling around this and my wife and I have been kicking it around. Um, me, mostly me kicking it, mostly me, mostly her telling me not to do it. Um, of selling it and investing that money then into some form of retirement savings, and I wanted some feedback on that instead.

Well, not counting the arrangement, which I endorse you helping a widow, endorse anyone helping a widow, that's biblical, and you're making, you know, about 7% on your money because $175,000, you're making $12,000 minus expenses, so you're probably making probably 5% on your money on this rental house, plus it's going up in value. It's not a bad investment, and someday you will be able to get full rent out of it whenever she's gone, okay? Right. Or whenever that arrangement stops for whatever reason. What keeps you from beginning your retirement investing now fairly aggressively since you don't have any payments?

Well, I do have payments on the property that we built on to our current home.

How much do you owe on it? Uh, $15,000. I know, but you're going to be done in just a few months on both of them. You told me, right?

Yes.

That's what I was calculating. So I'm talking about a few months from now, you're 100% debt-free. What's your household income?

Uh, about an $85,000 to $90,000. Okay.

So start saving 20% of your income into good retirement or 25% of your income into good retirement. You don't even have a stinking house payment. And fill up your 401(k), fill up some Roth IRAs, and get with a good SmartVestor Pro at Ramsey Solutions. And that account alone will be millions of dollars when you get— when you're 65, 25 years from now. Okay. And keep the houses. Okay. You don't have to give up the house to have a retirement plan. You got plenty of time, and you have a good income, and you have no debt.

But make space Make space in the middle of your chest for this feeling that's gonna come. I thought that if I had a house outright and I had a rental house outright, that then me and my wife could just do whatever we wanted with our money. Nope. And you have a debt to pay to future you. Of course. Right? And so you're still gonna have to watch your income. You're still gonna be putting a sizable chunk away. It's not gonna go, it's not gonna go to a house payment, but it is gonna go to future you. Right. And so expect to feel like, oh man, I thought we were going to be free of all this budgeting. And no, man, we still got to stay tight on it because we're going to get 85 or 90 years old one day.

Yeah, as the, the same intensity you were using, or maybe not quite as much, to clear up these two mortgages, we're just going to turn most of that cash flow and some of that intensity into a retirement planning system, into 401(k)s and Roth IRAs with your SmartVestor Pro. And promise you, dude, that's going to be millions of dollars, that one thing alone. Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. Dr. John Delony, bestselling author, Ramsey personality, is my co-host today. Clay is in Harrisburg, Pennsylvania. Hi Clay, how are you?

Hi Dave, good. How about you guys?

Better than I deserve. How can I help?

Yeah, so I'm just kind of really overwhelmed. Um, don't really know how to attack my debt. Um, a majority of my income is going to rent and a car, and, uh, it— I need both of those things. I need a place to live and I need a car to drive to work. So yeah, um, just need help getting out of here.

Gotcha. What do you make?

Um, I make about $2,200 a month.

Okay, think we found the What do you do?

Yeah, um, so I currently work in construction.

How old are you? 33. And, uh, how much do you owe on your car?

Uh, it's a little under $20,000.

Okay. And how much is your rent?

I did make— sorry, I did make a little bit more, um, but a portion of wages are going to some tax debt and student debt. Yeah, okay.

And, um, how much is your rent?

Uh, $750. Okay. All right. Currently also dealing with a pest issue that's taking up some more of the income.

A pest issue?

Yeah, that's why you rent, brother.

Your landlord would be taking care of the pest issue.

No, says it's on me.

But yeah, like, there's not an easy way to say this. You got to make a lot more money.

Okay.

What do you, what do you do on a construction site?

Uh, so I work in an office, like a design office. I'm in Um, yeah, we provide products.

But I mean, are you in some sort of apprenticeship that this is all going to double and triple and quadruple in 2 years, 4 years, or is this kind of it for you?

Um, this is kind of it. Uh, before that I worked in behavioral health as a, like a tech. Um, just kind of ran out of options there and looked for another field, and construction was kind of up and Good opportunity there.

Well, but the opportunity construction is, are you a builder? Are you a craftsman? Right. But you're the guy servicing those guys, right?

Correct. Yeah, I get the projects in the door.

Yeah. So, um, I mean, there's several things going on, but, um, one of them is that you just have an income problem for And there's two ways to fix that. One is the extra part-time job in the meantime while you're developing a career track where you go, instead of making $30,000 a year, you go try to find a way to make $90,000. And that's very doable in today's world. And it may take you a few— it may take you a hot minute. You may have to go take some classes. You may have to do— you don't have to get a 4-year degree, but you may have to learn some things you don't know now. But you're gonna have to set yourself excites differently than just whatever the next job is because you're starving to death. That's thing one. Thing two is if you have a low income, it does not give you a pass on math. And I— how in the world someone loans you $20,000 on a car that wasn't smoking crack, I don't know. You don't make enough to have a $20,000 car debt. No wonder. Yeah, you're dying.

Yeah, yeah.

How much could you get for that car if you sold it today?

So I did a quick, like, estimate on Carvana, and they offered $9,000.

Yeah, I bet they did.

Look up Kelley Blue Book, what the private party sale value is.

Yeah, and that's probably more like $16,000 $15,000. Yeah. Okay, and then dig up the difference and let's get the car sold. Yes, you need a car to get to work. No, you don't need a $20,000 car to get to work. You just need a beater, a hoopty that runs and gets you over to work. Because you're not driving to a $200,000 a year job, you're driving to a $25,000 or $30,000 a year job, and you're driving a $20,000 car over out of there. That doesn't fit in this picture. It shouldn't even be in this picture. We shouldn't be having this discussion. There's no possible way. It's not good for you. It's bad for you. So I'm gonna move you out of that car into a hoopty, get you out of debt and increase your income, and then I'm going to start learning about what my lease actually says about pest control. In most states, the landlord is in charge of pest control unless the tenant is a freaking slob that they caused rats to be in the place, in which case you may be in charge of it. So I don't know what we're dealing with, but— Hey, Clay, here's what I want.

I want you to reframe this. The way you described your life is as though this is happening to you. And I want you to visualize yourself getting in the driver's seat of your own freaking life and hitting the gas and going forward that way. Way. Your, your taxes didn't just not pay themselves.

Captain of your own destiny. That's it.

Your taxes didn't just not pay themselves. Your boss is paying you what you're accepting. Um, you're— you bought a car that, like, I want you to own this thing, and that's the only way you're going to get out of it. Because, because life just keeps happening to me over and over. Get in the driver's seat and say, what do I want this thing to look like in a year, 2 years? And let's head that way 1,000 miles an hour, man.

Yeah, the people that get along in this world that we call successful are the ones that leave the cave, kill something, and drag it home. They don't sit in the cave and wait on a duck to fly in already cooked. And that's what you're talking about is Dr. Stephen Covey's book is a great one to read, Clay. It's called The 7 Habits of Highly Effective People. The number 1 habit of the 7, the first one is to be pro— highly effective people are proactive, what John's talking about. They happen to things, things don't happen to them. That's the definition of proactive. And so, you know, when in doubt, you bust something, not get busted. When in doubt, you know, we're gonna hit something. When in doubt, we're gonna be a man of action. When in doubt, we're, you know, and we're gonna be slow enough that we're wise enough that we don't buy a $20,000 car when we make $25,000. We're gonna be slow enough and wise enough that we pay our taxes on time. Be slow enough and wise enough that we're reading the lease and Or not leaving a dump in some guy's landlord's house so that he has a pest problem because you brought it there.

Or you didn't bring it there and he's being a twerp and we need to hold his feet to the fire. Hey dude, yeah, the law actually says you fix this, and here's what your lease that you gave me says. It says you fix this. I own a bunch of rental houses, we do all the pest control, and I don't have any tenants tenants that create pest problems. If I do, that tenant doesn't stay there because they're tearing up my house, is what that means. No thank you. So, you know, these are proactive things that I do. So that's—

I just got to say, again, I don't want to toot my own horn here, but I was the dean of students at the law school in Texas. I drove a $3,500 truck, and when I got my job here at Belmont Nashville. I drove a $17,000— I really upgraded, man, to $17,000. You were making a lot more than— right. So it's like, listen, man, like, drive what you can afford. Happen to your life. I got— I got to do this. You don't, man, especially when it comes to depreciating asset.

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. Tax season is upon us. To get free checklists and guides that'll help you file free. Go to RamseySolutions.com/taxes. Shelly is in Washington, D.C. Hi, Shelly. How are you?

I'm doing good.

How are you? Better than I deserve. What's up?

All right. So I'm pretty new to watching your show. And so I just really wanted to reach out because me and my husband are in a big mess, financial and we can't seem to get on the same page. I'll kind of run down some numbers for you. It's pretty bad. We have student loan debt for— my student loan debt is $52,000. We have federal tax debt, $12,000. We have a mortgage, $175,000. And then we have personal loans that total about $38,000. $331,652. We have credit cards altogether that total $152,168. And then we have business loans that are $199,382 and business credit cards that are about $65,156. So we have a big mess.

So you have a business that is failing?

Um, yes, the business has, has been struggling in the past.

Yeah, you're not, you're not making money and you've been financing it with all these loans, correct?

Having too many people on payroll and not having—

you're not making a profit for whatever reason and you've been financing it for how long? How long has it been since you made a profit?

Well, I mean, technically I did make a profit these last 2 years, but obviously I'm paying loans, so the interest is obviously the only part I can deduct, but cash flow, I don't have any cash.

Yeah, but you've been using, I mean, you didn't use these credit cards, these business loans, these personal loans, these other credit cards all to finance the purchase of the business. You've been operating it at a loss and feeding it.

Yes. So from, from my portion, um, yes, I've been feeding the business with the debt too.

And all of this debt was created by this business?

No, no. My, my husband, he, um, took— he had an idea to pull money, balance transfers off of his cards and his personal loans to put it in the stock market to invest. Um, so first year he made a lot of money, we had a big tax bill. The second year we had a lot that we owed, and, um, he's never repaid those loans and credit cards that he pulled money off of. So his debt is about $360,000 of this, which is from him pulling lines of credit. He got a business loan, um, and business credit cards.

So does anybody around there work? Yes. Like for a job to make money?

My, my husband has a W-2 job. What does he make? About $120,000 a year. Yeah.

And what was the profit on your business that you paid taxes on last year?

$57,000. Okay.

Do y'all both agree that y'all have a mess Yes. Do y'all both agree that you want it to go away?

Yes. Okay. It's just the method of— so my husband got a bonus for about $12,000, and so since I've been listening to you, I was like, well, we do the snowball, pay these, uh, debts, the smaller debts off to free up about $600 a month. Um, he, he wants to pay on a personal loan that's for $40,000. And he wanted to put it towards that to get the balance down. But as soon as he was— we were arguing about it, and then he called in and it went into collections. So now it's in collections because he hasn't been paying it because he didn't have enough money to pay it.

So now, so the money that he made on the stock trades, he put back into the stock market and lost it? Yes. So he was day trading?

He never paid any of the—

like, I know he didn't pay the taxes, but also you said he made a profit that caused taxes. Taxation. That's where taxes come from. And then that profit, he might not— which means he not only made the money back— so he borrowed $60,000 on a credit card or whatever, and they put it in the market, he got the $60,000 back plus money, didn't pay the taxes, and put all of that back into the market and then lost it.

So the first year that he did that, which would have been 2020, he did— he did pay our tax bill. It was like $25,000, I think it was. Where's the money? Did lose it or not. He had the money and he paid it in full that year.

Now, the money that he made in the stock market, where did it go? He put it back in the market and lost it, didn't he? Yes. Okay, that's all I want to know. You don't have any money is what I'm trying to establish. Yes, that's correct. None of the money that was made is there anymore. It's all gone. Okay, do you own anything other than your Home?

Um, uh, he, his car, um, he doesn't have a loan on that. And then I have a vehicle that I don't have a loan on.

Okay. So your business doesn't have any assets?

Oh, it does. Sorry. It does. I have desks, computers, tables, laptops.

What's, what's your gross revenues on the business?

$330,000 for 25. Okay.

How many employees?

Right now I'm down to one. Um, okay. I, I let them go.

Um, what do you do? What's your trade? What's your skill?

I have a tax and accounting business. Couldn't you make more than $57,000 working for somebody else? I actually did. Um, the end of '24, I got a job, a full-time job, uh, making $110,000. And then I got laid off in August.

Okay, you need to go get another one. Yeah, yeah, because you need the income to be able to— we need the income to be able to learn, lean into this. Okay, and then back to your original question, y'all are arguing about what to pay off first and so forth. Not counting your mortgage, you have a long road ahead of you. So the first thing we need to do is establish two principal principles before we begin to attack the debt. Principle number 1 is no more day trading. 97% of day traders over a 3-year period of time lose money. So no more stupid schemes, okay? Second principle is businesses that don't make a profit are a bad hobby. A hobby. They're not a business. If it's not making a solid profit, if you work your full— your new full-time accounting job and you can run $57,000 out of this thing on your own as a side hustle in profit, and you know the difference in profit and gross, then keep it open. But if you can't make a profit, you do not borrow any more money to keep it open. You close it. Okay, you fed this thing enough, and he's fed his, uh, craziness enough.

Can I throw a third principle in, Dave?

Third principle, Shelley, is, yeah, for this to work, you're going to need all the, like, synchronicity and momentum that y'all two can muster together. And so y'all are going to have to decide, this is our debt, we both have done some dumb things, both done this, and we're both going to attack this stuff together. You, you will never conquer this thing if he's responsible for paying off his and you try to pay off yours.

Exactly. Then pull the mortgage out of the equation, list all of these debts individually, smallest to largest, and begin to pay them in that order after the $12,000 tax bill is paid. $12,000 tax bill is the first thing, and that should have been paid out of his bonus. If he's got that $40,000 bonus laying there, pay the IRS. You do not want the IRS— I mean, you're in tax and accounting, you know this— you don't want the IRS money. It's not only expensive, but they have ridiculous power to screw up your life. List your debts smallest to largest. Now, if he's making $120,000, you're making $110,000, you're making another $50,000, we're up in the $200,000-$300,000 range now, we're living on nothing, and we begin to attack this, it's probably gonna take you 4 or 5 years to clean up this mess. But it took you 6 or 8 to make the mess.

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Go to ramseysolutions.com/insurance. Insurance, ramseysolutions.com/insurance. Dave is in Pittsburgh. Hey Dave, how are you? I'm doing good.

Thank you for taking the call. Sure. How can we help? So I'm a huge fan with you guys. I've been watching for 5 years. I just want to say you guys are doing absolute miracle work. So the question is, right now me and my wife are thinking about relocating and, uh, we are thinking about having a kid as well within 1 year to a year and a half. So our planning, definitely want to buy a house to build up good memories for future kids. Um, so they can have a good memory and kind of build a good foundation with that. And so my question is, we either want to do 15 years fixed mortgage or 30 years fixed mortgage, or we're thinking about paying cash. I know your answer probably is going to be around the 15 years fixed mortgage or paying cash. However, the problem is we are afraid we're not going to have enough cash flow because my wife is planning to not work and taking care of the kids, and that I will be having the only single income that we will have.

Okay. So you don't have the cash.

Uh, so right now, uh, we have, uh, my salary is $70K and she's doing $55K. We— I mean, approximately net around—

do you have the money in a pile to pay cash for the house? That's not really an option, is it?

Uh, there is, there is. So right now, uh, you're going to be very happy to hear this. Um, I graduated my grad school and I did pay off all my student loan debt with around $100K. And then we both net around $1.2 million. It's just investing in the mutual fund, ETF, bonds, and stocks.

So you have $1 million in mutual funds and bonds and stocks?

Yeah, that's approximately right. Yeah, depending on the valuation.

Bro, lead with that next time.

Yeah, so way to go. So, um, no, I would not borrow money when I have $1 million in investments. I would just take some of that and buy me a house.

Simple, simple. You know Dave? Because you have a million dollars.

So what— how expensive a home are you thinking about buying, sir?

So we're looking at $350,000 to $380,000. Perfect.

So $350,000 leaves you $650,000 in investments. You have no house payment. There's no strain on your budget. Your wife can stay home with the babies. That's awesome. Yeah, yeah. Why would you not do that? Yeah, help us out. Why would you not automatically do that?

Pitch us on why they I don't think this is a scary ideal. Right.

I think I'm just running the two scenarios that usually the market returned 10%, but however, you know, when you pay down a house, uh, you're going to guarantee return back 3.5% on the real estate. And also you have to avoid paying this.

But your wife has to work, right?

And her plan is to not work once we have—

You missed the point. You just took out a house payment and put her in for your little investment scheme that you think is real, but you left out the fact that you're taking on risk and the peace that when your head hits the pillow, it goes to sleep. When you have no payments, you make different decisions than when you have a house payment. So don't do that to your family. You have worked very hard and done a very good job saving money. Use that money to buy a house, or don't buy a house, be a renter. But I mean, are you, what do you do? You own a home now?

So right now we are renting. We are waiting. We are waiting for— And what is your income, Dave? Uh, so I do $70K a year. What does she make? $55K. She do—

How did you get $1.2 million with that income?

I think there was, uh, I got lucky with some of the investment and also fortunate, unfortunate because we got some inheritance.

Inheritance. How much inheritance did you get?

Uh, she roughly got around $200,000 to $300,000 and kind of grew. Uh, and then I got around $300,000, $400,000 and kind of grew, and they both kind of get around $1 million.

Okay, there it is. All right, so whoever, whoever passed away and left you all this money bought you your first home, and that's their blessing to you, and you pay cash for it, and that's what you're going to do. If you're smart, there's no way you need to be playing around with all this stuff. Emily's in Denver. Hi, Emily. How are you? Good. How are you? Better than I deserve.

How can I help? Hey, so, um, I've carried most of the financial responsibility in my marriage the almost, like, past 6 years. My husband says he wants the same financial goals, but he feels the need to constantly spend, doesn't follow through, and won't take accountability. He also has a history of addiction, and he recently racked up, as of what I know, at least $6,500 in credit card debt on things like 7-Eleven and used money I gave him for— or money that I saved for a trip, um, on his own personal spending, and then added me as an authorized user to a credit card that I didn't agree to.

Is he using again, Emily?

Is he what?

Is he using again?

I don't know.

You know, you know. What do you think?

I don't— I, I think his behavior doesn't line up, but I can't prove anything.

If behavior is a language, what's he telling you? It says he's using.

Yeah, he's back. Uh, but he's back. He doesn't want me. Yeah, no.

Well, he, he wants the addiction. He's in the addiction. Yeah, yeah. An addict can have no access to money? None.

Okay. And somebody in recovery knows that. Somebody who's back to using again, and you've been down this road with him before, are world-class manipulators, world-class distorters of reality, and they make you feel like you're crazy, right?

Yeah, yeah, very much so. Yeah.

So here's the deal, um, you're going to get— if, if I'm you, you sit down with him and say, okay, we're going to get you back into rehab and get you back in some help, and you're relinquishing all control of all money until you've been dry for 2 years.

And you need to put a freeze on your credit report the second you hang up this phone call, and that way nobody else can add you to any more debt.

How do I do that? Freeze it. You can go, go on the line, go online, and you can freeze your credit report.

It's very easy to do, and it will do it across all 3 of the credit credit reporting bureaus.

Yeah, but you're— this is hardcore, kiddo. The only chance he has is, and the only chance your marriage has, is for him to stop using. And the first step is a complete confrontation. And, you know, he gets into a program. If he's not willing to get into a program, there's nothing you can do to save your marriage or your money. You have to get away from him as fast as you can. Because 100% of addicts burn down their world. 100% of them are broke until they get some healing, until they get the other side of the addiction and get some sobriety. They all of them, regardless of what they're addicted to, whether it's sports betting or whether it's pornography or whether it's heroin, 100% of them burn their world down. We work with them every day because we are there while their finances are burning, because you just light money on fire when you're addicted something. Just burn it right there in the middle of the kitchen table. And this guy's doing it. All the symptoms are there, aren't they? Yeah, yeah, yeah. And, you know, I know you don't want it to be true.

We don't want it to be true either. But we also don't want you— your don't want it to be true thing to allow you to walk around and act like it's not happening.

It's happening. Yeah, it drives me crazy because I can't prove it. I don't have to prove it.

We've got all the signs in front of us. And by the way, if he's not, you using, let's go one step darker. Um, where is he doing with the money? He absolutely doesn't care about your marriage, about how you feel, your safety at all, because he's going crazy with his stuff, right? You know what I'm saying? Yeah. So if he's— thank you— if he's not using, then man, he's got some—

he's got some other issues, some character—

yes, challenges.

Yeah. Or not even worse, but— or worse in a— or as bad in a different way, maybe it's a better way to say I—

you're gonna need to get yourself your own checking account and get on your online bills. I'm sure you already have this, but where you're paying that you got electricity and light and like— you're gonna take ownership of this for a season.

You have to take over everything. You have to take your name off of any— his name off of everything. He cannot have access to money unless you hand him cash. I hate this for you, kid. That's so he can put gas in his car with cash, which means he puts gas in the tank and walks into the store and pays for it and walks back out to the car like we used to do.

I did that recently. They took it. I know, it's amazing.

It was awesome. That little walk changes your— what you pay for gas.

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 do it. So 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 today, Matthew 6:26: Look at the birds of the air. They do not sow or reap or store away in barns, and yet your heavenly Father feeds them. Are you not much more valuable than they? Earl Wilson said, money in the bank is like toothpaste in the tube. Easy to take out, hard to put back. I like that. It's pretty cute. Mary is in Minneapolis. Hi Mary, how are you?

I'm good, thank you Dave for taking my call.

Sure, how can we help?

Well, I have a little bit of a dilemma. I became a widow 4 years ago at the age of 38. Wow, man. And my husband was a farmer, he was 51. Um, and he left me with quite a bit of assets. He left me with farmland and of course our home, and then a million-dollar life insurance policy on top of that.

Um, along with that, against the farmland. Oh, there's debt against the farmland. Yes. How much?

Close to $2 million. It's about $1.8 million. And what's the farmland worth? Around $6 million. Okay.

So what does the last 4 years look like?

I continued to run the farm for 3 years. I had a farmhand that my husband trusted. He worked with him for a very long time. And he took over the farm. I took over the business and we ran it for 3 years successfully. We did, we did very well. And then he bought the farm from me a year ago, 2025, January 2025. So I sold the farm. I didn't sell any of the farmland, but I sold the farm site and the equipment to him.

I'm sorry, what is the difference in farmland and a farm site?

Well, the farm site has the shop, the— there's a home on it. In it. There's hog barns, and then it's just where— it's just the home base for the farm. And then the farmland is what they grow the crops in.

So do you own the land still? I own the land, yes. And you have the debt still?

And I still have some debt against the land, yes.

Okay, so where are we—

where are we today, and how can I help? So I'm looking at trying to pay down some of this debt with the life insurance proceeds. I have about $1.1 million in in, in cash. It's in, it's in an investment portfolio, um, but I wanted to pay down some of these smaller debts, and I just was wondering if this is the right thing to do with this money. What are the smaller debts? The smaller ones, so there's a land— there's one land mortgage for $40,000, um, my home mortgage is $85,000, and then the, um, there's an SBA loan for $125,000.

$800,000. Okay. All right. Is there a business separate from the actual farm operation?

Um, no. Okay. All right.

So the SBA loan is associated with the farm. It is. Yes. Okay. Now when you sold the other piece of ground the other day to your farmhand, what did it sell for and where's that money?

It sold for $800,000 and that is a contract for deed with him. So that's where my monthly, my income comes from is that contract.

Contract for deed. Okay, so he's paying you how much a month?

Um, $72,000 or $7,200, sorry. Okay.

Is he also leasing the land from you that he farms?

Yes, he's also leasing the land and there's a 10-year lease on it, so he will be farming— it's 500 acres— he'll be farming it for the next 500 or 10 years. Um, and that brings in about $120,000 a year.

But he also put himself in kind of a pickle because if you sell this land, or if in 10 years you want to do something else, he's bought this farm equipment but he won't have anything to farm, right?

Right. He farms, he farms around 2,000 acres, so he has some contracts with other farm landowners.

So the balance on the farmland is now down to what?

The balance on the farmland, let's see. So I have $1.1 million in one piece of land And then there's $383,000 in another piece. And then the smaller one is just $40,000.

I gotcha. Okay. All right. Okay. So I think I've got the picture right. If I do, what I would do is to do what you're suggesting. I'd take $250,000 of your million and pay off the SBA and the $85,000 and the $40,000, right? Okay. And then you're 100% debt-free except for the two land mortgages. And you have an income of $7,200, which you can easily live on. Yes. And 100% of the profits from the farm go to reduce debt on the land.

Yes. Yes. So the, the profits coming from the land, the land rent is covering the payments for the— No, not just the payments.

You're making more than than that. When, right, in a given crop year on the acreage, your portion when he farms it on your behalf, your portion is how much? Was $300,000, wasn't it? Or $150,000? Um, yes, $120,000. Okay. And you have $300,000 on the small mortgage and $1 million on the other mortgage. So in 2 years, the small mortgage is gone because you can put that whole $120,000 on it.

Oh, okay.

Okay, and then we're gonna do the same thing until we get rid of that whole million. And so by the time his lease is up, his 10-year lease is up, before it's up, this farmland is gonna be free and clear. Yes. And then you're sitting on a $15 or $20 million net worth at that point.

Correct.

Okay, the value of the land will have gone up, plus your investments will have gone up because you got $650,000 invested that you're not touching either. Either, because you're living off the $7,200 from the land contract on when you sold him the property. Did I get that right?

You did, yes. Okay, yep, that sounds, that sounds about right.

Mary, can I throw an alternative reality at you? Yes. I, I spent a big chunk of my life out in West Texas where there's cotton farmers and cattle farmers. The, the conversations I had with those, especially those older men, the, the thing that I felt at the end of the day was giving them their coronary challenges was the debt on their farms. It took one bad year to start a debt cycle that they could really never ever get out of. Is there any part of you that wants to sell this thing for $6 million and be done with it and go have life?

There is not. No, I, I'm, I'm not opposed to selling maybe 100 of the acres down the road if I, if I run into that issue. I don't think I will, but I don't want to sell the land. I want to hold on to it. It was— it's family land. It's my husband's family land, and some of it was passed down. He actually bought 200 of the acres right before, like a year before he passed away, and that's where that $1.1 million came I'm more nervous about this than you are, so I'll keep that to myself.

But just, man, I just watching those farmers, we're getting rid of all the little mosquito debts right now, and then we've just got 2 big ones to knock, and, and the smaller one of those will be gone in 2 more years. So pretty quickly we're down to— and the land goes up in value, so we got an $8 million— 2 years from now we have an $8 million piece of ground with a $900,000 alone on it. Yeah. And that, that doesn't scare me as much because then we're whittling away at it, whittling away at it, and you love it and you're comfortable and, and you've settled into this with a great rhythm. I'm very proud of you. Yeah. I mean, you really threw your— you know, you really stepped into this, kiddo. Well done. And what's your husband's name?

Your ex? I mean, your husband who passed away? Kevin. Kevin. Pretty awesome guy.

Oh my gosh, he was amazing. Yes, he was an amazing farmer, an amazing husband, a great dad. Yeah, he was, he was, he was Great guy.

I just always want to take a moment and, A, honor somebody by saying their name who passed away, but I also want to honor a husband who gave his wife the privilege of— you got to grieve for as long as you wanted to.

Yeah, million-dollar life insurance policy and a business that was right side up.

You got to be sad for a season, not worry about where your next meal was going to come from, and that's noble and honorable. And, and good for Kevin, man. Yeah, he's a good man.

He took care of his wife and she took care of business afterwards. Pretty incredible, the dynamic duo there. Yeah, yeah, very cool. Congratulations, Mary, we're proud of you. Very cool. Thanks for giving us the honor of talking that through with you. Pretty crazy. So yeah, just always be looking for a way where the end of the story is, I got zero debt, because that always leads me to more wealth and more peace. That puts this hour of The Ramsey Show in the books. We'll be back with you before you know it. In the meantime, 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.