Transcript of Don’t Let Shame Keep You Stuck

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Normal is broke and common sense is weird, so we're here to help you transform your life. From the Ramsey Network and the Fairwinds Credit Union studio, this is The Ramsey Show. I'm George Campbell. My co-host, Rachel Cruze. We are taking your calls at 888-825-5225 if you want to join the conversation. Ian is in Cleveland up first. What's going on, Ian?

Hey guys, thanks so much for taking my call.

Sure, how can we help?

So yeah, so my fiancée and I are in a pretty substantial amount of student loan debt. We have about $65,000 of debt combined, and we're graduating soon. I'll be graduating in December, and she'll be graduating the following semester. My question is that once we get married— we're also getting married in the following summer— once we get married and our finances are combined, is it okay to donate our time as a a form of tithing instead of cash so that we can put more of that money towards our debt and clear it sooner?

Wow.

You're putting a lot of power in our hands.

I guess.

We get to decide what's okay.

Yeah. Yeah. I mean, this is the giving generosity topic is one that we encourage. I don't think we demand anyone do, right? I think it, but it is something that we teach and we talk about and we do hold very high up. You know, even on our budgeting app, EveryDollar, the very first line item is giving.

Mm-hmm.

So, I would say for you guys, I mean, I would personally continue to be givers because as you live life with an open hand and that becomes a part of your character through even the sacrificial process of getting out of debt, continues to change and it continues to be a habit in who you become over time, which I think is really important. I think one lie with giving people really fall into is, If I just had more money, I would give. And the truth is, it's more of a heart issue usually than a bank account issue, right? So, I would say, I would continue to give if I were you. It's not gonna be the end of the world either way, but you definitely can't say that you're tithing time because the word tithe literally means mathematically 10% of income. It's like, so, you could be giving away your time, but you can't interchange those words if we're going to be grammatically or vocabulary correct.

Correct for vocabulary. So I mean, as far as if you're a believer, a person of faith, and you believe in the tithe, it is the first fruits of all your crops. And I love this verse from Proverbs, honor the Lord with your wealth, with the first fruits of all your crops. So crops to me is a very tangible thing. That's basically currency back in the Bible days. So I'm going to see that as I'm going to be a person of faith. I'm going to be obedient. I'm going to tithe. And hopefully, I don't believe in a prosperity gospel, but there's something on the other side of obedience, which is blessing. And I don't think it's going to slow down your journey financially as much as it will create a habit in your life of generosity so that when you have a lot, you're going to remember these days when it was really hard to give. And so—

Absolutely.

I would make it a challenge for you to do it for a month and see, see how it feels. See what happens with your finances. See if you don't find other ways to cut expenses and increase your income. that wouldn't be the first place I go to cut, even though I totally get it mathematically, you would be out of debt faster if you didn't give a dime. We can all agree on that.

Mm-hmm.

How does that hit you, Ian? I feel like we got nowhere.

No, no, I appreciate you guys' input and I, uh, I thank you very much.

Yes, absolutely. Thanks, Ian. And, and I will say too, you know, one, one posture I do not like around spirituality in general, but specifically with this topic, with our money, is any type of legalism. I don't like this idea of, I have to do this right or wrong, black or white. You know what I mean? It is such a posture of your heart.

Right.

But when you look, if you are a person of faith, to say, okay, there's wisdom in what scripture talks about, and the tithe is mentioned a lot in scripture, and I think there's a reason for that. I think God knew that money was going to be be a thing for us. And so there's a lot of warnings about it. There's a lot of instruction around it. And over and over and over and over again, you see the generous person, the humble person, the one that lives not for themselves, but for others with an open hand, are the ones that for the most part, I think, do receive a level of blessing, or Jesus tends to yield to those people. versus those that don't. But then you don't wanna be Pharisaical because we don't have a Bible lesson.

Really? Jesus was Pharisaical?

But there is, but there's also like, oh, this Pharisee tithed and was like, look, this man with nothing did tithe nothing. But then this man was like, Jesus, please take my— there's a posture of your heart. It's all intertwined.

It's the heart plus the action that flows from the heart.

So the action I think is important. I do think that what you do with your money is a representation of what you believe. And so living that out, I see as very important.

I'll leave you with this, Ian. Again, I'm not a theologian, but I just like some of these passages.

You kind of look like a youth pastor, George, a little bit.

I don't think that's a good thing. I'm not sure that's a compliment. All right, youth pastor George here. I'm going to hit you with Malachi 3:10 to end it. Bring the whole tithe.

Wow.

Yes, Malachi. Bring the whole tithe into the storehouse. Get that? That there may be food in my house. Test me in this, says the Lord Almighty, and see if I will not throw open the floodgates of heaven and pour out so much blessing that there will not be room enough to store it. That's a threat right there.

There you go.

He said, test me, bro.

See if I lie.

And I don't know if blessing is necessary in material possessions either.

Right?

Exactly.

It could be. There's a lot of things that happen. It's a big posture, I think. I really do believe in that yielding of the spiritual realm.

That was beautifully said. I'm going to use Pharisaical in more conversations to sound smart. Thank you for that, Rachel.

You're welcome.

Don't be a Pharisee, George.

I try not to.

Live with a lot of grace.

All right, Donnie's in Paducah, Kentucky. Donnie, get us off of our soapbox. What's going on?

Wonderful. Um, yeah, thank you for taking my call. I've got $500,000 in a, uh, growth stock mutual fund. It was, uh, it's my IRA.

Cool.

And my, my company— or not my company, but my, the financial group that takes care of my mutual fund called me up the other day and said they had a great program that they, they, they would ask me if I would be curious in moving like $150,000 over into a fixed 5.7% rate of return for the life of the fund, you know, for however long I keep it in there. Okay, because my question is, right now my mutual fund as it sits is making way, way more. Matter of fact, the past 2 or 3 years has been incredible.

Oh, the market's been on just a tear. I mean, we're up 13% year to date this year. So, um, you're wanting to move it out of what, volatility, fear? What's driving this?

No, he just called me because Uh, they've always had this program, but it usually runs in the mid-2s to upper 3%. And for the first time in the company's history, they're offering 5.7%.

And it's guaranteed for life?

Guaranteed, yes.

That's odd. I don't know what kind of product this is.

Won't never go down.

Sure.

Feels like an annuity or something. I mean, I know it's not, but—

I always need a reason to do something. So unless you have a good reason of why you need that money, to stay liquid and stay growing at that exact rate? I wouldn't, because we know over time you're going to do better in that growth stock mutual fund.

Should do double.

Well, I only have one good reason why it sounds good to me.

Why?

And if the, if the midterms go south, then the political winds will take away this huge growth that I've been experiencing the last couple years.

I'm not a betting man, Donnie, but I'm betting the markets, whatever they do in the midterms, they will recover and then we'll be back at record highs. And you're gonna be calling and saying—

And then in 4 years you'll have another president.

Should I move my money from a 5.7% fixed account over to mutual funds? And I'll say, yeah, yeah, should have done that. But it's a great question and that's a pretty incredible return. If you're a business owner, time is money, and nothing drains both faster than a hiring process that doesn't work. You need qualified candidates who actually want your job, but sorting through applications can cost you dozens of hours you don't have. And that's where ZipRecruiter comes in. ZipRecruiter automatically puts the most qualified, most interested candidates at the top of your list. Their new feature lets candidates tell you in their own words why they want your role. So instead of guessing who's genuinely excited, you know, you get to skip the sorting and go straight to the people worth talking to. At Ramsey Solutions, we can get behind that. We only hire people who believe in our mission because a paycheck gets someone in the door, but belief is what keeps them there. ZipRecruiter helps you find those people faster, and that's why I recommend it. And listen to this, 4 out of 5 employers who post on ZipRecruiter get a quality candidate within the first day.

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Meet your match on ZipRecruiter. Spencer is in Syracuse, New York, up next. Spencer, welcome to the show.

Hi, thanks so much for having me on.

Absolutely. How can Rachel and I help?

I have a quick question for you. Um, my sister-in-law, uh, came into quite a large sum of money, and very graciously she has offered to pay off my wife's student loans. Um, she owes roughly around $73,000, and the—

That's amazing.

It is a wonderful gift. And so my underlying I guess question, it's my wife's as well, is we're trying to figure out if she's eligible for public student loan forgiveness. And her loans are, it's a bachelor's and a master's, and it goes from, you know, I think she's 18, so roughly right around, you know, 6 years of schooling, and they all mature at different ages. So after 10 years, they would naturally drop off for the forgiveness. With the way that the student loan department's been gutted and it's very volatile, we don't know if we should just pay them off writ large with this sum of cash or if we should wait it out and see if they're forgiven. My sister-in-law is willing to just give us the cash and let it sit in a CD to wait and see, but we're really unsure of what to do.

And we're talking years from now.

So some of these loans are going to mature in 2 years and be eligible. to drop off, but there are a couple like her master's, which are probably 4, maybe 5 years behind. So there's still a repayment schedule to be made between now and then.

What's the, what would be the price of the loans in 2 years? And has she applied for this program? Because sometimes it's great. Like we've heard, we have heard more and more, I feel like, success stories in that vein. Not a ton, but there's still so much volatility too, right? So I'm saying this with like caution and, Curiosity of how much, how much of the $73,000 would be forgiven in 2 years?

I wanna say roughly $25,000 would be my guess. I think that's the rough number we had.

Okay. So—

It's about a third of it.

So a, and so you have option A, just pay everything off immediately, which is what I would do, Spencer, just to jump the gun here personally. Yeah.

I'm taking the known, which is sister-in-law has $73,000 and can give it to us today versus, what might happen 2 and 4 and 6 years from now. That's a lot of just anxiety in the meantime.

You just hold for no reason. Yeah, that's option A. Option B would be you keep $50,000, throw the— or I guess no, it would be $25,000. You throw $25,000 at the— or keep $25,000.

You're saying the $25,000 could be forgiven?

Yes.

Yeah, yeah, yeah, yeah.

So pay off the other $50,000.

Pay off the $50,000, put $25,000 in a CD and wait 2 years. And see if they are forgiven. If they're not, you pay it off in 2 years.

Interest is still accruing, right? So the balance is growing and you're still making minimum payments.

Yes. So the average, these student loans were acquired, you know, over well over a decade ago. So they're, the interest rates are, are modest compared to today's, you know, roughly 4 or 5%. Um, but yeah, they're still accruing interest.

You factor the minimum payment you're still having to pay for years plus the interest. I'm gonna just pay 'em off, man.

Yeah.

I was gonna say you pay it off. Option B, which I wouldn't do, is you pay some, not— or option C would be you just let '73 sit and you just wait for all of it, which I wouldn't do that either. So yeah, I'm going option A, Spencer.

And then never think about it again is, would they have been forgiven if we had just waited 6 years?

Yeah, I wouldn't even worry. It's in the rearview mirror at that point. Go live your lives.

Eligible is just not that strong of a word. I mean, I'm eligible to run for president of the United States, just to be clear.

George, I'd vote for you.

Understood.

You shouldn't.

I would.

You really shouldn't.

I don't know.

I'm terrible with that.

I could be your running mate.

Okay.

Rachel just volunteered. I just want to know how you like hit the jackpot with sister-in-laws.

No, no. Well, the sister-in-law just came into money. What— can I ask that question? I'm just curious how she got it.

Oh, that's something I can't discuss because there's an NDA. There's an NDA involved.

Wow.

Okay.

There.

But this is a small portion of whatever she got, I'm assuming. Correct. Yeah.

Okay. Yeah. But very small portion.

I'm just thinking if that was my brother, I would hope my brother would just take it and knock out the loans and he can live debt-free instead of waiting.

Yes.

You know, it's less exciting to give.

I think that's what her heart is too, as the giver. She's like, here's $73,000 to pay off your loans. Um, you know, and Spencer, which, you know, no, no slight on you, but then you guys are like, I wonder when the mature payoff is.

Can we arbitrage it?

Yeah. Yeah. Yeah. Yeah. So no, pay it off, Spencer.

Congratulations. Is that all of your debt?

That's all of our debt. Wow. We've completed paying off everything else and we're 35 and 37 respectively, because we've been working hard at it the last couple of years to get debt-free.

Golly. How good would that feel though?

What a gift.

Oh, how much?

That'd be incredible.

How much do you guys make income-wise?

I make $85,000. My wife makes $65,000.

Good for you guys.

Fantastic.

That's awesome. Well, what a gift.

Congratulations on debt freedom, my friend.

That's a generous proportion.

Preemptive debt freedom.

That's pretty cool.

Basically.

I need better— I'm realizing I need better in-laws is what I'm realizing. I need some of that. That's fantastic.

Whitney's family's like—

No, my sister-in-law is wonderful. All right, Jessica is in Louisville, Kentucky up next. What's going on, Jessica? Stop handing out money.

Hello.

Um, so my question is, so we have no debt, but we're a military family, so we don't have a mortgage. We live in housing we always have. So how do we go about the mortgage payment part or planning for a house when realistically we won't pay for housing for a good 6-ish years if my husband retires at 20 years.

Oh, I was like, retires at 20 years old? Okay.

No, no, no, no. I mean like 20 years in service.

Sorry.

Yeah.

So 6 years from now you might buy a house.

Yeah. And you probably will buy a house in 6 years, you know? And with the market being as high as it is, I'd say start saving now. I would just be putting some money away every month.

So that's my other question. So are you, by putting money away, are we talking like savings account? Are we talking investing? Because then you have taxes on all of that. I don't know. I'm not very good with the whole investing thing.

Well, you're talking about, is it for sure 6 years or could it be 3 years from now or 4 years from now?

It will be a minimum of when he retires, 6 years.

Okay.

Like, could it be longer than 6 years? Absolutely. If he likes it. Okay.

But minimum is 6. Okay.

Great.

In that case, I would recommend investing it because you have a time horizon of 5 or more years. And so over time, the market will smooth out. There's a much higher chance it's going to be up and to the right if you look at a 10 or 20-year horizon or even a 6-year horizon versus 1 to 3. And so I'd be comfortable investing that in just a taxable brokerage account. So that'll keep it flexible. Yes, you'll owe capital gains tax on the growth, But that might be, you know, 0 to 15%, depending on how much you're taking out and what your household income is for that year. So I'll take, you know, the market growth and pay 15% on the growth versus letting it sit in a savings account.

Okay. That makes sense.

You'll still be better off. And if you do that for 6 years, how much could you guys save up?

Realistically, we live, we live comfortably and probably we've opened up our budget since we've paid off all of our debt and we still live on maybe two-thirds.

So how much could you put away per month, let's say, towards this house goal?

Um, hold on, per month, at least $1,500.

Fantastic. Okay, so $1,500.

I mean, and that's not tightening anything up. And we also, we invest, you know, like in retirement and all that, and we have kids' college funds taken care of. So this would be on top of all that.

Good for you guys. Yeah.

So I'm using our investment calculator.

Yeah, our kids are little.

We're just putting away every month.

Great.

So I'm using our investment calculator. You can jump on YouTube and Spotify and watch this. And I typed in $1,500 a month starting from nothing, 6 years to grow at a 10% average rate of return. You would have $147,000 as a down payment by then. Not too shabby.

No, you're right.

And if you upped it, let's say you could do $2,000. You said you could tighten some things up. $2,000 over those 6 years, you have almost $200 grand. That's a pretty incredible down payment.

Yeah.

So if you don't like that number, you can keep waiting. You can invest even more. But that, that's what my plan would be, knowing housing is covered for the next 6 years. I'm gonna be making a plan instead of going, well, we should probably start saving for a house now.

Well, that's what I'm starting to see that a lot with military families and families like in ministry where the church pays for the house, right? And then they're done with the job. And they're like, oh my gosh, I guess we rent and save up a down payment for the next 4 years, right, of our lives versus doing it ahead of time. So it's good forethought, Jessica. And 6 years is a great runway. So yeah, nothing to stress about by any means, but it is fun to see your money, your money grow for something great like a house.

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$25 forever requires customers to remain active on Boost Mobile Unlimited plan. Welcome back to The Ramsey Show. I'm George here with Rachel Cruze. The number to call is 888-825-5225. If you didn't hear, Dr. John Delony's new book, Building the Marriage You Want, is available for preorder now. And here's the deal. Nobody gets married planning to become roommates, but it kind of just happens. Life gets full, the kids, the work, the packed schedules, and one day you look up and you realize that's what happened. And that's why John wrote this book. He explains why marriage can feel so hard, why yours still matters, and what you can do to make it great, giving couples practical tools to reconnect and build a stronger marriage. You can get it on preorder right now for $24.99, and you can lock in a bunch of free bonus items along with it, including the enhanced audiobook, the ebook delivered 2 weeks early, and instant access to his video. Dr. John Delony on Connected Communication. Go check it out, ramseysolutions.com/store. If you're on YouTube or podcast, click the link in the description. Gretchen is in Miami up next. Gretchen, welcome to The Ramsey Show.

Hi, thank you guys so much for having me. I love YouTube.

Oh, thank you.

Um, so my question is just a little fun story. About 10 years ago, my husband and I started the Ramsey program, um, paid off her student loan, paid off both our cars. Everything went well. Unfortunately, lost his job, so we kind of lost Sidetracked off it a little bit. And about a year ago, I got sick again, being tired, you know. So we started the Ramsey program again, and we paid off— actually, I had 4 jobs, he had 2 jobs, and we paid off probably $40,000, the roof, the AC.

Wow, good job.

And yeah, so that was amazing. And, you know, it's a bittersweet phone call because I thought we are heading into, um, you know, an emergency fund to build that one. Um, and I opened— we opened the, um, the Fairwind, you know, savings account and all that. Until the day I wrote the check to pay off our last debt, I found out that my husband, behind my back, um, opened credit cards and gambled money away on sports betting quite a bit.

Oh.

Um, so there's a history of it. Um, so I just I was done, so I, I filed for divorce. Um, but my question is now, um, the house— I would love to keep the house. Um, we owe $290,000 on it. Um, we just got the appraisal done for, um, $674,000. Um, so obviously if I refinance, I couldn't afford it, um, and pay him out. Um, so my boss And his wife, who are really good friends of mine. Um, I know him for a long time. I've been working for them for 15 years. Um, and they saw our daughters grow up and, and they really want me to keep the house. He offered that he's paying half of my mortgage and give my husband the buyout. I think it's about— he's asking for $175,000. Um, but in return, whenever I'm ready, um, to sell the house, he— they would get half of What the selling— what I would bring in from the selling. And I would just want to know if that would be—

Hold up. So they're saying they'll give you $175,000, but they could get $400,000 back if the house sells for $800,000?

Yes, I would keep $400,000 and then they would get $400,000 and they would pay actually $325,000 right now because they would pay half of my mortgage right now, $150,000, and then give my husband $175,000, his part of the house.

Oh boy, this doesn't— it feels less like generosity and more like a business scheme.

Yeah, I was—

I thought you were just gonna say they're willing to loan me the money and I can pay it back when the house sells and just pay them their amount back, maybe plus some interest. But this feels different.

Hmm, well, I was doing a little bit of math. Let's say, you know, the growth of the house in like 5 years or 10 years minus inflation of the money he gives me because he's not charging really, you know, any interest right now. I don't know if it makes sense. Yes. Down the road.

Um, no, it doesn't. And it ties you, Gretchen, to people that right now, yes, are great friends. Do I pray they're still great friends in 8 years? Yes. I, I pray they are. But also you're tying yourself to a situation that could go That could go sideways real fast. And then you're up a creek. And if they turn on you, they could demand whatever they want out of a deal. And if you sign something with them, they could take, I mean, like it, it, it, what, what I, what I feel, Gretchen, if I were to just be honest with you, is you're going through a really, really difficult time. Number one, you've been lied to from your, your former husband, but at a point in time were married.

Mm-hmm.

You found so much more debt than you even knew about because he lied about it.

Mm-hmm.

You got divorced, which in and of itself is like a death. That's exhausting and it's horrible. It's horrible. And so sometimes after so many of these kind of events, emotionally, you try to hold on to any part of the life that you had, and out of that desperation, make some really bad decisions. And I, and Gretchen, I would say this is gonna be a bad decision for you. I don't think you can afford this house.

Mm-hmm.

And I'm so sorry. And I think that's one of the hardest things in divorces. Um, especially if, do you guys have kids?

Yeah.

Yeah.

2, 2 girls.

And you're wanting to keep the kids with, with normalcy. But I've heard Dr. John Delony talk, say this on the show. It's not the life.

They've already lost it.

They've already lost it. It's done. Yep. The life that they knew, that you knew is over. And so you have to start a fresh life again and do one on the back of you, Gretchen, that you are figuring this out. And when you try to keep something like a house that you can't afford, especially with these contingencies and it's tied to friends and all of it, it gets It gets messy really fast.

Yeah.

I know.

And I'm so sorry. I just don't think in good faith I could sit here and say that that not only is a good deal, but I think from a mathematical standpoint, I think you'd be better off, um, for you guys to sell, take the equity and, and, and start somewhere new.

Yeah. I, I was afraid you would say that. I was just thinking, you know, maybe keep it until my oldest one goes to college in 4 years, you know? And, and because at least, you know, I mean, yes. Could I rent right now for a year or 2? But if I keep the house, then at least I would grow a little bit of equity, hopefully, for the next couple of years or maybe—

Well, if you sold today, you said it's worth $674,000, you owe $290,000, you'll owe the ex $175,000. Is that all right?

Yeah, it's— I think it's $694,000 what it's worth, but he's asking for $175,000 because, you know, we—

yeah. So that would net you $229,000 minus fees and closing costs. So you'd probably walk away with about $200 grand that you could use as a down payment on a new house.

That's right.

Or you can leave that in savings, rent for a year, get your bearings and make this decision from a place of strength. But right now you're making decisions from a place of fear and grief and weakness, and that's not what you want to do. You're going to regret that long-term, even if this employer stays a great friend and employer. But what if you get a new opportunity, a new job, and you're like, well, I can't leave because I owe them all this money and they want me to stay. It's just gonna— we've seen too many situations where things look good on paper and sounded good and it didn't work out.

Yeah.

And my thing too is I don't really like him cuz I feel like he's taking advantage of you a little bit. I mean, the idea at the end of the day that when you sell this house, it's like, it's kind of gross to me.

Yeah.

And I wouldn't like the idea of borrowing money in general. Like, I'm not a fan of that. But even like what George was saying, even if it was just a, hey, instead of, Going to a mortgage company, you can go to us and pay.

We're trying to sell them.

Your effective interest rate on that could be like 15% when you factor in how much they got versus how much they lended you.

Yeah. It feels odd. I don't know. I don't like it.

So if you can't afford the mortgage on your own through a cash-out refi, then that's just the math telling you this is an unaffordable house on your own with one income. And that doesn't mean you'll never have a house like that again. It just means right now our situation's changed. And I think you can find a great house with $200,000 down, right?

I hope so. Yeah. The area is a bit rough where I'm in. Like it's really expensive. It's more like a Christian area, but yes.

What's your income?

I've been, my income is $85,000 plus, I have 2 other jobs. So I mean, I bring home a month is probably $65,000.

Would you be able to stay in that?

$6,500 a month. So, okay.

Yeah.

Okay.

Oh, Gretchen, I'm sorry. Ugh, that is so— it's so difficult just walking through that in life in general and then having to kind of feel like you're uprooting and changing. But I think you're just in the midst of change, and I think the wisest decision is to find something that you can afford.

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Tony is in Jacksonville, Florida, up next. Tony, welcome to the show.

Hey guys, how are you doing?

We're doing great. How are you?

Doing well. Um, so me and my wife, we're having a pretty big disagreement and I need some advice from y'all.

Okay. Do you think you're right?

Yeah.

That's where you went wrong, my friend.

Lay it out for us.

What's going on?

So for some context, uh, my wife inherited quite a bit of, uh, property, and, um, when her mom passed away 3 and a half years ago, and, um, her estranged sister wasn't too happy about it, filed lawsuit on us, and we just recently, back in June, Settled out. Um, so we owe a settlement to her sister. We've got attorney fees, plus we got some consumer debt that we want to get taken care of. But, um, we've always been, we've been talking about, you know, selling the property. Um, and, uh, you know, just paying off settlement that way. So we got offered through, it's a land acquisition company. A really good price, um, per acre for an 80-acre parcel that we own. Um, I've spent the last month, you know, negotiating this deal, you know, revising the contract, everything like that. Well, when me and my wife were talking about it this past weekend, she has decided that she wants to split the land herself and sell it piece by piece that way. And I don't believe we've got the money for all of that development when we've also got this offer, you know, on the table here that, you know, we don't have to do anything.

Is the total property 80 acres or is there more?

So So we've got 2 parcels. We've got an 80-acre parcel and then we've got a 64-acre parcel, which we live on.

Okay.

And what would you net with the 80-acre parcel?

Um, they're the land acquisition company that was part of the negotiations. They're paying all closing costs. So we would, I mean, aside from capital gains tax, I'm assuming, um, you know, $800,000. Minus, you know, whatever capital gains would be.

And how much do you owe?

Uh, just in consumer debt?

Everything, because you owe the settlement and all this stuff too. Just add it all up. What would get you guys free and clear?

Yeah, it's about $100 grand total.

How much do you guys make a year?

Um, I make about $7,500 a month. My wife stays home and homeschools our kids.

So what is she— she's wanting to just do it over time, and that would be a lot more work on you guys, but you could just sell pieces of it to clear the debt.

I was like, why don't you just sell $100,000 worth, pay off the debt, and you guys keep this property?

Yeah, and that's what my wife is wanting to do, but, you know, I mean, we've got to survey it. There's county applications, and all of that costs money that we Really don't have.

But for $700,000, Tony, I don't know.

Yeah, I mean, I know, for it to go up—

unless, unless y'all just aren't going to use the land at all and you're like, we're never going to use this.

Currently we don't, we don't use it. We— it's, it's actually just leased to a farmer that basically just pays the property taxes.

What would y'all do with the $700,000?

Um, well, I told— me and my wife's been talking about it. I told her what we'd be doing is sticking that into like a 12-month CD just as a cooldown period until we figured out, you know, what we needed to do with this.

You don't have a mortgage?

No. Wow.

So everything's paid for but this $100 grand in debt that you owe tied to this settlement?

Uh, yeah, it's— well, it's a $40,000 settlement, then $22,000 in attorney fees. And then we've got about $30,000, $35,000 in just consumer debt.

But no mortgage?

No mortgage.

Do you see this land going up in value over time? Like, do you think it'd be worth anything, you know, much more in the next 3 to 4 or 5 years? I'm just curious. Or do you think it's not in like a very, you know, desirable area? I don't know. I'm just trying to get a feel for what this is because it's just a great asset. that a part of me hates for you to walk away from. It's like fixing a $100,000 problem with $800,000.

It's a sledgehammer to a nail.

Yeah, that's exactly, yeah. It feels like a little extreme, but if you guys had a reason to, or if you're like, no, the land is not, it's gonna probably be close to the same amount.

Tell us you have no aspirations to do anything with this land. Eventually someone's gonna sell it.

Yeah. I mean, we've got, I mean, it's just sitting there, it gets farmed. Yeah.

Because I mean, if you just took that $700 grand and invested it, that's some truly passive income over managing the land and paying taxes or leasing it out or whatever you're doing.

Probably much more than what it would probably go up in value.

Yeah. So either way you can do some good things with this, but I don't know if it's a right or wrong. It's more of a timing thing. You don't want to do the work to try to parcel it off over time. She's wanting that. You want to just sell it all at once. We don't know what the future holds.

Why does she want to parcel it out? I'm just curious.

So we're, we're both prayerful people. She believes that God has told her to do this.

Told her to keep it?

And I have prayed.

God's told you something else.

Do it ourselves.

So sometimes that, that happens.

Yeah. Told her to do it ourselves. And I have been praying and I have not heard that.

That's a tough one. That is—

God gets blamed for the ultimate trump card a lot sometimes.

The girl from summer camp said God told her she needed to dump me. Oh yeah, it's that whole thing.

It's that—

never happened to me personally.

I mean, yeah, well, I mean, I, I, yeah, I don't know. I can't discern that if that's true or not. I mean, Proverbs talks about women are very wise.

More discerning?

No, I just think that there's a nudge sometimes women have that men don't always. So listening to your wife, I think is, not that you have to go with that decision, but at least having the conversations where you're curious about her side. She's, you know what I mean?

That there's actually— Can you at least do the homework to see what it would take to sell off enough acreage to cover the $100 grand?

Uh, yeah, so we, we would only have to sell like one parcel. We could probably get $12,500 to $15,000 an acre if we parceled it out ourselves, when we've got a land acquisition company that they're offering $10,000 an acre and we don't have to do it.

Sure, they're, they're getting a discount because you're not having to do any work. I'm just wondering if you just did a little bit of work, split the difference here and went, all right, I can get, get a few permits and whatever it takes. You, you know all the ins and outs of how to do this. I would maybe just see how much time that would take and how much money that would take.

Mm-hmm.

Because it might be a nothing burger where you go, okay, it's gonna be 10 hours of work and cost us a couple grand. We can do that. We can fit that in the budget.

Okay.

And then hopefully the land deal still exists a couple months from now, right? Is there a timeline on that?

Uh, well, I talked to the acquisition company this week and basically told them like my wife wants to pull out. Um, they, uh, they've basically given us like a 2-week timeline just for her to think about it and consider, mull it over, stuff like that.

Perfect. That's enough time for you to do some homework.

Yeah. And I wouldn't, I wouldn't, I, I don't think I would do this big of a deal with you and your wife on such separate pages regardless of, because there's not really a right or wrong here. From a marital aspect, I don't think that's wise if you guys are not on the same, with something this big.

Yeah.

I mean, we're talking $800,000 here. You know what I mean? Like, this is not just, oh, I'm gonna go buy a new truck. Like, this is a big deal and you both need to be, you both need to feel really good about it and have a lot of peace going forward. And that's just not happening right now, Tony. So from the relational side, I would pause because I do think that you could parcel out and pay off the debt, which is great, which is an easy button for y'all, right? Like, you get it done with. the debt, which is amazing. But then over time, there's no rush to sell this property.

And you guys have 144 acres total.

Yeah.

So at some point it's like, do we really need all of this?

Yeah.

And I think eventually you guys end up selling it, but you do it when you guys both feel good about it. I just don't think— Yeah.

I dislike compromising to where nobody's happy. That's usually how it works in my marriage, where we both leave a little bit unsatisfied.

Where everybody's just miserable.

You don't wanna leave going, well, he won. That's not gonna go well. That's just my house. That's my rules. But I wish you the best in this endeavor, and I hope you guys knock out that $100 grand.

Yep.

Either way, you're doing pretty good, all things considered.

Amen.

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10% off up to a $250 value. See store for details. Welcome back to The Ramsey Show in the Fairwinds Credit Union studio. I'm George Campbell here with Rachel Cruze, taking your calls at 888-825-5225. Jade is in Buffalo, New York, up next. Jade, what's going on?

Hi, thanks for taking my call. Um, I have about $60,000 in credit card and personal loan debt and a mortgage, a monthly car payment, um, 3 young kids, and my margin is very limited enough without paying the credit card monthly minimums.

Wow.

How much do you guys make?

So I bring home $7,800 a month.

Great. Is it just you?

Me.

Um, my husband, he's on disability, so he gets disability and contributes $1,000 a month from his disability.

How much? $1,000? Is that what you said?

Yeah.

When you say contributes that, is there more money, but it's not going to the household expenses?

Yeah, it's going to his Debt and expenses.

Like, oh, you guys have separate finances?

Yeah. Yeah.

Okay, so he's basically like Venmoing you for some household bills, but he's on his own plan and you're doing your plan?

Yes.

Okay, how much debt does he have, out of curiosity?

Um, he's got maybe $20,000, I think. And then he's also working through— we have like some back taxes.

How much is in that? Do you know?

In his, um, $1,300, I think.

Okay. And how much does he bring in total per month?

Um, $3,500.

$3,500.

Okay.

And doing this separately, is this just how you guys have always done it? Was there a reason why you chose to do it this way? What happened?

It's just how we've always done it. Um, we lived separately for a while and there's been some Health issues, and it's just how, how we've done it. Okay.

How long have y'all been married?

Oh, 10 years.

Okay, great. Um, because honestly, Jade, it's— it, it can be very difficult to work a plan when it comes to finances and, and an overall household when not everybody is in agreement, right? But it sounds like you guys are both kind of working to get outta debt. It almost sounds like you guys have kind of the same path. And I wonder if putting all of this together actually puts some forward motion and you guys actually do this faster together. Do you think?

Possibly. Yeah.

Yeah. Because we just find over and over again that couples that tend to work together not only get out of debt, I think, at a faster rate, but their overall net worth grows at a faster rate. And when we did our study of millionaires, over 10,000 millionaires, one of the largest contributing factors is that their spouses, they saw each other as one in a household when it comes to money. And there is a study, and we're gonna talk about this weekend at our Money and Marriage Conference, but the study of, That actual relational health and wellbeing of the marriage in general actually increases when accounts are shared and when money is seen as one. So I'm just saying that all to say that it actually is gonna do so much more than just the money side. But I wonder from the relational side too, how much, how unifying it is if you guys did combine everything. And tackle this together so you're not doing it on your own.

Yeah, actually, I didn't think about that from like a unity standpoint. Um, that might—

yeah.

Are they, are they your kids or his kids?

They're our kids.

But it's not our money.

Right. Okay.

Just wanna make that clear. I was, I was painting a picture for you.

George is being snarky.

I'm being facetious.

A little facetious. Yes.

Okay. So here's, here's what I'm getting at though. He's got $2,500 that we don't even— where is that going? Because you're saying, I have no margin at the end of the month to knock out my debt. He's over here flush with cash, apparently. So how does that work?

Well, yeah, his is going towards his own— his paying off debt that he accumulated and our back taxes.

So he's got $2,500 a month to apply to $33,000, but you have almost nothing a month to throw at your $60,000. Do you see how unbalanced it is?

Yeah.

So he's gonna beat you even though his— the debt— he's got half the debt. And so that's where I'm trying to say, man, if we just combine this, we could be debt-free. You guys make $11,300 a month take-home. With then you combine all the debts, you've got $93,000 to pay off total.

Yeah.

What's on the car loan? How much left?

About $18,000.

And what's the car worth?

I don't know. I bought it new. I don't know what it's worth today.

Okay. I'm just wondering if, if you can get a cheaper car and want to do that, that'll shorten your time horizon. I'm just looking for any ways to speed this process up. Because out of your $7,800, you're telling me that after minimum payments and all of your household bills, there's not much left over?

That's without minimum payments.

How is that possible? How are your bills— Well, $7,000 a month?

Yeah, childcare is— it was $3,000 a month for the summer, and now it's $1,600 a month plus mortgage plus all the other expenses.

Okay, how much is your mortgage?

$2,300.

Okay, that's reasonable for your income. I'm still trying to count where all the $7,800— not really, $8,800 is going because he's contributing $1,000 to the household bills. So have you done an actual budget in EveryDollar where you lay everything out of here's all of my expenses for this month, here's all of my income for this month, to really see what could be?

I haven't done it in EveryDollar. I've done it in Excel.

Okay. What does Excel tell you? Is there money left over?

There's no money left over. There's— well, there would be if— so $7,900 of fixed expenses and Then I have about $1,900 a month for credit card payments.

Wow.

$7,900 in fixed expenses. That's where I'm going. If we looked at those expenses and I said, Jade, you have to cut $3,000 somehow, what would you go do? What changes would you make?

I did see, I've been trying to do that since I started listening about a month ago. And so far I've gotten through decreasing Taking out the streaming and cutting my car insurance in half.

What's your food budget every month?

Food budget is, well, I have it at $1,500. I think my goal is $1,200.

Yeah.

Are you investing at all right now?

I moved it from 6% to 1% since I started listening.

Okay.

So we'll get 1% back if we bring it to zero. So there's something. I think it might be death by a thousand cuts for you to look in this budget and find $50 here, $100 there. Based on what you're telling me, there's nothing glaring that's like a $3,000 payment, but I think you're not going to make much progress unless you guys combine your finances.

Okay. You think that's the first step versus getting a second job?

I mean, I would do both because I think once you look at the numbers now, you'll have a good picture of, okay, if we combine our finances and I get a second job, we can be done in 18 months.

Yeah. Because if you look at your budget overall, and this probably may not be possible right now, but with a second job, Jade, If you guys just combine everything and say, okay, out of the $11,000 we're bringing in, we're gonna live on $6,000. We're gonna figure out how to make that work. And then we're gonna throw $5,000, dedicate that to debt. And you guys could be debt-free in what, 18 months doing that?

I'm just doing, I was just making a number up.

No, it is 18 months.

Yeah, yeah, yeah. Ding, ding, ding.

Look at that. 18, 19 months. That's pretty incredible. Which is amazing.

Instead of 7 years, if you try to do this on your own. And if I'm married, I don't want to see my wife suffer when I can jump in and help.

Yeah, I know. I want you guys to lock arms, Jade, and the money is the problem up there against you two. You two are locking arms and fighting the world together and seeing yourselves as a household. When the, when the income hits the account that we share, that's how we run our household. When you start to do that, there's a lot of unity there. It's almost annual enrollment time, and you wish you could save money on healthcare costs, but every year it's the same story. Premiums go up again, and yet you can't even control your choice of doctors. CHM is not insurance. It's a health cost-sharing ministry where members literally share each other's medical bills instead of paying into a big, uncaring system. CHM programs start at just $115 a month. And while insurance premiums keep climbing, CHM isn't raising their prices this year. And you're not locked into an enrollment window either. So you can sign up right now before you watch your premiums jump again. Y'all, Ramsey has trusted CHM for over 15 years because their mission is simple: Christians helping Christians cover their medical bills. Visit chministries.org/budget and use promo code Ramsey for 50% credit towards your first month's membership.

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Sam is in New York City up next. What's going on, Sam?

Hey, hi, my name is Sam, and, um, hi, thank you, thank you for taking my call.

Sure, how can Rachel and I help?

Okay, uh, so I have a question regarding, um, I have about $40,000, I would say $45,000, $50,000 in debt, and, um, but that's not my question. My question is that I am I was making about $14,000, $15,000 a month in my job until they converted our system to AI. And the past 3 months, it's— the system is not really working. There's a lot of bugs in AI. And the question is if I stick around in this company or I just look for a different job.

And what, what are you selling?

It should be a sales. I sell canopies.

Okay. And what has your income gone down to per month?

It's gone down the last 3 months. I'm not, I'm not moving a sale because I can't push out a quote.

But have you made $0?

I have made $0. I mean—

All because of AI, because AI messed up your program?

Yeah. My, yeah, my board decided to put in an AI system. Which does not—

But how do you sell? Do you call people? Do you talk to people? How does this work?

I call, I talk, I get people to give me whatever I need, and then I can't provide them with a quote.

Because the system is messed up.

So why—

Because the system is messed up.

And you've been dealing with this for 3 months, and corporate or your boss or whoever has not fixed it?

No, he says he'll fix it. He's in the middle of fixing it, but I'm like—

I mean, isn't it hurting his own revenue? Isn't this guy bleeding out too?

But I don't know what's his deal here. Yeah, I know that he's bringing in investors and other people, but I don't know what his deal is there. But I, I know one thing, that I cannot pay my bills by sitting in here.

You need to go sell something else.

Yeah, I, I—

you—

he's either incompetent or I don't know what's going on. But yeah, you—

But you're 100% commissioned.

Yeah, 100% commission. The question is if I should go to this place where there's also 100% commission, or I should go to a place where there is a salary, a base salary plus commission.

Well, you're a pretty good salesman, it sounds like, Sam.

So I was working out before. Yeah, it depends on what it is and, you know, how quickly you can get ramped up.

I, I brought in with one year, I brought in $2 million, not of sales, of cash on the table. I mean to say Sure, that much revenue. Like a job or a deposit, whatever, yeah.

How are you covering your bills right now?

Miracles. What should I tell you?

What kind of miracles?

I wanna know. I called a friend Friday. I told him that, you know, if he has a job for me, I said, I'm— I don't have what to pay my rent with, and I'm like, I need a job. I'm, you know, he knows I'm a I like to work. He says, how much have you done? I said, $8,000. He zelled me $6,000. I'm like, what the hell?

So you're, you're working, doing other jobs already?

I'm not working, doing nothing.

Okay.

He just sent you money. Okay.

Okay. Okay. Well, Sam, yeah, I would, uh, quit your job probably because you're not getting paid.

So we— You'll make the same amount if you quit. How about that? That's basically what we're saying.

Yes. And go find a Position where you, because you're apparently a great salesman is what you've told us. Those numbers are impressive. So go and sell something that you believe in.

And actually use the money wisely to pay off your debts. Because a guy making $15K a month shouldn't be carrying $50,000 worth of debt, even in New York City. So I would say you have a new goal when you get this new job, which is debt payoff. Get yourself to a place where if this ever happens again, you're going to be okay because you have an emergency fund and you don't owe anyone All right. Thomas is in New York City again. Hey, it's a hot day for NYC. What's going on, Thomas?

Hey, how are you? Uh, so I was— I have a closing date for my house. It was supposed to be last week, but it's now pushed to next week. Uh, I'm set to sell my house for $425,000, and with the house, I'm currently $345,000 in debt. So my question is, should I pay off all my debt at once or should I keep some money for a down payment on a new place?

Is your $345,000 in debt to the house, meaning that you owe that much still?

No, I'm $210,000 still owed on the house. And then I'm about $135,000 in consumer debt.

$135,000. What's the consumer debt?

Um, There's a Harley-Davidson motorcycle, a camper that I'm currently living in. So my rent going forward, my living expenses going forward will be nothing besides the camper payment.

Why aren't you living in a house?

The rest is just, uh, so it was a bad decision a long time ago going, uh, I bought it with an ex. We weren't married. We broke up. And it came time I had to sell it.

So no one's in the house right now?

No, but does she get any equity or no?

Our closing next week.

Okay, so you'll walk away with about $215,000 and you don't owe her anything, the ex?

No, I bought her out a while ago.

Okay, okay.

So that is part of the debt.

Okay, so if you— let's say you sold it, you pay off your mortgage, you pay off all of your consumer debt Even after fees, you're probably left with what, $50 grand, $60 grand if you do that?

Yeah, just about that.

Great.

I would not use that to go just buy another house immediately, but I would pay off all of your debt.

And all of it at once.

Yeah.

Yes.

And the camper, I mean, Thomas, I almost would sell the camper and just go rent somewhere.

Instead of rushing back into another house. Yeah.

You're not rushing. If you rent, you're not rushing. That's just buying yourself some patience to get some financial freedom.

What's the camper worth?

I actually just bought it about a month ago. For what purpose? I paid $30,000 for it to live in.

I'm just confused.

You're moving out of a house to move into a camper? I don't get it.

It's like a big, nice camper.

Okay, but still, that feels like a weird life move where you're going backwards.

It was supposed to be like a middle position until I found myself into another house or something like that.

How much is the camper, Thomas? How much did you buy it for?

I bought the camper for $30,000. If I was to sell it right now, I could probably get $20,000, $22,000.

Okay.

It's gone $8,000 in value already?

Yeah.

Because Thomas lived in it?

Well, and it's been a month and it's a camper.

Yeah, they go down in value pretty fast.

So I would get out of it quickly. And you're going to eat some, some, because you're going to, you know, you won't be able to sell it for what you paid for it. So it's—

Here's the problem though. This home equity is a get out of jail free card, but we haven't changed the behavior that got us into jail. So I'm scared that you're going to go into more debt once this debt gets cleared. Or buy more campers.

And that's why I'm trying to get an idea of where I should go from here. Because I was already like looking at houses and stuff, but I don't know if that's the right move.

How much do you have in savings?

Right now, virtually nothing. A couple thousand dollars.

Okay. If I woke up in your shoes tomorrow, Thomas, I would, I would go find a place to rent. I would sell the camper because that's gonna, that thing is gonna be dragging with payments and interest and it's gonna be, it's a, it's going down in value. Like there's nothing good. There's no good investment in that. It's just, it's bad, bad for your money. Bad for Thomas. Go, go rent somewhere, a one bedroom. You're gonna have $65,000 in the bank. You're gonna be debt-free. I would figure out about 3 months of expenses for you. How much do you think that would be? How for, cuz I'm trying to get you to like a fully funded emergency fund. How much?

Yeah. So I mean, at right now, once I pay everything off, I would virtually be like insurance and a phone bill. So $500, $600.

And rent.

And your rent.

And your rent.

Rent would probably be like, yeah.

What's that gonna cost?

$2,500.

What do you make a month?

Uh, roughly $9,000, $9,500.

Great.

Okay, so like a $6,000 a month kind of feels right. That feels pretty generous, but that's good, right? So probably an $18,000, $20,000 emergency fund for you. So you'd have $45,000 left.

Um, which is the start of your down payment fund.

Which is the start of a down payment fund. Yep. And I would be working. I'd be starting to invest. Are you investing, Thomas, in retirement?

Yeah, I have a pension and then I also have like a 401.

Wonderful. So I'd be investing 15% of your income into retirement and that $45,000, I'd put it in a high-yield savings account and I would just be throwing money at it and trying to get a good down payment.

And here's how to change that behavior. Take all the payments you were paying towards your debts and then use that for your down payment fund. Now that'll help you switch the behavior instead of letting that money disappear into the abyss, into more Yeah, the future's bright for you, Thomas.

I'm excited for you. I think there can be some really good moves you make here to set you up well.

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Just before the show, Rachel Cruz and I came out of a meeting where we got a little preview of what's going to happen on the Live Like No One Else cruise, and it is jam-packed. We were all like, wow, there's even more going on than last year. And last year We're busy people.

We're gonna be all around.

They got us working over there. It's no vacation for us, but we are so excited. It's all super fun stuff. I can't complain at all. And this is your week to get away, March 14th through the 21st, 2027. If you have worked the plan, you've sacrificed, you've become debt-free, you're in Baby Steps 4, 5, 6, and 7, then join us. It's a great way to mark that milestone. And a lot of you, you need a vacation. you've been grinding like you're still in Baby Step 2 and it's time to go.

We have a lot of repeat cruisers, including some people out in the audience.

Some today.

Yep. They were on the cruise last year, coming back in 2023.

Going right back. I love it. We're going to the Western Caribbean this time. All the Ramsey personalities will be there. We're going to have live show tapings, brand new talks, creating a legacy that lasts beyond you, ways to continue building wealth, lots of Q&As, lots of personal time, lots of meeting New friends that will feel like old friends soon. So join us, go book your cabin at ramseysolutions.com/events.

George, I think, because there's keynotes every night, like we're giving content all day, every day, but at night it's great.

People weirdly just want more content.

Yes.

And I think, are we allowed to say?

We can say.

I think we're matched up together.

We are.

Yeah.

We'll be doing Smart Money Happy Hour 2 different times on the ship. And then George and I have our keynotes together, old friends. That's right.

And we do 'em 3 times in a row to make sure everyone can get through.

Yeah, so you have to get through.

get badges, so you get different colors. So they, you know, blue goes first or yellow, you know, they—

It's very organized.

Very organized. But, um, yeah, it's really, it's a great week, you guys. A great week. Do not miss out. Go to ramseysolutions.com/events and sign up.

Tickets are selling out.

Come with us in March.

All right, Heather is in St. Louis up next. What's going on, Heather?

Um, so I was just offered a gift of $21,000 to pay off my car, and I am wondering if I should take it.

Wow.

Why wouldn't you take it?

Tell us that.

Um, I was offered the gift because someone went behind my back and told the person who offered me the gift something I did not want them to know. Um, and I want to be able to do things on my own and, you know, be a responsible adult. Um, and not take handouts.

So you feel like this is a handout?

Yes.

Is this someone you know that's giving you the money?

Um, my aunt.

Oh, wow.

So somebody you know gossiped behind your back, slandered your name, and your aunt was like, you know what, I'm just going to give her $2,100.

And you didn't want your aunt to know that you had debt?

Um, so actually I was laid off at the start of September. Okay. Um, and I have enough money to make it through January or so. I am actively looking for a job. I had an interview this morning, have another one on Friday, a couple of really good leads. But my father, despite being told not to tell my aunt, told my aunt. And then my aunt called me and said she wants to help me out, make sure I don't have to, you know, suffer, so to speak, and ease pressure, etc. Yeah.

How old are you? 49.

Okay.

So how, how long have you been the type of person who has a hard time accepting help?

Pretty much my entire life. But I also my entire life have had a problem with my father, particularly meddling in my life and trying to parent me when I don't need a parent.

That's fair.

Are you able to separate a toxic father-daughter relationship from A blessing of generosity?

I mean, I guess.

Regardless of how this came about, are you able to just not block the blessing and take it and go, I actually need this. I'm unemployed. I'm 49 and I have a bunch of debt, man. I'd love this to be coming down.

The ego doesn't like it, Heather. Everything you said, the ego, this is, it's a shock to the ego. But you know what? Sometimes the ego needs to minimize.

I mean, that's— it's a shot to the ego, but I've already run the numbers and paying the car off only buys me an extra week until I run out of money. Um, and so it doesn't really, in theory, help me out except for to lower my debt.

You're saying because of the car payment is a couple hundred bucks and you're going, okay, it'd be nice to not have that, but that's not gonna save my life.

Yeah. So, well, actually, so the car payment is $670 a month. Um, and then it really, like I said, even after paying it off, it only buys me an extra week of before I run out of money. And then saving that $670 is not enough to keep me from—

Well, it doesn't solve your life problems, but it's not a retirement account.

It's just a, man, relief, relieve some pressure here.

But here's how I see it. Someone is throwing you a life raft. And you're just floundering and actively saying, no, I'm good. I want to swim to shore on my own. And that's a noble thing to do. But right now you could use a life raft. Can we agree? You're still in the water.

In theory, not until January. I don't— I mean, I'm good between what I had, the little bit I had in savings and—

Until you're down to $0 to your name.

I don't think Heather's going to take it. Heather?

I think Heather— I'm just saying I would take it.

I would take it too. Unless your aunt— does it mess up any weird relationship with her? Is she expecting it back? Is she gonna— is it more like a loan, not a gift? I mean, anything, any strings attached?

It sounds like a gift. What she and my uncle told me was that that money was already earmarked for me when something happens to them, and they would rather give it to me now and help me out than—

Yeah, you know what, that's, that's, that's on them, you know what I mean? Like, that's their— it's their money. They get to decide when or who they give it to. So they've just, they've changed their mind to say, yeah, we wanna give it to Heather now. And I mean, I know it probably pisses you off about your dad and you probably should stop sharing information with them and put some boundaries up there relationally. But also, Heather, I think it's okay. I think you can kind of just take a gift when it's given to you. And you're no less than, you're not less hardworking or less of a person or, you know what I mean? It's nothing against that. It is.

It doesn't make you weaker. It actually makes you stronger to be able to accept help. And that's a hard lesson to learn in life. Are you going to do it?

I don't know.

Yeah, she's not going to. It's okay, Heather. We're glad you called. Thanks for the great story.

We're still rooting for you.

Yeah.

But I do this how I'd want to be treated and what I would do if I was in your shoes. And man, I try not to block blessings at this stage of life. I did that for a long time and I'm just over it. If someone wants, it doesn't matter. Rachel doesn't need the money, but if I pay for her lunch, she's going to be really grateful. Right?

I'll take a free lunch.

Exactly.

Thank you.

Yes.

So it's not even about, do you need it or not? Is this charity? Just remove that and go, somebody wants to be generous and I want to give them the ability to be generous.

Yep. Yep.

It's that simple.

I, yeah, man, what could we have said to— I don't think we could have convinced Heather.

I'm not a persuasive salesman, unfortunately. But I think there's too much—

But that's the second call this show of someone reaching down to someone's situation and saying—

Usually it's strings attached.

I don't wanna get— yeah, we've had 2 larger sum, you know, of money, like a good bit of money.

Sister-in-law paying off $73,000 of her sister's debt.

$21,000 of a car.

Wow.

I mean, it's, it's $100 grand given away and someone said, no, I'm good.

Yeah.

Keep your money.

Keep your money.

I don't know.

But I mean, yeah, either way, Heather, I think you're gonna be fine, but also Yeah. When opportunity presents itself, I don't know.

Yeah. I'm just racking my brain to go, if I see someone who needs help and I reach out to help and they don't take the help, well, now 2 people are hurt. The person who was trying to be generous, who's now rejected, and the person who needed the help and rejected it.

Yeah.

Yeah. Yeah.

So nobody wins in this situation.

Yep.

So I'm going to do my best to swallow my pride Take the gift and maybe pay it forward someday. If it's going to weigh on you to go, I shouldn't have taken that. I could have done it on my own. We believe you, but also you're unemployed at 49 on your own trying to do all of this. At some point you can't carry the weight of the world on your shoulders and it's okay to accept help from other people, especially family.

Yes.

When there's no strings attached.

I know. And I know that it came about in a weird way, but—

It's not a GoFundMe from your coworkers. You know what I mean?

It's your aunt.

It's blood. It's a blood relative.

She's saying, let me help ya.

And she has the extra cash. It's not hurting her.

No, she's fine.

She's not $21,000 poorer by doing this. She's actually richer in spirit by doing it. But I hope you take it, Heather. Call us back if you do. We want the where are they now story of Heather becoming debt-free and finding employment and getting back on her feet.

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Our question of the day is brought to you by Ask Ramsey, your free AI money tool that provides personalized money answers based on Ramsey principles. Visit ramseysolutions.com/askramsey.

Today's question comes from Sydney in New York. She said, I'm 55 and planning to retire in 4 and a half years. I have approximately $1 million my company's 401, plus another $800,000 in other investment accounts. My 401 is invested fairly aggressively and has averaged around 10 to 11% return. At what point should I begin shifting some of that money into more conservative, lower-risk investments, knowing that it will likely mean lower returns?

Ooh, this is a great question. And if you ask the financial planning community, they're going to move you to like 60/40 equities and bonds, which is a problem because if your portfolio is half in bonds, you're going to get half the returns if those bonds perform at 3%, 4%, 5%, 6% versus your investments making 10% or 11%. So our hot take here at Ramsey is that you should just stay invested aggressively. It's that simple. Your retirement doesn't change that. Now, what does change it is having a cushion for when the market's down. And for that, I would just suggest having a year or 2 of expenses saved up in a high-yield savings account or, you know, T-bills, whatever you want to do there. Just something that's pretty liquid that can get you by if the market is down for a year or 2 so that you're not taking money out at the worst time.

That's right. Well, and when you think about it, I mean, you could live, I mean, after retirement, a good 25, 30 years. Yes. So I'm like, golly, to put stuff in lower accounts for that long period of time.

She's retiring at 59 and a half. So let's say she makes it to 90. That's 30 years of lower returns, all to reduce risk.

Right. And you're going to be getting a fraction of what you would get if it was just in the market.

So sometimes the riskiest thing you can do is stay too conservative in your investing.

Oh, that's good, George.

Put that on a stitch pillow.

Or a fortune cookie.

Needlepoint. That's what the kids are doing these days.

I found out.

Oh, really?

Yeah.

It's coming back.

It's coming back. Old people. I think Hobby Lobby is going to stay in business thanks to Gen Z. Going back to crocheting.

Man, sourdough bread and crocheting.

Little House on the Prairie over there.

A little mahjong action too.

That's Rachel's retirement plan and current life plan. It's just mahjong. It's great. Thanks for the question though. It's a, it's a good debate and I'm gonna, you know, we'll get roasted for this, but it's fine. I'd rather see you get better returns and keep money on the sidelines in cash too.

We have no ego here. We can take the hate.

I do, but Rachel doesn't. Gabby's in Fort Worth, Texas up next. Gabby, how can we help?

Hi.

Hello, George. Hi, Rachel. Thank you for taking my call.

Absolutely.

So I have a question and would like to know, what would you do if you were in my shoes? So my husband and I, we have a good financial foundation. I'm 26, he's 30 years old. Uh, we don't have any debt except our mortgage, which is $112,000. And we house hack, means we live in a duplex. We live in one side and the other side is rented. So we don't have debt. We have $1.5 million invested. We both work in tech and we are thinking about moving to Washington.

Washington State?

Yes.

Okay.

So that means Getting a new mortgage, uh, which is going to be pretty expensive. I'm looking and it's around $400,000 and I'm scared since that will be taking on debt. And here we have something really good going on with renting one side of the house.

What would you get if you sold this duplex?

Uh, probably $350,000.

Okay, so you could net like $220,000 out of this?

Yes.

Once you pay off the mortgage, and then you'd put that $220,000 down on the new place in Washington as a down payment?

That is something that we could do. Um, is that what you would recommend? You know, we also thought, should we keep the house? Should we pay it off and keep it with a property manager? Like, Or should we just move and start from scratch over there?

Yeah, I would move and start from scratch. Being a long-term or long-distance landlord is, is tough, Gabby. I mean, honestly. So I would take the equity that you guys have built and keep on moving, start your life. Is the $1.5 million that you said is invested, is that retirement or other investments?

So we both max out our Roth IRAs and we also have Or individual investments in a brokerage account.

Okay. How much is in the brokerage accounts?

So, like $400,000 or $600,000 between the two.

Wow.

And how much would this house cost total in Washington?

You said $400,000? I would take some out of the brokerage, put with the $220,000 and go pay cash for a house.

It's probably around $400,000. Obviously we don't have any kids, so we're looking for something cheap. We live pretty cheap.

And what's your household income?

We have about $220,000 right now.

Oh, amazing. Well, the good news is even if you got a mortgage, you could afford it. But with your situation, just go pay cash. Sell off enough from the non-retirement brokerage account plus your $220,000 in equity that you'll have netting to you and just go pay cash for a house. You'll have no mortgage and now you're making $220,000 with no payments in the world. So then think about how quickly you could stack up Yeah.

Yeah. That's what we're thinking. You know, I just, you know, it's scary to do that, especially as Texas is cheaper. So I just wanted your guys' opinion.

You're saying it's scary to move to Washington from Texas?

Because of living.

Sure.

Yeah. We'll be higher.

Probably higher taxes. You can afford it.

You guys can afford it, right? I mean, you guys have done a— I'm sure you've mocked up some level of a budget to know What, um, what the cost of living is there and what your— will your income stay the same?

Um, we hope so. Yeah, we work remote anyway. We work in tech, so—

Okay.

Uh, we hope that it will.

So why Washington?

Um, we have family close and because of what we do, which is tech, I think that being close to Seattle will give us better opportunities. I mean, we're pretty young, so we want to live in the city or at least close to the city.

I love it. I mean, so far, green lights. Your quality of life is going to go up. You're closer to family. You have more career opportunities, and you can do this completely debt-free and buy a home in cash. That's pretty incredible. Will your husband be on board with this, or is he going to be anti-selling off any investments for any reason?

You know, I don't know about that, but we've, we've been also saving cash. We have around $40,000, which is our emergency fund.

Good.

So we can definitely sell this house, which is something I've been thinking.

Yeah, for sure.

To avoid dealing with the house from far away.

You're doing this from a place of strength because you have no debt, you've got a fully funded emergency fund, you've got tons of money in investments. So now just do the math on how much would we need to sell from our investments? And then do we have the money to pay the taxes outside of those investments? So that might be your next goal is figuring that out to go, okay, we need to pay $30,000 total in capital gains. We don't wanna do that from our investment account. Let's have that money set aside.

Well, that's what I'm gonna do. Thank you so much.

Absolutely. Congratulations.

Thanks, Gabby. Well done.

It's an exciting move. But yeah, the long-distance landlord thing, the analogy we always use is if you were living in Washington in a paid-for house, would you go out and take a mortgage out on a duplex in Fort Worth to rent out? The answer is 100% of the time, no.

No.

That's a crazy thing to do. So don't become a landlord by default.

That's right.

Just because of your past life going, wow, we could make some money on this.

Yeah, yeah. Reverse engineer it the opposite way and still see if it would be the same decision. And if not, then you know you're just doing it because of your specific circumstance, not just your overall financial picture.

Yeah, that's a good one. And it's a, it's pretty cool that they, they've done a really good job not only maxing out retirement, but then thinking ahead to go, okay, let's also have some flexible Investments ready to go in this taxable brokerage account.

All right, George. Ryan from Facebook asks, should I cancel my gym membership while on Baby Step 2 if it's only $25 a month and has equipment that I don't have at home? I did this because George loves working out.

Well, my hot take is you should keep the gym membership.

That was gonna be my hot take too!

I think for people who actually use it, it keeps you sane. For people who actually go to the gym, They need to go to the gym.

Yes.

For people who don't go to the gym and will not go to the gym, I will stay much more sane staying at home.

You are fine. You are fine. No, it's good. Because when we talk about Baby Step 2, that's the step where you get out of all consumer debt. We're like scorched earth. You cut everything, all of this. But there's elements of life that you're still gonna live through Baby Step 2. And again, it's this very small—

If it was $250 a month, I'd go, hey, let's go down to the $25 a month gym membership.

Yeah, that's right. That's right.

It's Equinox right now. You can survive on Planet Fitness on the black membership, whatever. I don't know what the fancy ones are these days. Clearly not a gym rat.

Not a gym rat. You don't know all the bundles and memberships, but—

I'm good with that.

Hey guys, it's Rachel Cruze. When you get married or have kids, your money decisions aren't just about you anymore. And that's why Winston and I have term life insurance through Zander Insurance. Because when you love your family, you make a plan to protect them. None of us likes to think about if something were to happen to us, but your income helps keep the lights on, pay the mortgage, and put food on the table. And having the right life insurance means that when you pass away, your family will not be dealing with financial stress during one of the hardest times of their lives. At Ramsey, we recommend term life protection that's 10 to 12 times your income with a 15 to 20-year term. And Zander makes it easy to help you find the coverage that you need. Zander is an independent broker who works for you, shopping the top companies to find the most competitive prices on the coverage you need. You can get an instant quote online in just minutes. So go to zander.com or call 800-356-4282 to get your term life insurance quote today.

Welcome back to The Ramsey Show and the Fairwinds Credit Union Studio. I'm George Campbell here with Rachel Cruz, taking your calls at 888-825-5225. Angela is in Birmingham up next. Angela, how can we help today?

Hi, thank you for taking my call. I'm excited to get some advice from you two. Um, I'm a 70-year-old widow who inherited a lot of money about 3 years ago, and in '25 and '26, uh, thoroughly enjoyed, uh, annual exclusions for my kids, taking some trips, just living life like I had not before. And I have a financial advisor. My father had put all of his money in a private, well-known bank with an investment section heavy on bonds. And this— in August, when I went in for my annual meeting, they want me, instead of taking money out of my investments, to have a $200,000 loan at 6% interest for 2027. And I just— it just sounded odd to me. I don't have any financial background, you know, I'm trusting, and that may be the right answer. I just needed somebody to confirm or tell me that doesn't sound right.

Well, let me be the first to say that is lunacy.

Good. They're dumb, Angela.

Can I, can I tell you why I think they want you to do this?

Okay, go ahead.

So they likely make a percentage of your portfolio. Am I wrong?

Oh, absolutely. Yeah.

If you take money out of your investments, who gets a pay cut?

Well—

The advisors.

Yes.

Now are you understanding why they want you to not touch those investments and instead go borrow hundreds of thousands of dollars at 6% interest to live?

Right.

Because how much is in your account, Angela?

$6.2 million.

Woo! I know.

Way to go.

Well, oh my gosh, how dumb are they?

I know, I have no—

Well, it stinks because they just lost a client. So instead of—

Yes, well, that's my other question.

Where do I go?

I, I have no— my dad had it all set up for me. I'm gonna let y'all— and he had this advisor there that he trusted who has since retired. And so now I just feel like I'm kind of thrown, uh—

Well, they're gonna be sad to see you go, and they're gonna hate us even more, but you need to find a credible financial advisor who's not going to push you to go into debt so that they don't get a pay cut.

And more than that too, Angela, finding an advisor that lines up with your value system. When that made your head tilt, it's because that doesn't feel right to Angela.

And you're right, right?

So finding somebody that's handling that amount of money, knowing and feeling secure that they're functioning out of the same mindset you are about money is huge. So yeah, if you hop on ramseysolutions.com, check out SmartVestor Pro.

Okay.

And find one in your area because they will have the heart of a teacher. They will be there to guide you, not tell you what to do, but teach you, give you options.

Okay.

And it's a really, it's really, really important that you, that you trust this person. So do you feel comfortable with, even if you wanna interview 2 or 3, right?

Yeah. Um, right.

Did I, did I hear you say that a lot of this money's in bonds?

It's, it's bond heavy. My dad set it up that way because he was 90 when he, yep.

Yep.

Moved it there. And so another great—

yes, so another great advisor, Angela, is gonna probably move a lot of that out to, to get it into the market because you could be making double, triple in some cases of what you're probably making there to let your money grow even more, right? Um, to be wise about it. So, um, yep, I would, I would check out SmartVestor Pro. And if there's a couple, there's sometimes multiple And, you know, close to you, that's great. Then talk to a couple of 'em because you really, I want you to feel really good about it, Angela, cuz you are smarter than you think you are.

Well, y'all have already made me feel better because I, I thought it was crazy and now I'm, you know, confirmation helps.

So absolutely. Oh my gosh.

Well, thank you.

Absolutely, Angela. Well, thanks for calling and, and I'm sorry at which this way the money was, you know, circumstances was given. Yes. And that's sad. So I'm sorry.

But we all know.

That's right.

Well, thank you so much.

You're awesome, Angela. Yes.

What a legacy. At least you're not stressed out about money on top of losing your loved ones.

Yeah, no, life is good. All right, y'all take care.

Yeah, call us back if you need anything else. Man, I just can't believe—

I feel—

I could talk to her all day.

I feel a little bad.

No one's like, Angela, what are you doing this afternoon?

I feel a little bit bad because they just lost a lot of money because of us. But I also feel good because I feel like I helped someone avoid a scam. How dumb are you?

How dumb are you to have a 70-year-old widow And be like, don't touch those investments. Let's go take out a loan at 6%. But half of them are— most of it are in bonds. So I was gonna say, maybe they're thinking, okay, you know, you can at least make 6% more in the market. You know what I mean? And try to even it out. But it's mostly all in bonds anyway.

So it's not even making 6%?

No, no.

Oh man.

I'm sorry. There's some bad apples out there.

I know, I know. And it just feels gross. It feels taking advantage of, and I don't like it. I don't like it.

So she doesn't like it. She made that clear. John is in Dallas, Texas, up next. What's going on, John?

Hey, George. Hey, Rachel. I'm so grateful to talk to you guys. I've been trying to call you guys for years now, it seems. Wow.

I'm glad you made it.

I know it is hard to get through to you guys, but I'll try to keep it simple. But I do want to start with giving you guys a huge kudos. I bought my, I would say, a second car or third car All cash earlier this year. And that is 100% huge load off your shoulders, not having a car payment to yourself.

So way to go.

I want to give Dave and the team like kudos to kind of recommend that. I never believed that, hey, it's going to be only 1%. It's okay. But paying off $35,000 for a used car, an electric car that I did, although I know it's a lot.

Is it a Tesla?

No, it's a Kia, but I bought it secondhand because my first car was— sorry, I don't want to digress, but my first car was totaled. I got a bunch of money from my insurance, so I just added another $10,000 on top of it and I bought myself a Kia all cash paid.

Nice, good for you.

And I was— that's a huge, huge, huge compliment to you guys because I never thought it would be, but it is not having a car payment.

I love it.

But anyways, um, my question to you guys is, I know I've been doing— I've been listening to you guys for years now. I've been— I, I listen to 5,000 kind of financial advisors, if you will, try to kind of soak in what's useful to me. But everyone starts with budget, right? You guys say the same thing. That's the first thing Yeah. You budget and know where your money goes so that you know where to put the rest of the money, whatever's left over. And I do budget. I do have tons of apps. Latest app that I'm using is Origin, and it tells me exactly where all my money is going. But at the end of the month, or even during a month, I'll kind of look at that app and I'll see, hey, where did this $20 kind of payment go? Where did this $50 that I spent went?

And it'll be like, Holidays are coming up.

Oh, we went to a pumpkin patch. We ended up spending $100 over there.

Yeah.

Oh, we went to this.

So these are like miscellaneous expenses that you didn't really plan for.

You're exactly right. The miscellaneous expenses, for some reason I'm not able to account for. And like, even if I save $500 a month for miscellaneous, it goes $1,000, it goes $1,200, and I'm not able to keep up. Like, I end up overspending the budget every month.

Can I give you a crazy idea?

My salary and 50% of—

Are you—

are you—

you're not going into debt for this? You're just saying you're just spending more than you originally planned, right?

No. So excluding my house, uh, I've got like $1.4 million in all brokerages and, and investments.

Yeah.

Okay. So you're, yeah, I hear you, but you're just saying life in general, you plan one way and then you seem to keep dipping into this, what would be in savings, right? Extra.

And you're like, gosh, I have to keep like, yeah, I hear you. Yeah.

Yeah. Yeah.

Um, so I, what I would say, how do I get over that? Yes.

How do I get over that?

How? So I would say because your lifestyle is probably high, Irv, and what you're spending month to month than someone making $35,000 a year, your miscellaneous category could bump up if you wanted, because you guys do have more income to spend miscellaneously, right?

Maybe it's entertainment.

Yeah, and if there are more categories in it, like kids' stuff, right? Like that could be a line item, and you're like, okay, we need to be budgeting and think about money going in that. So if there's more categories in the miscellaneous, I would say They put some of those out and then bump up your miscellaneous because you guys just have more going out. And that's okay because you're paying for it because you make a good living.

Listen guys, I've heard just about every excuse for why folks think they can't get ahead with money. So let's go ahead and settle this right now. You get the final say on what happens with your money. That's why you have to start telling your money where to go so you can stop wondering where it went. So if you're gonna start winning with money, you have to get on a budget. And the easiest way to get started and stick to it is with the EveryDollar budget app. It'll help you make a plan for every single dollar coming in and every single dollar going out every single month. And guess what? It's free. So no excuses. Download EveryDollar in the App Store or Google Play today.

Well, Rachel, we did a Smart Money Happy Hour episode and this topic came up that I'm personally passionate about right now, and that is e-bikes and e-scooters. They are all the rage among the youth, and I'm like the old man on the lawn shaking my fist going, there's kids in this neighborhood! They're going around, no helmets, 35 miles an hour.

I know, I know.

And I talked to doctors like, oh, it's the number one thing we see in the ER.

I know.

These accidents.

Dude, I'm telling you, we live close. Our elementary school and middle school are very close together, right outside our neighborhood basically. So when we walk to school or the kids sometimes will bike, the amounts, the amount of e-bikes and electric scooters all, I mean, it is like a, it is 50, 75 kids. I mean, it is the craziest thing you've ever seen. It's wild. And what they do now in schools, or at least for our county, you have to go through a safety course now. This is the first year they've done it. You got to go through a safety course and get a special tag to then put on your electric bike or your electric scooter in order for it to be on school grounds. So they make you do it, which is great. And I'm saying all this to say, because you need to learn and be educated about safety. And there's some other elements of it.

That's right.

Because you've tied the e-bike And the ER doctor.

This came up because we had a conversation about credit cards, and this is the one, it's the hill that we die on. It's the most beef we get because people are like, well, I can use my credit card responsibly. I can ride my e-bike responsibly. I'm like, okay, maybe, maybe. I'm not saying you can't. There are people who have never paid a dime in interest. I always hear that. Have they paid a penny? We don't know, but they haven't paid a dime. So our stance on credit cards is very clear. It's a no for us. You don't need it regardless of what you think you might need it for. There are pretty simple workarounds, and I've done it for 13 years now with, with no complaints. Uh, you don't have the risk of going 28% into interest, paying that to Capital One or, you know, Discover, whoever it may be. And you're not gonna spend more than you make when you use a debit card. It's physically impossible outside of an overdraft fee. And so that's the part that I always tell people, try for a month or two to just spend money you actually have that's yours right now, instead of spending other people's money that you pay back later and see how it feels.

See how much less you spend.

Yeah, it is a crazy exercise. We actually had a friend and they were like an anti-credit card person. And then for about 6 months they were like, you know, they signed up for one, they got one. And he was telling me, he was like, Rachel, literally in 6 months, the amount of money I spent Even though he had the money, like he was one of those people for sure. He could afford what he was not going into deep credit card debt, but just in general, the emotional tie to be like, oh yeah, I'll pay it later when the bill comes. It's not a big deal. Like it's just this delayed pain that ends up happening and you don't feel it in the moment with a credit card. And so he was saying, you genuinely will spend more.

And that's for the perfect spender.

Yes. And he's like, was a responsible guy, but So I'm telling you, if you— if that's what you do and you spend with credit cards and then you pay it off at the end of the month, just try for one month just to spend with a debit card, knowing that that money's leaving your account. I swear it will change. It'll change your habits.

That's right. So this is the financial ER. This is what this show is. We've just seen too much people calling in with $5,000, $10,000, $30,000, $60,000 or more just in credit card debt. And that's That's partially why we are so anti-credit cards.

Sadly, they can't even make the minimum payments in some cases. Sometimes these interest rates are 28%. Like, it is brutal. It's horrible, horrible, horrible.

So I am anti-e-bike, I'm anti-credit card.

Oh my gosh.

And I will yell at the clouds all day long.

George is the ER doctor. He's like, listen, people, don't do it.

You don't need to go to med school.

You should go through a safety class about credit cards.

Oh, that would be genius.

Like they do for the e-bikes. Just to be like, here's all the horror stories of what could happen.

Every 18-year-old, before they can sign up for a credit card, they have to go through a 3-hour course. Remember in school they do the fake car accident outside of the school?

What?

Yeah.

They didn't do that at the school.

To scare you about drinking and driving.

What'd they do in Boston?

It was a different time at Dedham High. What can I say?

Now they did put us in a— we had a van thing. It looked like a room and they would fill it with smoke and make you a fire safety vehicle. Did you ever have that?

No, the South is different.

Okay.

Back in the North, we're civilized. Filling vans with smoke. They had actors who were injured. It was crazy. But it made you never want to drink and drive. And so we need that for credit cards.

Oh, it was the drinking and driving thing. I thought it was just car wrecks.

No, no, that's not that helpful. Wow. Well, hey, listen, if this is you and you're the kind of person who goes, I want to feel my money, I want to feel in control of my money, the budget is the best way to do it. And EveryDollar is the best way to make that monthly budget, to track your spending, to be in control, to see the transactions come through versus, yeah, I can pay the monthly bill every month and it's fine. It doesn't bother me. Just try it out. So go check out EveryDollar. We'll drop a link in the description below, or you can download EveryDollar in the App Store today. There you go. There's my soapbox.

Thanks, Cenk.

On e-bikes, credit cards, and budgets.

And car wrecks.

You learn something every day. Madeline is in Spokane up next. Madeline, save us from ourselves. How can we help?

Hey, thanks for taking my call.

Sure.

So my question is in regards to discerning when it's wise to be generous and when it's wise to hold back and wait for maybe a better opportunity. My husband and I are 23. We have 2 kids and another on the way. We are currently completely debt-free, about to buy our first house.

Sure.

We just recently upgraded to a larger family vehicle, paid cash. And so, I'm looking to sell my old vehicle. And I'm battling a strong desire to be really generous and help someone else that's in need of a vehicle. And I'm just not sure how to discern whether that's wise or not. Maybe you can help me with that.

Wow, Madeline, that is so kind.

What's the car worth?

Um, Kelley Blue Book estimates it's around between $5,500 and $6,500.

Cool.

And you're like, I could sell it and get the $5,000 and we could apply it to the down payment, or we could be generous and give this to someone who could really use it.

Yeah, I feel like we're kind of in a position where we're, we're really blessed with where we are financially and I feel like we could do that. I'm just also thinking, oh, we have a chunk of debt in our near future, and we're going to have 3 little ones. And so, just trying to be practical and wise.

Yeah.

Wow!

What does your husband think?

I'm not sure, but he's listening right now, so we're going to find out.

Oh, good.

I'm just wondering, is he like, yeah, I'd love to do this, too, or is he sort of team, we could apply that to the down payment? And that's a future thing we could do.

I could see him going either way.

Okay. So I would say, do you feel financially comfortable? Like you guys are in a good spot from not the down payment per se, but the like everyday monthly expenses with the kids? Every, like, do you feel like you guys are in a good spot there? Because I would, I, so one of my kind of benchmarks with generosity is making sure, Madeline, that you guys are first and foremost. good, right? Mm-hmm. The whole idea, like, put your oxygen mask on first. So if this new baby coming and some expenses, if that was like a little stressful and made some, you know, unease, I would say, listen, take care of you guys first. And then you have, you have tons of time to do these kind of things and be generous. But you're saying to me, you, that feels good. That's one check mark. George is right. Number 2, when you're married, that you guys, you know, both are on the same page with it. Uh, number 3, that it's not enabling something, but the great thing about your situation with the car, there's not tons of enabling that you can do necessarily, right? That ends up happening when people give cash gifts, right?

And helping somebody with like—

You hope it goes to the thing that you wanna help with.

That's right. Yeah, yeah, yeah. But when, but girl, I love it, Madeline. I think you— I think there's a nudge in you to do this. And again, if all 3 of those things check the box, I mean, I'm not kidding. If you find a single mom and you can ask, I don't know if you guys have a home church or where you are plugged in in the community, but if you can find a young single mom, maybe who's even around your age, and a new car, that literally will change someone's life, especially somebody coming out of a cycle of poverty and they're trying to get on their feet. Just a hard situation.

To save up $6,000 is phenomenal.

To give a car to somebody is like that changes the course of people's lives. That gets them to and from work. I mean, it is It's insane what that can do for somebody. So, I love it.

I'm team gift the car.

I am too.

And if you can find someone specifically that your heart pains for them, that's even better. Our local church here, they just launched a cars ministry.

I know. They've given away thousands at this point, right?

Yes.

Where people trade in their cars, instead of trading into the dealership, they give it to the church. And the stories that come out of it, it's amazing.

You will never No. Do it. I finally get to announce that my brand new book, Building the Marriage You Want, is available for pre-order. If you and your spouse have been feeling like roommates lately, like maybe this thing called our marriage has just run its course, like this is just the way marriage is, I get it. This book is me sitting at the table with you and you and your spouse, helping you both take the next right step towards the marriage you both want. Marriage is still worth it. Order now for $24.99 and get over $100 in preorder bonus items, at ramseysolutions.com/store. We love hearing from you guys. Your questions are what make The Ramsey Show happen. So give us a call at 888-825-5225, or you can submit a question using the link in the description of this episode. LaShawn is in Charlotte up next. LaShawn, how can we help?

Hi guys, um, I'm a little nervous, um, but I am trying to, uh, start my debt payoff journey. I am a gambling addict, um, for the past 15 years, and I have been sober for the past 6 months.

Congrats!

Well done!

Um, thank you. And this is one of my steps with my therapist is to actually call you all because I speak about Dave Ramsey's show a lot in therapy.

I'm so glad you called today. You made our day. Thank you.

I'm glad you made it through. We're honored to talk with you.

Yes. I am grateful. So, I'm 6 months sober. The first 3 months of my sobriety were just catching up on my mortgage. It wasn't late. It was just, you know, my mortgage and my house bills. And so, for the past 3 months, I've started paying on my credit card debt. I am a high-wage earner. I earn— my base salary is $196,000, and I'm a family nurse practitioner, so sometimes it's up to $210,000 just depending on overtime and things of that nature.

Mm-hmm.

However, throughout these 15 years of gambling, I've done bankruptcy, paid that off. I have refinanced my house. Paid that off, got back into debt, you know, the whole cycle. And I recognized all that. And now I have— I still have debt, obviously, and I want to pay it off and be done. So right now, I have about $16,700 in credit card debt. I started 3 months ago with $20,850.

Good for you.

I got it down to $16,700 right now. I do have consumer debt, high-interest consumer loans on my home. And so I had my water heater break, HVAC. It's like things happen all at once. So I have a total of $52,000— no, $50,000 in consumer debt related to obviously some of the gambling addict and some home repairs.

Mm-hmm.

And about $9,000 in IRS debt.

Okay.

So $59,000 total will get you debt-free, but the mortgage?

And my mortgage is $400,000 on it.

Okay.

Are you single?

Yes.

Okay. So is your take-home pay around $10,000, $11,000?

Yes.

And I also get— I didn't know whether to include it or not, but I use it for utilities. I get $1,050 a month in child support.

Okay.

Okay.

So we're really talking about $12,000 to $13,000 we have to work with for this debt-free journey. And what are your monthly expenses plus your minimum debt payments? Have you added that up in your budget?

Um, I have it. I have it here. So my credit card payment with the minimum is $785, uh, with the minimum. And then my minimum with my consumer loan debt That is $2,090. And then my mortgage is $3,136.

Okay.

And then you still have all your household expenses, or is that—

Yeah, like your—

oh, I'm sorry.

Other bills and food and all of that, right?

Yeah, yeah.

No, no, that's good.

You can just guesstimate it.

That is about the tens. That's $1,050. That's what I use to pay my utilities, cell phone, and food in North Carolina.

So based on that, about $7,000 would get you by for the month to cover all of your debt payments and cover your household bills?

Yes.

Do you know what that means, LaShawn? If you do this right, you would have $5,000 or $6,000 left over after that to tackle this debt.

Yes.

You know what that means? 10 months from now, you could be debt-free.

I know.

I—

yes.

Do you believe that?

Like, I believe it. I'm not used to having money in my account, so, um, I'm used to being paycheck to paycheck. So now I have the money in my account, just trying to tackle Not trying, but knowing how to tackle this. Like, I've cut up all my credit cards. I had— out of this, um, $16,700, it is 17 credit cards. And obviously they're little amounts. The most has $3,000. I've cut them all up.

Good.

The question with that, once I've already paid off 3, uh, when do I close them?

Now. Yesterday.

Yeah, once they're paid off, I'd go ahead and close them down. Yep. That's gonna feel really good.

You can close them now. You'll still owe the money, but you can close them. And just start using your own money. I think that'll cause you to trust yourself more. As you start using your own money month after month, you're going to learn to trust Lashawn because Lashawn is a trustworthy person and Lashawn's a person who can pay her bills and tackle her debt.

Can I say this too, Lashawn? You're somebody who does what you say you're going to do. And you have come from one side of the spectrum of not only financially, but with the hardship of addiction. I mean, all of that. And you have chosen to do the work. You mentioned your therapist. I mean, I'm sure you're going to GA. Like, you're in group. I mean, I could only imagine your sobriety plan of what you put into place.

Yeah.

And you continue to make steps to heal and do the right things. And George is exactly right. We have people call all the time and they're like, well, I said I was going to do this, but then I didn't and all this. And sometimes we just ask them, Are you going to do what you said you're going to do to yourself? There's a self-integrity level of life. And LaShawn, you've proved that to yourself completely. Absolutely. That's one of the most courageous things that you could do. And I think you're amazing. Absolutely amazing.

Thank you.

I appreciate it. And I have a 12-year-old who looks up to me and wants to be an anesthesiologist, and I don't want I'm not ready to take out any debt. No debt. Also, I'm sorry, I do, I do have student loans. I have $122,000. And the reason why I didn't mention it, because I'm on the PSLF and I only have one more payment and I'll make my 120 payments. So that'll be washed away or forgiven.

I'm sorry.

That's incredible.

After one more payment, they're done.

You've made 119 payments and there's one more to go to hit that 120 threshold. And they're gonna wipe out $122 grand.

Yeah.

Because you've been working in a, like a not nonprofit type?

Uh, federal. Yeah.

Federal government.

Federal. Okay.

Yeah.

Wow.

That's incredible. Well, there's one blessing right there.

That's, that's amazing.

Yeah.

Absolutely amazing.

How are you doing a budget currently, LaShawn?

Um, you know what? I have just been paying this stuff, paying things off. I downloaded the EveryDollar, um, to be honest with you, 3 days ago.

Good.

And I filled out the first portion.

That's how I knew how much Yeah, have you inputted all of your debts into the debt snowball there at the bottom?

That's why I called today, because once I looked at all this, I'm like, oh my God, I got to get to this step. Yes. So no, I have not.

But you know what's incredible? When you do that budget and you lay out that $13,000 in income and you see the expenses and you see at the top it's gonna say $5,000 left to budget, now you're gonna knock out a bunch of debts every single month. Yeah.

Right?

You'd clear a bunch of credit cards next month with the next paycheck.

Yes. Yes.

So now just learn to live off $7,000. Imagine you're a person who makes $7,000 a month. The other $5,000 is earmarked for restitution to lenders.

Okay.

And if you just live like that, I'm telling you, 10, 11 months from now, you're gonna be completely debt-free. Oh, you're gonna undo all of the pain and the mistakes that you are still beating yourself up for from the past. You're gonna be a new person.

I'm trying. That's, that's the hurdle. Um, I get a gold star when I go to my therapist. I'm gonna tell them I made it through. Um, that's the hurdle. Like, okay, I, I can see it now even though I haven't input it. I have my little spreadsheet that I made. Yeah, I can see it now. Um, and, uh, one thing I, you know, Dave would say is, you know, it's not that you need more money because I can go out and make more money to pay this off. But I— it's not that I don't want to. Does that make sense?

I don't—

I shouldn't have to.

It's your habit. That's right. That's right. Yeah.

Of what I have.

Yes.

Yes. So, um, that's why I have not picked up an additional— I could have, but I just— I don't feel like I would be doing it right.

Yes. Yeah.

Yes, absolutely. Change your habits. Get into a new rhythm with money and take it one day at a time too. Even in, I know in the addiction world, they talk about that, right? It's like one day at a time. And that with your money, don't get overwhelmed. Just look at, okay, today I'm looking at the budget for today and what needs to happen today. It's one day at a time. But what George said, you're gonna look up in about 365 days.

Call us back, do your debt-free scream.

We're proud of you. So, so proud of you.

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, 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.

Our scripture of the day, Romans 8:37. Yet amid all these things, we are more than conquerors and gain a surpassing victory through him who loved us. Booker T. Washington said, excellence is to do a common thing in an uncommon way. Ryan is in Nashville, just down the road, up next. What's going on, Ryan?

Hey guys, thanks for taking my call.

Absolutely, how can we help?

Uh, so I have a question about before I file bankruptcy. So I'm in a lot of debt right now. I got about $70,000 in debt, and 2 of those— some of that's, uh, 2 vehicles that I no longer have anymore. So I was trying to figure out what I should do as far as that. Should I file bankruptcy or should I try to pay off The debt before I do that.

$70,000, is that what you said?

Yes.

And the cars are repoed. Is that the only type? Is that the only debt? Is that $70,000? Um, is it all car or is there other types of debt in that?

I have $35,810 in a car loan, $20,525 in a car loan, and then $10,000 in credit card debt.

Okay. How much do you make a year?

Um, currently I make $110,000 a year.

$110,000 a year?

Yes.

Ryan, I don't think you're bankrupt. $70,000?

Yeah, yeah, just now— I just now got this new job to where I'm able to make that much money.

Yeah, I'm proud of you. That's great.

What happened to the cars? Where are they?

Um, so I let them go back because I wasn't able to afford them at the time.

So this is the deficit that you have?

Yes.

Okay. Are you able to settle with them?

Um, I haven't tried yet. I was trying to get some advice before I go making calls.

You have anything in savings right now to your name?

Um, about $12,000.

Oh, you got 12 grand?

Yes.

Man, I might see if they'll take 11 grand for that $20,000 deficit. That'll clear one of them.

Okay.

And then go save up another chunk of money and see if they'll settle on the next one. Because I don't know how— if they even expect to collect on you. And so the longer it's been, the better chance you have to settle for the deficit there. What's the smallest debt right now? Are those small credit cards or is that one big balance?

No, it's spread out over 3 credit cards.

Okay, good. So that means you can knock one out, free up a payment, knock the next one out, free up a payment if you just line them up smallest to largest. So what's your next paycheck? How much is that going to be?

Um, I'm salary, so my paychecks are $1,800 every week.

Fantastic.

That's great. How much, um, if you lived on just, you know, your— do you own a home mortgage or rent somewhere?

No, I rent.

Rent. Okay, so what would— how much is your rent?

My rent's $1,500.

Okay, so could you Could you live off of half of your, of your take-home pay, do you think? Uh, $3,600?

Yeah, that's honestly about close to what I live off of now.

Okay, well, the great thing is, Ryan, if you could settle in George's world, which I would love, that $11,000 for that $20,000 car loan, then you got $45,000 left. If you have— and you throw $4K at it, you're done in 11 months.

Okay.

Just think about that. The credit card debt, even if you focus just on that, you're done in 3 months if you do $3,600 a month at those credit cards. And if you keep that up, even if you had to pay the full amount for the cars, you just keep throwing that chunk of that money at it, it's going to be gone in less than 2 years. So this is not a bankruptcy situation.

Okay, that answers that question. So as far as the credit cards go, I don't have those accounts open anymore. I already closed the accounts. I just owe the money. Mm-hmm. So I decided I'm no longer gonna be doing credit cards at all.

Good for you, Ryan.

Way to go. Welcome to the club. I'm 13 years credit card sober over here. They don't do coins for that, but maybe we should start.

Right. Well, I guess as far as that goes, I guess you guys answered my questions that I was looking for. So I really appreciate you taking my call today.

Yeah.

If I helped a guy avoid bankruptcy today, I think we did a good deed. And yes, we have so much hope for your situation, Ryan. That's why we're not being flippant here. We're telling you, shown you the math. You have a great income. Yes, there's a big pile of debt, but man, you're ready to clean it up. You have the income to do it. Now it's the hard work.

Yeah. And some people think bankruptcy's just like the easy get outta debt, or get outta debt, just get outta free jail card. But the truth is, depending on what chapter you file, you may still have payments. They'll put you on a payment plan. And then you have bankruptcy on your record for the rest of your life. And so, Avoiding it at all costs.

It's not the clean slate people make it out to be.

That's right. That's right.

Like, I can just restart from scratch.

Yeah.

And you gotta change the behavior that got you there.

Exactly right.

And bankruptcy, sometimes people just go right back into it.

Yes.

Yeah.

But we say avoid it at all costs to the point that you could cash out retirement to pay, to avoid bankruptcy. Like, that's how much we want you to avoid it because it's not good for you and it doesn't always solve the problem. So, uh, well, we're excited for you, Ryan. Well done on the High-paying job.

Fantastic income. That'll— that's your greatest wealth-building tool, and it's your greatest way to avoid bankruptcy. So way to go, man. Adam is in Los Angeles up next. Adam, welcome to the show.

Hi, thank you for taking my call.

Sure, how can we help?

So I accepted a job at a luxury car dealership, and it is a job as a technology specialist where I help customers like learn the features on their new car. The dealership is very hard to get into, and I had to do like 10 or 11 interviews just to get hired. And once I got hired, they completely switched the entire pay plan with me.

So I'm kind of—

Last year? Yeah, when I interviewed and such, I was told it was a salary position, And I agreed to the salary and everything. And then now they're kind of at, oh, it's the minimum wage for the area. But they said that I can make the rest in performances and commissions. So, I'm kind of just seeing, do I stick it out and see if I can earn that? Because it was so hard to get into. Or do I just walk away?

Have you projected realistically what you think you would make on those commissions and all the other parts that would fuel— your income? Like, have you mapped it out to say, okay, yeah, there's a realistic life here, or is it hard?

So since it's not like in sales, like it's not like I make commission off of selling vehicles, um, it's really just like if I— how many reviews I get, how many customers I get, um, how many people I can help. I kind of just get like—

You're not really in charge of that. You can't just go drum up business.

Right, exactly.

So this is not a commissionable role. Do you have anything in writing that showed they were going to pay you a salary?

I just have the initial ad of the job. And right now, basically, they're saying that they'll take me for $18 an hour and the salary was supposed to be $6,500 a month.

Yeah, that's not adding up.

Yeah. And I'm like, so I asked them, like, is it I can make the rest in commissions. And I'm like, I don't know how that's possible. And then just for the area, I mean, I'm in a very expensive part. Yeah.

If you're in LA and they're paying you minimum wage—

It's a luxury dealership.

You can go do anything else and make that. Yeah.

Yeah. I mean, it's a Mercedes dealership, so it was very hard to get into. And, you know, I felt really connected to the brand and the management and all of that.

So do you already have the job?

Yeah. I mean, I'm supposed to start next week, but I'm not—

But you don't have another job lined up?

No.

I mean, if you can go find something else to make that much or more, do it.

Or you could try for 30 days. I mean, I don't—

Yeah. At this point, at least you have a job. I'd rather you take it temporarily until you can find something else.

Yeah. And see if you get it and give yourself 2 months or something and see if it's like, okay, then There really is a huge customer base coming in and it is getting close to what I would pay, what the salary was, right? Maybe, but the fact that they can't—

I just question their integrity now.

Can't you plan for that? I agree with that.

And I don't want to work somewhere where I have to question the integrity of leadership. And I don't know if you can go to corporate and let them know if it's more of a localized dealership.

After taxes, I'm at $2,400 a month, which is just incredible. That's not even my rent.

Yeah, sure. Well, if you can't afford it—

What were you doing before?

I'm— well, I'm 22, so I had, um, I've, you know, I'd finished college.

And what was your degree in?

Marketing.

Okay, I might just try to aim higher and find a marketing corporate job and, and kind of go down that path. And in the meantime, work this job until you get to that next thing that is a salary job that you can actually afford your rent and life. I'm sorry that to you, man.

Yeah.

That stinks. That puts this hour of The Ramsey Show in the books. Remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.