Transcript of Financial Irresponsibility Always Has a Cost New

Brought to you by the EveryDollar app. Start budgeting for free today. Normal is broke and common sense is weird, so we're here to help you transform your life. From the Ramsey Network in the Fairwinds Credit Union studios, I'm Dave Ramsey. This is the Ramsey Show. Jade Washall, Ramsey personality, number one bestselling author, is my co-host today. Open phones at 888-825-5225. The call is free, and some say the advice is worth exactly what you pay for it. All right, Taylor is in Dallas. What's going on, Taylor?

Hi, Dave. So I'm calling in.

Me and my husband got married about 7 months ago, and over the course of this tax season and gathering all of our documents, unbeknownst to me, he has not paid taxes for '23 or '24 and now '25. Oh, and so yeah, kind of a big deal going into a marriage wanting to know anything like that. I'm very Type A and on top of that sort of thing. I'm a W-2 employee, and so it's pretty simple, straightforward every year. He's a 1099 graphic designer. And so now this year, we're— in years past, I would get a return. We are going to owe a pretty big bill on top of owing for '23 and '24.

And so I just kind of want some advice on what to do.

I will say, first and foremost, same day I found out, I contacted the CPA, and we're in the process of, you know, we finalized 2025 and we're working on '23 and '24. But definitely unexpected, you know, going into a marriage and now having what could potentially be up to $35,000 or $40,000 debt.

Wow.

Okay.

So what does Mr. Creative say about his irresponsibility in lying to you?

Well, he is— it has been a rough couple of weeks. He obviously is very apologetic, and in his words, it wasn't intentional. It was kind of in the back of his mind and he knew it was not going to be good, but in his mind, he didn't realize it had been that long since he had paid taxes.

That, that doesn't make me feel better.

Makes me feel worse. Yeah. Like, what else is rumbling around in your little mind that you haven't told me about and you forgot and didn't think it was important?

Yeah, that was definitely my first question as well. The first couple of days when I pulled it or asked him to pull up the IRS website so I could gather our documents and I realized that it had been that long. Yeah, that was not a good feeling.

How long were you together before you got married?

We've known each other for 7 years. We've known each other since college.

Okay.

How long were you dating?

On and off for a while, but about a year before we finally got engaged and got married.

Okay.

Okay. Well, you did the right thing by getting on the ball and getting a CPA and getting a hold of this. It does point to a deeper issue. Because this all came about as a result of your diligence and you being on top of things. And this was all solved as a result of your diligence and your being on top of things. Yes.

Yeah, for sure.

So that's where my issue is. And that's probably where my conversation would start is this is a behavior that won't be able to continue.

Yeah.

Yeah.

Yeah.

Have you started that conversation?

Not if you want to live.

Well, here's the thing.

For being a young married couple, I've been intentional about us saving. And so we have a decent amount in the bank right now that once we know—

That's not the point.

That's besides the point. The, the money here is not the problem. I'm not concerned about that. You'll put money aside. If you're concerned how, we can talk about that. The problem here is my mom used to tell me, she'd say, the patterns that you allow from the beginning will be the patterns that persist throughout the marriage. That's what she told me.

She's right.

If you allow things to persist, so for you, This is something that you guys have gotta grab hold of immediately. And if I were in your shoes, I'd really be kind of searching, searching my memory and searching my heart. Is there anything else that sounds like this that's been going on to, to where I'm seeing a pattern? Because if I'm seeing a pattern, then I'm really concerned. If this is not a pattern, this is just a concealed incident, that's very different. I'm probably gonna be, uh, approaching it a little bit differently. But nonetheless, this is a, a conversation. Have you had that conversation with him about the behavior? Not the money, the behavior.

Oh, for sure. That was the first thing, because to me it's, it's the dishonesty of not knowing that, because that would have been vital information, you know, going into things. And so we've definitely, definitely had that conversation. And, you know, I did say it's not something I can just get over in a day. Like, this takes time because it is, it is kind of a big deal, especially with the dollar amount. It is, you know, I file every year. I'm on top of this. And so to find out that not only are you not W-2, which I knew, but to know that nothing's really been set aside with that in mind, that I'm going to owe this amount.

Here's where I want to get to if I'm you and him for that matter, where we need to arrive at. Okay, you've already done the tactical things. You've figured out how you're gonna pay it and you figured out how to get the filing done. All that's done. I don't want this to settle into you're his mommy and you spend the rest of your life bailing this guy out. Every time he is irresponsible or forgets something and throws it in the bucket of, "Oh, I'm a creative. I don't do details." No, I'm gonna kill you. It's not gonna happen. So I mean real, I'm gonna lose it. Right here. So I want you guys, instead of settling into that rhythm, I want you to settle into a rhythm that says, "Okay, you're a creative and you don't do details. I get that, but you have to get that while you're a creative, you also have to be an adult. And adults file taxes. Adults take care of business, even if it's not their natural strength. So as long as we both are together on this and we're two adults making decisions about all the adult things," that together from this point forward, and there's no more deception or no more, "I forgot and mommy take care of me." We're not gonna run that script out in this marriage.

We're gonna be two grown people handling our responsibilities within our strengths. And you've got natural strengths toward detail and task orientation that he doesn't have, and that's fine. I have that. My wife is more of the free spirit that we call them, the nerd and the free spirit. You're the nerd, he's the free spirit. I'm the nerd, Sharon's the free spirit. The Holy Spirit, so on, right? So you can accept those things, but that does not give you a pass on emotionally carrying the weight of the household and the making of adult decisions together with me. You don't get a pass on that. And so as long as we can make— as long as you feel assured, maybe meeting with a marriage counselor a couple of times, and you guys get some language to this that you can— that some tools in your belt so that he really grasps what this does to your psyche, and that we're not going to have a pattern going forward, to your point, Jade, then I'm good with it. I think you've done everything perfectly. Just make sure that we're— okay, that however we got here is gone. We're not gonna get here again.

And the way we avoid that is the two of us standing side by side, both of our shoulders bearing the weight of being adults, and then we make the decisions together. Then having said that, "Hey, you know, he's gonna have more of a natural tendency towards fun and creativity. You're gonna have more of a natural tendency towards detail and task orientation. And that's good. We'll utilize those strengths in executing the plan that we develop together." [Speaker:GINGER] Yeah, it's really important.

I think a lot of times in the beginning of marriage, you kind of tiptoe around things. Everybody's still trying to be on their best behavior. You don't wanna rock the boat. You don't wanna, you know, be too strong on certain things. But actually, now is the time to really lean into those issues and try to get them right side up early on.

And she's so on it that this is like—

Listen, she's going to be the best thing that ever happened to him.

He got lit up and he deserved to be. He deserved to be lit up. Oh my gosh. Jordan is in Lansing, Michigan. Hey Jordan, what's up? Oh, nope, you're not up. You're going to be up after this commercial break. I'm going to learn to do this podcast radio thing one of these days.

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Jordan is in Lansing, Michigan. Hey Jordan, how are you?

I'm doing better than I deserve, Dave. How are you?

Just the same. How can I help?

Well, I'm 20 years old.

I've got a wife and a baby on the way. Uh, no debt, making a decent amount of money, saving up money for a house.

What's decent money?

I make about $70,000.

And does she work outside the home?

She is getting her nursing degree this spring. She'll be passing. Um, So she works, she babysits a kid right now, but so she's gonna make more than you. Okay, probably.

Yeah, definitely. I mean, a nurse ought to make more than $70,000.

Yeah.

Okay, cool. Good for y'all.

Yeah. Um, I'm wondering if it's financially responsible to want to buy a bike before I buy a house. And when I say bike, I mean motorcycle.

Um, I, I would go with yes, because yes, it's irresponsible. And my reason for just thinking that outright is one is one is strictly for you and the other is for the wife and the baby and the family and everybody else to live in.

And for the future.

Yeah.

Yeah.

The reason I'm asking is I got a big, big tax return and I was like, man, this is nice. I've got a nice big chunk of money that I didn't expect coming.

Well, for the rest of your life, Jordan, you will fight between the little boy that lives inside of you and the man that has responsibilities.

Yeah.

And, um, the interesting thing is if the man that has, that has responsibilities wins the fight, the boy that lives inside of you gets to buy his toys.

Well, that's good.

Meaning, meaning that you do things in the right order, you'll get the bike someday. And, um, if it's not out of order— and it's out of order if you do it now. Yeah, but I can easily see 20 years old. I mean, that's still But yeah, you got married and had a kid. Hello. And now, so it just all of a sudden changed, right? And all your buddies, they may not have the same grown-up responsibilities that you've signed up for recently. So that kind of thing. So that's the environment you're in. But yeah, the truth is, when you're 30, which one will you be glad you did first, the house or the bike? You'd be glad you did the house first. Your 30-year-old version of you won't look back at the 20-year-old version and go, "Come on, dude." You know, you don't want the 30-year-old version talking to the 20-year-old version of you that way.

Nope.

Yeah, go get your house, get out of debt, build an emergency fund, and buy some toys and buy her a nice couch or whatever it is she wants. But you do that in the right order. We're also not going to spend the equivalent amount on the baby's nursery dressing up everything in the rental house while we're trying to save up for a home. And so, yeah, if you just go, what would the future version of me want to do? That's the mature side of every one of us. Then I get to do that. And by the way, I'm a guy that's got a pretty good collection of toys today, but I got them after they didn't matter financially and my family was more than taken care of and we were set. And so now when I buy a toy, it's irrelevant. To the financial situation. And that's the, yeah, the manly, the grown-up way to do it. But it's, you know, but you're— I'm 65. I still have that guy lives inside of me that fights with the other guy inside of me. And everybody does, right?

That's right.

So it's cool you ask the question, though. That tells me you probably have a clue, like you already knew the answer. I was going to say his conscience was telling him he wants somebody else to tell him what he already knew.

Uh-huh.

Yeah.

Well, if we didn't tell him, his wife was going to tell him.

We do a lot of that on this show.

I know, those are my favorite calls.

We tell people what they already know. And we make good money telling them what they already know. It's kind of ridiculous if you think about it. It's not bad.

All right.

Bridger is in Salt Lake City, Utah. Hi Bridger, how are you?

Good, how are you doing?

Better than I deserve. How can we help?

Well, I'm newly married, about 8 months married. And I and my wife previously got married, made some not the best financial decisions, but we recently got access to $27,000 through a trust fund. And just wondering your guys' expertise on the best way to utilize that and turn our life around.

Cool.

That's a great question.

Yeah.

Tell us, tell us about your current finances. You said you made some mistakes. What do those look like?

So we have 2 car payments. We got one that is $16,000. And then her car is $20,000. Both of those total up to $1,000 a month. They're both each $500.

Wow, yeah.

What's your household income?

We both make $55,000.

So $110,000?

Or sorry, both together.

Oh, your total household income is $55,000?

Correct.

What are your careers?

Um, she is a receptionist and I work for my dad.

How old are you guys?

I'm 20— she— or I'm 21, she's 20.

Okay, so $16,000 on a car, $20,000 on a car, and what else in debt?

We did have $8,500 on credit cards, um, but about a week after we got that trust fund, we paid all of those off.

Did you, did you cut them up?

Uh, not yet, no.

You got to cut them up by the time when you get off the phone.

Get them out and cut them up, otherwise you're going to run them back up again.

Yeah.

Now, after you paid that out, after you paid that off, now there's $27,000 left, or is that less the credit card?

Well, that's what it started out as. Now we currently have $17,000.

Got it.

Okay.

And we had to spend $500 on a car repair, and then we already spent $1,000 on our discretionary spending.

Got it. Is there any other debt laying around besides the cars?

That's a cool way of saying, "I just blew $1,000." Discretionary spending. What are you, in Congress?

No, definitely not.

Is there any other debt besides the two cars?

That's about it. Just the two car payments.

Okay. Okay.

So, we just— And you guys are 20 years old?

Correct, 20 and 21.

Okay, uh, okay, so there's, there's two things at work here. First off, you guys' income, uh, we got to get it up. Somebody's not working full-time hours. Is that you or your wife?

So we're both actually working about 40 hours a week. I try and work 50.

Yeah, your job sucks.

Her receptionist job is not, not the best. She does not— definitely could make more. Yeah, she's an esthetician on the side. And so we're trying to get that up, but I mean, that doesn't really bring really anything in the world.

Bridger, here's the thing. Here's some data points for you from 35 years of doing this. All right. I have never met someone that became a millionaire when they owned cars with payments.

Okay.

Yeah, I believe it.

You're getting killed. By your cars. You signed up for it, but you're getting killed by your cars. So what would I do if I woke up in your shoes? I don't know if I can talk you into it, but if I can, when you're 30, you have a shot at being a millionaire. If I can talk you into doing this, sell both cars, have no payments, use the money to pay cash for a couple of $7,000 cars. Okay, and buy a boring car, not a cool car. A boring car is one that doesn't have a lot of miles, that grandmother drove to church on Sundays only, and that your friends think you're a goober because you bought it. That's a— that's a good car. That's a good $7,000 car. Okay, because if you buy a cool $7,000 car, it means somebody ragged out the Camaro. That's the only way it's worth 7, okay?

Okay.

So you want a Camry, an Accord, stuff like that. I'm serious, a grandma car, a boring butt car. Pay cash for them, get rid of these 2 car payments, and then do what Jade was talking about, and let's work on your careers, and let's double your income in the next 3 years, and never have a car payment again. Because if you do, when you take out a car payment, what you are doing is you're looking in the mirror and saying, Lord, I desperately want to be middle class the rest of my life. That's what you're saying when you take out a car payment, because that's what the data tells us.

Well, he's sacrificing so much money. If you were to take that money and invest it—

what you put in car payments will make you a millionaire in 15 years.

Oh, yes. Oh, if you took that car payment from today until age 61, so 40 years, that's $8 million, my man.

Yeah.

Oh, that's stupid money.

Hope you like the cars.

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Yeah.

And so the target market was my generation, and that's who was having little kids and having— asking us the same questions we get asked. And so I've gone through X and Z and millennials and everybody. And this Z's, I mean, think about, we had two different 20-year-old callers already this hour. Both of them married, both of them making big boy, big girl decisions, both of them making big girl, big boy mistakes. Okay, but owning them, coachable, both of them, if they do, and both of them that you did not get the pushback. Sometimes we get a pushback and we all know, all you listening, and we know they're not gonna do it. They're not gonna do it. They're not gonna do it. Those two though, I think there's a chance that both of them are gonna do it. And so those two 20-year-olds are probably 30-year-old millionaires because of that one phone call if they follow through.

Absolutely.

And that's why we come down here. That's why we turn these microphones on. It's for you.

Absolutely.

Those of you that wanna listen, those of you that wanna do better, those of you that wanna win and take the data of the decades of experience that Ramsey Solutions has, that started with me, but now it's with everybody else in the building. There's 1,000 of us. The research, the data, the 30 years of being on this microphone, taking these same phone calls with different little twists and turns to them, but they're still there. And so I'm really excited about what 15 years from now all the Gen Zs look like, because they're a very serious, sober-minded, the good ones. And I think there's more good ones than normal. And they're not who they've been made out to be in the media. That's a bunch of crap. So I'm your biggest supporter if you're 22, if you're using your brain, okay? If you want to plug your brain in, Ramsey, we're fans of you. We're not gonna put you down. Now, if you start the other crap, I'll knock you in the head just like I will any generation, right? You start telling me how capitalism is the problem— capitalism is not the problem, you're the problem.

So get up off your butt, leave the cave, kill something, drag it home. That's, you know, get a job. There's nothing new about that. That's the same in every generation. So, you know, and Donald Trump's not your enemy and Joe Biden neither. They're not— neither one of them going to fix your life. Look at them. Come on, you got to do this. So all that stuff. And but I just— when we take these calls, I see patterns in these calls coming in like today. And it just gets me. I just want to share with you guys observe what we're observing, it's exciting what this nation could look like, what this economy could look like based on people like those callers contributing to the economy and becoming a positive thing for their families, generational. Think about where their grandkids will be. That guy, if he takes his car payments alone, he'll have $8 million at 65.

Yes.

You put it in the calculator while we were here.

Plugged it in.

What if he does that? Talk about this. I mean, and then what if the kids that he raises takes that $8 million and turns it into $80 million? I mean, this is changing your family tree. This is what it looks like. And this is the power of God's ways of handling money, of grandma's ways of handling money. We call it common sense, but it's so rare, it's like having a superpower. And so, we just keep bringing it back to you all the time, and we just gotta tell y'all, We're fans of you if you're 22 or 25, and, and, and assuming you're one of the good ones, okay? If you're not, then you're not gonna like it when you call here because we're gonna box your ears like we would anybody else because we love you and we want you to win, and we're gonna get you on track. That's what we do. Sarah is in Albany, New York. Hi Sarah, what's up in your world?

Hi Dave, thank you for taking my call.

Sure, how can we help?

I am Calling because my husband and I, um, about 2 years ago, on his grandmother's house when she passed, and we were all fired up about it. It was my husband and I working on it, you know, with our own two hands together fixing it. Problem is, she lived in that house for about 50 years and not a lick of work was done to maintain it, and it is way more than we anticipated. Um, And then fast forward to 2025, you know, we had a major structure fire. We're fighting with the insurance company in a different property. Um, we've lost my daughter.

We had a major water break in the grandmother's house.

Oh, you just drove— you lost your daughter? Whoa, you drove by the what?

Uh, a baby?

One of your child—

children?

It was my oldest daughter. She's grown.

Oh, how old was she?

25.

Oh my gosh, honey. Oh wow.

All of the excitement and drive and you know what, maybe you and I can do this.

We can fix this house together.

It's out the window.

It can be for our kids to use.

It's—

there's no fun left.

All that drive is gone. Yeah.

So what is the condition of the property today?

So when we purchased it, it was technically legally livable.

But, you know, all the windows needed to be changed out.

The electrical's not been tubing.

The interior was from the '50s. Um, and what'd you say? What is the condition of the property today?

So today we've replaced all the windows. The electrical's still there. Um, I had replaced a whole bunch of floors and done a whole bunch of painting in there. And then the water break, I mean, I'm talking a swimming pool amount because nobody's living in it right now. So it wasn't caught right away. And that resulted in most of the interior work that we've done.

Or actually, I did most of that. What did you pay for the property?

We paid $73,000, $75,000.

How much acreage is with it?

About half an acre. It has 2 parking spaces. It technically has a garage, but it's sagging off and it's If it went on the market as is, what do you think it could go for?

What do you think you could list it for?

If it went on the market as is, we would probably get like $74,000 for it, and it wouldn't qualify for traditional financing because—

Yeah, but that's okay. So if you could get $74,000 for it, you got $70,000 in it. Is it paid for?

No.

Well, you've put lots more in it.

Oh yeah, no, between the— what we paid for it The closing costs and the money that we've put into it, we're in it for a little over $100,000 right now.

Yeah. But the money, do you have any debt? What debt do you have around it?

So there's the loan that we took for it. It ended up being like $82,000, I think, for the purchase and the closing costs. And then there was like $1,000 or $2,000 left.

Yeah.

And then on top of that, we put about $7,000 on a Home Depot card, which is all into that house. And then we put other cash that we had into it as well.

But the only thing I was talking about debt.

Okay.

So in debt you have $82,007.

Yes.

Okay.

And where are you living?

Yeah.

So we don't live there.

We have our primary home, which we still have a mortgage on as well.

What is it worth?

This house?

Yes, ma'am.

Maybe $200,000.

Yeah, $200,000.

And what do you owe on it?

I mean, it could be more if they fixed it a little bit.

What do you owe on it?

We owe about $75,000 left on it, I want to say.

Okay. All right. Well, I mean, you have two options. One is, um, dig deep and find some energy and get this thing fixed up and at least get your money out of it and sell it. I would not keep it. It needs to go away.

No, we're not keeping it.

So I would fix it up enough that I could get my $90,000 out of it and lose some of the cash I put into it and all the effort I put into it. But you're gonna have to dig deep to find the energy to fix it up that much. The other option is take a complete whippin' and probably sell both houses so that you've got the cash to take the whippin'. But I really wouldn't do that. I'd dig deep and finish, get it at least up to 90 and get where you can at least get the credit card paid off and the mortgage paid off and move on. And whatever cash you put in it, you just lost. And we've all done stupid things and lost money. Welcome to the club. At Ramsey, we don't partner with companies chasing trends or pushing gimmicks. Trust is earned, and that's why we send people to Fairwinds Credit Union. See, a lot of banks rely on teaser rates, marketing hype, and fine print, but that's not how Fairwinds operates. They've been serving members for 75 years, and you don't last that long by cutting corners. You last by serving people well.

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I'm good, how are you?

Better than I deserve. What's up?

Um, so I was wondering if it would be smart for me to move 3 hours away from where I live now to move in with my boyfriend so that I can build up a clientele where he's at and build my own salon.

No, no. What's one thing got to do with the other? What's moving away got to do with building the salon?

So the area that I'm in right now, there's not as high of a demand because there are so many salons over here, and I also don't have the greatest relationship with my family. Okay, so I would rather be around people that want to be around me, such as his family and him. And he has also said that he would help me build what I am wanting to build if it's over there.

So what kind of a salon are we talking about? Hair?

No, nails. I do nails.

Okay.

I love the idea of you going someplace where you can have the business that you want to have. I love the idea of you exiting what might be a kind of a toxic relational environment with your family. I think that's all great. And if you've identified the right place to do that, I think that's fabulous. What I don't like is you tying up your business, your prosperity with someone that you're not married to. Because what happens if this guy turns out to not be the guy that you marry? Well, now you're tied to him economically, which means if this starts going south, but your business is doing well, you might be less likely to end that relationship because you're economically tied up in it.

Or, yeah, or worse than that, your nail salon takes off really, really slow. And so you become financially dependent on a guy you're not married to, and he's now controlling the whole thing. Yeah, even really not a good thing for you, my little sister. I want you to be a standalone woman with square shoulders and a strong backbone.

So we were planning in about a year, a year and a half, we are going to get married.

Great.

How long have you been dating?

A little bit over a year and a half.

Okay.

And how old are you two?

I'm 19 and he's 20.

Okay.

And your nail salon clientele is going to be Working in a salon with someone else and, and they have the rent and they bring you in and you work for them, but you build up a client base, or you're wanting to start a salon at 19 years old in a strange location where you know no one from scratch and build a whole business? Which one are you saying?

So I have a job lined up there for whenever I am out of school and I am licensed, which will be around 2 months from now. And I was going to work there for 2 to 3 years and then hopefully save up enough money to open up my salon on my own.

Good. Very good. I like that a lot.

How can we help you solve the problem to where you can go there, do what you're saying, but do it without living with your boyfriend?

So where I'm stuck at is I'm not, I'm not 100% confident in myself that I'll be able to run and manage my own salon.

No, you're not. You're— you got a job.

Yeah.

So go take the job. What does it pay?

Um, so it's really just going to depend on how many clients I get. I'm pretty sure it's going to be based off of— I'm going to pay rent to rent a chair there and then probably pay a little bit in commission.

So there's no base pay at all?

Um, no.

Do you have any money saved? Do you have any money to your name?

I do. I work right now. I'm a home healthcare aide for my mom. I make $11.50 an hour and I have about $1,000 saved.

Okay.

So how are you not going to starve to death when you go take this job on straight commission with no base pay?

So I was planning on moving over there and before I get licensed, I'm going to— it really just varies on when I'm going to get licensed. I was going to start at a different job. And then whenever I have enough saved up to be— enough saved up besides my emergency fund to be able to—

I think I know why your parents are a problem for you, because they're telling you that this is dumb and you don't want to hear that.

It's not exactly that. I just don't— I've never really had a good relationship with my dad. My mom fully supports me.

I just think you need to get yourself in a better spot before you do this.

This is a nightmare looking for a place to happen. Okay.

Okay.

So you don't have any money and you don't have a job lined up to eat. And so what 100% this screams is you're going to be dependent on this guy that you're not married to from the first moment you make this decision. And you don't do that unless you're married. It's not good for you. It's a dangerous, vulnerable situation for you. He kicks you out, you know what you are? Homeless. Yeah. Uh-uh. No, I'm not going to let anybody I love do that. And we love you and we're going to talk you out of it.

And by the way, even if he was the best guy ever, why would you want to put yourself in that position where you're completely dependent on him? That's, that's not a great—

unless you're married. If you're married, sure, fine. If you're married and he has an income and he wants to support to support the family while you get your first and second job going here, and all that kind of stuff, that's fine. But if he's not, then we're just playing house. This is dangerous for you.

And there's no reason for you to put yourself in that position.

I just wouldn't do it. You know, you need a different set of income, a different set of savings to protect you, to allow you to be standing as a standalone grown woman operating her own home, and then be dating this guy.

Yeah.

Or be married to him. Yeah. I don't think y'all are wanting to get married right now because you don't think you're ready. And I would agree with that.

If I were her, I'd probably keep doing what I'm doing and try to get a job at a local salon, save up as much money as I think, you know, I need to be able to make that leap and get my own apartment.

And if you need to just have no contact with your family, but you live in the area where they live, that's fine. Yeah, sure. It's not a big deal. Just set up a boundary. Just, "I'm not gonna interact with you people. You're morons." I mean, you can just— that's fine. You can do that. But I want you to have some safety for you, because when you have to bet everything on someone else that is not legally bound to you, that is a very dangerous scenario for you. And we get the call when this 19-year-old beautiful Madison is 25 and she's living in her car. And she calls us because he kicked her out. Oh, and there's a baby now. But there's no, you know, we can't find baby daddy because he's not actually the husband. And this is, this is a guaranteed way to end up spending the first, the next decade of your life in poverty. Don't do it. Please, honey. Please, please, please don't do this to yourself. So, okay, I don't— the— you have to be able to put, when you're making big decisions, you have to be able to put all of the key elements of the decision on a piece of paper and look at them, and they all have to line up and say, this life-changing major decision I'm making All of these things say it's a good idea.

And when we list them down for you, Madison, all of them say it's not a good idea.

Well, you have to run it through not just best-case scenario, but through worst-case scenario. You have to look at the worst-case scenario.

Absolutely. Well, I mean, best-case scenario is you don't have any income.

Yeah.

And you're waiting on clients to walk in the door and you're paying chair rent. And you're living with him and you don't have any income. So from day one, you are 100% dependent on this guy to eat and to have shelter. That, that's your best case.

You're just worth way more than that.

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Hey Alex, how are you?

Hey, doing good, Dave.

How are you?

Better than I deserve. How can we help?

Yeah, I want to know if I can just invest $50,000 into my retirement account and then just work on retirement minimally for the next 30 years until I retire?

Well, the regulations don't allow you to put it into a 401(k) or a Roth IRA at that sum, that lump sum. So no, you can't do that. But could you invest it? Can you invest it and say in your own mind that particular mutual fund is my retirement account? You could do that, but you can't Just randomly add $50,000 to a Roth or a 401(k)?

Yeah, that's kind of my goal. As of right now, I have about $20,000 invested into various 401(k)s and Roth IRAs. I'm about to max out my Roth IRA for this year. I'm on Baby Step 4 right now, but I don't have kids.

If you're on Baby Step 4, then no, I would not do that.

What's the purpose of you wanting to do it that way?

Is that you have a mortgage, right?

No, actually my mom is, uh, she's going to help me out with a tiny home. And, uh, I've always kind of lived under my means. My, my real goal is to just kind of travel the world, um, and just really kind of enjoy the next 20 years because, uh, I'm probably going to end up taking care of my mom when she gets into her elder years, cause she's, uh, she's single. So, um, she's going to need help. So as of right now, uh, Like I said, I have about $20,000 invested and my job is going to allow me to get to about $50,000 that I can invest this year pretty easily. And I guess what my question is, is can I just invest that all into a mutual fund through a brokerage account and then just kind of enjoy the next 20 years of my life?

You could, but it's not enough.

Okay.

What would—

$50,000 will create $5,000 a year income.

It's a great place to park the money while you travel, but it's not a solution to say, "And after that, I'm never investing again." I don't mean never investing again.

Right now, with my job, I work a full commission job, but I am projected to make probably about $180,000 this year. How old are you? I'm 36.

And you're single, obviously.

I'm single.

Yeah, I'm completely debt-free. I just paid off my car and I realized I don't ever want to be in debt. I work in home improvement.

Okay. All right.

Um, okay.

Uh, you're, you're mathematically not ready to do what your dream is yet.

Okay.

You're going to have to work a few more years to do that. Um, and so, I mean, you're making $180,000 a year. If you need $30,000— if you need $50,000 a year to travel, then you need $500,000.

Oh no, no, that's not what I meant. I'm thinking of just bringing my retirement up to $50,000. I put the numbers into your website and I was looking over it.

And then quit.

Huh?

And then quit and then go travel the world.

No, I mean, I would work periodically. I just want to, you know, take a month off here, a month off there, come back and work, and then just kind of have the majority of my money go towards traveling and then anything that I don't spend go towards retirement.

Right. The majority of the money that you're earning, not that lump sum. That lump sum is just going to go away forever.

Correct.

That's just going to go into my brokerage account and max out my 401(k)s every year.

It's never a bad thing to invest, and so investing is a good idea. It's never a bad thing to have fun. So having fun's a good idea. It's never a bad thing to be generous. As a matter of fact, people that are wealthy and healthy do all three. And so yeah, I think now that I'm understanding your plan a little bit better, I thought you said you were— I misunderstood. I thought you were saying, I want to put $50,000 away and never work again and go travel the world. And I'm like, yeah, dude, you're going to be skinny.

You know, I mean, the $180,000 that you make now, what do you think it'll go down to when you're kind of doing this plan and working periodically? And what do you anticipate that being?

It's performance-based. I mean, I, uh, I was pretty thin last year and it went down to $80,000, um, just because business was slow. You know, I guess, uh, what the market— the market I was in was a lot slower than what I'm in now.

What I'm getting at is if it's just you, you're still earning a fine income. I mean, $80,000 while traveling. Is there a way where you can still do some investing and that you're not putting it completely on hold?

Yeah, I'm kind of wondering what a good number to shoot for would be after I hit that, after I invest that, the rest of the $50K.

I think it's whatever number allows you to continue to do what you're planning to do. But I don't necessarily know that you need to live on $80,000 while you're traveling.

Maybe it's— if you make $80,000 and you put 15% of that away, and you have an emergency fund and you spend the rest of it on travel and living, you're gonna be okay. You just kind of follow the major steps.

Yeah, I've always been minimalist, so I mean, I've spent as little as like $1,000 a month before.

That's what I'm saying. I think you can do both. I don't think you have to say, "I'm not gonna invest anymore." I think that you can continue to do that.

So I want you to work enough that you make at least 80. And I want you to put 15% away, and I want you to take as much time off as that allows you to take off and travel, and put the $50K with a SmartVestor Pro. Go sit down with one. Go to RamseySolutions.com, click on SmartVestor. Sit down with a professional investment company. They'll help you, teach you, show you, and understand your plan and what you're trying to do. And now that I understand a little bit more, but if you could do that right there—

Yeah, that's perfect.

To put 15% away. Travel, live minimalist, make a minimum, work enough you make $80,000, then you're making more than most people, and, and, and you can go travel. Have at it. Have at it. Oh, and by the way, as young as you are, your mom's young, maybe she ought to actually have a freaking plan so she has some money.

A good point.

So that you— she's not a burden in her old age. There's an idea. Man, so I had a really crass friend that was in his 80s, and he was a multimillionaire. And he was kind of a jerk, honestly, but he was a friend. And but he used to say this all the time, and I don't like it, but there's enough truth to it that it needs to be said. He said, "You know what an old man is that's broke?" I said, "No." in the way. He said, you know what an old man is that's rich? I said, no. He said, Grandpa. Oh, well, I don't like that. Listen, I'll tell you what, you know, one of my goals is to not be in the way.

Yeah, be Grandpa.

I don't want to be in the way, man.

Listen, he's telling the truth.

Well, he's grouchy. I mean, Oscar in the trash can on Sesame Street. Dummy street. This guy's got that down. But, but, uh, yeah, yeah, but still, it's like, I don't like that. Not everybody— no, and people aren't that. Yeah, they are.

Yeah, I mean, you don't want to be the burden. Yeah, I want to work my whole life and then be a problem. Yes, you want to be able to be fine.

I end up working in McDonald's at retirement, it needs to be the one I own in St. Thomas, you know. Come on, hello, I don't need to You know, I'm sorry. I'm not mad at you people, but there's no chance I want to be a Walmart greeter as my retirement golden years. Okay? No chance. I don't mind saying hi to you in Walmart, but I don't want to be paid to do it. Hell up. Okay, so come on.

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Ann is in New York City. Hi, Ann, how are you?

Hi, I'm great. How are you guys?

Better than we deserve. What's up?

I love it. So I had a question about life insurance and estate planning. My husband and I are in our mid-30s and we have a 2-year-old baby. I knew that term life insurance was something that we had to get, but I recently got into a car accident. I'm okay, my car's totaled, and that really brought this task of, you know, life insurance much more to the forefront.

Good.

I'm sorry you went through the car accident, but I'm glad you're awake.

Okay, good.

Yeah, yeah, thank you. We've been working very diligently in baby steps too, and we're about like 3 or 4 months away, all depending on when we get our refund, because we're just going to put everything to the final debt. So with the term life insurance, should— I'm assuming we should be putting that as a line item now. Yes, probably adjusting. Okay, right, that makes the most sense.

Yes.

So then my follow-up question is, when it comes into budgeting for like estate planning, I know we're gonna have to hire a lawyer, draw up a will, and all of that stuff is gonna cost more money.

You know what, you might not need to do all that just yet. You could take the wills quiz that we have, and you might be able to just do one online quickly with Mama Bear. And not get any, not do any lawyers or anything like that.

What is your, what's your net worth?

Um, I, I think I'm at $10,000 now.

Yeah, you don't, you don't need a lawyer.

Do a state-specific will.

Yeah, you need, you just need to go to— so let me help you. Both things, we can do both things for you. They're both trusted people that we've done business with for years and years and years and years. So zanderinsurance.com, Z-A-N-D-E-R, for 30 years. I've told people to go to Zander. They're my insurance agent. Jeff Zander is a personal friend of mine, okay? And they shop among a gazillion companies to get you the best possible deal on a term policy, okay? And then go to mamabearlegalforms.com, and like $70, you can have a will done, and it's perfect for you in New York. All wills should be state-specific, and so this, this is software that will print out a will for you that's for New York. You have to feed into it what you want the will to say, and then it'll print it out, and then you sign it, and it'll tell you what the proper notary or whatever you have to do in New York is. I don't know that, but some states require a notary witness, some just require a witness, some don't require anything. So you just gotta know your specific state, and they'll tell you every bit of that, and it's like $50 to $70.

You'll have the whole set of documents You'll have a full estate plan, you'll have your life insurance in place, and you really— your budget won't skip a beat.

Okay, I love it. Um, I suppose the follow-up question as well. So my husband and I, we have, um, combined earnings are about $150,000 a year, but we have— each of us have side businesses that have been doing well and we love it. So I know that once we get past Baby Steps 3, then I know we're like, we're on track to becoming, um, the Baby Steps Millionaires.

So when it—

when our net worth continues to increase, I'm assuming that the life insurance policy and like the state-specific will, that's something that we can upgrade, I suppose, in a few years?

Yes. Yeah, if you start to have a multimillion-dollar net worth, you need a lawyer to do your estate plan. Okay, it's worth paying an attorney at that point. If you, you know, unless there's just something super simple about your will and everything, it's okay, you can still do it. You could have a $10 million net worth and be just fine with a simple will from all of that. But if you want to spend a little bit of money at that point, have an attorney look at it, that's perfectly fine. Nothing wrong with that. And life insurance, you could just add some more policies if you want. Keep in mind, Ann, that what you want to buy is 15- to 20-year level term insurance, and it, and it should be about 12 times your income on you, about 12 times his income on him. And that way, if something happens to you in a car accident God forbid, he could take that amount of money, the 12 times your income, and invest it, and it will produce your income without touching it. And so let's just say you made $100,000, and so he— so you took out $1.2 million, and he invested $1.2 million.

That will create $100,000 of income without touching the $1.2 million forever.

Perpetually.

And so that's where we came up with those numbers. And here's the thing, you're in your 30s, if you're not overweight and you don't smoke, $1 million doesn't cost hard— it's the cost of a pizza to get life insurance. And it's just ridiculous that people don't have it. So you need to go get your stinking life insurance. Do the things she's talking about. And I'm really glad she called, and I'm sorry she had that accident, but I'm really glad it woke everybody up. And we said, hey, we got to deal with all these things because stuff happens in life.

Yeah, she's paying attention, and I think that's the best thing you can do is pay attention to what's going on, be intentional about making those solutions, and don't wait. Life insurance is not a baby step. And I think that's the thing to remember. I remember having that aha moment even back when Sam and I were paying off our debt, because the truth is you do wrestle with it in your mind. You think, oh gosh, I'm cutting in so many areas. I'm too broke to die. I'm too, yeah. And the last thing you want to do is add something to the budget. And you really do have to because you just don't know what tomorrow holds.

Wow.

This is true. Cade is in Dallas. Hey, Cade, what's up?

Hey guys, how's it going?

Better than we deserve. How can we help?

Perfect. So we're in a pretty good situation, but my wife and I were having a discussion. I wouldn't call it a disagreement, but differing opinions.

Sounds like a disagreement.

Right.

I appreciate it.

And so, oh, we have, um, about 5 rental properties, not about 5 rental, we have 5 rental properties and our main property, as well as a good amount. I say good amount, right? That's subjective, but about $75K in cash in our bank and about $150,000 in stocks. And so we were, we're all about paying off debt, but right now we're in a pretty good position. Two houses paid off, three houses with mortgages, and then one house with a pretty big mortgage, which is our primary residence.

And your household income is what?

Uh, I make about $150,000. Um, wife makes about $75,000. So $225,000.

Got it. Very good. Okay. And what's the balance on your home mortgage?

Uh, $350,000. Okay, cool.

And how old are you guys?

Uh, 40 and 35. Cool.

You've done really well. Congratulations. It's fun to have these discussions because you got to this point. So if you're asking what I would do— are you? Well, I'd sell the stock and take the $75K. That's 2.25, and I'd put that on that $350,000 by close of business today.

$150,000.

Okay. I'm assuming you have an emergency fund in addition to the $75,000, right?

No, the $75,000 is just cash in our pocket. So we would, but you know, let's just say we need $25,000 in there for the emergency fund.

Yeah.

Okay.

Okay. Then put $200,000. That leaves $150,000. And then that brings up the question you were going to ask about whether we sell one of the rentals, right?

Right. So then the question becomes, so, you know, Well, back in, I would say about 10, 15 years ago, I got into the real estate craze, listened to all the gurus. And I've heard you say before, rentals come with their fair share of problems. And I have a fair share of dog day stories for you, but nonetheless came out the other side okay. And all of them are cash flow, quote unquote cash flowing.

Okay. So the 2 that are paid for, what are they worth each?

$200,000 and about $150,000.

Okay. And the other 2—

I've got the $250,000 one.

And you have 3 then that have mortgages?

Correct.

Those are $50,000, $100,000, and $150,000. Again, these are just ballpark numbers.

Just small mortgages. Okay, good, good. All right. And is there any of— who wants to sell some of the houses to get the debt paid off?

That would be my wife. She's fully bought into the let's go debt-free.

I like that.

Yeah.

Okay. So here's the thing. The only question, the only thing we're arguing about is not not when, not if we're gonna be debt-free, it's just when.

Yes, basically, yeah.

Okay, that helps the argument. Okay, because if the argument is I'm gonna stay in debt the rest of my life, we got a different discussion. But if it's like, okay, I got small balances on these things, I got this pile of money, so I can throw $200 at the house, let's get the house knocked out, and then we'll whittle away on the mortgages on the rentals, and you'd map that out and you say with a $225,000 income it's gonna take us 4 4 years to do all that. Or if we sell one of them, we can do it in 2 years. Or if we sell 2 of them, we could do it real fast. That's the argument, right? So we're arguing about 2 years or 4 years or whatever these numbers are. We're really not arguing about the concepts. And so is it— do I— I don't want to give up these houses. I would rather fight with it for 4 years. She's saying, I want to be done today. If we gave up 2 of them, we could be done today. And that's about the numbers, roughly. And that's the only argument is whether we— what are we going to do with the next 4 years?

And either, either answer is in the wise column. So we're not going to— we're not going to call it for you.

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We wish we could get to every call and question here on the show, but we can't. You can't get through. There's not that many lines. So if you have a money You got a question and you want an answer for your situation, we got a tool for you to help you. Head on over to our website and use Ask Ramsey. Ask Ramsey is our free AI tool that's built and trained on Ramsey-proven principles. We downloaded several years of answers from this show into the data. All the Financial Peace University lessons, all the articles we've written that are on our website, and the books we've written are all downloaded into that. So AI knows what Ramsey would say one of us here on the show would say, and it will give you that answer free. And it's not polluted with outside confused information from Reddit or TikTok or other stupid places that people get bad information. Instead, you could just go to RamseySolutions.com and Ask Ramsey, and you'll get a Ramsey answer. To your question. If you want to know what we think, it's an easy way to do it and it's completely free. Ian is in Atlanta.

Hi Ian, how are you?

Hey Dave, I'm doing good. I appreciate all your help through the years. My wife and I, you've helped us out a lot getting our finances in order, so appreciate all that.

Thank you.

We found out before Christmas my father-in-law had fallen into some scams, thousands of dollars. He actually maxed out all his credit cards and then he wound up mortgaging the house to pay off the credit card debt. We think he may even now have gone gone so far is to get a reverse mortgage on the house. Tomorrow he has to go to small claims court to deal with one last creditor, about $2,500. The only income he has, legal legitimate income, is his Social Security. So we're not sure where to help him, where to step in and help him at this point. He hasn't let us not help him, but he hasn't given us a lot of room to help him. But it's, you know, tomorrow he has to go to court and we're just not sure what to do, what he can expect there, and then what to do after that. Because like I say, it's this one last debt and all he has is the house and Social We don't want him to wind up homeless.

So how old is he?

He is 80.

Okay.

How has he been clearing the other, the other debts? You said this is the last one.

Yeah.

The rest of them, when he mortgaged the house, he paid everything off, but he missed this one card. He actually wrote him a letter and explained the situation to him and they still moved forward with it. Like I say, he got the letter in the mail that he has to be in court tomorrow for this, for this last $2,500.

Who's the creditor?

Do you know? I do not know.

Okay.

All right. What are you thinking about?

Are you thinking about— well, I'm sorry, what state is he in?

Georgia.

Okay.

All right.

Go ahead.

I was going to say, what are you thinking about paying the $2,500 for him? Is that what's on your mind?

No, we're not. We, we're not giving them any more money. My wife is, you know, that's her dad. She's, she's helping out some. I'm not entirely sure, you know, what, you know, she's doing, but I know she's not doing a lot because, because we know how bad it was. Um, we actually, we actually find out. I took his cell phone. I was paying for his cell phone. He was supposed to pay for it. We actually went over the house, took it from him. So, you know, to try not to keep him— keep it from happening again. But yeah, we're just trying to find out what he can expect tomorrow from the court. Can I get that? All he has is Social Security. What can they get? What can they do?

Well, to start with, what will happen tomorrow is uneventful. Have you ever been to traffic court for a ticket?

Right.

Yeah, like the first time you go to traffic court, you're like, oh, I'm going court, and then you go in there, it's kind of funny, it's kind of not much to it, it's uneventful, anticlimactic, you know what I'm saying, right?

They tell you what you already know.

Yeah, that's exactly what's going to happen to him tomorrow, okay? So these attorneys have entire cases, boxes and boxes and boxes of people that they're suing tomorrow. They roll them all in on two-wheelers. No one comes to oppose them. And they get judgment on all of them in about 10 minutes.

Okay.

They don't go through them one by one by one by one. The only one they will pull out is if someone actually shows up. So if he actually shows up, they'll pull it out and they'll talk about it. But they will do nothing because here's the deal. The guy legally owes $2,500 and he has not paid the bill. Right, he will lose the lawsuit, right? I got scammed is not a defense, right? Okay, so he loses tomorrow and they take a judgment lien tomorrow. Now then, on to your question: what can they or will they do with a judgment lien? 98% of the time on $2,500, they'll do nothing with it because it's too much trouble. It's not enough to screw with. With. Okay?

Okay.

But they take the judgment lien. If they're in a state where they can garnishee, they can clean out bank accounts, and they can garnishee wages. They cannot touch Social Security in any state.

Okay.

They could take a lien on his house, but were they to do that in the state of Georgia, and they would have to go through— they'd have to spend $1,000 to $2,000 to do a foreclosure to collect $2,000, and they end up owning a house which, by the way, has a mortgage on it, right? And they get to keep that mortgage. The bank does. So the chances that a bank takes on $100,000 or $50,000 or whatever mortgage to try to collect $2,500 on a credit card is zero. Never seen it happen in 40 years. Okay, not gonna do it. So they take a lien on the house so that if the house ever sold, they get paid. And they will do that. Okay, in most states, as soon as the judgment is final, it's an automatic lien on property that you own. I don't know for sure in Georgia if it is. It is in Tennessee. Okay, so it's an auto— as soon as the judgment's final tomorrow and they record it at the courthouse, his title is now clouded. If he tries to borrow money on the house or try to sell the house, they have to get paid because they now have a lien on the house.

Execute on the lien and force the sale of the house. It's not practical, not practical, right? And if, as long as his Social Security comes to an account that is standalone and doesn't have any other money in it, they can't take the money out of that account because it's Social Security money, right? But if he has, if he's got $10,000 laying somewhere, which he doesn't based on the story you told me, but if he had $10,000, he probably would have paid this bill, right? But, um, yeah, but, but, but yeah, so basically he is largely what we call judgment-proof. There's not a lot they can do with the judgment, right? Because he's too stinking poor.

Yeah, that's true. Yeah, yeah. And we're trying to help him, but it's just— yeah, it's, it's— I mean, you've probably gotten these calls before. And, you know, it's frustrating to hear about other people falling into these scams.

And then, you know, what kind of scam was it?

Almost a year.

Oh, well, Dave, he, um, he was going to marry Jennifer Aniston.

Oh, okay.

And he was, you know, getting them, buying the Apple gift cards and sending $100 and $200 here and there and just not bad work if you're ready. Yeah, yeah, yeah.

Romance scam, huh? Wow.

Yeah, it was one of the big ones too. So yeah, I mean, you know, we've heard other people fell into it. We just never— I thought, how do you fall into that? And then, then they hit our phone, you know, hit my father-in-law.

So yeah, I'm so sorry. Yeah, yeah, it's heartbreaking. Um, but it sounds like the money is gone. It doesn't sound like it's recoverable from anything. And so my guess is that tomorrow will probably end the drama on the $2,500. $1,500 until you all sell the house after he passes away.

Okay, okay, because here's something I might not even go, and what good would it do to go?

And he's right, he's right. Yeah, you're gonna lose. You just walk in there and you're gonna lose. There's no, uh, they can't— they don't send you to driving school, you know. It's not, it's not that part of traffic court, but you're just, you're gonna lose because there's no defense. There's not a, you know, there's no fraud or something like that committed. It's not identity theft. It's not— he borrowed the money and he signed up for the debt. He didn't pay it, he loses. It's very simple and very cut and dried. And I promise you, there'll be 1,000 at least in the box, in these cardboard boxes sitting there, and they'll all go boom with one drop of the hammer, right? One smack of the gavel and it's over. And it's like a conveyor belt for lawsuits lawsuits, a lawsuit factory. And it's just— it's boring is what it is. But unless you're the one that's all freaked out because of it, you know. So anyway, I, I think he's okay. I think he's probably in good shape. I can't be 100% sure, but based on what you told me, I don't know of anything that— any way they can get to him at this stage because everything's gone, basically.

Rachel is in Baton Rouge. Hi Rachel, how are you?

Hi Dave, I'm good. How are you?

Better than I deserve. What's up?

My question is, is it smart to do a balance transfer that is offering a 0% APR PR for 20 months to take care of a portion of a personal loan that my husband and I have.

A personal loan to who? Uh, it's with a SoFi loan that we have. Oh, gross. What, how much is SoFi screwing you for?

We have $15,000 left.

And what's the interest rate?

12.31%.

Aren't they helpful?

I know how they paid for that stadium. No. Okay. 12%, huh? On $15,000. And what's your household income?

Uh, before taxes, uh, $112,000.

Okay. So how fast are you going to pay off the $15,000?

Well, we would like to pay it off within a year and a half.

That's awful.

Is there something ahead of it? Is that why it would take so long? Like, do you have other debts you're attacking first?

We have, um, we still have $1,000 left to pay off on our furniture that we brought, and then we also have a car loan. We have $18,000 left on that.

Okay.

And then starting back in July, I was gonna say the car shouldn't come before the $15,000.

Okay. Our payment is pretty high. Our payment is $679, right?

So what we have learned is the fastest way to get out of And the most sure way to get out of debt when it comes to everything but the house is to list your debts smallest to largest, pay minimum payments on everything but the little one, and attack the little one with a vengeance. And I mean no eating out. I mean no vacations. I mean nothing. Scorched earth on your lifestyle, and you attack these debts. You make too much money to be this freaking broke.

Broke.

And if I'm you, I'm going to pay all of this off in just over a year.

A year?

Yes. But you have no life during that year, you understand me? And right now, you're— right now you're trying to slow walk this and figure out some interest rate that gets you out of debt. There is not an interest rate to get you out of debt. What gets you out of debt is when you get so pissed off that you've been screwed over by SoFi and the car companies that you attack this stuff with Vengeance.

Are you guys doing anything outside of your normal jobs? Any side hustles? Anything to bring in extra money?

No, we aren't.

That's the key. I'm telling you, that's the key to knock this out because the longer the horizon on this, the less likely you are to complete it. If you're not attacking this with intensity, it's just going to be, ah, I'm tired of doing this. Oh, we've done it long enough. This is, we paid off the car. That's good enough, right? You've got to be intense. Intense, which means the income that's going towards this debt has got to be as high as possible.

Yeah. And the outgo is nothing. I mean, I'm not kidding. Do not see the inside of a restaurant unless you're working there as your extra job.

Because if you did that, if you committed, if you and your husband both said, man, we're both going to do a side hustle, we're both going to bring in an extra $2,000 or $3,000 a month, oh my goodness.

So, Rachel, here's the deal, okay? You can wander into debt, and we've helped more people get out of debt than any other organization in America. We know what we're doing. You can wander into debt, but you cannot wander out. You have to get angry about this situation, so angry that you become sacrificial in your lifestyle because you want rid of this, because it's standing between you and prosperity. It's standing between you and becoming a millionaire. It's standing between you and changing your whole family tree. You got screwed by SoFi, but you allowed it. You signed up for it. You got screwed by the car company, but you allowed it. You signed up for it. So no more. Okay, I'm not gonna— I'm not gonna— I'm not gonna be the, the person that gets stepped on anymore, and I'm gonna punch back so hard that it goes away. When you do all of that, your question that you called in with becomes almost irrelevant.

That's right.

Because 12% on $7,000 is not your problem. That's $700, $800. Yeah, it's $800 for a year. $800 does not fix a $30,000 problem. And you have a car debt, a SoFi debt, and a $1,000 debt. That's $30,000. And so you've got, you know, and you don't have an $800 problem. Problem. You have a $30,000 problem. $2,500 a month for 1 year and you're done. Now where are you going to get it? You're going to get it from cutting lifestyle and increasing income and cutting lifestyle and increasing income, and you're going to go so hard that your broke friends think you joined a cult. Now I don't know if you're ready to do that or not. I can't make that decision for you. If I could, I would, because I know that the 10-year-from-now version of you would love you.

You're gonna—

the time is gonna pass anyway, and you're gonna go, "Ah, if only I had listened to that guy on the radio." Oh, and here's the other thing: the faster you get out of debt because of increased income and sacrificed lifestyle, the more likely you do get out of debt. The more you drag it out and slow walk it, the better the chance is that you just stay in debt forever. And it just becomes normal. Well, everybody's gotten screwed by SoFi, so we might as well just be like everybody else.

Yeah, that's right.

And your brain starts to normalize the stupidity that is America today.

Yep.

And so, and then we've got Gen Z saying, I can't afford to buy a house because Congress screwed them with student loans. Their college screwed them with student loans. Ford Motor Company, Lexus Motor Company, Toyota Motor Company put them in $1,200 car payments. SoFi put them in 12% personal loans, and we're here to help you with your money. Oh, bullcrap. You're here to help you with my money is what you're here to help. We know who you are. And you know, this is it. And you know, when you look at Gen Z, They got record credit card debt, record car loans, record student loans. And then they say, "Well, I can't afford to buy a house." Well, no kidding. 'Cause you got screwed by everybody in sight. And the only thing I would do if I was Gen Z is I'd get really angry about that, and I would clean this mess up, and take these villains out of my life, and say, "Never again." See, I was 28 when I went broke, and American Express called my house and asked my wife why she would stay with a man that wouldn't pay his bills.

Bills. And she called me crying at the office and said, I was thinking the same thing. I got so mad that I'm 65 and I'm still mad. If American Express calls my house now, it's a wrong number because I'm not going anywhere near anything that freaking company does ever "Ever. They screw people for a living. I don't want anything to do with Citibank. What's in your wallet? Money, not your crap. That's what's in my wallet." See, you got to get that thing going like that, that swagger. And, you know, that's what happened with Jade and Sam. They said, "I'm not living like this. I've had it.

I'm done." Yeah, you have to get to the point where you're— instead of blaming people, You're just, you're just mad about it and you're realizing, oh, the same people that screwed you aren't going to come save you. You know what I'm saying? Like, they're not going to help you. So you have to help yourself. That's the only way. That's the only way you get out of this. It's the only way.

Yeah. When you get twisted up about it and you say, I'm looking around out here and none of these people have my best interest at heart. Nope. And including the balance transfer 0% credit card. Well, you know what, you know what that is? They're betting you're not gonna pay it off in 20 months, and you're not gonna pay it off in 20 months if you don't change the way you're doing this.

And they're just gonna send you more offers.

Well, no, they're gonna jack you to 28%. They're gonna make SoFi look like a good deal. Yeah, at the end of 20 months, they're gonna hand you a, you know, oh man, it's gonna be bad. It's gonna hand you a new piece of paper and you're gonna go, I think I got a little throw up in my mouth. Yeah, because I've signed— I did it again. I signed up with one of these companies. Companies, Fifth Third's here to help. Give me a break. They're gonna screw you. When you walk into the finance company or the finance office of the car dealer, it should have a sign over the top of it that says, enter here to get screwed. Because that's what they're gonna do. They're gonna jack you up, and it's to their benefit, not yours. All you get out of it is toxic smell from the plastic that's new in the car, and we call it new car smell. It's the plastic that's new, and it's toxicity. Let me help you with this. Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. I'm Dave Ramsey. Jade Washaw, Ramsey personality, number one bestselling author, is my co-host today.

Cassandra is in New York City. Hi Cassandra, how are you?

Hi Dave. Dave, first, thank you for your incredible gifts and the wisdom you share so generously. Your teachings truly made a difference in my life. Years ago, I joined Financial Peace University and wiped out $80,000 in debt.

Look at you!

Wow.

Proud of you. Way to go, kiddo.

Thank you. Thank you.

But now I feel torn between responsibility and boundaries. I have family in a third world country and also family here who are struggling financially. I have been helping, but now it feels expected, and they openly talk about what they want me to pay for. I feel guilty saying no, but I also worry because they do need the money. How do I help in a healthy way without being taken advantage of or feeling resentful and/or becoming their financial plan? Knowing that I'm supposed to give anyway. And lastly, I don't appreciate that the privacy and the mystery of where the money is coming from is not there, and therefore it doesn't feel like I'm giving money. It's more— it feels more like not— it doesn't feel like I'm giving money like a gift, but more like an obligation.

Yeah, that's true. That's what entitlement does. That's no fun. Okay, so what amounts of money and how much is stateside and how much is in the developing country?

Okay, so my family in Haiti—

in Haiti, everything. Yes.

Okay, they need everything.

We're talking about—

now, how much money have you been— how much money have you been giving the people in Haiti? And who is it, your mother or your dad or What?

So my, my parents live here in the States and I help them out as well. They have retired, but they do not have that much money to retire off of.

So that's one. Who's in Haiti?

My brother and my sister and my siblings. So my brother has 5 children and a wife, and my sister has 2 children, and her— my nephew just had a baby.

And yeah, what kinds of money— in a year's time, how much money are you filtering to these folks in Haiti?

So sometimes I send like $600 to one, $800 to the other. I send $400. So it depends because sometimes the kids needs to go to school, so we pay for— I pay for them to go to school, and then I pay for for food. I also pay— I've been— I'm also working on helping them to come to the States, so that involves, um, applications.

So if you had to put a rough estimate, what's a dollar amount that you would say yearly I'm spending this amount of money on Haiti?

I would say about like $10,000.

Okay. And how about your mom and dad?

Okay, so my mother, um, she— I've been giving her about $400 to $600 a month, but I've been scaling back off of that because I, I found out that she hasn't been using it appropriately.

What's she using it on?

Um, she'll—

she, she likes to buy things and she likes to show off to her friends that she has money.

So, okay, so can we, can we make the statement about everyone involved? A, we love them and we want good things for them.

True.

A, true.

Yes.

Okay. B, no matter how much money we give them, it's not going to be enough.

Okay.

I mean, you could, you could triple what you're giving them and nothing will change in their lives.

And that's why we are working now on getting them to the States.

Yeah, but, and that's— so that's a good— that's a good— that's a sustainable investment. But just throwing $300 into a family of 8 in Haiti doesn't even move the needle. You could throw $3,000 in that same hole and it would still go down the hole. So you can't give them enough money to be God, and you don't have that much money. Money. And so, you know, all you're doing is getting aggravated and helping a tiny, tiny bit, but the amount of money you're giving into these situations is not changing their lives. It might feed them for a day. It might help them with their application to come to the States, both of which are good things, but, you know, so if I'm going to give any more money, I'm going to have two different things on it. 3 things on it. One is you're going to be responsible with the money that you have, mother. Two, we're going to set a set amount and that's all I'm going to do. Three, I'll help with the applications. Okay, but I'm not going to— $600, $800, $400, $300, and them thinking, "Oh, she's just made of money," and I'm feeling used and guilty, and they still want more.

There's no end to it. And so what we've got to do is put a boundary on it, put an amount on it, and say, "I'm going to give you X per month, and I'll help with the application. That's it. Don't ask for any more." So should I do that?

Like, so now, would I now be on the hook? Because now I—

It's up to you.

If you don't want to give, you don't have to give.

The amount of money you can give per month can be zero. But you need to set an amount.

And that's for your budgeting purposes.

And you need— and for your sanity.

Yeah.

Because this has— this is like a dog chasing its tail. It's got no end to it. That's what's driving you crazy.

It is, but it's also expected of me.

I don't care what's expected.

You get to set the expectation.

You get to decide what's expected. I'm not expected of anything. Bullcrap.

You get— you can sit down with them.

Let me help you with this. You get nothing. I decide I changed my mind. I'm not giving you any more money. You can do that. That's perfectly okay, and you have no reason to feel guilty for that at all. Okay, you know how much money I'm sending your family? None. You know how guilty I am about it? Not at all. Yeah, I'm not, I'm not obligated.

They're hungry.

I'm, I'm not obligated. There's a lot of people hungry. I'm not there. I'm not Jesus. I can't feed all of them. Okay, I feed some hungry people as an act of charity, but not as an act of obligation or guilt. And we do feed hungry people through the Ramsey Family Foundation. We do that, okay? But we don't feed everybody on the planet. We don't have the money, and I feel zero guilt about that. Okay, so you have got— you've got to put this in your head that you're not Jesus. That job's taken. He already took the job. You can only do a little bit. You do not have the money to be God. You cannot fix their lives. And once you accept that, then you can explain that to them and say, I can't fix your whole life, but I can do this much a month, and that's what I'm willing to do. And if you don't like it, I can send nothing also. That's a possibility if you're a jerk about it. If you don't appreciate it and say thank you a lot, I can give you nothing. That's a total possibility. But in the meantime, I I'm willing to do this.

But you're not the Messiah. The job's taken.

When I talk to people on The Ramsey Show, 90% of the problems I hear come down to one thing: not having a plan. They're not living on a budget. They have no idea where their money's going. Money is just happening to them instead of them happening to their money. And guys, that is so normal, but it doesn't have to be normal for you. And that's why I want you to go download our EveryDollar budget app. EveryDollar not only helps you tell your money where to go with a budget, it also builds a plan to free up extra money so you can pay debt off faster master and start building wealth. And the best part, your plan is completely personalized to your life. It's the same advice that you would get if you called the show, and it's right in your pocket. So, don't keep living normal. Go download the EveryDollar app, answer a few questions, and get your plan today.

Today's question of the day is brought to you by Yrefy. If you've fallen behind on your private student loans and have stopped making payments, it can feel like every door is closed. But Yrefy helps borrowers explore low fixed-rate refinancing options that fit your budget. Go to yrefy.com/ramsey. That's the letter Y-R-E-F-Y. Kofi.com/ramsey. Might not be in all states.

Okay, today's question comes from Parker in Tennessee. Uh, he says, my wife and I move every few years for work, and we rented homes each time. Our friends recently bought a house for $1.5 million, which I know is out of their price range, so I asked how they did it. They said they did an interest-only mortgage. What are your thoughts on this type of loan? It sounds like it's renting a house, but you get the benefits of ownership. Ownership. Would buying a house this way be a smart move for somebody that relocates frequently, or should we keep renting? So there's, there's two concepts in there. There's the friends who have the $1.5 million house, which that feels like their personal residence. They're not relocating as often as you do. But you're saying, is this a good idea for, for us since we relocate? And I would say no, under any auspices of the idea. This is a horrible idea. And it's— the product is really just what it is. You're only paying interest. So if you're not paying any of the principal, you're never paying down the mortgage. So in essence, you're just renting a house.

That's really what you're doing for a period of time. So there's no real advantage that I can think of for you to do this. I mean, after the interest period ends, your payment's gonna jump up anyway, 'cause you will start paying principal. And you're just paying more interest over time. It's probably, I gotta believe it's one of the most expensive ways that you could buy a house.

And actually on the short term, owning a home is more expensive than renting. Heat and air goes out, roof leaks, property taxes go up. Homeowners insurance goes up. All of those things, you've still got all those things. And if you move and try to sell the house and you've reduced the principal not at all, you're likely gonna take a loss.

Oh yeah, you'd be upside down.

Between how often you move. So no, you need to stay away from it. So anything that sounds too good to be true is, and your friends, Parker, are short-term thinkers.

Yeah, it wasn't very smart.

They're not thinking long-term. Long-term. There are people that think, "Thank God it's Friday. Oh God, it's Monday." I want something, I want it now, and I'm going to buy it even though I can't afford it. And by the way, the interesting thing is the difference in a payment on an interest-only loan and a 30-year, which we don't recommend, not much difference. Not a lot of difference. Because think about your 30-year mortgage. The first payment you pay has almost no principal It's almost all interest. So the payment's almost the same. It's not $50 difference or something like that. It's not a lot different. But the concept is way different because it describes someone who's thinking short-term and is immature rather than someone that's thinking long-term.

So the other part of this that I can't help but just call out is if you said, hey, they bought this house for $1.5 million. I know it's out of their price range. So I asked how they did it. Did it? That's the wrong question to ask. You don't look at someone—

You ask how they did it so you don't do it.

Right. Not so you go, oh, they're buying things they can't afford. Let me figure out how to do it too.

How I can buy things I can't afford. Yeah.

It's not a great method.

Really bad. Yeah, that was kind of laying there and I missed it on the page. Yeah. Mark's in Washington, D.C. Hey, Mark, what's up?

Hey, how are you guys doing today?

Better than I deserve.

What's up? Um, so I've got a little bit of a funner question. I think you helped me out in the past, about 8 years ago. We were drowning in consumer debt, just bought a new house, and since then we are 100% debt-free. Good for you.

House and everything.

Thank you. House and everything. We got really angry and really focused.

8 years later, knocked it out. Well, I'm glad I was there 8 years ago. That's awesome.

That's really cool.

Me too, me too. Um, and we're kind of, we, you know, we've definitely let off the gas some. Uh, still focused, still intentional, but still frugal. And, uh, I'd like to, um, take my wife to Italy, and I'm curious as to how much would be a responsible amount to spend on about a 10-day trip to Italy.

What's your household income? What's your income?

It's about $200,000.

And what's your net worth now?

Right now it's probably just north of $1 million.

Wow.

Okay. Good for you. That's a nice 8-year turn. Okay. And how much money do you have saved for the Italy trip?

So we're going to go in the fall, so we're going to work towards saving towards it, but I was thinking Like for the way that we like to travel, which again was very frugal, I was thinking for Italy probably between like $8,000 to $10,000.

I would double that.

I mean, you got to price it out and see.

I would double that. Okay. You're a millionaire. You're responsible. You're careful. You make $200,000 a year. Of course you're paying cash for this. No question. And, um, $16,000 on a world-class epic adventure is not out of hand for you.

Okay.

So I'd put $15,000 on the budget and say we need to save up $15,000 between now and the fall and then go do it up right. That's 10 days. That's still not a lot of money. You're still not— I mean, you're not staying in the Four Seasons doing that.

Have you Have you priced anything out? Have you looked at it?

We've looked at flights. Um, I've looked at a couple like Airbnbs and things like that that some people have sent me. Um, places that like would kind of fit our style.

Okay.

And, uh, you know, they, I was surprised because they're like, you know, it's, it's kind of like going on a trip in the US. Like it's not that bad going over there.

Okay.

And I was kind of surprised by that.

So.

Okay.

Um, I've heard you've been over there a couple times. Are there any things over there that like we should definitely see in your opinion?

What part of Italy are you going to?

My wife wants to go, uh, Sicily to Florence, which I told her, hey, I just looked at the map and those are on two opposite—

yeah, that's right. Listen, I love Florence in that area. Florence, Pisa, uh, and anything in that area, I think you're gonna— you can't go wrong.

Great food, Yeah, Tuscany is amazing. I mean, the food/wine scene in Tuscany is off the chain. Of course, Florence has got the Statue of David. It's got— and an hour and a half away is the Leaning Tower. And so that's all touchable right there. That's all doable. Actually, you can get down to Rome. Rome's full of tourist everything, from the Colosseum to the Vatican to whatever. And tourist hack, if you're gonna spend a little money, if you're going to Rome, if you're gonna go into the Vatican and you're gonna go into the Sistine Chapel and so forth, you're gonna see the museum, hire a private guide and you don't stand in line for 2.5 days to get in. It's a mile and a half long and you walk past every bit of it with a private guide and straight in like you're a snotty rich person and just go do it.

For sure.

And, uh, it's definitely the way to go. And, you know, that's just a couple things. But I mean, yeah, Rome's full of, uh, things you've read about your whole life and thought about your whole life. And so it's, it's amazing. You stay there the whole time, probably. It just depends on what you want to do, I mean, and, and what it is you're after, uh, what, what type of experiences you're trying to, uh, curate in the process. But yeah, you can, you can drop $15K pretty quick over there and and still be called frugal.

Absolutely. Especially in 10 days.

And you did it, Mark. You lived like no one else for 8 years. And now you're still young and you can live and give like no one else. And so, yeah, enjoy this. Plan it out, stay within the plan, and that helps you enjoy it, because you're not stressed out about busting the budget or something, but you're not being quote unquote irresponsible. Not even close. Well done, sir.

Listen up, folks. If you've got a complicated tax situation and you're putting off filing your return, it's time to talk with a Ramsey Trusted Tax Pro. Not next week, not April 15th, right freaking now. Ramsey Trusted Tax Pros know the tax code front to back so they can do the heavy lifting to help you file on time and explain things to you with the heart of a teacher. Future. But they can only do that if you get on their schedule before they book up. Go to ramseysolutions.com/taxpro to find a full-time tax advisor who serves your area with excellence. That's ramseysolutions.com/taxpro. Buying or selling your home is a big deal, and with all the clickbait headlines and conflicting data out there, it's hard to know what's really happening in the housing market. Well, we're here to make the latest trends easy to understand and factual. Median home prices went up a little last month to $400,000. $203,000. We typically do see that in the spring season because it gets a little busier. Mortgage rates also dipped all the way to 5.43%, down from 6.1% that we saw last February, giving buyers some breathing room. But since rates are unpredictable, the best time to buy is when you're financially ready, not when home prices or rates drop.

To learn more about the housing market trends and to get some free tools to help you buy or sell with confidence, go to RamseySolutions.com. Or click the link in the show notes if you're listening on podcast or on YouTube. Maria is in Houston. Hi Maria, how are you?

Hi, um, thanks so much for taking the call. Um, I'm calling about my marriage. My husband and I are not aligned financially, um, and unfortunately I knew this before getting married. Um, this could be 10 years that we've been married and, um, Um, I was a single mom, uh, when we met. My daughter was 12. He helped raise her. Um, she was 19 when we got married. Um, but we keep our finances separate. Um, he's a saver. Uh, in the past I've been a spender, and I've worked really hard to get my act together. And, um, he bought the house cash. He bought the house when we were engaged, but he did not put my name it. Um, and, um, I'm an entrepreneur. When I wasn't— whether or not I was earning money, I was responsible for all of the expenses of the house because he bought the house cash. And, um, I'm now in a place that I'm earning money, which feels good. And he's, uh, a lot of times has said, well, you know, now that you sit at the adult table, oh, we can have adult conversations. And, um, as long as I keep my eyes on God and then focus on myself, and I, um, I'm okay with it.

Um, I'm obviously not okay with it, and every time I bring it up, it causes a big issue. And so I just pretend like I'm okay with it. And I know my daughter, um, thinks It's not good for me, and, um, I don't know. I don't know what to do. Uh, what made me call you today is that, um, we, uh, we have a 4-bedroom house. We have a roommate, uh, because that roommate covers property taxes.

Um, you have a roommate living in your home that's paid for Um, yes, we do. Why?

Yeah, because, um, he's not covering the property taxes.

Well, I mean, why can't you guys cover the property taxes? You all aren't broke.

Yeah, exactly. And, um, so, um, when he—

let's stop a minute. What does your husband make a year?

My husband retired at 43. Um, and he now has a part-time gig that he does just so he has play money.

So what does he, what does he plan on living on if he retired at 43? Does he have a huge savings?

He does.

Well, how much does he have in his investments?

I don't know because I don't have access.

What do you think?

I think $5 million.

Okay. And what do you make a year?

Um, um, conservatively $100,000.

Okay, well, so here's the thing. We get in relationships what we tolerate. For 10 years, you've tolerated being treated this way, and you're running out of toleration. You're running out of steam. You're not willing to tolerate it anymore, and that's why you called us. And so, I do not know in a radio call or a podcast call how to navigate through 10 years of you being treated like you're not an adult, and through all the pain that I hear in your voice. I don't think we can navigate through all of that in one phone call. But I will tell you, just listening to you, I think your marriage is probably going to end if you guys don't do something to heal it, because I don't think you're going to stay much longer if you don't do something to heal it. I don't know that you've said that out loud to yourself, and I'm not suggesting that. I'm just observing that I'm talking to a lady who's completely done.

Yeah, if you've had to convince yourself that the only way to survive in there is to basically keep your mouth shut and have a roommate.

Yeah, that's just strange. We have $5 million, but we're so cheap, we have a roommate to pay our property taxes. No, thank you. Not how I want to live. So what would I do if I were in your shoes, Maria? I think I would sit down, I would get on the phone and call your pastor, call your church, and get a recommendation of a good faith-based marriage counselor that can sit down with you and coach you and coach him. And then I would sit down with your husband and say, I've made an appointment with a marriage counselor on Tuesday because I want to try to save our marriage because it's almost over, and I want to try to save it. Do you want to come?

Have you ever tried that?

We have. We've gone to that point, and he— we started, we would do a couple sessions, and then we things get better. He's even put my name on some of, um, because our finances aren't blended. He's even put my name on some of the accounts, um, but my name is still not on the house. And I, I, I, yeah, so we've done it like 3 or 4 times, and I, one time I actually, um, actually, I mean, are you, do you want to try again, or are you done?

I don't—

I, no, I, I don't want to try again unless I think it's going to work. And so I'm going to demand that this time it works.

Have you sat with a counselor, just you?

Yes.

Okay, okay.

I think you guys have got that to do. I don't think we can help you on this show, hon. We're not— we're not— we're not qualified, number one. We're just your friend, and we're sitting here with you I'm sorry you're hurting. I can't do anything about any of that. And I don't have a magic phrase to say that hasn't worked in 3 rounds of marriage counseling. But I will tell you, doing what I do, and knowing that the number one cause of divorce is money problems and money fights over money, I will tell you that I'm honestly surprised you've made it as far as you have. Statistically. I'm glad you're still married. And I want your marriage to heal. But yeah, you guys are— you're gonna have to sit down and you guys are gonna have to lay out some milestones, some things that we agree that these things are going to happen. And these things are never going to happen again. And we've got our little list of 5 things that we always do and 5 things that we never do. And, you know, that will include full transparency and understanding where the money is, and I have a vote on the money, and you never talk to me like I'm not an adult again and tell me I get to sit at the big girl table.

That's so freaking demeaning, it's unbelievable. But, you know, that, you know, but, but you've put up with it for 10 years, so some of this is on you. So you've got to call this. And, um, I, I recommend you try another round, uh, but I would put very clear expectations in that round of counseling that these things have to occur or I'm not staying. And if you do stay after that, now it's your fault.

I think that's what she's struggling with.

Yeah, you keep staying and nothing changes. And now it's your fault. So if you want to make one more pass at it, you can. And I recommend you try it, but with some very clear objectives. I think we kind of went in sideways and said, this just needs to get better as some kind of general statement instead of saying, here's specific things that must change and here's specific things that can never happen anymore. And those are my conditions. Hey guys, Dave Ramsey here. Every day on this show, we help people work through real 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 ramsaysolutions.com and try Ask Ramsey today. That's RamseySolutions.com. Scripture of the day is Philippians 4:8. Finally, brothers and sisters, whatever is true, whatever is noble, whatever is right, whatever is pure, whatever is lovely, whatever is admirable. If anything is excellent or praiseworthy, think about such things.

Charles Schultz says life is like a 10-speed bike. Most of us have gears we never use.

Interesting.

This is true. Faith is in Dayton, Ohio. Hi Faith, how are you?

Hi, how are you?

Better than I deserve. What's up?

So, um, I'm a single mom I'm 30 years old and I kind of just started, you know, kind of paying attention to my finances. So I'm a little late to the game, but, um, I'm on Baby Step number 2 and I'm trying to pay off my debt.

Good.

At the same time, I want to make sure that I'm saving for my son for his future. So in my budget, I have been putting a little bit aside, but not much. I've just been putting it into a savings account. And I've heard you talk about like 529 accounts and different ways to save. I just didn't know if that kind of account is useful for someone who can't put like that much into it every month.

Probably not, but I wouldn't be putting anything aside for your son right now. You are investing for your son by getting yourself squared away, because as you get yourself squared away and out of debt and build wealth, it's going to benefit Yeah, I'm just, I'm the, my biggest worry.

I'm feeling so much anxiety because I feel like my student loans are so big.

Like how many, how much do you owe on your student loans?

I owe, um, $54,000.

Yeah.

Cool.

What do you make a year?

I make $58,000.

Doing what?

Um, I work for a construction, I'm an admin, like kind of assistant here. Um, but I just got promoted to salary, so I'm making a little bit more.

And you're 30 years old and your baby's home. How old?

He's 4 years old.

Cool.

Cool. And where's daddy?

Um, he's, I mean, um, he's, he's in town and stuff and he does give me some child support. Um, every month it's like, uh, $400. Um, but I do use a lot of that to like pay for childcare and that kind of thing.

That's what it's for.

Sure.

And you have $58,000 student loans. What other debts do do you have?

Um, I have, uh, $15,000 left on my car, and then I just— I have a personal loan, uh, for $5,000 that I used to pay for a little bit for a lawyer and to like clear off a couple credit cards that I had when we were together.

Have you cut up all the credit cards?

Yeah, so the credit cards are gone, and I've been DoorDashing, um, every other weekend when I don't have my son, and I've been putting everything I make onto that— onto that personal loan right now.

Great. Very good.

You're doing the right thing.

And anything else you can find in that budget, you throw it on that too and get it cleared off. Then you get the car cleared off, and then we go after the student loans. So you're right, with DoorDash and a 4-year-old and 30 years old and making $58,000, with what you owe, it's gonna be a little while. You're gonna take a while, but it's not gonna take 10 years. It's just not gonna happen in 2 years.

Right.

But you will be amazed when you knock off the car and the personal loan how much that frees up your budget to attack this student loan. And then you've probably got another 2 or 3 years at that point.

Yeah, when you knock out the car, that's going to give you a new lease on life. You're going to feel so good having that money back in your pocket every time you get in that car, and that's gonna almost act like a reset for you mentally when you start attacking the student loans.

But let's reset for a second on your 4-year-old son, okay? Let me tell you about him. He has a mom who is a warrior princess who knows how to fight and scrape and cause things to happen. That's going to help more than $10 a month being stuck in a savings account. He's watching you live your life well, and then as he watches you scrap and claw to get out of debt, he's gonna learn to stay out of debt when he's older because he'll remember what we went through. My mom was a single mom and it was tough, and that doesn't kill the kid, it makes him awesome. So he is really blessed.

I don't know why it makes me feel like— it makes me feel so guilty that I'm not like, you know, able to save like more for him when he's—

well, the best thing you can do for him is not be a problem later. Yeah, truly, by cleaning this up and becoming a millionaire. And you actually can do that, believe it or not. Let's pretend that it's 5 5 hard years from today, and pull up the calculator, and so 35 to 65, and we save 15% of $65,000. Okay, 5 hard years from today, you're debt-free and you have an emergency fund. Okay, student loans and everything, and that's gonna be hard. That's like really watching every penny, DoorDashing, everything you can you can do. Hard 5 years, but you're tough. You can do this.

5 years?

Yeah. And then at 35 years old, you start investing 15% of your income because you have no payments.

How much is 15%?

15% of $60,000 would be $9,000 a year. Okay. And so that's gonna— 500 plus 750 month. Okay. Okay, and do that from 35 to 65 in a mutual fund. We're gonna put it in our calculator right now to see how rich you're gonna be. Okay, Faith, that's $2.3 million when you're 65. So if you invest 15% of your income and you make $60,000 a year and you never get a raise for 30 years, Highly unlikely. From age 35 to age 65, and you're able to invest that because you cleared off this debt in the coming 5 years, and you spent 5 more years of hell. The kid is 9 years old when you are debt-free and begin investing. All right, and then when you are at his wedding, you will be a millionaire.

Yes.

Okay, that's where you're headed. That's where you're headed. And that's the best gift you can give him. He's not gonna be— he's, you know, harmed if you don't put a dime in savings for him today, because by taking care of you, you're setting yourself up to be able to help him in any way you want to.

And by the way, you know, we've been teaching this. I know, Dave, you've been teaching this long enough that we have people who come and their parents did FPU and their parents walked the baby steps. And now the children are standing on stage and the children are part of that legacy. And they never come back and say, oh, it was so hard because my parents walked the baby steps and they paid off debt when I was a kid.

Mom and Dad never saved anything for me when I was 4. They don't say that.

Say, I learned how to handle money from a young age. I never got into debt. And then when I married my spouse, we immediately attacked our house and we became millionaires.

You know, my mom taught me how to do hard work. My mom taught me what resilience looks like because she lived it. These are the gifts you're giving him. He's going to have a great life because of you. And so quit putting money in savings for him out of some kind of false guilt that you're not taking care of him. My point is you're taking care of him beautifully, but you got to follow through on all this. It's not going to magically happen. There's no genie in a bottle that does it. It's not going to get easy. It's not going to be where there's no trouble. The transmission's still going to go out, the tire's still going to be low, the, uh, you know, somebody's still going to steal something from you. Stuff's going to happen through your life. You can count on all that still occurring. But the point is, you got to have a target and a plan, and when you're working that, you're gonna get to a place that you will have taken care of him better by taking care of you than by putting $10 a month aside out of some kind of misdirected guilt, like you've done something wrong that you should be ashamed of.

You're a single mom with a 4-year-old and you're 30. You have nothing to be ashamed of. Now go get you some, girl. Girl, this is your time. It's your time. Go make this happen. And we're gonna set you up with everything, alright? We're gonna put you into Financial Peace University. We're gonna put you into our EveryDollar app. And we're gonna pay for all of it and give it to you as a gift because we think you're a hero. That puts this hour of The Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.