Transcript of Financial Momentum Starts With a Shift in Perspective New

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Brought to you by the EveryDollar app. Start budgeting for free today. Normal is broken. Common sense is weird, so we're here to help you transform your life. From the Ramsey Network and the Fairwinds Credit Union studio, this is the Ramsey Show. George Campbell, number one bestselling author, Ramsey personality, co-host of Smart Money Happy Hour here on the Ramsey Networks, is my co-host today. The phone number is 888-825-5225. You jump in, we'll talk about your life and your money. Betty is in Washington, D.C. Hi Betty, how are you?

I'm hanging in there. I can't believe I'm actually talking to you.

Well, I'm honored. How can you— how can we help you today?

Uh, well, I'm gonna apologize up front in case I cry because this has been a really stressful situation. Um, but long story short, my husband and I have a house that we cannot afford. Um, our mortgage payment is over $6,000 a month and it's been listed for over 2 months now and the house is just not selling. Um, and we got, we got a report back from our Ramsey Trusted Real Estate Agents last night. Um, that's not very good. And so we're looking at either having to drop the price again and try to find $30,000 while we're in Baby Step 2 to be able to pay to get out of this house that we can't afford. Um, and the other options that they gave us really were to potentially look at a short sale or a deed in lieu or something like that. And those options aren't on the table because my husband will lose his job if we go that route tonight. I don't know what to do.

Okay. So what is your household income?

My husband is currently working between 24 and 30 hours of overtime each week to be able to bring in $12,000 a month take-home. Okay.

All right. And your payment is $6,000. And how much debt have you got in Baby Step 2?

Well, we started out with a lot more than this in July of last year, but we were able to get cruising through through December. And now we just have $45,000 left on 2 personal loans.

So how much have you paid off before that, from when you started in June down to $45,000?

What did it start at? Uh, we— I think the balance was a little over $70,000.

Okay, so how did you get that $30,000 given that this house payment's so high? How did you manage to pull that off? That's impressive.

My husband did receive a bonus at the end of last year and we used all of that. And I, I was working at the time when we first got it, got started with our debt snowball. But over the course of last year, I lost all 3 of my part-time jobs and I have not been able to find another one. And we have a 7-month-old, so I was pregnant during all of that chaos as well. And, um, Nope. No one will hire, will hire me apparently. Yeah.

Um, what, what is your career field?

Um, I am primarily a stay-at-home mom. I homeschool.

So I know, I mean the jobs, the jobs that you've been getting, what were you doing? I mean, what is your, if you could go get a dream job right now making $6,000 a month, what would it be?

I worked remotely, um, doing data entry for the past 10 years.

Making, making what? What were you making?

Um, I was making about $2,000 a month.

Okay. All right. Good.

All right. Okay. Um, well, um, and, and the house you, you owe so much on it. That's what the $30,000 is, is that you're afraid you'll have to sell it for less than, or you'll net less than you owe, right?

Correct, sir.

Okay. All right. What did the report say?

You said you got a bad report from the real estate pro.

Um, yeah, just that if we didn't lower the price, they thought that we had less than a 10% success, like likely success rate of being able to sell it. Um, we've been in the house for just under 2 years. We originally purchased it. Um, it was supposed to be with my parents who were supposed to split it. And, um, as soon as we closed, before the first mortgage payment came, my dad went back on his word and said he had never agreed to split it 50%. With us, um, which was what we were all under the impression would happen. And then since—

Is he on the mortgage?

No, he is not. And not on the ownership either.

Okay. No. Okay. All right. Um, well, here's the thing. The great news is, is that with bonuses and finding extra work, both of which could be easily in your future, you've been able to hang on and reduce debt by $30,000. That's fairly impressive, really. And so if we can add the bonuses and the the income from you, and I think you can, back to the equation, even if you stop your debt snowball temporarily and start piling up cash to write a check and get out of this house, you can make that. That's gonna work. You're gonna be able to do that. You're not trapped. You're just in a really sucky temporary situation. But you know, 10 years from now, this will be in the rearview mirror and you'll be going, "Oh, that's a dumb thing I did. My dad lied and I wouldn't have done it without that. And dadgum, what a horrible mess we got in just about the time the baby baby was born. By the time Rachel was that age, by the way, I filed bankruptcy, so there you go. I mean, and I'm okay now, you know? So you're gonna be okay is my point.

But right now, the snapshot that we take's got tears in it, and that's valid, okay? The snapshot is, "Oh, this, I can't breathe." But the film strip says there's an end to the movie that's not the end of the world. The rainbow comes out. So yeah, so I would say stop your debt snowball temporarily. And just start piling up cash. Because as soon as you start seeing options, your anxiety level is going to go down. And yeah, he picks up all the hours he can pick up, and you pick up all the hours you can pick up. And yes, you'll find something. You've just gone through a dry spot here, and nobody's hiring people who have 7-month-olds. Not true. You're in Washington, D.C. You'll find something. I mean, is it easy? No. Job market's kind of slow right now. But, uh, but you could— I think you can do it. Even if you don't get any income coming in, you can make the payment and not go into foreclosure, short sale, or anything else for a period of time until you get rid of it. And while— pile up $30,000 and get ready to do what the real estate agent said.

Let's write a check and get rid of this hellhole. It's driving us nuts, right?

Have you guys actually done a budget to see where this where that other $6,000 is going in your take-home pay? 'Cause you might find some $1,000 or $2,000 right there.

Yeah, we have. We've actually been pretty locked in since July, which I'm thankful for. But generally speaking, with the work that we had to do to prepare the house for sale and everything, I think we're able to put aside about $1,000 to $1,200 a month right now to do that.

And then you add your income that you're going to get, and you add his bonus, and you start selling stuff because the house is going to get sold anyways.

Might as well clear some rooms out, make some money off Facebook Marketplace, and all that can help if you get creative.

And again, take the pressure off yourself to get rid of the $45,000, unless it's a $45,000 car. If it is, sell it and be done with it. But, um, but I mean, personal loans, the If you're, you know, but I think that the proper perspective on this will give you a lot of, give you some of your fight back and get the tears back, push the tears back from the edge a little bit and go, oh yeah, we can do this. This is actually doable. I think you can, but I think it's going to be, I think the next 12 months are not going to be fun. And you get rid of the house, you've got $30,000, and then you go knock out the 45 and You know, you learn a whole bunch of lessons in this short period of time about the time the baby was born. And you'll look back on that 20 years later and baby's 27 and you'll go, "Man, when you were born, our life sucked." And the baby will go, "I don't remember that." Yeah. "I don't remember that." "What's for dinner?" "I don't remember that." Statistics show that half of Americans don't have enough life insurance, or they don't have any at all.

I don't understand this, John. Why don't people want to take care of their family? They think they're going to die or something? Well, I used to be one of those guys.

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

That's a gut punch. And oh, you're telling me.

And for decades, Dave, I've sat across people who've lost a spouse. They've lost somebody important to them. Me too. They don't know what to do next. Me too.

I mean, you're going to have a crisis here and, you know, you got two options while you're sitting and talking to a young widow. She's concerned about how she's going to invest all this money properly and not mess this up, or she's concerned how she's going to eat tomorrow. That's exactly the two options. And take care of your dadgum family.

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Good, how can we help? I have a question about boundaries with parents and money. So, um, gotta have a family, you know, member. My mom and dad, they want to gift us a vehicle. Um, they had a track— or at least my dad's had a track record of just using parent guilt throughout my life and It's really created just some tension in our marriage. My dad likes to have control over our life when he doesn't have any really means to it. You know, we have— I'm a breadwinner and my wife stays home, takes care of the kids. We're active in a church, we're active, um, and we're states away, so it's really nice to just have that distance. But we are trying to respectfully decline even though they're very pushy on trying to give us this vehicle. When in fact, you know, they want us to be, you know, going— yeah. So just trying to find a way to respectfully do that.

So it sounds like you, over a period of time, have established some boundaries because of this pattern, and now they're like, "Oh, I think I'm going to try it again." Pretty much, yeah. And I mean, there's not any current They don't currently have any hooks in you, do they? No. Okay. My brother though. Well, not you, but I'm talking about you. Okay. Yes. No, no hooks. Yeah. And so they're like, okay, well, we ain't getting hooks in him, so let's set one, right? Yeah. So I mean, just don't be a bass. Don't be a bass. Yeah. Don't bite, right? Don't bite on the hook, man.

It's just, I mean, so yeah, when you say they keep pushing, are they like calling you saying, hey, we really want to give you this car?

What do we got to do? It— I mean, yeah, I mean, they're— it's like texting, it's, you know, and then you get on the phone and it's— can you just say—

so here, I don't want to talk about this. Here's the thing: when someone's doing stuff like this, the fewer words and the shorter the conversation you have, the better for everyone, them and you. Because the longer you stay in a conversation, the more likely you are to revisit all the past sins, and that doesn't do anyone any good because they're not going to change. Yes. And so, you know, no is a complete sentence, and keep your sentence pretty close to that. Hey Dad, love you, man. Thank you for the offer. Not going to be able to do that this time. We've got other plans.

Thanks. That's it. And we love— we, I mean, we love the offer. We have a beater car. We would—

no, no, no, no, no, no, no. You don't love the offer. You spent the whole first half of the call telling me you didn't love the offer. You I'd like a new car, but the cost is too high on this one. Yes.

And you'll open the door to him going, ooh, it looks like there's a chance.

I'd like to have a new car too, but I don't want a $1,200 payment, or I don't want my dad breathing down my neck again because I just got rid of him the other day.

You know what's inside that Trojan horse, and so you just got to keep it at bay. Don't let the Trojan horse in.

So even though you do need a car, then you just go, hey, we got all the plans, and We appreciate it. Thank you. Not going to work right now. Yeah, I don't have to go into a long explanation. And the more you feel tempted to explain yourself, the more you're going to cause issues that are not helpful. Yeah, I appreciate it.

Yeah, this is— it's definitely helpful. Know the whole sentence. Um, yeah, and we're driving a beater. We're on— we went through Yells course at our church and it's been very helpful.

I'm working a plan. I've got a plan, Dad. I'm going to get me a car. And I know you noticed our old car, but hey, thank you. I appreciate your offer. It's very kind of you, but we've got it figured out. And you guys find somebody that needs that car over there on that end of the world. Let's find a single mom and help her out with it, Dad. Thank you. Thanks for the offer though. End. Well, what about— what about— no, Dad, I just told you we're not going to do it. Okay. And it's just, you know, we don't have to be mean, but just real low volume, slow sentences and short, concise conversations. And all of that's very helpful to bring this to a close. And it may take 2 or 3 times because this guy— these people are not used to hearing no.

Yeah.

No one tells them no.

Yeah. And so—

but I'm telling you, you're going to feel so much better when you get off that text or off that phone and your wife is going to look at you with a beautiful smile and go, "I married a man.

Look at that. Look at the backbone on that guy." It really is.

I mean, that's what's going to happen. And if you continue to struggle with it, I always recommend Dr. Henry Cloud's book Boundaries. I think he sold 20 million, and I told him the other day, I think I sold 2 million of them for him because I just love that book. I love him. He's a good friend, but also I love the book because most every family family struggles with some kind of boundary-violating person at some time. Sometimes they grow out of it, or sometimes they finally get the message, or whatever. But you just have to go— and there's a universal rule: people who violate boundaries don't like you setting them. Mm.

That's when they throw the fists up and go, "It's time for a fight." Always.

100% of the time, expect pushback. 'Cause their goal is to get through the fence, knock the fence down, act like the fence is not there. And then you put the fence up and it pisses them off. Wait, there's a fence. I don't like fences. And so 100% of people who don't like boundaries don't like you setting boundaries. So when you do, and you know, you just go, yeah, but look, there's a fence.

I just had Jefferson Fisher on my show this morning, and he was talking about this, of if you start to sort of ramble and talk more and more and more, it just gives them more ammo. It gives them more leverage. And so he said short sentences.

It puts oxygen in the fire. Yeah, he gives the same advice.

Firm, short sentences, frame the conversation.

And he's smarter about that stuff than I am. He's very tactful. I might have actually stolen it from him. He's a lot nicer than I am.

That's true. For sure. He's a gentleman. He's Mr. Rogers compared to you.

But yeah. But I'm just like, no, piss off.

You know, that works too, though. In Dave's defense, that is a strategy that can work. It does work.

It's just a little more brutal. All right, Sam's in Bend, Oregon.

Hey, Sam, what's up, man? Hey guys, I'm a big fan. I've been working your guys' plan for several years. I absolutely follow everyone everywhere I can. Well, thank you. Awesome. I'm, uh, I'm going to try and keep it short and sweet and not get too emotional. Um, I'm at the tail end of a divorce where I'll be able to, um, have access to funds and properly pay for debts and everything. And I'm just trying to figure out what's the best way to go about that with, um, some of the lump sums that I'm going to be receiving, uh, when the divorce is finalized.

How long were you married?

Um, last Friday was our anniversary, and it was— we're still legally married, but, um, 16 years.

Wow, I'm sorry. How many kids you got? 3 boys. How old are they?

Uh, 15, 10, and 8.

Okay, all right. Well, rule number 1: take care of them and your broken heart. "Oh, we are.

We are." That's rule number one.

That's the most important thing in this. And then pretty soon you'll be able to laugh about this. I talked to a lady the other day that got divorced. She said, "You know, I got out of debt. I divorced him." So there's good that can come of all this. This much manure, you can grow something, right? So, oh, I'm so sorry. What a horrible thing to go through. All right, and so I'm still gonna take the— I'm gonna make sure the household is taken care of. Food, shelter, clothing, transportation, and utilities. And then lump sums, if they're in retirement accounts and need to stay in retirement accounts, I'm just going to do rollovers. And other lump sums, we're going to walk the Baby Steps. You got debt you're going to get out of this?

Well, so I was— that was my kind of on-the-fence part with the retirement, is I'm still young. I'm 38. So I have time. I have a full-time job.

Oh, not cash out the retirement. No, I would not pay the penalties. You'll pay penalties on it, and I wouldn't do that. So same as if you weren't getting a divorce.

So if any liquid cash, just apply that to your next smallest debt, make minimum payments on the rest, and just debt snowball it.

And if you're getting a big chunk of his 401 or something, then go see a SmartVestor Pro and just do a rollover into an IRA into some good mutual funds.

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Attorney advertising. Results may vary and no specific outcome is guaranteed. Well, we wish every call could get through on this show, but I'm afraid right now the lines are jammed. And as soon as one of those people are gone, there'll be 4 more. And we hope you can get through. The phone number if you want to get in the lottery is 888-825-5225. But if you can't, I've got something that might actually even be better. It's called Ask Ramsey. It's our free AI tool that's built and trained only on Ramsey Answers. So you'll get an answer the same way we would answer it right here on the show. You can ask your question today for free at RamseySolutions.com. Click the link in the description if you're listening on podcast or YouTube. And in case you didn't know, and I didn't because I'm a boomer, how AI works. I did know that AI is artificial. It's not real. That's a good start. Artificial intelligence. So it doesn't manifest its own intelligence. It only can speak from the database that has been fed to it. And so that's the problem, for instance, with Google using AI to answer your questions, because they're so stupid that they're using Reddit as part of their database to answer the question.

And Reddit, if you look it up in the Greek, means not true. So people's opinion, it's like the TikTok in written form, you know, stupid stuff, but that's being entered in. So we don't have any stupid stuff in our Ask Ramsey AI because the only thing we put in there was 3 years of this show, all the Ramsey personalities answering your questions, and all the books we've written and all the articles that we've written. And so they're all our opinion, how to work our system, how to work the Baby Steps. That's the only data that's in there, so that's the only possible answer that's gonna come out. We've almost got it as snarky as I am. It's about at George level of snark, not quite at Dave level.

It's not yelling at you quite yet.

It's just snarky. It's kind of funny snarky like George, not mean and snarky like me.

It is conversational though, and you can have a conversation with it. So there's a back and forth, which is great. You can enter your own information.

I'm really proud of our tech team.

I mean, it's stinking good. Feedback's been amazing.

100% free. AskRamsey@RamseySolutions.com. You can get the answer as if you called in on the show. Ash is with us in New York City. Hi, Ash. How are you?

Hey Dave, thanks for taking my call. How are you?

Better than I deserve. How can we help?

Awesome. So, um, I'm 26 and I make about $100,000 a year, uh, under $100,000 a year in my salary. And I had an education loan worth $65,000. My mom originally promised that she would pay for my education, so I went through school expecting that support. But now I'm left with the student debt and she hasn't followed through yet. Uh, I'm sort of struggling with how to handle both the financial side and the emotional side of it. I want to move forward responsibly, but I also feel hurt and honestly misled. So what would you do in my situation? Do you have any advice for me?

Well, I mean, if you sat down with her over a cup of coffee and said, um, I feel hurt and misled.

What would she say? She gets really emotional and then she says, oh, I did so much for you and, you know, this small thing is bothering you. You make so much money. I don't think a $1,000 installment should hurt you that much. And it's— we just usually end up getting in an argument. And then I—

okay, so this is settled then. This is settled. She's not going to pay it. And she doesn't care if it hurts your feelings.

That's the fact. No, that's the fact.

Those are facts. Those are data points. She doesn't care if it hurts your feelings. She's not gonna pay it. Now then, you've got to decide what you're going to do, okay? I'm not going to give her access to my feelings anymore, so I'm not going to talk about it with her ever again. She's not going to pay it. You are.

Okay, now the next step is easy. Let's attack this debt with our great $100,000 income. How fast could you pay it off on your own?

Well, so I've got about $20,000 in savings, $20,000 invested. Good. Um, I live in New York, so I mean, my monthly expenditure is about $4,000. Yeah, great.

So you pay off the $40,000 and you got $60,000 to go, and you just lean in and knock it out. And you know that your mom is your mom, so we can't be too mad at her, but we can be mad enough at her to go, she's not reliable, and if she promises me something ever again, I'm gonna laugh and wink and not believe it. Because she doesn't care if it hurts your feelings, right?

And then I had this conversation that if, if she wanted me to pay it off, and she said, just send me— just pay it off for this year, just give me $10,000, and then you won't have to worry about it from like Jan 2027. So now I—

she's not gonna pay that. You're wishing for something that's not going to happen. Okay? Dogs can't climb trees. She's a dog. She ain't gonna climb a tree, dude. Squirrels climb trees. Okay? She can't climb a tree. She's not gonna do it. And every— every answer she gives you is telling you she's not going to do it and that it's on you. And so the faster you just go, you know, "I hate that I have to say this about my mother, but she's an unreliable person and is not concerned about the fact that she lied to me. And that just breaks my heart, and I have a bill to pay now." And you go pay it as fast as you can, Ash. And the sooner you get it paid off, and then please don't ever believe anything else she says. So any plan she comes to you with, is false.

The plan should have a check attached to it for $65,000 if I'm gonna believe her ever again. Yeah. And it can't bounce. So that's the only way you go, "Okay, we're gonna rebuild trust here." Yeah, but she's not gonna do it.

No. I mean, there's no chance. She probably doesn't have it either, by the way.

It was probably wishful thinking, and it sounded like a nice thing to say, "I'll cover your education when—" you know.

"I believe in you, Ash. I got your back." Yeah. But yeah, I mean, this happens a lot. We hear this way too often of parents that don't want to follow through on the promise of what they were going to do with their kids' education costs. And so it's yet one more reason for those of you out there that are considering taking out a student loan based on the promise of a parent to pay it, that would be a dumb idea. It puts a strain on the relationship even if they do follow through and pay it. Chris is in Fort Collins, Colorado. Hi Chris, how are you?

I'm fine, thank you. Um, my question to you is, uh, I lent my mom and dad $40,000 20 years ago. They put my name on their house via a quitclaim in 2012, and they— and I haven't lived in their house for 40 years. Well, they both passed. They have a will that says to pay me $75,000 off the top and split the rest between myself and my 3 other siblings. What kind of a tax mess am I in? Hmm.

Are you the only one on the deed, or were they on the deed with you after they quitclaimed you?

They were on the deed with me after they quitclaimed.

Oh, okay. So you're going to need professional tax advice, but I'll take a stab at it. Okay, okay. Here's what would happen if they had taken themselves off completely and it was just you. When you sell the house, you're going to be taxed on every dollar above what they paid for the house, which was nothing, probably.

Yeah, it was—

if we paid $13,000 and now the house is worth $500,000.

Yeah, so you'd have tax— you'd have capital gains tax on $500,000 if the house was in your name. Mhm. So you may have tax on half of that since the house is in their name and your name. You probably do. You probably have tax on that. And so what I would do is require that that tax be paid before— and my $75,000 be repaid before we divvy up any proceeds. And so you need to get tax advice, figure out what your tax bill is going to be, and I would add that that and make the estate pay that because you got screwed. If you run a business, you already know this: bad information leads to bad decisions. And right now, AI is everywhere, but AI is only as good as the data behind it. The best AI is built on the best data. That's why I recommend NetSuite. NetSuite is the number one AI cloud ERP, and more than 43,000 businesses run on it, including us here at Ramsey Solutions. Their AI isn't bolted on, it's built in, and it connects everything that runs your business— accounting, inventory, customer data, all in one place. Because when your numbers are connected, AI actually works like it's supposed to.

NetSuite's AI helps flag cash flow problems, spot inventory issues, close your books faster, and cut down on manual reporting. If your revenue is at least 7 figures, go to netsuite.com/ramsey for a free product tour. That's netsuite.com/ramsey. Recapping, George, um, lesson for the day for some of you out there: do not gift capital assets like stocks or real estate to your children while you're alive, except in rare circumstances. Here's why, okay? Our last caller, Chris, mom and dad quitclaimed the house over to— thinking they were doing her a favor, they were trying to do something nice, and they were ignorant of tax law. So here's how tax law works. If Chris— if again, in Chris's situation, both names were on it, so it's done there. But if it was just her name, So if you gift, if mom and dad gifted that property to her, her basis for calculating capital gains is their basis. What they paid for it. Which was $13,000 in this case. And the house sold for $513,000. Then they got $500,000 that's taxable. That's a gain in the IRS's eyes. Yeah, it's gonna be a 15% gain, or capital gains tax. $75,000.

So it's a $75,000 error. In that case. The reason it's an error is if her name was not on the deed and they give it to her by will after they die, her basis is the market value of the house at the time they die. So her basis would be $513,000 and she sells it within 6 months of death, it's presumed to have been market value and it's presumed that there is zero no tax.

Which just saved her $75,000 by doing it that way.

It's called a stepped-up basis. So the basis goes to market value if willed to you. So if Grandpa has stock, and he's got $2 million worth of Exxon stock, but he paid $10 for it, and he gives it to his grandchild before dying, they have capital gains on $2 million. He just passed the hot potato right over. If he waits until he dies, 10 seconds after he's dead, that stock basis for resale is the market value at the time, $2 million. Junior could sell every bit of it and have zero tax. This is huge, y'all. Quit doing crap like this without seeking tax advice and knowing what you're doing. And it's like, "Well, I don't want the government to get—" You just made sure the government's gonna get it, dumb butt. It's exactly what you did. And you can't just practice law and tax law out of your ear and think you're gonna get anything except screwed up. So just make one phone call to a simple— to a Ramsey Trusted Tax Person and they'll tell you, "Don't transfer this." Period. Now again, there might be a situation where you can use some of your gift tax exemption, or you can use some of your estate tax exemption and qualify it under unified estate tax credit, and you have to fill out some forms and you can make the move and not get into the taxes, but you still could set up a problem with income tax on the other end.

And so you really need to think this stuff through. It's not as simple as, "Well, I need to protect little Chris. She gave us that $40,000 and her brother and sisters ain't right, so I'm gonna put the house in her name, make sure it's okay. Boom! Without checking. That's exactly what those sweet people did, and they screwed this up royally. And they meant well. I guarantee you they're not bad people. They didn't go, hey, let's screw Chris over.

That wasn't what they meant to do. Sometimes good intentions are the most expensive mistake you can make.

Yeah, just don't be doing this stuff, people. All right, James is with us. James is in Lexington, Kentucky. Hi, James, how are you? How are you? I'm good. How you doing? Better than I deserve. What's up?

Hey man, you know, I'm really interested in how can I regain control of my finances. I just graduated college. You know, I have a good job, but I feel like I'm losing control.

Cool. What's the good job? What are you making?

$73,000 base salary, and then with bonus and everything, I'll be— should be around $80,000.

Good for you. Cool. Are you married? I am.

Well, fiancée. And then I have a son with my previous relationship, and then we have 2 kids, my fiancée and I. Oh, when you getting married? Um, you know, whenever she wants to. We haven't set a date yet.

Saturday works for me. Dave is free.

I'll send you the invite. Okay.

And the, um, all right, so what does she make?

So she stays at home. That is the— that is what's best for us.

Yes, Saturday works for me. All right, and she's in extreme risk right now. I don't like the position she's in. As her friend, I'm telling her to marry you now. Okay. Okay. Anyway, now we got that behind us. So you got how much debt with your $80,000 job and 3 kids and fiancée getting ready to be wife?

So my student loans, that is the largest, $44,000. I've had— yep, I've used that to supplement income all throughout my time at school. My car, made a dumb purchase when my son was born. I'm not— I still owe about $20,000 on there. And then my credit cards around $12,000, and then she has around $12,000 as well, $12,000 on credit cards as well. Gotcha.

Okay, $44,000 for— you got $88,000, you make $80,000, it's gonna take you 2.5 years of living on beans and rice, rice and beans, and you can pay all this off. Okay. And that's if nobody adds any income to the equation. You ought to try to talk about somebody adding some income to this equation if you can. So, and I am not being just smart aleck only. There's all kinds of data points that says being married is going to cause you to succeed financially. And so I want, I want good things for y'all. I love y'all. I want you to win. Okay. So then we're going to list our debts smallest to largest. We're going to cut up the credit cards tonight. We're gonna get on an EveryDollar budget tonight. George and I will give you a premium version and let you get started. The two of you sit down together, and since you're gonna be married on Saturday, you can go ahead and start doing it tonight like you were married. And you sit down with everything and you're looking at it together and saying, "Okay, we have this baby and I've got these kids and we've got this stuff we've gotta take care of and we got a house and we're gonna plow through these credit cards, get rid of them.

Then we're gonna knock that car out and then we're gonna knock that student loan out, meanwhile paying minimum payments commitments on everything but the little one. Attack the little one. Everything but the little one. Attack the little one. Everything but the little one. And attack the little one with a vengeance. You're not going to see the inside of a restaurant unless you're working there as your extra job. And don't talk to me about a vacation. You are seriously broke. Broke people don't go on vacation. And get this mess cleaned up in the next 2 years. And if you get— you get kind of— you kind of hear that anger in my voice, like, ah, right? The coach at halftime. Mm-hmm. That's what I want inside of y'all. Okay, I'm trying to transfer that to you. And you get that swagger going and you start punching these credit cards out, knocking them in the nose, going, "You people are screwing my family's future. I hate you Citibank. I hate you Fifth Third. Get out of my life." Then when you kind of get that idea going, then you have a villain in the story and you are the hero.

You get to go win and it changes everything. And that's what I want them to do, George.

Yeah, what is your intensity level right now, James? 1 out of 10, would you say, to get out of this debt? 20.

You know, last week I sat down and I spent hours on an Excel chart because I hate where budgeting apps charge you a subscription fee. I think that's one of the biggest scams in this industry right now, man. It's mind-blowing. You know, you get on the App Store, look up budgeting, in-app purchases, in-app purchases, you know what I mean?

Yeah, we don't have any in-app purchases, but we do charge your subscription fee after we give you this free portion. So we'll give it to you for free for a while so you don't have to worry about it, but you later on you'll have to pay Okay, I won't hold back on that, but we have to pay— we have to pay the guys that build the app and run the thing.

So if it gets you out of $88,000 in debt, I'd say it was worth the purchase. But if you don't do anything with it, I agree, it was a waste of your money. So I hope it helps you, but I just wanted to see how intense you were and even think about selling this car if it's worth more than $20,000. Yeah, I'm fine with that payment.

I think you're gonna do it. I'm proud of you, man. Go do it. You can have a great life. You graduate, you got babies, you got a new wife. Life's gonna be great, man.

But for now, you got to keep living like a broke college kid, which is gonna be nice. Not as fun. I got a new salary, I'm a big— I gotta go buy some things. Nope, you got to pay off some debt. You'll get there.

Absolutely, absolutely. So why do people pay to join a gym if they can lift? It's a scam if they can lift weights at home.

Hmm, the environment.

Because they don't lift weights at home, that's why.

And there's some skin in the game.

If I paid for something, all you do is stub your toe on That's all they're for, is stub your toe.

I want to see a study. If it was a free gym membership versus a paid gym membership, who's showing up at each gym? I'd be interested to see.

Inquiring minds want to know.

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Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. I'm Dave Ramsey, your host. Thanks for joining us. George Campbell, Ramsey personality, number one bestselling author, is my co-host today. Janessa is with us in Salt Lake City.

Hi, Janessa, how are you? I am so good.

How are you? Better than I deserve.

What's up? Oh, wonderful. Um, so me and my husband, we are struggling with a decision to make. We have decided to kind of get our butts in gear on our student loans, but in the past year we have promised our girls season passes to a local amusement park, and we are trying to decide if we break our promise to our young kids and try to teach them a financial lesson, or we delay paying off our debt about 2 to 3 weeks and keep our promise.

Okay, well, if you take— sometimes if you take an ethics thing to an extreme, it'll give you the answer. Okay, so you have information that is available to you today that was not available to you today, or at least your viewpoint on the student loans was not the same when you made the promise. Things have changed. Yes. So if we took it to an extreme and said, hey, mom's got cancer, and so we're not going to get the theme park things this year because we're going to pay the doctor bills— that's it. That's not— that didn't happen. and I'm not speaking that into existence, okay? But if it was something like that, you wouldn't have an ethics problem because it's new information. Correct. Yes. And so I think the— you know, I would sit down with them and say, "Kids, at the time, we were trying to ignore these." How old are the kids?

Um, we've got a 6-year-old, 7-year-old, 9-year-old, and a 10-year-old.

Well, they're not going to remember whatever it is much past Friday anyway. But, you know, what I would do is say, "At the time we sat down and talked about this, we thought we were able to do it. And now we've looked at the details of our debt, and I know you don't understand that necessarily, but we are— we're not in trouble. We're not going to be hungry. We're not going to lose our home. But we do have to clean up this debt, and we're going to have to get serious about it. And that means this year," we're not going to be able to do the season passes unless we come up with some other way to pay for them. And you might create some— how expensive are they?

Um, all in all, it'd be about $1,300.

Yeah, okay, all together. And it might be that if we come up with some kind of fun kid/parent participation adventure that is the the GoFundMe of lemonade stands or something. And, you know, teach them a way— we got to go find this money if we're gonna do this, kids. And so we're gonna have an adventure by doing these 3 things, and we're gonna cut grass, or we're gonna rake leaves, or we're gonna do this together and come up with the $1,300 that way, because we can't just go buy it after what we've discovered about our debts, and we've got to pay it. And so that's a third option. One option is buy it when you can't afford it. One is just look at them and go, "No, we can't do it. New information." Third option is, is there some kind of an adventure that we can turn this into that says, okay, the way, you know, what do we do when we're broke? We go to work. We find something. Let's find something. Let's all get in here. And if y'all want to do that, we'll be able to do it. If you don't want to do that, that's okay.

It'll just be next year at least because we've got to get this student loans knocked out. Okay. When I was 11, my parents sold our boat because they had a bad year in the real estate business.

And you remember it?

I'm still in counseling.

But now Dave has multiple boats, so he's recovered.

I have, I have recovered. I have lots of boats now. His boat has its own boat.

It's very impressive. So yeah, this is a— it's just delaying it. It's not a no, it's not crushing their dreams, it's just a not now. And so when are you gonna be dead Free in a year.

Okay, great.

So will the theme park still be there in a year?

I sure hope so.

Can we do something that's an alternative that maybe is free or super low cost that also is fun? We've been talking about—

yeah, our local pool has a swim pass for the summer we were thinking of doing instead.

There you go. There you go.

That's good idea. So there's still something fun for them to look forward to, and their other thing is just delayed by a little bit. I like this plan.

Our neighbors had a boat.

That's what we did. Find a friend with a boat. You just saved yourself a lot of emotional hassle and finance.

Boats and pickups— find someone else that has it and use theirs. That's what I do.

I borrow Dave's boats. Yeah, I wouldn't know how to drive it, Seth.

I'd crash. You're not getting near my boat. I barely could drive your little Sea-Doo.

I almost crashed that thing. So I know I haven't been on it since.

It's scary. It was a really scary day for me. Uh, I'm in counseling for that too. But yeah, uh, I think the thing is, um, I— it's a bigger deal to you. This is Grandpa talking, okay? 8 grandkids. It's a bigger deal to you than it is to them, this breaking your promise thing. And it's not like— it's not like you have a pattern throughout their lives of setting them up and then disappointing them, setting them up and then disappointing them. You're not that person. Or you wouldn't even be asking this question if you were that person. So they're fine, they're gonna be okay. Find an adventure to get them paid for, buy the pool passes instead. One year from now you'll be able to do it, and you can all talk about the time that we took a year off and got ourselves cleaned up as a family, and that's when we changed our family tree. And then when you're celebrating your 50th wedding anniversary, your kid can stand up and give a toast because of the character he witnessed when he was 11 that his parents delayed pleasure to change the family tree.

That's a great lesson learned and some character built there as well.

That's it. That's what's really going to happen. Not they're going to be so disillusioned that they need counseling.

I would love for them to be in therapy going, "Yeah, what happened?" "Well, I got a pass at 7 instead of 6. That really crushed me, man." I just don't think—

Never recovered. Never came back from that one. Blake's in Washington, DC. Hey Blake, how can we help?

Hey, how's it going?

Better than I deserve. How can we help?

Uh, yeah, so I just had a quick question about— I'll try to keep this short as well, but I am just wondering, I'm still planning out my education, my career path. I just graduated with my undergrad.

Oh cool, what's your degree in? Public health. Public health. Okay, good.

Yeah, and I want to go to audiology school, and that would be a 3-year program. And I do have some student loan debt from my public health degree. I graduated in 3 years as well. And so now I'm just working and applying for audiology school. But because of, you know, I feel like current times have changed, and I feel like there is some things that I also need to change with my plan. So I was just Um, actually thinking of holding back audiology for like 2 or 3 years until I work and then I can save up that money, pay off some of my debt and then, you know, save up cash flow as well.

Nothing wrong with that.

Try to, yeah. Cause it's gonna be all on my own money, but my, uh, family does, they do want me to go straight into audiology school starting next year. I'm just a little bit scared because I feel like that—

Well, they're not paying for it.

It, right? Yeah, they don't get a vote.

You only get a vote if you're paying for it.

Yeah, I definitely understand.

You can have an opinion, but you don't get a vote. And the opinion is, is that it's no big deal for you to go deeply in debt, no big deal to them.

I wouldn't let them pressure me unless they're writing the check along with it.

I, I think they mean well, but they don't see this as big a problem as you do, right? You wouldn't even be calling here. So I like your plan better, Blake.

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Noah is in Hawaii. Hi Noah, welcome to the Ramsey Show.

Hi Dave, thanks for having me.

Sure, what's up?

So, I am in a bit of a kerfuffle. I have moved home to try to help my dad with his business. We're in construction. And we are digging into the finances. I've been listening to the show for a long time. I am currently trying to get myself out of debt. I'm $4,000 away, but I have come to find out that Father at 61 has saved nothing for retirement. It is met every time with, "I'll figure it out," or, "It's not your problem." But Dave, I feel like it is my problem. You know, he's my dad and I've got to take care of him at some point.

Well, that's sweet, but it's not your problem. He's right. Yeah, really. Okay, you're $4,000 in debt, you're broke, you came home to try to help him with his business. That's your problem. And you keep that running. He, you know, he's a grown 61-year-old man. He should take care of of it. I mean, he's not mentally disabled.

You're right about that.

Yeah, so it's not your problem. I mean, if he was, you know, if he had a brain injury or something, maybe you'd want to go, okay, I need to help my dad, right? But all he is is bullheaded.

Did you ask him why he hasn't put a cent away for 40 years?

I think the conversation scares him. I don't think he knows what to do about it, and I think it's gotten to a point —where avoidance is the only technique.

I think you can end up helping him, and I'll give you an idea. But first thing I want you to do is release this emotional burden of having to carry your dad, okay? But the way you help him is this: you finish turning this business around, getting yourself out of debt, and then the more you get involved in the running of the business— set up a 401 at the business and sign him up for it.

Okay.

I mean, he's probably gonna work another 10 years at Didn't he?

Uh, I'm hoping he's able to. Um, it's, it's—

how many people, how many people on your construction team?

Uh, so right now we've just come down to 3. So it's him, myself, and an accounts manager, and then everything else for the most part we subcontract out. Okay.

So he's not physically straining.

So, you know, um, the, the, the issue with, with his kind of thing here is that he's, he's kind of avoiding technology and you've got a bunch of other companies coming in and kind of taking over.

Yeah, but see, you can fix that too, to the extent you take over the running of the business. If you guys keep running the business and you continue to insert yourself in the operations of the business and you help with the technology and you help grow the business and you help keep it alive, and, you know, if you can't do that, then y'all need to shut the thing down and you need to go both get it, go get a job, right? But if you can do that, while you're doing that, you could reach over to our Ramsey SmartVestor Pro and set yourself up a simple 401 in there and just sign him up and start dumping company money in his name into it and dump company money in your name into it.

Awesome.

And you know, it's almost, almost against his will, but you tell him, you go, hey, I just set up a 401. I'm gonna be putting my money in, or putting our money into me and our money into you, and I need you to sign this right here. Shut up.

Sometimes you got to sneak the vegetables in for their own good.

Eat your broccoli. Yeah.

Does he have any money saved? Is he like a tin can guy? Like, does he have anything, or is he really he just can't live on less than he makes.

Well, so the company does well enough to where when he needs money, he just draws it out. Yeah. Um, so he has got nothing saved, I believe, from what the digging that I've been doing. He's got about $8,000 in debt, which is nice. That's not much and he makes enough to pay it. Um, but yeah, no, nothing in savings, no emergency savings. No other assets. Yeah.

So part of your, uh, your business job to grow this business is to take the inner workings of the business and make them more sophisticated. You knew that already, and you were the one told us that. And as you're doing that, you get your debts paid off, his debts paid off, you get— you start instituting some financial systems as part of it, and one of those financial systems is what's called a 401. It's a 401 or Simple IRA. It's a 401 for businesses, for small businesses your size. And, and, and, you know, it's real easy to set up, very inexpensive to set up except for the money that you stick into it. And so then you guys, when you go make some money, you don't have any debt payments, you've got some savings in the business called retained earnings. That's part of your systems. You're building your technology base, you're competing you're even getting ahead of the competition out there in the way you're doing the jobs, and in the process your profits go up and you start chunking a bunch of them into the retirement. That's how you take care of him, is almost against his will.

But I don't want you feeling like you failed as a son if a full-bodied, full-brained 61-year-old didn't take care of themselves. That's not a failure on your part. You have done nothing wrong. I'm not gonna guilt-trip you for— and I don't want you to guilt-trip yourself.

You can't and shouldn't fund his lifestyle for the rest of life once he's done working. Yeah, that's a bad plan.

By 61 or so, somewhere in there, you should grow up. Somewhere in there. I'm trying still, but I'm still, still trying. I'm getting there. All right, Ricky. Ricky is with us. Ricky's in Orange County. Hi Ricky, how are you?

Hi Dave, how you doing? Thanks for taking my call. Sure. I'll just paint a picture as to what the situation is. So I'm in California, so I'm considered in their world of high net worth based on my income. I have about $5 million in equities, a little over $2 million in 401 on top of that. So, so we're looking about $7 million, um, income around $600,000 a year. Good for you. Now my question to you, my question to you is this. It's bothering me that based on discussing with my CPA that the house that I live in, uh, I guess around 6,000 square foot house, I bought it for $2.5 mil. Maybe it's worth $4.3, $4.4 today. The mortgage is about 1.1. And I know I've been listening to you a long time, but I feel I wanna continue to keep the mortgage 'cause it's free money. It's at 2.2, 2.3% fixed, but that's a separate issue. But the bottom reason why I'm asking this question is I have a lot of equity sitting there, roughly around $3 million. And I could be, given the fact of my income, it's not allowing me to write off any of the $30,000 a year in taxes for property taxes.

I have zero write-off on that. They won't allow me to write off any of the interest. So I'm thinking like, based on my return that I'm getting on my equities, whether it's the 401 or the other $5 million, um, I'm averaging, you know, maybe 12% a year, um, in, in, in good indexes. And, um, on the amount of money I could be making, $250,000, $300,000 a year on that equity, I'm better off maybe renting given I'm not getting any benefit of the write-off for being a homeowner. And I don't think in this country necessarily it's a benefit to be a homeowner if you're not getting the ability to write off.

Well, your analysis, the problem is your analysis is based on a moment in time rather than projecting into the future. And so your analysis is flawed. Okay, so I'm calling bullcrap on your statement that in America today it's not a good idea to own a house. That's just bullcrap. So because you're looking at this particular moment in time, you forgot the fact that this house has gone up several million dollars while you owned it. You seem to leave that out of the equation.

But true, but then again, if I were to put, you know, uh, I based on the money—

California real estate has done better than mutual ROI, return on investment, right? Period. Okay, it's done better. It does. Yeah, you can't write off the taxes. Welcome to your socialistic state. But that's, you know, that's the problem that you got where you chose to live. But the, the issue is that California real estate remains an excellent investment. And so no, I know renting and, you know, putting all your equity in an S&P does not outperform owning real estate. I own a whole bunch of both. I believe in both. And all the people that we know that have $10 to $60 million net worths that we coach— my net worth several hundred million— own a good mixture of real estate and mutual funds, and they've owned their own home paid for for decades. They haven't overanalyzed this. Let me tell you something I see all the time. People are working hard, trying to get control of their money, and then their phone bill shows up higher than expected again, and they don't even know why. That's why I want you to switch to Boost Mobile. Here's the truth: your phone bill should fit your budget, not the other way around.

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So George, the Ramsey Show live recordings that we've done in all these different cities, Charlotte and Denver, they're a big hit.

Oh yeah, we had a blast doing them in April and and we finally released the very first one. Charlotte dropped last week, Denver episode releases later this week. We got Phoenix and Anaheim coming in the next few weeks. And I was on that one with Rachel and Ken. We had 300 people filled with live questions. So you actually get to see the person asking the question. And even better, we bring the spouse or boyfriend up and—

Does that make you meaner or nicer? You have to be nicer.

You have to be a little nicer. You can kind of poke a little more, which is fun, and be a little snarky. Work here with a live audience because they can tell it's for entertainment purposes. And you kind of get the crowd on your side or against you. And so that kind of adds a whole other element to it. So my favorite was, how much should my boyfriend spend on an engagement ring? And, you know, Rachel— and he's there. So we bring him up to say, hey, you tell me, bud. And so that got into some juicy debates.

That's a good one.

So if you want to go watch it, it's live on our Ramsey Show YouTube channel, Spotify, Ramsey Network cap. Go check it out. It's like nothing you've seen before on this show with a live audience like that.

That's fun. Very fun. Yeah, we got 4 cities: Denver, Charlotte's already up, Denver will be up this week, and then you'll see Phoenix and Anaheim come on in the next few weeks. You don't want to miss these. Every one of the Ramsey personalities had a blast being out there with you folks. So thank you all for showing up. We appreciate you. John is in Nashville. Hey John, what's up?

Hey Dave, thanks for taking my call. Um, I am 23 and I am debt-free. Um, when I first graduated, I took out a truck loan and all that, and I, I got it all figured out. Um, so right now I have no debt. I got about $35,000 saved up and, uh, trying to figure out what I should do next.

Wow, that's impressive. Good job. What do you How much do you make?

I make about $60,000 a year. And I work for a family business. And that's part of my issue is coming up with that. What's the issue? So at first, at first it was me, mom and dad in the restaurant every day and everything was going great. And it seemed like more of the responsibilities were getting pushed my way. And now it's me in there every day. And mom and dad don't really work anymore. And he gave me a business card that said I'm owner-operator, but I'm making about $20 an hour. And, uh, my mom, you know, I don't want them to work all the time, but, you know, mom's working no days a week and dad'll work, you know, one day a week and— They own it.

They own it, right. So it's a formality that it says you're the—

So you're not an owner-operator.

Right. You're an employee. I have business cards that say I am. I don't care.

And that's what I was— That's of no value whatsoever. Okay. Well, I mean, could you get a job at another restaurant if you were the general manager of another restaurant and you were responsible for the operations? What would you make?

Um, well, I'm not exactly sure. I applied for Buc-ee's in Murfreesboro. I applied to be the assistant manager up there, and it does pretty good.

Um, what does that pay?

But I hadn't, I don't, it pays $33,000 plus benefits and retirement. See, right now I'm a 1099. See, here's my issue. So he kicked me out of the house. Understandable. I'm 23, you know, it's about time. And so I came and got an apartment and I started looking at one day getting my own home and I'm a 1099 employee. No, you're not.

You're not supposed to be. Oh, I'm not? Yeah, y'all are screwing that up. You're gonna make a mess. You're not an employee. I mean, you're not a 1099. 1099 is an independent subcontractor. You're an employee. They're gonna get their butt fined by the IRS big time. You guys are gonna end up with tax penalties and all kinds of stuff. You need— your family needs to get some professional tax advice on how they do payroll. Okay, yeah, this is gonna— that's gonna get ugly. It's gonna end up with a mess. But I think we got a bigger mess, and that is, is that your parents walked off and handed you this thing, but they didn't really hand it to you. So I think y'all are just gonna sit down and go, okay, Dad, what's the plan? I'm gonna— I'm gonna need to get with a tax person. I've gotten that financial advice that says I'm gonna get messed up on this 1099, and you're gonna get messed up when we get audited. You're not gonna like it. So we need to get that fixed, and then we need to get me in there as the general manager, and I need you to be paid like a general manager.

Manager, which is a base salary plus a percentage of profits.

Okay.

And it's not an hourly— it's not an hourly— it's not an hourly rate.

Let's see.

And, uh, I'm sorry, I hate to get it— we keep interrupting you. What kind of revs is the restaurant producing?

Um, we do about, about $2,000 a day, so that'd be $12,000 a week because we're closed Sunday. So that's about $50,000 a month, roughly. Now we got a food truck, so sometimes those numbers can change. Mm-hmm. Um, but, but just in the restaurant, that's what I do. They, they'll do the food truck, um, when we do it. Now this year they decided we're, we're only gonna do it about 5 times this year. Mm-hmm. Is this their retirement plan?

Like, is all, are they basically getting paid from the business and don't have anything else?

I'm not sure if we got a plan. That's my fee. It's really starting to bother me.

Yeah, I think you need to sit down and say, okay, Dad, we need to formalize this. Bucky's is gonna make me an offer at $33 plus benefits and properly pay me on a W-2. And so if I'm gonna stay in here and I'm gonna do all the work, I'm gonna need to be paid like a general manager, because I'm your general manager. And that's gonna be a base salary that's the equivalent of $40 an hour for a 40-hour week, but you're probably gonna put in more than 40 hours, plus a percentage of profits as your bonus. And then you need to close the books on the restaurant each month and tell what the profits are each month.

Let's see, that's part of my problem is I pay all the employees, I buy all the supplies, so I, I know I can do simple math. I know how much he's making, and it's a lot, a lot more than me, you know.

Yeah, and, uh, I mean, you are, you are only 23. Free, but you are doing the job. And so regardless of your age and your experience or whatever, if you're giving a job, you should be paid to do that job. I'm not asking you to be paid more than the job is worth, but if you weren't there, they would have to hire a general manager for a salary of $30, $40 an hour average and some kind of a bonus kick based on profits. That's what you would get paid in that business. Agreed? Yes, sir. And if you weren't there, that's what they got to do. So if you take the job at Bucky's, that's what they're gonna have to do. They're going to hire somebody, right?

And I'm about at the point to where I'm, I'm about to start looking and applying just about anywhere because it's getting—

it's been a little overwhelming. I think you sit down, have a cup of coffee before you do that and say, Mom and Dad, I got a problem. I'm about at the point that I need to go do something else The way we can solve that is I need to be paid for being the general manager, and I'm gonna close the books, and we're gonna get a base salary and a percentage of profits for being the general manager, and we're gonna develop a plan where I become the owner of this a little bit at a time, over time, and meanwhile, you guys are gonna make a lot of money, and you don't have to work as much. I'll take care of running the thing. 'But if you don't want to pay me the proper amount to do the job that you've got, then I need to go work somewhere else, and you need to get somebody in here that's gonna enjoy doing this.' Which, by the way, you can't get for $20 an hour, right? Um, that's fair. I mean, you sit down, have that conversation with them, and if they say, 'Screw you, you're supposed to work for free,' then go get a job somewhere else and let them figure it out.

Out. They're not going to say that.

That worries me. They're not going to say that. Hey, I'm— when I told him, hey, I'm looking for a new job, it's kind of like he got aggressive and he took it as a personal attack, right? And I didn't want to— I don't want to mess up my family situation, you know.

You're not messing it up, they are, okay? All you're doing is talking about about it. And I wouldn't say, "I'm gonna quit if you don't do this," but I would say, "Dad, if we can't work something out that's reasonable here, I'm going to be forced to do something different." And if he wants to get aggressive based on that, then go do something different, because you're going to get aggressive every time you have a conversation about this business. And then you're going to build resentment.

You can't have a conversation. You're going to ruin the relationship anyways.

Yeah. I mean, my son and I get in arguments. We run Ramsey together, but we don't get an argument every time we're together. Most of the time we don't have an argument, but occasionally we just like, "Nah." We fuss and fight. Fight like grownups. Yeah, we fight like grownups. We're arguing about an idea. We're not personally offended like a 4-year-old.

Okay guys, let me ask you something. What would it take for you to switch your bank? Because if you're still earning next to nothing on your savings, you need to check out Fairwinds Credit Union. And I know what you're thinking, it might sound like a hassle moving your your direct deposit, updating bills, getting a new debit card. Feels like a lot. But here's what most people don't realize. Staying where you are could be costing you hundreds of dollars every year. Y'all, the average savings account pays less than half a percent. So let's say, for example, you got $20,000 saved. You might earn around $70 a year. But with a Fairwinds High Yield Savings Account earning 3% APY or more, or that same money could earn you over $600. And that's real money that you can use towards the Baby Steps. So, don't let temporary comfort keep you stuck. Check out the Smart Bundle from Fairwinds Credit Union. You get a high-yield savings account, a no-fee checking account, and the Ramsey Be Weird debit card. Go to fairwinds.org/ramsey to learn more and make the switch today. That's fairwinds.org/ramsey, insured by the NCUA. Way.

Our question of the day is brought to you by Y Refi. When you fall behind on paying back your private student loans, it can feel like your life's being held hostage. But Yrefy helps you borrowers explore a fresh start with low fixed-rate refinancing and a payment plan designed around their ability to pay. Visit Yrefy.com/Ramsey. That's the letter Y-R-E-F-Y dot com slash Ramsey. Might not be in all states.

Today's question comes from Dylan in New Mexico. Mexico. I'm aware of your recommendation to invest your money evenly in 4 funds: small-cap, mid-cap, large-cap, and international. I also hear you guys regularly reference the average annual return of the S&P over the last 30 to 50 years. Can you provide some insight into how his investment protocol has performed compared to the S&P? If mimicking S&P performance is the key metric, why wouldn't he recommend just parking your money in an S&P index fund? It's a great question. He, I assume meaning Dave, per your recommendation, for many, many years now. Alright, so, insight how this investment's performed compared to the S&P. Well, the small-cap, mid-cap, large-cap international, there's not one fund that we can look at to compare to the S&P. But the S&P largely is a bunch of mid-cap and large-cap companies, if you look at the makeup of that. So, it's just not as diversified as what you're Exactly.

So here's the thing: individual mutual funds in the growth mutual fund sector, less than half of them beat the S&P. And that was the guy that started the Vanguard S&P Index Fund, Bogle. John Bogle was brilliant, and he discovered that. And so he came up with this idea of where you hear the phrase passive investing. That's where it first came from, where you don't have to worry about about it, you just buy the S&P, screw it. Because half the mutual funds don't even beat it. And those people that do that are passive investors— Versus active. —sometimes called Bogleheads. Because John was actually on to something. His actual data was correct and is correct. To this day, half the growth stock mutual funds do not outperform the S&P. But that also means, it's kind of like, there's a 60% chance of rain, there's a 40% chance of sunshine. Hello. So I have picked in the 4 categories 4 mutual funds that have outperformed their indexes. Now the small-cap, the index would be the Russell. Small, 'cause a small-cap is not necessarily, it's more like an aggressive growth stock mutual fund, right? A mid-cap would be like a growth, that's more like a, that's a typical growth mutual fund.

Large-cap, typical growth stock mutual fund. Like you said, the S&P is a mix of those 2. And then obviously is mostly international, a foreign fund, that's a different index. Okay, so what I want to do is pick a fund that outperforms the no-brain way of doing it, the passive way of doing it. And so if I've got a mutual fund that for 35 years has outperformed the S&P and it's a growth stock mutual fund, and I put that in my 4, I've got a small cap that's outperformed the Russell and I put that in my 4, and so on. Well, guess what? The 4 of them as a group are going to outperform the group of indexes unless they don't do as well as they did in the last 25 years or whatever the number was of the history on the things. So my particular 4 mutual funds that most of my stuff is in that has outperformed the indexes has outperformed the S&P because I didn't pick one of them that didn't. It didn't.

That's why. And the other piece of this that we're not factoring in is that international fund, which we recommend 25%. If you look at the S&P 500 and it's down in a given year, the international fund usually is up.

Yeah, it pretty much runs the inverse.

And so even in a given year, if the index, you know, beat your mutual fund setup, you're not factoring in the long term of what could happen in the market. But it never has.

The 4 I picked has always outperformed the S&P. Every single year.

So if the average in the S&P is 10 to 12, you might be seeing 13, 14.

Yeah. I've not gotten 10 points more. It's not 20%. And here's the thing. Let's go back on this too. It's very interesting. I mean, the way I'm doing it is actually mathematically beating it. So it does answer the guy's question. But the problem with this discussion is always that somebody's having this hypothetical analytical, "If I had done this," thing. And when we actually have figured out that people who invest in slightly substandard mutual funds way outperform those who never invest.

Or those who jump out, or those who are in single stocks.

Those who analyze everything to the point that they've got an anal problem with it, right? And it's like, you guys, would you Shut up and invest, because 100% of the people that invest end up with more money than those that don't. Every time. And that's the number you need to concentrate on.

And so it's not mutual funds versus index funds.

If you actually do the index fund versus the person that believes what we believe and doesn't do anything, I'm on your side. I'm glad I got you to invest in something, because if you just put money away, you'll have some money. It's magic. Logical. And so like, for instance, was we studied the million— all the millionaires we studied, most of them were not super sophisticated investors. They didn't spend a lot of time analyzing, like Dylan is, what this is and what I should do and da da da da da. There's not a lot of theoretical mumbo-jumbo.

They weren't prodigies. They were average people.

They just said, "Oh, I got a 401 at work and I'm gonna put some money in a growth stock mutual fund and now I'm a millionaire." And that's exactly what they did. I mean, they really didn't— they picked out their mutual fund based on what the guy in the cubicle next to them was doing. They did not do some kind of sophisticated think tank analysis. But here's the trick: they did put money in investments. They didn't sit around and talk about it and not do it. That's the problem. So, you know, the percentages all go out the window until you actually do it.

Yeah, whether it's 12% or 13% doesn't matter if you have no money in the market.

So, all that to say, Dylan, I have 4 mutual funds that have outperformed the S&P for 30 years as a group. Not hard to do. It's really not that tough to do. You can have your Smartvestor Pros say, "Show me some mutual funds that have a 25-year track record of outperforming the S&P." They can do it. They're there. Not all of them, less than half, but they're there. Okay, and you can put that little portfolio together, and if it does what it did in the past, it will outperform the S&P. Mine have. But if you don't want to do that and you just want to put it in the S&P, you're gonna end up with a lot of money.

We'll all end up rich. And we'll be happy for you.

We're not mad at you. But that's the answer to your overall question.

What a great nerdy discussion. It is a fun one. By the way, you actually cover how to pick mutual funds in our Investing Essentials virtual event. We've got one coming up later this year. Next year. So if you guys want to learn more about that, you can sign up for updates at ramseysolutions.com/events. But that's where, if you want to nerd out like this, you're interested in this kind of conversation, you want to know how to build wealth the right way in depth, we'll walk you through it in that event.

Yeah, and, but here's the thing, I go, we have talked more people into putting money in their 401 and Roth IRAs than anybody in America because we got them out of debt so that they you could do it. And then they believed us, and so they went and did it.

It's a margin issue and a little bit of education.

And then there's some, not Dylan, but there's some, you know, moron on the internet going, "Well, Dave Ramsey's created more poor people." No, he didn't. He got people to invest while you're sitting with your thumb in your ear.

You weren't listening very well if Dave Ramsey made you poor.

I mean, that's pretty wild. That's just, but that's the, they say, you know, because he doesn't understand, he doesn't understand how. Yes, I do understand it, you idiot. Of course I understand it. But what I'm better at than you are is getting people to actually invest instead of discussing freaking theory. Theory doesn't matter until it's applied, you know. I really don't care what you think about swinging a baseball bat until you swing one, honey, and then we'll talk about whether you can connect. That's how this works. You got a lot of theory going on out there. You got a lot of people that have an opinion out there that have no stinking money. It's all these life coaches that don't have a lot It's the same thing, you know. And so guys, just invest. Even if you do it wrong, you're doing it better than the moron who talks about it and never does it.

It's like a bunch of out-of-shape people talking about workout routines and which one's better. It's like, yeah, great, let's go work out.

Arnold Schwarzenegger has created more fat people. No, he didn't. No, he didn't. It's just— that's just dumb, okay? Seriously. But here's the trick: if you invest invest, you're going to have some money. Ooh.

And if you don't invest, you're not going to have any money.

Take the money away, you're not going to have any money. Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. I'm Dave Ramsey, your host. George Campbell, Ramsey personality, number one bestselling author, is my co-host today. Joshua's in Houston, Texas.

Hey, Joshua, what's What's up? Hey Dave, uh, thanks for having me on your show. I appreciate you taking the call. Sure. How can I help? Let me, uh, let me give you kind of like a brief backstory. I'm 31 years old. I work as an HVAC technician. I make around $92,000 a year, but I still feel like I'm drowning financially and living paycheck to paycheck. Over the last year, I spent $22,000 fighting custody battle for my son. Son, which I ultimately lost and kind of wrecked me financially. Right now I have about $17,000 through, uh, a loan, another $28,000 through an affirm loan, and then I have some credit card debt, about $3,500, and then I owe some family members around $7,500 because they helped with my attorney fees. Um, I have some student loan, but I'm in a forgiveness program with them, uh, which I have like $0 payments, but they're expected to be forgiven in about 30 years. I've also been in a debt settlement program for about a year now, uh, through National Debt Relief, and I paid them about $603 a month while they're working to settle my debts. I pay about $2,250 a month in rent, $650 in child support, and they also may be increasing that soon.

Uh, I pay $750 a month in health insurance through work, uh, and I pay $520 a month for my truck, which is about to be paid off in 2 months, thank God. Um, and other monthly bills, obviously, but I feel like no matter how much I work, I can't get and I also want to buy a house soon, but I feel stuck.

You're not buying a house soon. You're not buying a house anytime soon. You're broke. You got a lot of cleanup to do before you buy a house. So let's just set that on the side. And then, I mean, and you're getting ready to have the truck paid off, so that's gonna free up a bunch of money. You do know where your money's going. It wouldn't take you long to build your EveryDollar budget because you've got most of the numbers in your head that are pretty clear. And I still hear room in this. I still hear room in what you've got, but what you've done is you've been focusing on the heartache of a custody battle, and you've been focusing every single dollar that you could towards that, and that's been a valid distraction for a year, and now that distraction has passed because you lost lost, and now you know where you stand, and now you've got to turn around and focus back on cleaning up your mess. But you really weren't working on the mess before, and so it was sitting there or getting bigger, and now you can work on it. I think you're going to be okay.

Well, my question really truly is like, now should I get out of the debt settlement program and pay the $603 that I paid and just pay them, pay my creditors directly? Probably.

You can do what they're doing on your own without tanking your financial world because they told you to stop making payments, goes into collections, and they try to settle it.

I've already done— yeah, I've done that for about it. I've been doing— because I did it, I've done it like twice now. I've gone through different programs, but I've been doing it for about 2 years.

Yeah, you keep looking for one of these programs to straighten you out, and you got to straighten you out.

And that's kind of where it's like, I've never really had any real instruction on how to put money away while trying to pay off those.

Well, you don't need to put money away. We need to clean up the debt. That's—

and then don't go into any more debt.

Yeah, first thing is don't borrow more. The second thing is we're gonna get on a detailed written budget. We're gonna give you EveryDollar, our budgeting app. Once you sit down tonight and fill it all out, it's really not hard. Hard. I mean, I actually have that app. Okay, we'll start using it tonight. It's gonna guide you through step by step exactly what to do and how to build that out, and then stick to it. And you make enough to pay all these bills and extra on these bills and get rid of them, particularly when you get your car paid off. That's gonna free up another $500 a month to be able to attack this stuff with. And then if you want to stay in the debt settlement thing until you get this moving, that's fine. If you want to step out of it, that's fine. If you want to check with Guardian Litigation, they're a different type of program, but they do similar thing. They don't work the same way, uh, that we endorse. You could talk to them and see what they can do. But I think more than anything, you've got to take control of this.

And you've been focusing your energies emotionally, spiritually, financially on other things. And that's valid because it was a kid, and you need to take care of that kind of stuff first. But now, now we know where we stand, and now it's time to focus on the best dad you can be, and that is cleaning up your life and getting this mess cleaned up. Because dude, if you didn't have any payments, you'd have money to stack. You got serious payments going around that place from everywhere. And no, we're not waiting 30 years to pay off those stupid student loans. They're just the last thing we're going to get to. When you get to them, knock them out 2. List your debts smallest to largest, pay minimum payments on everything but the little one, and attack the little one with a vengeance. So hang on, I'll send you a copy of the Total Money Makeover book also, which shows you exactly how to do this stuff. And you can go— you can read it to go with your EveryDollar app, and you'll be fine. And you call us back if you want more help. But more than anything, it's focus and being very intentional and And I think you can do it with the numbers you gave me.

You really do know where you stand, and that's pretty stinking cool. All right, Junior's with us in Atlanta. Hi, Junior, how are you?

Hey, I'm doing well. Good.

How are you? Better than I deserve.

How can I help? Doing well, doing well. So, the reason why I'm calling is because a couple of years ago, we went through Hurricane Helene. And unfortunately, with Hurricane Helene, we had a couple of things that ended up happening, um, with the best devastations to our home and our property. Um, things like, you know, in Atlanta, it's in Augusta. Augusta hit us hard. Oh, okay. Okay. Yeah. Um, so in Augusta, we got hit pretty hard with, uh, Hurricane Helene and, and And, you know, our roof, our deck, again, our fence. And now we had a power surge, ended up messing up our AC unit. Fast forward, we've been doing Band-Aid repairs.

Did you not get an insurance settlement at the time?

So, so we tried to go through the insurance. At the time we had Allstate, and Allstate told us that we had a clause was that, uh, any typhoon, cyclone, or hurricane-related damage was a 10% deductible on the— of the entire dwelling coverage. My home's value is about $360,000. So out of pocket, they wanted us to come out first $36,000 roughly.

And so what's it going to cost you out of pocket now if you do it on on your own?

To do all the repairs on our own? Mm-hmm. Well, right now we're going through getting all the estimates for everything that needs to be done. Um, we've thankfully— we've been approved, and I say thankfully, uh, lightly, because—

okay, for a loan. Hang on, we'll be right back with you. We want to make sure we get the good— all the details, and we'll be back with you in a minute. But when you have the right real estate agent to help you buy and sell the right way, you'll have confidence to make smart decisions. Ramsey Trusted Agents aren't just experts who guide you through buying or selling. They're people you can trust to have your back from the first call to closing day. Find a Ramsey Trusted Agent near you at RamseySolutions.com/agent. That's RamseySolutions.com/agent. All right, we're talking with Junior. He's got a house in Augusta, Georgia. Was damaged by Hurricane Helene a couple of years ago. Allstate doesn't pay out on typhoons and hurricanes, he discovered after the fact. So I'm guessing you have different insurance now that you figured out Allstate's not a good idea. And they pay out, but they wanted a 10% deductible of $300,000 or $30,000 on a $300,000 house. So now he's got all these repairs that still remain undone, and that's about how far we got in the discussion.

Does that sound right, Junior? Yes, sir, that's correct.

Okay, so what repairs remain to be done today?

We are still getting an inspection on our roof. Um, thankfully, uh, one person mentioned that it's looking good. They still need to go into the, uh, into, into the attic. Um, I need to replace an AC unit. Our deck is completely done for, um, and it's only deteriorated over the past year and a half.

And so the AC has never been fixed since the hurricane?

It's been bad. We've had a couple of Band-Aid fixes, and then finally the condenser's finally gone out, and they said that all that's left to be done now is to, um, put a new heat and air unit on it, and you need a new deck, right?

And that's what we need, correct? Okay, and the deck has been that way for 2 years, and the heat and air unit just finally gave up the ghost after some Band-Aids. So, uh, have you gotten 3 or 4 bids on the heat and air unit?

Yes, sir. Yes, sir. What do they look like? Yeah, you're— we're averaging, uh, $10,000, $11,000, uh, just depending on what the, uh, you know, what the type of the air unit is. Yeah.

And, uh, and what's your household income, sir?

We're at about $175,000 between my wife and I.

Okay, so why can you not come up with $10,000 making $175,000? $100,000?

Well, the, the, the reason why is because since the hurricane we've had— so we've had two major life events in the past couple of years. So one, my grandfather passed, which, um, anyways, we had some major, uh, some major expenses come out of that. Unfortunately, we've also had some just, uh, mal-money management. So we're currently in debt, um, what we've truly never have been as far as credit card debt goes. So how much debt do you We've got about $30,000 in debt right now.

So why can you not come up with $10,000 with $30,000 in debt making $175 grand? $175,000, man, really?

Are you taking home $10 grand a month?

Uh, no. So after, after all our taxes are taken out, our take-home is probably about, um, I want to say maybe about $6,000, $5,000. There's not.

You're taking home $72,000 out of $175,000? No, there's not $100,000 worth of taxes.

Nope. Nope. Are you putting money in your 401?

No, we stopped that when we were—

How much is your— Are you taking health insurance out? What else is coming out of your check?

Yep, so health insurance is coming out. So we do owe on our— on 2 vehicles. Out of your check? I'm sorry, my apologies. I'm just pointing out the monthly expenses.

I'm talking about what hits your bank account.

Here's the thing: $175,000, that's $15,000 a month. Okay, you with me? Yep. Minus taxes, you should be coming home with $12,000. In 12, minus your house payment, you should be able to save up $10,000 and fix your heat and air. But you guys are just running in circles chasing your tail instead of getting on a system and making these, these dollars behave, as you said, malhandling, right? Yes, sir. Yeah, and so you got that. That's how you ended up with $30,000 in debt. I'm sorry your grandfather passed, but that didn't cost you any money. Money. Did it? Um, well, the overnight, um, travel for the families and just the same, a few hundred bucks or something, but it really wasn't— I mean, it's not— it was, it was heartbreaking and it's tragic. I don't— I'm not, not diminishing that, but we don't confuse those things with the math impact. So you make enough money to have cleaned up this mess long go, and that's what you should do. You should cash flow the heating and air, and then you should begin to work on paying down your debt and talking about putting together some money to fix the deck.

And out of your monthly income— and are you getting a big tax refund every year? Yes. Okay, I thought you might be. So you probably need to look at that. You probably have too much coming out of your check check and you're getting it back at the end of the year, correct?

We, uh, we claim zero.

Okay, what was your refund this year?

This year being the biggest one that's— it's, it's been— yeah, this year was about $9,000. Okay, where did that go? So we, we still have it in, in a savings.

So you can almost cash flow the AC unit.

So use it to buy a heat and air unit.

Why are you getting approved loans?

Well, this one was through the SBA, the loan. So, correct. I don't care what it's through.

I don't care if it's through your mama. You don't need a loan. You have the money in your bank account to buy heating and air. Go fix the heating and air and start getting the money that you have coming into the house. And you need to change your take-home $700 a month now. And that's the minimum you need to change it by. So that'll— at least that. And go in and change your— go in tomorrow at work, tell payroll you need an extra $700 a month coming out of your check. Pull the money out of your savings, order a heat and air unit, call the guy and tell him if it's cash, what's the discount, because I'm gonna give you cash. Cash, like Benjamins. What's the discount? And I want a discount. I want you to get over here and get this thing fixed now. Then I want you to get 4 bids on the deck, and I want you to find some guy at your church that's looking for work that knows how to build decks and get him to build the deck for you at a deal. And he gets work, and you get to use some money to do that.

And you got $700 a month now to put towards fixing that deck. And then you start getting rid of these credit cards. You get them out and chop them up. So you just gotta sit down by— the way you eat an elephant is a bite at a time. You list these different things out that are going on and you fix them. One, fix that one, then fix that one, then fix that one, then fix that one. And you've been very passive and stood back and all of this has happened to you, and you're being a perpetual freaking victim, and you need to stop it, man. It's killing you. I mean, I talked to you for 7, 8 minutes before you finally revealed to me you have the money money in your savings account to buy your heating and air. You buried the lead. That's how screwed up your brain is right now. So dig into this stuff, man. Dig into it and get it laid out like it was your job, because it is your job. That's what you got to do. Anna is in New York. Hey, Anna, what's up?

Hey, George and Dave, very excited to be speaking to you guys today. So I recently learned earlier today that my husband Um, was hiding, I would say hiding, um, not being fully honest with $40,000 worth of credit card debt. And I am unsure how to proceed in both our relationship and paying it off.

Wow. You're being very calm.

I'm trying. Is he alive?

Why did he do this?

Let him out of the closet, Anna. You can't lock him in the closet. That's illegal. Oh my gosh. Wow. Well, you rebuild trust one brick at a time by being trustworthy. And so it's not instantaneous and it's not a system and there's not a switch you flip. So he has violated trust, whether he did it because of shame and didn't want to tell you about it or deception. Which is even worse. Either way, I think it's the former. Yeah, either way, he, he, you know, he regains trust by being extremely transparent, both of you getting on the same page, and every single transaction is in front of both of you for the rest of your lives. And then you sit down and you go, okay, with our income, how are we going to pay off this $40,000 freaking dollars? We're going to cut up the stupid car. Hard. We're gonna attack it and knock it out as fast as we possibly can. Hey guys, Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now you can get that same kind of help anytime with Ask Ramsey.

Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to RamseySolutions.com and try Ask Ramsey today. That's RamseySolutions.com. Well, we love debt-free screams. We love debt-free screams on the debt-free stage in the Ramsey Solutions lobby. We especially love them when it's our own team members. So Gabe is with us. Gabe Fox is a copywriter here at Ramsey Solutions, has been with us for a whole year over in the Ramsey trusted area, and he's up here to do his debt-free scream. Did I get all that Is that right, Gabe?

That's correct, absolutely. Very cool.

So when you moved here, did you move here from somewhere else? I did, yeah. From where? From Texas. All right, and you came here to take this job? I did, yes sir. Okay, and how much debt did you have? I had $26,469. Okay, and that's been one year you paid it off then? Uh, 21 months. 21 months, okay. So since you've been here, it's been half of that roughly. Yeah. Okay, cool, very cool. And we don't ask incomes on team members, 'cause he's got 50 of his friends that work with him standing around here.

Don't make it weird.

Not fair and awkward. Okay, so anyway, what kind of debt was the $26,000? Completely student loans. Okay, and your degree is in?

It's called Integrated Studies with a minor in business. Okay, very good.

Perfect for being a copywriter at Ramsey Trusted. That's right. No question. Good. Okay, so before you came here, had you just graduated? Is that what the 21 months is? Or—

no, I moved home for a year, graduated in 2024, moved back to Texas for a year, and then I moved here.

Okay, all right. And so this was your second job, I guess, after college then? Correct. Okay, cool. And, uh, so how did you— because you started this get out of debt process a year before you came to work here? Correct, I did. And how did you find Ramsey at that point?

So I graduated in 2024, moved back home to work a copywriting job for a Christian TV network back there. And right before graduating, one of my one of my buddies sitting over there, um, he was like, dude, this— I was just becoming familiar with Ramsey. I had heard about FPU and a few other books, and he's like, dude, I think that might be something that you should take. And I'm like, honestly, I think you're right. So signed up for it, started taking it. It fired me up.

Financial Peace, correct? Okay, Financial Peace University, correct? Yeah, freshly graduated from college, freshly minted, right?

Yeah, a little like 2 weeks later. Bought it and started taking it.

Wow, okay. And so from then on, there's no looking back. Correct, yeah. Yeah, 'cause once we suck you into that portal, you're gonna do it. Oh, for sure, for sure.

And then once you got here, did it put things into high gear for you? What changed once you landed at Ramsey?

Lots of shaming. We shame them. So much. We shame them at length until they pay off their debt.

Well, people think we don't even hire you unless you're debt-free. Guilt trip.

And I should tell them that's a lie. Lots of guilt tripping. I'm being sarcastic. There's a lot of encouragement really, isn't there? Oh, absolutely, yeah.

My whole team was encouraging me. They knew where I was at. My whole onboarding team walked with me through this and encouraged me to do the debt-free scream. And it was just so encouraging to have people alongside me that one, had their own stories. A lot of people here have paid off their own debt and were just in it with me daily and catching up with me and taking me to the end.

Very cool. So other than the Ramsey team that you sit with every day, who was cheering you on?

I've got 4 friends over here. Yeah, went to college with 2 of them, and they were with me from the very beginning when I realized, guys, I've got $26 grand to pay off, and I have a decision right now that could really impact my future, and not only my future but my family's future, if I go ahead and deal with this now. And they were— they just sat me down and set me straight and said, Gabe, this is the time. Time to deal with this. Um, and I said, you know what, you're right. So decided to do it.

Boom, game on. I love it. So Mom and Dad cheering you on too, I'm sure.

100%. Yeah, they let me live at home for a year, and, um, I mean, that freed up so much money for me to send to the debt. Um, so massive shout out to them.

Such a generous offer. Very cool, very cool. Good for you, man. And then you have been here a year and finished off the thing, 21 months total for $26,000. Okay, now you write copy for Ramsey Trusted. Which area in Ramsey Trusted? Which group? Protections. Protections. Okay, so for insurance. Correct. For those of you that don't know out there. And so you're kind of immersed in this stuff every day, but now when you're personally doing this and your buddy from college calls up and says, hey, what's the secret? What did you do to get out of debt? What do you tell them?

That's a great question. Great question. I think the idea of ownership, just realizing that this is mine to deal with. I could look away and I could just act like it's not there for 30 years and look back and it's grown to be much larger than it was in the first place. Or I can decide that I have a decision, an opportunity to transform my family tree, my family's financial legacy. Both, both are hard, both are hard in different ways. Ways, but I think hard things are worth doing, and this was a hard thing worth doing. I decided that this decision is going to change my life forever, and just deciding that, taking ownership is so worth it. That would be a message that I would share with anybody, teaching them to take ownership.

Okay, so for all you people out there that when I say there's awesome Gen Zs, and a bunch of them work here, You just heard it. Okay? You just heard it.

That was a complete mic drop. That's a good hire right there.

That's a complete mic drop.

I see myself in your story, Gabe, because when I started here, I was 23, $36,000 in student loan debt.

And we did good to get a continuous sentence out of you. That's true.

I was on the struggle bus back then.

He just preached a sermon.

Gabe's a stud from day one. It took me a while to blossom, but I just— I love that story because I go, okay, he's on this trajectory to be a baby baby steps, millionaire now, probably in your 30s if you continue down this path. Or sooner. And so it just encourages me that we're gonna see a whole new generation of Gabes who go, I'm not gonna wait on the government or student loan forgiveness or make it someone else's problem. I'm gonna look in the mirror and go, I can clean this up.

I own this, I'm not a victim.

Yeah, and in 21 months it's done. Most people go 21 years in mediocrity hoping that someone else changes their life. And you decided, it's my job.

Yeah. Amen, amen. Well done, sir. Thank you. Very proud of you. The gang is very proud of you.

Got a few hundred people. Is anybody working anymore, Dave?

Does anybody work here anymore? They all come out and watch Debt Free Screams. I love it. Gabe Fox, copywriter for Protections and Ramsey Trust, had been with us for the last year, but 21 months ago he started Financial Peace University, started the process, and he's now paid off $26,000 in debt. $100,000 debt-free Gen Z, ready to rock and roll. Count it down, let's hear a great debt-free scream. 3, 2, 1. I'm debt-free!

Yeah!

Woo, woo, woo, woo, woo, woo, woo, woo! The crowd goes wild.

Yeah! That's pretty cool. Man, I loved his answer. Ownership, own it. I did it, I gotta fix it, I own it. Personal responsibility. You call it whatever you wanna call it, but I mean, that at any age, once you look in the mirror and you go, you're the freaking problem and you're the solution, your life has changed. But until you look in the mirror and you say that to you, you're gonna struggle the rest of your life. And getting people to do this at any age group, that's an emotional maturity, a spiritual maturity that is necessary to be to just have a world-class impact on things.

Yeah, I mean, if he can do this with money, now he's going, "I can take ownership in every other area of my life." And so it really gives you agency, maybe for the first time, to go, "I can affect change in every other area." That's encouraging.

I'm not going to wait 30 years to pay off my student loans. I'm not going to wait on the government or Biden to forgive my student loan debt. I'm not going to— Just knock it out. Knock it out. Just draw back and smack it in the head, man. Just go, "You, you're going down. I own you. You don't own me." And when you get that going, you get that thing going, you understand the borrower is slave to the lender, and I don't need any more masters. I am so done with masters. I'm so done with people telling me freaking what to do. What's in your wallet? Jump off a cliff. I don't want to care what's in my wallet. What's in your wallet? Millions of dollars for doing them stupid ads. That's what's in your wallet. So no, we don't want— we don't want to listen to some broke actor. This is not— no, no, no, no. I'm not living like this anymore. Not Ford Motor Company, keep it. We don't need a payment, you know. No, no. It changes everything when you take that ownership. I love this guy.

Yeah, when you have that level of focus just for a short time in an ADD culture, you'll be shocked at how far it'll wherever it will take you. Just being focused on one thing at one time, you will get so much done and be so successful.

Yeah, but it starts with this idea of spiritual ownership, and Gabe nailed it. So proud of you, Gabe.

I love it, man.

Glad you're on the team. Man, we are definitely proud of you. Glad you're here. Yes, yes, yes, yes. This is how it works, ladies and gentlemen.

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RamseySolutions.com/checkup. Andrew is in San Francisco. Hi, Andrew. How are you? Hi. Good.

How's it going, Dave?

Better than I deserve. What's up?

Good, good. Just kind of calling about an issue I got myself into. A little bit of a backstory. About 2 or 3 years ago, I put myself in a bit of a hole. I had a very good financial year for myself, and then I lost someone who meant very much to me, a good friend. I decided then to take the money that I had after becoming debt-free and buying a car. You know, I went the spoil-myself route to feel better. I now have a remainder of a balance of $34,000 on a car loan. At a horrible interest with a $795 car payment per month, not including insurance and the rest. I also have about $5,900 in credit card debt included with about $7,000 in personal loans debt. And I have a baby coming up that is due in August.

Cool. How long you been married?

I am not married. Okay.

What does your fiancée make?

Um, she's actually a stay-at-home mom.

Okay. All right. And how old are you?

23 years old.

Okay. One more time, tell me what you make.

I make $83,000 a year gross. Doing what? Sums up to about— What do you do? I work in sales. Okay.

All right, cool. All right. Okay, well, you're probably gonna get a little more than you asked for on this call, but I'm gonna try to love you well. If you were— my son is 10 years older than you, but if you were my kid, here's what I would tell you, okay? The data tells us that people that are married and work together have higher net worths and higher income and live longer. Longer than people who are not. This is statistical data, okay? So when we study millionaires, we find almost none of them shacked up. Almost all of them are married, is what we find. That's the data, okay? So it's a financial advantage, a relational advantage, an advantage for your child, a legal advantage for your wife because she has some protections then. And so I'm— my first recommendation to you would be to get married Saturday. That's my first recommendation, okay, to help you move forward and build your family. And let's go from here. Then you've got $5,900 in credit card debt and $34,000 on a car, and you make $83,000. Is that your only debts?

Those are my only debts, along with the credit card debt. Yeah, credit card debt, personal loans, which was $7,000. Oh, I missed that. And the car loan. Okay.

Yeah, 47 total.

Who are the personal loans to? Me. Okay, no, I mean, who are they? Who'd you borrow them from? Oh, um, it was an online company called Upstart. Oh crap, so this is like a payday lender type thing?

Uh, not necessarily.

It's crappy interest rate.

Yeah, it's horrible interest rate.

Yeah, that's the one I remember.

What's the car worth? Car is worth an estimated of about $30,000, so I've already looked into getting rid of it. I'm about $4,000 upside down. Okay, good, good.

Okay, so I think I would scratch up the $4,000 first, pay minimum payments on the other stuff. Let's get rid of the car and get you a $2,000 or $3,000 car that you pay cash for. Getting rid of that car mistake does two things. One, obviously the mathematics are horrible, the interest rate and all of that, the payment's crazy, all that stuff. It's dragging you down. But the other thing is that car is tied to paying pain. It's tied to psychological trauma for you. So every time you get in it, every time you write a check for it, you know, I got ripped off because my heart was broken and I made a bad decision. And it's a reminder of that. I'd want that reminder out of my life. Am I right? Yes. Yeah.

And with that, an $800 a month raise. Yeah.

Yeah. So the first thing I'm going to do is pay minimums or just quit paying the $7,000. I don't care. Doesn't matter to me. But I want you to get rid of the car by scratching up $4,000 working overtime. You got anything you can sell? Do you have any money saved?

I don't have any money saved. I've been trying to work continuously to save up a little bit extra money on the side. How old is the baby? The baby isn't here yet, luckily. So we're due in August.

Oh, great. Okay, so you can get married before that. That's even better. Okay, that's very helpful to the data. Okay, good. Yeah, well, I mean, anything she can do to earn money until the baby comes— I know she's in her third trimester, I'm not trying to put her in the salt mines— but if anything she could do to earn money, it adds flavor to this, right? Because here's the deal: the faster we get rid of this car, we got $800, and then the two of us sit down, we do a tight budget, we work what we— and then all we got to do is just, you know, knock out like $10,000, $15,000, and you can do that in a few months.

Yes, because most of this debt is tied up in this car.

Think about what it would be like to get to Christmas and have zero debt.

Man, it would feel good.

Yeah, that's what I want for you. And a new baby and a new wife. Life is good. I'm smiling right now. Now we're moving forward. I like this a lot. And you've learned your lesson at 23 to never go on one of these rip-off interest rate personal loan sites. Like, you got screwed, and you got screwed on the car. Yes, I did. Yeah, so you're— the good news is you got the whole rest of your life to never get screwed again, because now you know what it looks like. You know, I'm not signing up for that. I don't care what you do. You can do whatever you want to do. I'm not signing up for that. You can have a gun. I'm not signing up for that ever again. I'm not going to let myself get screwed ever again. You, you got a beautiful life ahead of you. You're only 23. I went broke when I was 28 and filed bankruptcy. I've had a beautiful life since since then because I learned a lot of stupid butt stuff about myself during that time. And I— there's a lot of stuff I never do again, you know.

You got a great thing going here. I'm so proud of you, young man. You're gonna be great. This is gonna be so good for you. All right, I'm gonna give you a wedding gift. Ooh, so kind. I'm gonna give you a copy of George's book.

Oh, perfect. Yeah, happy to give that away.

And a copy of the Total Money Makeover book since you and I are the ones that took the call. And the baby's gonna have a mommy and a daddy Daddy, and they make $85,000 a year, and he's 23 years old, and he's going to get rid of people screwing him. All these car companies, all these payday lender types. What was it? Upstart. Upstart. Yes. Yeah, Upstart just had 30 million people say you suck. Upstart, I hope you heard that. We just told 30 million people you suck. You screwed a 23-year-old kid, and you deserve for everybody in America to have insurance.

I bet their marketing is like, "We're the lifeline.

We'll give you the financial freedom you need." Their marketing is like, "We suck, but come do it anyway. We'll screw you, but come see us anyway." That's their marketing line. It's like SoFi, right? Yeah. "We have a stadium. Who do you think paid for that?" Yeah. You! And your interests. And you, and you, and you. They're people that we help. Oh my goodness. We're helpful. That's what we are. Oh man, I'll tell you what, the villains are run amok in this country. Cartoon.

Well, it's funny that the villains will happily show up in your life when you're so desperate, and they'll act like they're the hero. Oh yeah, the scary part— we're here to help. You'll get an Instagram ad going, oh, finally, relief is here. No, that's not relief, that's 600% interest on your payday loan.

Relief is when I get Upstart out of my life.

Unless you're selling hemorrhoid cream.

We don't want relief. You people ought to be— I bet your mother's ashamed of you if you We work at Upstart. Oh my gosh. Wow. Hey, hang on, Andrew. We're going to give you a couple wedding gifts and congratulations on your wedding this weekend. That's exciting.

I love that Dave just planned the wedding for you. The man should be in the wedding planning business.

Totally assumptive close. Yes. No question about it.

I wonder how many people you've convinced to get married that otherwise wouldn't have.

That's a beautiful thing. It's a wonderful thing.

And you're not even ordained, I don't think.

Not yet. You never know. You never know. I'm a lot of things, but that's not one of them. 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.