Transcript of Fix The Money Mess That’s Stressing You Out New

This is an ad for BetterHelp. The time to fix your budget is before you're in debt, and the time to deal with stress is before it becomes a crisis. Talking to someone can help you find a path forward. Go to betterhelp.com/ramsey to get 10% off. Brought to you by the EveryDollar app. Start budgeting for free today. Normal is broken. Common sense is Finance 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. Rachel Cruz, Ramsey personality, number one bestselling author, co-host of the Smart Money Happy Hour. My daughter is my co-host today. The phone number here is 888-825-5225. The call is free, and some say the advice is worth exactly what you pay for it. Liz is with us in Charlotte, North Carolina. Hey Liz, what's up?

Hey, how are you?

Better than I deserve. How can I help?

Um, I'm calling because about 3 years ago I had discovered that my husband had amassed a pretty substantial amount of debt, just kind of a combination of bad decisions, bad luck, overspending. Um, and I had kind of stupidly let him, you know, he was bringing in most of the money. I had let him take control. So, um, about 3 years ago, I started managing our finances, and, um, I've been able to kind of rein it in some and make some progress. But my, my job that the past 2 years have been pretty steady has slowed back down, and so Every— for the last 3 months, we're about $2,700 short a month. I know. And, um, I just— I don't really know what to do because I've put our household expenses to nothing. I've gotten rid of— the only 2 things I could still get rid of are our home security system, which is $25 a month, and then house cleaning for my mental health. But other than that, I've, I've gotten rid of extras.

Um, so how much debt is there?

Probably right now about $200,000.

Okay, all consumer debt, Liz?

It's, um, he took out a HELOC. Um, there's some credit card debt, 2 car payments.

Oh, what do you owe on your cars?

Between the two of them, $48,000.

Break them down to him for me.

Um, his truck is about $18,000 and mine is, um, like $33,000 or so.

And what do you make a year and what does he make a year?

He makes with his bonus about $160,000 a year. My job varies. I work on an as-needed basis for a law firm. So the past 2 to 3 years, I'm, I made about $90,000, but, um, I'm probably tracking this year what it had been like the previous 5 years, which is $45,000.

Because, okay, so what you gave me does not equal $250,000 worth of expenses. Where is this money going? What's your house payment?

Um, our house payment is $1,900 and then we have a HELOC, which is $470 a month.

Yeah. Well, that's only $2,500. That's only $30,000 a year and you have a $250,000 household income.

Well, I guess I'm factoring in like all the, like the debt, all the monthly payments we're making.

Yeah, I am too. I don't get to $2,700 upside down. Your household income is $20,000 a month.

No, it's—

well, no, it is. I mean, it's not your take-home pay, but your household income is $20,000 a month. $160,000 plus $90,000 is $250,000. That's $20,000 a month.

What hits your account every month, Liz? What do you actually have to work with after taxes?

Right now, what we're working with is about $7,700 a month. Because I haven't been working.

Where's the other $13,000 a month going? That's— are you still putting money?

I know she's not working, so she's not—

she's not at 90 anymore, she's at 60.

She's at 45, and your husband's 160.

Yeah, but the, uh, so, uh, but even at $160,000 income, yeah. Are you putting money in a 401 still?

Um, he does. I don't.

Well, you manage the money now, so yeah, we are putting money in his 401.

Okay, we— yes.

Okay. And, um, what else is coming out of your checks other than taxes?

Insurance. Um, he has this debt where he— this company called Beyond Finance, so that's $750 a month that he's paying towards something that he had some debt consolidation company.

And that comes out of his check?

That comes directly out of his— well, it comes, it just auto drafts out of our—

now that's checking account. You— that's after $7,700 went in, and I'm still trying to find like $10,000 a month that's missing. And so far the only place I found it going is a 401.

Well, I mean, his His take-home pay is— he gets after taxes like $3,400 every 2 weeks. And then he gets a big bonus in January, which we use this year to pay off a credit card.

That's $7,000.

And then you bring in $700 a month is what you're saying, because you said $7,700 hits your account every month.

I mean, that's what it's been the last like 3 to 4 months because I haven't really been working. Okay.

Okay. So can you pick up the same type of position somewhere else since this— since they've slowed you down?

I can't because, um, I work for a law firm and I'm covered by their liability insurance.

So I, I can't do the same kind of work for anyone else because of—

I mean, is there another law firm that'll hire you and quit those guys?

I mean, I've been looking. Yeah, I haven't found anything yet.

Yeah, because you know, we're not going to stay at 45 when we have a market income or market value of 100. Okay, so a couple of things, backing up then. So number one, the two of you need to sit down together and work on the budget. You can do the details, but he needs to feel the weight of the responsibility of this with you and be carrying it emotionally. You're carrying it by yourself. And it's crushing you. I can hear it in your voice. Okay. And you're still harboring a large amount of resentment, which is fair. You're still pissed off about him running $200,000 in the hole without bothering to tell anybody. Okay. That's thing one, though. You're not got— your only shot at your marriage getting through this is the two of you hooking arms, putting your— both of you putting your shoulders in the same end of the harness together and pulling this wagon together. Okay, now you can do the details. You're the detail person, and you definitely have to know what's going on because we can't count on him. Okay, so that's thing one. Thing two, then once you're doing that, then I want you to go find where all this money's going, because stop his 401 immediately.

You don't go $2,700 in the hole while funding a 401. That's not logical. That's borrowing money to put in a 401. No, I'm not doing that. So stop his 401 in the morning or tonight or whatever. Stop yours. No saving money. No investing money.

And I'd be selling the cars at this point.

That's the next one. Sell the cars. These cars have got to go. They're crazy in this situation. But you've got to go find where all this money's going. Because when you add this up and look at the grocery gross amount that you guys have been making and you're only getting $7,000 home, something's wrong. If you got a huge tax refund, something's wrong. There's some gaping holes in this.

Well, and I think a big part of his $160,000 is the bonus, which they use to pay off the credit cards. That's not in the paychecks either month either.

You got to figure out where all this is going because it's not, it doesn't add up to $250,000. And that's what we got to get to.

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Jay's in Oklahoma City. Hi Jay, how are you?

I'm doing well, I'm doing well. How are you all?

Better than we deserve, sir. How can we help?

Yes, I'm just calling. Um, I am 27 years old. I still currently live with my parents. Um, I am $35,000 to $45,000 in debt. Um, that's with credit cards, vehicle loans, and personal loans. And I make roughly $3,200 to $3,500 a month. Um, I work two jobs and I'm going to school. And I'm just, you know, very overwhelmed and I just feel like I'm financially behind in life. Wow.

So did you say you had two car debts?

Uh, yes. Um, they, it's a 2021 Hyundai Elantra and a 2018 Denali. Um, the Elantra, I have about $11,000 left on it. Uh, the Denali, I have $21,000 left on it.

Are you married?

I am not.

Why do you have two cars?

Uh, the 2021 Hyundai Elantra is mine. Um, the 2018 Denali is my father's. Um, he is disabled, so he is on a fixed income, and he had no vehicle. Uh, he had one, but that broke down on him, and we both needed reliable cars, so that's I believe looking back on it was too much of a burden to take on.

Yeah, you need to sell it. You can't afford the Denali. It's one of your problems. What's the nature of your father's disability, hon?

He has nerve damage and he has severe arthritis in his hands. So, um, and what, what some days are you—

you said you're living with your parents. Your mom is involved too?

Uh, yes, she is the only one working.

What does she make?

She makes about— she makes $20 an hour. Okay.

And your dad has disability income coming in, I assume?

Uh, yes.

Was the, um, was, uh, is this just SSI or was he military or, um, it's SSI, but, um I guess something came up.

They, uh, said that my mom makes too much money, so they're threatening to cut it off.

No, there's not— there's not a thing where the spouse makes too much money if someone's permanently disabled. Your mom can make $800,000 a year and your dad still gets his disability SSI. So that— somebody's confused somewhere on the messaging. Okay, so here's the deal. Your dad's income from disability and your mom's $20 an hour adds up together to determine what kind of car they pay cash for.

Mm-hmm.

And they manage their lives. They're like grown-ups and stuff.

Mm-hmm.

And the Denali's gone. You are way too broke to be supporting other people. That's why you're stuck.

How does that hit you, Jay?

It hits me, but I've seen it and I've looked at the numbers. I've known it for a while and it's like, you know, a realization.

Yeah. And I'm just the mean guy that said it all out loud.

Well, it just, you know, hurts because I want to help.

Like, I want you to be able to help, but you're not helping. You're hurting because you've quote, you guys have woven together a situation that is not good for any of you. And that can happen. You can do the wrong thing out of a good heart, right? And you got a great heart. You're trying to help your dad. I appreciate you doing that. That's good. That's a good man, okay? Trying to help your mom, and you're living there, so you feel like you owe him because you do. That's okay. I get all of that. That's fine.

But basically all the debt you're feeling is— are these two cars?

Yeah, yeah.

I mean, that's basically all of it.

If you didn't have the Denali payment, your life all of a sudden starts working again.

Mm-hmm.

Yeah. And so, yeah, and then we begin to work extra like a crazy man and clear up the credit card debt, clear up your, your little $11,000 car debt, and you'd be debt-free in, gosh, about a year.

Mm-hmm.

But because you don't have any overhead, you're not paying rent, right?

No, no, I'm not.

Yeah, I mean, and you're buying some food maybe and stuff for the house and maybe paying a light bill or something, but you don't have much overhead. So, you know, basically we're talking about $2,500 a month, which is $30,000 a year that you could be throwing at debt. And that means you're debt-free in a year. Of course, we're getting rid of the Denali too, but that's part of the equation. But yeah, once that's gone and you do these things, and then mom and dad scratch together a little bit of money and they go buy a $5,000, $6,000 car, and that's fine. There's nothing wrong with a $5,000 or $6,000 car. You can get a lot of car for $5,000 or $6,000. It's not pretty, but it's And you're not trying to win any sex appeal jobs anyway. They aren't at their age. They don't need to pick up a date. They're fine. So, I mean, it's, you know, it's it. So, and then you start working to get out on your own, and, um, and you can emotionally support them and coach them and be there for them and drop by some, uh, drop by dinner occasionally for them and that kind of stuff.

And then you start your own life, and that's going to be the best thing ever happened to them and to you.

How will that conversation go with your parents, Jay?

Um, I think it will go very well. I think, um, yes, I, we, we, I have a great, uh, relationship with my parents and my dad is always telling me that he wants me to win. He wants me to do better than he did.

So, okay, good.

Yeah, that's wonderful. That's a very supportive environment.

And how much is that payment a month?

Which one?

The Denali.

The Denali is $508,000.

Yep.

Wow, really? Okay, I would have guessed double. Okay, but, um, just the same. So yeah, I don't think it's good for them to have that burden, and I know it's not good for you. The car— that— the car was— oh, you had a valid need and you purchased about 4 times as much car as you should have, or 5 times as much car as you should have. To cover your dad's need. And then that's when it exposed all this other stuff. 'Cause when you put stress on that budget, all the little stupid things are really exposed then. You can kind of get away with those and forget about 'em until you put stress on it.

You know, and I can see how all, you know, it's $21,000 Denali, you know, versus a brand new $90,000, right? So, he's probably thinking in his head as he's doing it, "Oh, this is a good deal. Okay, it's not crazy." Like, I can— But here's the problem, are these small purchases, small purchases that we make, start when we justify them, you put them in the whole picture of your math, and a $500 car payment making, what was it, $3,500 a month? That's what he said, yeah.

$40,000 a year for a $20,000 car.

Eating, eating away. Yep, with another $11,000 car.

And another $11,000 car, and credit card debt. Yeah, so that's what you gotta do. So hang on, Jay, I'm gonna send you a copy of the book, "The Total Money Makeover," that shows you exactly how to do the Baby Steps that we talk about here, and we're also gonna sign you up for EveryDollar, for our budgeting app, and it'll hold your hand as you walk through this process. But beans and rice, rice and beans, and what'll happen is, is you'll get a new level of energy when you have a clear path and you can map out, "I'm gonna knock that debt off, and then I'm gonna knock that debt off, and then I'm gonna knock that debt off, and then by this date I'm gonna be completely free, and then I'm gonna save my good 3 to 6 months down payment." And you know, by somewhere in that That timeline is when you decide you're gonna move out on your own, and all of these things come together. You get out on your own and you're debt-free and you got $10,000 in the bank, you're a different guy. It puts you in a whole different world.

And what's wild is all that can happen in 18 months.

Less.

Well, being debt-free and saving up $10,000, yeah.

Yeah, yeah, oh yeah, you're right, you're right, good point. Yeah, that, and only 18 months. And think about where you were 18 months ago— about right here. So nothing changes until something changes. So hang on, we're gonna send you a copy of The Total Money Makeover and get you moving here, my man. Get you moving. So, Rachel, I would say that in 30 years of doing this, that a high percentage, and I'll call it maybe even 90% of the people that are struggling with money issues have— they're either struggling with their spouse or they're struggling with some other family members with money. There's a relational component.

9 out of 10.

There's a relational, a negative relational component to about 9 out of 10 people that are having money problems.

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Kevin is in Charlotte, North Carolina. Hi, Kevin. How are you?

Doing well. How are you?

Better than I deserve. What's up?

So my question is, I'm currently living with my girlfriend and we want to start to look to buy our first house. We're currently renting. I make good money. She has a lot of money that she made throughout college and her dad is also going to gift us $35,000 for a down payment. We just kind of feel like right now we're wasting money renting. And I know you're totally against doing this before marriage, but it just kind of feels like the smartest option right now.

How long you been living together?

We've been living together for 1 year.

Why don't you get married?

So, if it was up to me, I would have got married last year. Um, she is going to be competing in the 2028 Olympics, so we want to make sure that she's ready to go for that. And she is—

How does marriage negatively affect competing in the Olympics?

Just the whole wedding and planning for all that. She just wants to stay focused on—

so the wedding affects it but not marriage?

Yeah.

You're willing to buy a house, which is a big deal, but we're not willing to do a wedding while competing in training? It's too stressful to do a wedding, but it's not too stressful to buy a house? It's inconsistent and illogical.

The wedding's gonna be a fun big party that we could, uh, all enjoy it together.

You ever bought a house?

No.

It ain't an easy process. They're gonna do a— yeah, okay. Um, so Kevin, you guys are going to do what you're going to do, and, um, I'm not sure why you called us because you knew exactly what we were going to tell you. And, um, it is absolutely relationally, legally, financially stupid to buy a house with someone you're not married to. Her father willing to give her shacked-up boyfriend $35,000 and have no protection on where that money's gonna go is idiotic. That's just dumb. Okay. No way he should do that. Because here's what could happen. Okay. Both your names are on the deeds and you decide, I'm leaving because I don't like Olympians and I'm going to go do something else with my life. Now she's got the whole thing, but he can't get his money or her money out of this thing because they can't even find you. These are the calls we get on the show. But that's never going to happen in your case. Yes, it is. Crazy people do crazy stuff all the time. It's how I— it's why we have a show, and it's compelling radio, you know, it's compelling calls.

So please don't do this. So what would I tell you to do if I were your friend? And I am your friend, even though I'm fussing at you, because I don't want you to do this for your own sake. I don't want you to be one of those callers that has a horrible situation and you have to call me back and try to unweave some barrel of fishhooks you got yourself into. And so what I would do is I would call the preacher and I'd go get married Saturday. And I'd have a party after the Olympics. And then you're legally and relationally and financially on the same page, committed to— then if you wanna talk about buying a house, and then if her dad wants to give you all a wedding gift of $35,000 to help you on the down payment, I'm in. Let's talk about whether you're out of debt. Let's talk about whether you have your emergency fund in place. But conceptually, then, I would go ahead. But if you're unwilling to commit to marriage, you should not be buying a home together. These are permanent decisions that are not easily undone. So yeah, period.

Period. And it's not— The data tells us that your likelihood of having 1/4 of the net worth that you have, that your friends that are married have, when you're 35. 35-year-old men that are married have 4 times the net worth of 35-year-old men that are shacked up. That's the data. And that's where this is going, 'cause if there's always an excuse, there's always an excuse, but we're gonna go ahead and buy a house. Now, I think you're probably gonna buy the house. I don't think you're gonna listen to a dadgum thing I said. But I wish you would reconsider, and I wish you'd play this back for her dad where I called him an idiot, because this is just dumb. He's just trying to do a nice thing for his daughter, and he thinks you're a good guy, and he's trying to be a good dude, and he hasn't thought through the unintended consequences of this, which is this crap only works when everything goes right. If anything goes wrong, she's screwed in this scenario. And you don't— she don't want to be in that. And you don't want to love— you want to love her better than that.

So we're going to see the preacher Saturday. Saturday.

Saturday.

This Saturday.

Southern uncle.

This Saturday.

Kevin, that's your Uncle Dave coming out.

That's your Uncle Dave loving ya. Because I don't want to talk to you when you're 30 and you've had this— all this struggle in your life because you've got things out of order.

Yeah.

And it screws up everything. And the number of people we call, that we get in here in your situation, and you knew this before you called me. So, you walked into the bear's den and said, "Hey bear, will you eat?" Yes, we will. So, we love you so much, we're always gonna tell you the truth, and forcefully, to try to get you to do it. So, I want you to win, honey. And man, obviously, the girl's a great girl. I mean, an Olympic champion, wow. "When you get to compete in the Olympics, you got some serious stuff going on. That's neat. So, this is a great find. You probably ought to like make sure this gets wrapped up before she slips away." I was gonna say, or she goes to the Olympics. Close the deal, man.

She's an Olympic man. Not that you aren't, Kevin, but listen.

She said she's the one wanting to put it off, but she's tying it to the wedding and the stress of doing the wedding. But buying a home is stressful. Selecting a home is stressful.

The quality of your life, the quality of your relationships, when you have commitment together, when you know it's gonna happen anyways, and you start creating a life together, there starts to be balance, give and take, you know, all of it. It just— there is, like, there's so much data coming out that it is— there is an advantage to it, to being married. And you add the finances on top and doing something like purchasing a home together.

I mean, by the time you get to 50 years old, folks, the numbers are staggering. You ladies, you have 14 times less net worth when you're 50 years old if you shacked up than a married friend of yours. 14 times less money. That's the reality. Men is 5 times less money at 50 years old. Married men long-term live 7 or 8 years longer than unmarried men. Now, John Delony and I were discussing that piece of research. He's convinced it's because our wives keep us from doing stupid things that kill us.

Yes, yes.

"Are you gonna eat that?" "Are you gonna wear that?" David.

David.

Yeah, passive-aggressive questions coming from a Southern Belle. There you go. Yeah. Ah, yeah, I'm convinced this is real. Well, and ladies live longer too. You have a 20% higher possibility of surviving a cancer diagnosis if you're married.

And the stats on What is it? Is it fulfillment or happiness within the marriage?

Yes, happiness.

Before living together, before marriage even.

Yep.

So, the whole generation shift has been, "We live together first." And actually, the data's coming out against that.

On a happiness front.

Versus like, playing house together, like, "We are married," and we're not, because from the psychological perspective of the deep commitment that you have for protection, legally, and all of that. And that's Arthur Brooks' happiness, the happiness profession. Yes, all of that. I mean, yes, it is all wrapped in together. And again, it's not what the culture's doing. I know it's not the norm. But that's what's coming out.

So here's a good idea too. More people live together now than are— than that aren't married than live together that are married in America for the first time ever. That happened about 10 years ago. The shift is— so more people are shacking up. So I'm pissing a whole bunch of you off right now, but more people are shacking up than are married today. And but here's the thing you got to keep in mind, okay? Divorce rate's at an all-time high, and if that's the case, then the splits that aren't divorced are at an all-time high. We know those things are there. So what you got to figure out is what do most people do in a world where very few people are successful at any area of their lives and figure out what normal is and run from normal. Normal sucks. You don't want to be normal.

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Uh, you can get in if you try, but if you can't, let me give you another idea. Go over to our website and use Ask Ramsey. Ask Ramsey is our free AI tool that's built and trained only— the only data in it is proven Ramsey principles. So 3, 4 years worth of phone calls from this show dumped into it. The books we've written, dumped into it. The articles are all over the Ramsey Solutions website, dumped into it. So, if you want a Ramsey answer to your question, that's the only thing that's in this. There's no other answers in it, which means the answers are all right.

And what's fun is you can build out a profile, so it will remember you as you come back in your situation and everything. Like, it's amazing.

Yeah, this is a— I'm real proud of our tech team building this out. This is a good use of the AI technology. So, you get an answer the same way you'd get right here on the show. You can ask your question, it will remember you and update you as you go down your journey, and it'll walk with you. It's pretty cool. It's called Ask Ramsey. It's completely free. Ask your question at RamseySolutions.com, or if you're on YouTube or you're podcasting, just click the link in the description. It'll take you right there. Jennifer's in Daytona. Hi, Jennifer, how are you?

I would like to say better than I deserve.

Cool!

Very fine.

Right on brand. How can we help?

Okay, so long story short, I'm trying to figure out if we should refinance my private student loan. So me and my husband kind of discovered you and your whole program and Baby Steps and all that about a year and a half ago. And so I'm a full-time teacher, so I teach in high school. So it's 40 hours, but 40 hours means 50. And then so I started working in a restaurant and then I started a baking business so I could spend more time with my daughter and make income. And then from that, my baking stuff, I started putting on a wedding show, which is making a lot more money, which is great. But because I made all this income, more income— my husband works about 50, 60 hours too, so probably more 60. Because I made this more income, now my government student loans are going up about $700 a month. And I'm starting to have some weird health issues, so where like there's a new medication they want me to try. My insurance that I pay 12% $500 a month for, is denying the coverage of that medication. So I might have to start paying it.

I just changed my entire diet to see if that helps versus paying for this medication, which is like $500 a month, they said. So I've changed my entire diet so that way I could save the money.

Okay, so wait a minute, how much student loan debt do you have?

Um, so government student loans, I'm in the— and I know you're gonna, you're gonna roll your eyes on this one, um, but I'm in that like, uh, um, what is the balance?

What's the balance on your government student loan?

So The government student loans is about $80,000.

Okay. And the balance on your private student loans?

About $17,000.

Okay. Good news. All right, good. So $100,000 gets you out of student loan debt. How much other debt do you guys have? Not counting your house?

We paid everything off. We paid everything off.

So you're debt-free. And what is your household income with all this activity? You guys are working like horses, man.

Oh, you have no idea. I'm so tired. And my kids kind of miss me, but I'm like, it'll be fine. We'll make it work. So it's, um, Probably around $130, give or take.

Okay, first rule is we need to find out exactly what our income is, and we need to have a detailed plan of where every dollar of that income is going on the EveryDollar budgeting app.

Okay? Okay.

And that will make you feel like you got a raise, because part of this chaos that is your life right now is the finances are very disorganized and they're kind of floating around as separate numbers in your head instead of sitting in a line.

Yeah, it's—

and that adds stress.

We don't have a set paycheck, so because, I mean, my husband obviously depends on his hours too, and the extra shifts I can pick up at a restaurant and things like that.

I understand.

So it's my salary.

You've got all these wonderful things going on that are side hustles, but you still need a detailed game plan of exactly where every dollar comes in as it comes in. But sometimes it's gonna be more, sometimes it's gonna be less, but we need a detailed game plan, and you and him need to be agreed. I'm telling you, your stress level will go down, your fatigue level will go down, because you don't mind working if you can see the traction, if you can see the progression. Like, if you look up and you go, "We just paid off $20,000 in student loan debt, and our private student loans are gone." See, then I'm not as tired.

And you've been on this for a year and a half, Jennifer, you said. How much debt have you guys paid off so far?

Um, almost $100,000.

So, um, so like in a year, in another year you'll be debt-free.

I'm kind of hoping so.

No, no, no, no, no, that's a math thing. It's not a hope thing. Yeah, even if you already paid off $100,000 in a year, you could pay off $100,000 in another year.

18, a year and a half. Okay, they make $130,000, they have $100,000. So, yeah, so it'll be a year and a half. But Jennifer, to the point that you can still budget with an inconsistent income, You guys just every month kind of guess and just say, "Okay, here's what we think we're gonna make." And when the 15th hits and it's a little bit less, you just lower that income, which means you already have planned out which categories you're gonna lower or what's gonna be cut out of the budget for the remaining part of the month.

Well, we're not putting as much on the student loan is all it is.

Oh, fair, fair, fair.

All you're gonna be doing is putting everything on the student loan and how much you make up or down is gonna be more on the student loan or less on the student loan that month. That's all it is. That's the only variable in this.

But it helps you stay within the margin of your food budget, your out-to-eats. I mean, all the extra stuff that just ends up kind of slipping away, that can add up to a couple hundred bucks a month, which makes a dent in this debt over, you know what I mean, over a period of time. But it is that kind of strict budget. But you guys have been doing it. I mean, so you've done a great job.

If you only have the student loans debts left and we're on an 18-month schedule to pay them off, you're paying way more than minimums anyway. So whoopty-doopdy, it went up.

Okay, is it on—

you said something, Jennifer, as you were saying the $80,000 and you're like, you're gonna hate this, but you're on the—

well, you're, um, she's on the income repayment. Yeah, and they said like after 10 years. I'm on like year 7 of it.

But now you're not 10 years. I wouldn't do that. I would just get it paid off. Let's just get it paid off. Yeah, because you can't count on them. They lie. It's, it's the federal government. And, uh, like 1.7% of the people that do the 10-year one-time repayment plan so far have actually gotten forgiveness. It's nobody gets it because it's so screwed up and bureaucratic and messed up that I'm gonna, I'm gonna be the one. Yeah, you're— no, you're not. Don't do it. Just get it paid off. You're working like crazy, people. Get— because think about where you'll be 2 years from today when you don't have a payment in the world except your house. I'm telling you, all this other medical stuff you're facing will be affected by your stress level and your anxiety level. And when there's all this chaos and lack of organization, and when the weight of the $100,000 is not there anymore, all of that's gonna affect— it does affect health. It does with everyone, by the way.

So, well done, you guys, though.

I mean, yeah, you're doing great.

You're killing it.

You're doing real good.

And in our millionaire study, teachers are on the list of the 5 careers of Baby Steps Millionaires, Jennifer. So, you guys are, you're in great professions. You have got a great head on your shoulder. Just dial in the budget, and I promise you'll be finding some more cash when you do that.

Yeah.

Wow.

That's powerful. And she's not lacking in energy.

No.

She can work.

She's got a lot of energy, Jennifer.

Highly caffeinated. Yeah. Well done.

Keep at it, Jennifer.

Well done. Yeah, me too.

Me too.

I like it. I like it, I like her. She's neat. So way to go, kiddo. Push on through and get this stuff out of your life. But the best way to do it, the most efficient use of money, is a detailed plan. And one of the things, folks, if you think about it this way, if you worked for a company called You Incorporated and your job at You Incorporated was to manage money for You Incorporated, and you manage money for You Incorporated the way you manage money for you now, would you fire you? And if the answer is yes, then probably you ought to change something. And don't be sitting around shocked that you're broke if you're doing a bad job of handling the money. And so, you know, like, I've got 14 profit centers here at Ramsey. I just met with one of them a while ago for an hour and a half going over their detailed budget. And the vice president of that area is showing me with SmartVestor— we were looking at SmartVestor stuff— and he's showing me exactly what we've got coming in, exactly what we got going out. We're going over the details.

And, you know, we have— believe me, he has a stinking budget. Watch it. And believe me, it's organized. And believe me, he executes because it's his freaking job. Hello. And get to keep that job is how he does it. Hello. So he's really good at it. If you're waiting for the perfect interest rate before you buy a home or refinance, that moment may never come. That's why people should talk to Churchill Mortgage, because rates move every day, and when rates drop, buyers flood the market, which means more competition and higher home prices. Smart buyers know they can't time the market. They move with a strategy. Buy the home you can afford now and refinance later if rates improve. Churchill helps you understand what you can actually afford, not just what you qualify for. And with their Certified Homebuyer Program, you can get fully underwritten before you shop so you can make moves faster and make stronger offers. And right now, Churchill has a special offer only for the Ramsey audience. Go to churchillmortgage.com/ramseyoffer to learn more. That's a special website. Remember this, churchillmortgage.com/ramseyoffer.

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The Churchill Certified Homebuyer Program is available for qualifying borrowers and select loan types only. In MLS ID 159 800-591-MLS, consumeraccess.org, Equal Housing Lender, 1749 Mallory Lane, Suite 100, Brentwood, Tennessee 37027. Welcome back to The Ramsey Show in the Fairwinds Credit Union studio. Rachel Cruz, Ramsey personality, my daughter, is my co-host today. Open phones at 888-825-5225. Emily is in Raleigh, North Carolina. Hi, Emily, how are you? How are you?

Hey Dave. Hey Rachel. I'm doing good. How are you guys?

Better than we deserve. What's up?

Um, my question for you is, um, I've been with my boyfriend for 4 years now and we're at a fork in the road where we had a conversation yesterday and he gave me a list of things I need to work on to earn an engagement. Should I leave?

Wow.

I know the answer. Wait, what?

How old are you? How old are you?

I'm 31, he's 38. We've both been married.

Yeah.

Can I ask, not to be like overly vulnerable, Emily, but like what's on the list?

Two things. I struggle with change and adversity.

You struggle with change and you struggle with adversity.

With dealing with adversity.

And you have to fix both of those to earn his hand.

It's not something he wants to come home to every day for the rest of his life. What? Wow.

That—

do you feel like you have that attitude while you are dating? Like, has there been conversations and he's like, you see the glass half empty, I need someone with the glass half full? Like, what have the conversations been before this list was created?

It was a call. I asked a question back. Has it— oh, have you always felt this way? He said, no, it's just been this last year. And I asked him, well, we've gone through a lot of challenges and adversity this last year. It's probably been the most challenging year we've had.

So what kind of adversity did you face that you weren't good at, according to him?

I have changed my career and moved to— I've moved out of state 3 times in the last year to stay in this relationship, and I'm being asked to do it again, and I don't want to do it without a commitment.

And so the adversity is you've had all of these moves and you're sick of it, and that means you're— according to him, you're not good at adversity.

Yeah, and my response is if things can stabilize for more than one year, then I will be able to be content again.

Why does he move every year?

Ambitious. We're ambitious people. Promotions. We decided to open a franchise, which is why we moved, and it didn't work out. So there's been some financial hardship along the way that has caused more stress. Us. So that's, that's essentially what's been the most recent adversity we've gone through. And we're about to go through it again. So I'm a little nervous of— I feel like I have to watch myself if I decide to move forward.

Sharon and I moved out of a home that we had had for 15 years that we built, custom-made, beautiful home. And in '21, when people were paying more for properties than they should have, someone paid us more for that than they should have. And so we sold it. And we were homeless and we went and bought a house and we moved. Those were decisions we made together and there was always stress associated with a move, but I don't think either one of us would call that adversity. That was, we decided to change our location together and together we changed our location And whatever drama there was was outside of our house, that it was she and I facing that drama, not like, "I'm weak and I can't handle the change, and you're strong and you can." We didn't have that discussion, 'cause we both decided and did it together. So I'm a little bit confused, coming from that point of view, as to how moving is actually adversity.

Well, she's— she said she followed him around. She had to move 3 different times to stay in the relationship. Relationship. So, he's asking her to move with him.

And she's like, "I don't want to move again." I got that part, but I don't even think this— I think adversity is the wrong word.

I think that— okay, it could be the wrong word, but I think it's stressful. I think her following him and then having to, quote unquote, "put on a brave face," and you can't even authentically be yourself when you are stressed.

Adversity is you have a—

of having to move.

You have a cancer diagnosis. Adversity is someone in your family has is sickness or an illness. Adversity is you got fired from a job that was not your decision.

Well, their franchise failed.

Yeah, a failed business is an adversity, but moving cities to take a better job and choosing to do that with your boyfriend is not adversity. It is change. It's dramatic change.

And you could hate that, though.

Yeah, and I'm good with you hating it. I'm just curious. It's just curious word choice for me. Me.

That on his part.

Yeah. Or on yours to adopt it, either one. But the— interesting.

Interesting.

Yeah.

So I think, I think this doesn't come down to your deficit and he's got it all together. I think it comes down to you're sick of following this guy around.

Yep.

I don't get anything out of it.

And he knows it. He knows you're sick of it. And he wants you to not be sick of it. Of it, and you're sick of it.

Yeah, I feel like it's a too bad, so sad, oh well kind of response.

Yeah, yeah.

Like, and, uh, I'm just— it's just a fork in the road in my life.

Yeah.

So I'm just—

that's hard.

Listen to you guys every day, and I—

and that's heartbreaking, Emily.

I'm sorry.

I've been with them for 4 years, right?

But I mean, you know, I think that's hard. The truth is, just listening to you, you're— I mean, you're not a, uh, an immature little girl. You're a grown woman that's got strong intellect, and you're articulate. And so So, I think when he said this, you've already made up your mind. You just wanted to hear us say it too, that it's weird. So, I'll say it, it's weird. That's a weird request. If you had a daughter and her 18-year-old boyfriend said, "You have to do these 3 things to get married to me," you would tell your daughter, "Run." I'd be like, "Here's my list for you, Chad. You need to change these things too." Get out the door, bubba.

Yeah, let's change your commitment issues, Chad.

Yeah, man. Yeah, I've been following your butt around and all you got for the return for that is criticism. So yeah, I think you already made your decision before you called us, but it's just you hadn't, hadn't said it out loud and now you did. Yeah, I'm sorry. Yes, it hurts.

I appreciate it. You know, it's just talking to like-minded people, getting their opinion on it.

Yeah. Well, and here's the truth to Emily. You want a partner, you want a spouse spouse in your life, if you choose to get married to him, that you can come home and be who you need to be at home. Then again, you don't— I mean, and I get that like some, you know, people complain in marriage, like, "So-and-so complains all the time." But there's a level of authenticity of like, "I need to just to like, unload right now. Like, I'm so stressed and I need you to partner with me in that and hear that in me and empathize and ask questions, be curious, like, do this life with me. Not that I have to image manage in front of my spouse." Do you know what I mean? Like, that's gonna be an exhausting life.

"Yeah, I have to do this to earn." Yes. "This is a conditional love versus unconditional love." Yeah.

"And I'll show up." And we're getting your side of the story. And I'll say, more and more now, we get DMs from the person on the other side of the story. You know what I mean? And you hear, so I—

Let me tell you, you can DM if you wanna DM, but you did leave your girlfriend of 4 years who followed you in 3 different cities, feeling this way. Even if, even if you didn't say it that way, you left her feeling like you said it that way, so you still screwed up.

Emily, I'm sorry.

Yeah, sorry. That's awful. People do like change, by the way. When it's change for the better, they love it. You ever bought a new car? It's exciting and fun. It's change. When you've worked hard to buy a car the right way, you paid cash with no payments hanging over your head. The last thing you want is to worry about it every time you drive private. That's why we trust Christian Brothers Automotive as the official auto repair partner of The Ramsey Show. See, most people don't stress about their car because it's older. They stress about it because they don't know what's happening under the hood or trust the people that are working on it. But Christian Brothers Automotive uses digital vehicle inspections. You can actually see what your technician sees and know what's urgent and what can wait. Plus, Christian Brothers stands behind their work with their Nice Difference Warranty—3 years or 36,000 miles, whichever benefits you more. So if you want real peace of mind with the car you worked hard to own, go to cbac.com/ramsey. Use the promo code Ramsey and you'll save 10% off your visit, up to $250. cbac.com/ramsey. See store for details.

If you're working the Baby Steps, the best and fastest way to do it is by using EveryDollar. It's more than just a budgeting app. It is the Ramsey Plan built right in. You track your progress, you get personalized recommendations and coaching for your situation. That will help you free up more money, work the plan faster, get out of debt faster, become wealthy faster. It's like having one of us walk with you every single day showing you the next right step and holding you accountable. Start the EveryDollar process for free by downloading the app in the App Store or Google Play. Thomas is in Phoenix. Hi, Thomas, how are you?

Hi, Dave, I'm doing well.

Good, how can we help?

So I just finished Baby Step 2 and I'm 52 years old. And so I'm doing Steps 3 and 4 right now. And I just wanted some guidance on whether I should do, focus more on investing or paying down my mortgage once I get 3 accomplished.

Okay.

And I got numbers. All right, cool.

We teach to do Baby Steps 1 through 3, which is $1,000 saved, then out of debt everything but the house, and then 3 is a fully funded funded emergency fund with great focused intensity. One of those things at a time until it's accomplished. So you should not be doing anything on 4 until 3 is done. And you probably can do that in just a month or two, so, or maybe in 10 minutes, I don't know. But call Baby Step 3 completed. Then we change from scorched earth intensity, like running for your life intensity, to intentional, and we relax just a little bit. Okay, and this is when you could upgrade a car or do some other, you know, go on a trip or something like that. But until then, till you get past Baby Step 3, you don't need to be eating out, you don't need to be buying cars, you don't be doing nothing. Okay, so once you're there, then Baby Steps 4, 5, and 6 we do simultaneously, which is kind of what you're trying to do right now on 3 and 4. And that's 15% of your household income going into retirement.

And if you have kids' college to deal with, that's Baby Step 5. And then any—

I'm never married, no kids.

Okay, then any other money beyond 15% of your income being saved would go on the house mortgage. And so we're running Baby Steps 4 and 6 simultaneously. But it's very simple. You put 15% away, and every other dollar you can find that you don't need to use to have a good life, you can throw at the debt. And what typically happens is people are paying off their homes using that system in between 7 and 10 years. So let's look at your numbers. What's your household income?

So, um, I'm a Fed and I make $55,471 a year, and I have a VA compensation which is $21,701 a year.

Okay, so you have $76,000 income. Thank you for your service. And, and you owe what on your home? Oh, $191,000. And you said you're 55 years old? 52. Oh, 52 years old, that's right. Okay, all right, so cool. So what we would prescribe is you get your emergency fund finished, and then you're putting 15% of your income away. It's about $10,000 a year, about $800 a month. Month. And if you're working for the Fed, you could put it in the Thrift Savings Plan, the TSP, and/or you could use just a Roth IRA and good mutual funds, and that'll take care of a bunch of it. You put $8,000 in that, and that's what I would do.

Well, yeah, TSP has a Roth now.

Yeah, but they also don't have as good options as the open market does for mutual funds. The best option in the TSP by far is the C plan. It's the only thing that even mimics the market, and it's about like an S&P 500. So it's a good investment. It's not a bad investment. And so if you need to do some in the TSP, what I would do is put $8,000 into a Roth, getting with a SmartVestor Pro, and put $2,000 into the TSP. And then beyond that, if I can find any money in the budget, I'm gonna start throwing it at the house.

Do you have any money right now, Thomas, saved? Uh, some. In retirement?

Yes. I've got— oh, for retirement? Um, I got $26,000 in the TSP.

$26,000. Okay. Because I was just running out—

is the caveat is there's a— there's an investment, um, package, um, that is being handled, and it was my dad's, and he made my stepmom the beneficiary. She doesn't touch it, she doesn't need it, and she's like, this is yours when I die. I have no idea how much it is.

You don't know how much it is? Yeah, so I would—

I don't feel comfortable asking.

I would plan like that doesn't exist.

Yeah, so if you ran— if you did the numbers, I just typed in the calculator real quick, Thomas, with your $26,000 that you have and you put $800 away between now and 67, you'll have $565,000.

And you've got your military retirement of $21,000. Yep.

Yeah, yeah, I came up with the same numbers when I used your calculator, which doesn't include Doesn't include the Fed contribution.

So good. And whatever's going to happen—

Oh, wait a minute. Fed's contributing to your TSP? 5%. Is that a match? Yeah. Okay. Well, you do the— you put 5% in the match then for sure. And the other 10% you can put in a Roth IRA. So match in the C plan, TSP Roth, and then Roth and good growth stock mutual funds, and with your SmartVestor Pro that you can contact at RamseySolutions.com. And yeah, you're going to have $500,000 to $1 million you know, by the time you need some money. And you're doing really good. I'm glad, Thomas. Well done. And you got $21,000 a year coming in as long as you're alive, military retirement, which is excellent. So very cool. And the house will get paid for using this system. And, but no, I would not put more or less in retirement. I would work that exact plan.

And then bump it up once the house is paid off, throwing more at investments. And you can have more there at retirement. So well done, Thomas, which is so encouraging to do all of this in your early 50s. Like, he's jumping on the plan now, you know, on Baby Step 3, starting retirement. I mean, it can be done. Yeah, it's great.

Ever since we started doing this, we've had people in their 50s and 60s and 70s ask, you know, is it too late? Well, not if you're breathing. You still got a shot, you know. So, you You know, just keep sucking wind and working on it, right? It's not too late. That's the idea. So you can do a lot of stuff in a few years. But is it easier if you start earlier? Yeah. For you 21-year-olds, pshh. $100 a month and you're a millionaire in no time, man. I mean, just shut up. Hello. That's way different than saving $800 a month to end up with $500,000. That's right. You know, so yeah, get that compound interest, the 8th wonder of the world according to Einstein, working in your favor. In your favor, right? And it is, if you ever run compound interest numbers, it'll blow your freaking mind how powerful that is. All right, Ted is with us in Nashville. Hi Ted, how are you?

Howdy, I'm well. How you guys doing?

Better than we deserve.

What's up? Wonderful. My wife's 31, I'm 36. We're on 4, 5, and 6. We owe about $328,000 on a house that's worth about $550,000. We have about $300,000 saved currently for retirement. Way to go. I'm about 6 years away from being eligible from collecting my pension and retiring from the military. I'm in the blended retirement system. Ah, and I was doing, I was reading some of the literature recently and I hadn't realized that I have an option to take a reduced pension at either a 25% reduction or 50% reduction in exchange for the lump sum. Do it. And I got on Ask Ramsey last night. Yeah. And, uh, I asked, I asked Ramsey AI, was very helpful. I ran a couple of models and it all looks like a good idea. I mostly wanted help deciding if I'm missing something, figuring out what exactly I want to do with the lump sum. Nope.

You roll the lump sum into an IRA, so there's no taxes on it that way. And you leave it alone and you let the lump sum grow because the lump sum will grow and feed you more than the pension would have fed you because the mutual funds are growing at a greater rate than the pension is. Yeah, it's not even close.

Yeah.

And when you die, the pension dies with you, and lump sums don't die with you. So you end up with $500,000 or $1 million as a result of this over in your inheritance, versus when you die, your pension just goes poof.

Yeah, the model that I ran, I'd be giving up $480,000 of future pension payments, and if I invested, that all would grow to about $3.2 over the same time period.

So you did it correctly. That's why we tell you to do it. That's exactly it. No, you didn't miss a thing. That, that's how smart it is. It's, it's not just a little bit smart, it's like way smart.

Dave, we got a lot of calls on this show where life happens. One day someone's healthy, they're working, providing for their family. And then a curveball hits. You know, we hear it all the time. A car accident, a cancer diagnosis, a heart attack, and suddenly everything changes. Yeah, and that's why you've always said that having term life insurance from Zander is essential because it protects your family if the worst happens. Yeah, that's right. You need 10 to 12 times your income in coverage. No gimmicks, no whole life junk, just straightforward term life protection. But there's another piece that people often overlook, and that's long-term disability insurance. Yeah, it's important to understand the difference between them. Life insurance steps in when you die. Disability insurance steps in while you're alive but can't work. So it replaces a large part of your income so the bills still get paid while you get back on your feet. Now, if your employer gives you free disability insurance, great, take it. If it's discounted there at a better price, take it. But if not, Zander can help you find the right plan. Whether you're single or married, it's not optional.

If you're gonna be out of work for a while, then you need to make sure the money's still showing up. And that's why Zander is our go-to. They make it super simple to get the right coverage at the best price. No pressure, no upselling. I've trusted Jeff Zander and Zander Insurance for over 25 years, and so has my family. So don't wait. It's fast, it's easy, and it could make all the difference. Go to zander.com or call 800-356-4282. Protect yourself, protect your income, protect your family. Ethan is in Atlanta. Hi, Ethan, how are you? Good, how are you? Better than I deserve.

How can I help? Hey, so I'm going over my mom's finances with her. She's 55 years old, has only $19,000 in retirement and a ton of consumer credit debt and a HELOC loan. And, um, I built her a spreadsheet just to get everything out, um, in front of her so that she could see what her finances look like. And I was trying to teach her the debt snowball method She's got about $200 that she could start throwing at consumer credit debt, but I was wondering if there's a quicker way that we could get her— I say we, it's my little brother and I— we're trying to get her positioned better financially before she kind of hits that retirement age. That's very neat.

And she's accepting your coaching. That's interesting.

Yeah, hesitantly, but yes.

I heard it.

How old are you? My little brother's— I'm 27. My little brother's 24, and we're just trying to— what do you do for a living? I'm a mechanical engineer. I work on elevators. Ah, okay.

All right, so you're a detail guy.

Yeah, yeah, I love spreadsheets. Yeah, you love spreadsheets.

Yeah, I can tell. And, um, you're a good son. You're really helping her. That's awesome, and I appreciate that you're guiding her on that.

What is her income? So she makes $20 an hour, so after taxes her take-home is roughly, um, she nets $2,500, but her monthly gross is $3,400, so about $41,000.

What does she do for a living?

She's a custodian.

And where's your dad?

Alden County. Um, my dad's kind of out of the picture. He's off doing his own thing. Just, they're divorced, really contribute be— they are separated. Yes, they're divorced.

Are they separated or are they divorced? They're divorced. Okay. All right, uh, because that'll matter in her future. How long have they been split up?

Um, I think they're coming up on like 11 years being divorced.

Okay, good.

All right, so how much, how much credit card debt is there?

So minus the HELOC loan, about $16,000. Okay.

And is she using credit cards to get by monthly? That $3,400 isn't covering her expenses, or is it just kind of flippant spending that's caused it?

Um, so her— it's kind of a messy situation. She right now is living off of just her paycheck. I made sure that she— like, when I talked to her, she's just using her debit card to pay off all Yeah, so she's not using her credit cards at all. Okay, she's—

I was in Palm Beach a while back where Mar-a-Lago is, among others, and about 3 doors down from Mar-a-Lago is a property that is probably a couple hundred million dollars in value. And the lady that lives there was Mary Kay of Mary Kay Cosmetics. She built that house. You've heard of her, I'm sure. Yeah. Okay. She got divorced at 55 years old and started from nothing and decided, I don't want to be broke anymore. So she started her whole life, her encore, her whole career. Everything started at your mom's age. And so, uh, encouraging. I want that for your mom. I don't know if I want her to be in a $200 million house next to Mar-a-Lago, but anyway, but I want a— I want a second chapter. Yeah. Beyond the 11-year-ago divorce, beyond being a custodian, because she didn't sign up for the trip she's on. And I want her to sign up for a new trip. So I'm going to ask her as her 65-year-old older brother, what she's gonna do in her encore career. What's the next chapter of your life look like, honey? What do you want to be when you grow up?

Because now at 55, you get a second chance. You've got 40 years, 30 years of income potential. And I don't want you— there's nothing shameful about being a custodian making $20, but part of our problem is she's a custodian making $20, and the life that she settled in on, she'll still be doing that 25 years from now if she doesn't have some kind of a wake-up call. You follow me? Yes. And that's a bigger concern than a little bit of credit card debt. I agree. So I want to— I'm gonna put a bunch of inspirational literature around her, make sure she has friends that are inspiring her. Charlie Tremendous Jones said, 5 years from today, you'll be the same person you are today except for the books you read and the people you meet. I want her to meet some new people because you become who you hang around with. I want her to read some new books. I want her to get her nose back in her Bible and her tail end back in church. And I want her to get fired up and wired up about who she's gonna be in this next chapter.

And I want her making $45 an hour 48 months from today. This is the kind of way I want to think about this for her. I want her to have a better life than she's got lined out right now. Obviously the side— the byproduct of that is it solves your problem that you're facing, because part of what you're facing is you're taking very little income and trying to squeeze a lot out of it. That's what your spreadsheet told you, right? Yes. Yeah, so part of what you got is a huge income problem, but the reason you have an income problem is you've got a perception problem, and the dreams died on the first go-round and we need a new set of dreams. So that's— yeah, yeah, I want Mary Kay story for her. I want that too.

I was wondering what your thoughts on this were. Um, if she only has about $19,000 in retirement due to the way the company that she's worked for structured it, it's really messed up. Uh, what if she were to take that $19,000 out of the 401 and obviously has to pay taxes on it and just knocks out all of her consumer debt. And then she's left with only the $34,000, um, on the HELOC, having to pay off that HELOC. And then that would make her cash flow about $1,300 a month.

Yeah. If we don't do the other thing I was talking about, it won't matter. Right. Because she's going to struggle to make ends meet. At $20 an hour. That's below the poverty level. She's gonna struggle, okay? And it's gonna get harder and harder and harder as she ages because it's, you know, it's hard to be a custodian when you're 70. So, yeah, you know, your feet hurt, hello, your back hurts, hello.

Yeah, and I wonder, you know, even Ken's book, we could give her a copy of that because there's a great—

Finding the Work You're Wired to Do.

Yeah, because there's a great assessment in the back just to start jogging her memory of what she enjoys, right? You find what you're good at, her natural bent that may has been squashed for years. I mean, who knows, right?

But just to get some ideas. The divorce definitely did a number.

Oh sure, it steals your— it steals your dreams.

Encourage her with this because when I showed her the spreadsheet, it deflated every kind of belief she had because she wasn't snowballing, she was paying extra.

Yeah, yeah. So I, I know I would not cash out the retirement because I don't want you to have to— I don't want her to have to pay the 10% 20% penalty plus her taxes on the retirement. I would stop adding anything to retirement and I would lean in and pick up extra jobs and start taking classes and do whatever we want to do for this next chapter. And then begin clearing the debt that way. But if we waived a wad and she had no debt, including her HELOC, and she's at $20 an hour at 55 years old and she has no hope of that changing much except for a little bit of a cost of living raise every so often and it goes from $20 to $20.45, or whatever, right? That's not— we're not prescribing a prosperous future with no debt. And so there, you know, your spreadsheet's not gonna get fixed until you put more on the top of it. But, but yeah, keep working on it and keep encouraging her. But if I were in her shoes, I would spend 80 to 90% of my energy dreaming again and setting up my next career and 10% of my energy trying to manage the mess that I'm sitting in.

And I'm gonna work my way out of this manure and go on to the next thing. The best revenge is success. So hang on, we'll send you a copy of Ken's book.

Tess is in Detroit. Hi Tess, how are you?

Hi, I'm well. Thanks for taking my call. Sure, what's up? Well, my husband and I have been mulling around the idea of buying a new car. A car. And we finally decided on one we might like. And separately, we looked it up. We're like, hey, this is pretty good. It'll fit us. And then I said, well, let's go buy it because we have cash. We can just buy it. And he said, oh, you know, they have 0% financing. Why wouldn't we do that? And I thought, you know, I listen to the show all the time, but I don't really know. I would say you don't do it because you don't want any debt at all. Correct. Oh, would you have a— why wouldn't you, you know, use their money?

Yeah, well, hypothetically, that would be the— would cause you to have more money or build some wealth because you did that. That would be the hypothetical. In other words, I'm paying no interest and, you know, my investments are paying me. Um, but the, the truth is what ends up happening is it's not going to be a problem for you. You got, you got plenty of money, I can tell. Um, but it would not be a problem.

Yeah, but you would lose money.

Yeah. No, no, you don't. You don't. Because here's why. Two reasons. Number one, what car is it? What's the car?

Well, I don't know if you like it, but we did. It was, uh, no, what car is it? It's a Hyundai Santa Fe that we rented when we were in California. So we wouldn't have ever looked at that car, but it was a rental, and we're like, wow, this was really nice. It was a rental.

They rented one and liked it.

Oh, I see, I see.

Oh, it was a rental that made us decide this.

I understand, understand.

Yeah, that's happened to me. Okay. And I've also decided on some cars I would never buy after I rented them. But the Jeep Wagoneer and the— anyway, the— yeah, whoo, bad car. I haven't looked at Hyundai's program, but every program I have ever looked at, the only way they give you 0% is if you pay MSRP. You pay full price. You pay sticker. So 0% is not really 0%. So I bought a, a new Raptor Bronco the other day. Okay, okay. It's cute I love that that's the adjective you use for your car.

"I have a cute car." It is.

It's cute. I mean, compared to my big truck, it's a cute little car. But it is brand new, and I called the dealer that I work with on Ford stuff when I'm buying it, great people, and I just buy it for a few dollars over invoice. But do they do that for everybody? They do that for everybody, because they get manufacturer rebates and kickbacks and 14 different things, and they make plenty of money on the car at invoice. So $500 over invoice, $1,000 over invoice, that kind of thing is fairly typical on a car like you're talking about, like I'm talking about. Okay? And that's a lot less than MSRP, a lot less than is on the sticker. So 0% is not 0%. That's problem number 1. Problem number 2 is I have met— we did detailed research with 10,000 millionaires, and the number of millionaires that we interviewed that told us that they became millionaires because they used 0% financing and kept their money working for them was precisely zero. None of them do. Millionaires just don't do this.

Okay, right, I, I agree.

I don't want a stinking car payment. Rebuttal for him: even if it's a 0%, I don't want a stinking car payment. And it's that simple. So yeah, so yeah, you win the argument. And, uh, it's an interesting discussion, but that's the two reasons. One is you're paying too much for the car, and so it's not really 0% because you're really in You know, in a sense, borrowing the money at an interest rate. So, and then the other thing is that real people that have real money don't do this crap.

And you've got real money, and that's why you stopped and said, "I don't think so, honey." Yeah, and the problem is when you don't have real money and you still go into this, if you miss a payment or something goes off, sometimes they backtrack all the interest, and it's an absolute disaster.

Yeah, you can really get— the terms that you have to abide by to continue to get 0%, and to get 0% in the first place, places are pretty horrendous. So they basically— very few people, by the time they get through all that at the dealership, end up with 0%. And so it's a bit of a bait and switch to get you in the door and get you— go, oh, we'll get you in the finance office and then we'll get your real loan, you know. And that happens a lot because you got to have all kinds— well, that's it. That's— don't do it. Michelle's in Sacramento.

Hi, Michelle. Michelle. Hi, how are you?

Better than I deserve. What's up? Oh, good.

Okay, I just had a quick question about, um, shared bank account. So my husband and I have been married for— we're going on 8 years, and we have a shared bank account, and then we have a separate one through a failed business attempt, but it was a personal account. Um, and he wants to keep that open and have my paycheck go directly to because, okay, and so it's kind of— now I got to think about it. And he's one— we just barely got to Baby Step 3, and we are completely out of debt, and we have our first month's expenses for emergency funds in there saved up, and we're moving, trying to get that moved up. But I just don't feel comfortable keeping that other bank account open. It feels like like, you know, just—

Okay, I'm confused.

We are working on the Baby Steps, which indicates that both of you have some exposure to Ramsey, and yet he now has decided he has a better plan, and that's that we don't do anything. We separate everything and act like we're roommates.

Yeah, kind of, but he's wanting— like, he still is giving me access to the family account and the groceries and all of that. Well, that's nice of him. But he wants And it's not like he's—

why does he want to do it, Michelle? What's— I don't understand his why. Keep it open and put your income in that. For what though? Like to— oh, so there's—

so he has an ex-wife and he's nervous if something happens there. He wants to make sure that we have separate, that doesn't affect the family account. Okay.

How can his ex-wife get into the family account?

She can't. I, Yeah, I'm not sure. No, she can't.

I, I even, even in California they don't allow that.

That's fair. Yeah, so it's just, it's just kind of a— it's— I, I don't know if it's him trying to be like— he's trying to think that it's like a safety thing or a backup safety thing or whatnot, but no, I've— he and I have sat down and had this— had a conversation about it. I said I, I'm not comfortable with it. Yeah, like, I'm not doing it. Is, yeah, we've already been through 8 years. There's nothing to be insecure about. You know mine, I know yours, and we've already gotten out of everything.

So if you're worried about me, we got a different issue, and it's not a separate account. If you're worried about her, you have a different issue, and it's your lack of knowledge of how the legal system works. She's gone. She's called the ex for a reason. She's a used to be.

I mean, they've settled everything.

You guys have been— she's a starter wife.

You guys have been married for 8 years. So, so interesting. Yeah. Yeah.

And there's, and there's only left of like maybe 2 or 3, but, but, and that's the thing is like we're on the same page with everything else, but it's just for some reason it's, and he wants it to go to like, um, you know, this is where we pull to go for.

Well, I mean, when you, when you say no, I'm not going to do that and I'm not okay with that, what's, what's going to happen?

I don't know. I don't, I don't think it's anything. I don't know.

Because he wants me, you need to make sense to keep it everything in there.

You're right.

Okay, you're right. Is he wanting to have a separate account in general to put all of, like, you guys together? Like, and he's just saying, hey, I want to save your income over here so when we go on trips or need to buy a car, we pull out of that account?

Is that what you were saying? Yeah, that's—

yeah, that's okay. So I would have a— okay, so what I would do, Michelle, is I would go get our Smart Bundle at Fairwinds Credit Union. This is what Winston and I did. You have a checking account and on there. And then you can have up to 10 high-yield savings accounts. So, we have our emergency fund in one. And then you can open up another one. And yeah, and if you guys look at the budget and say, "Hey, we're gonna do the budget and we're gonna save—" Some amount of money. This amount of money. And maybe it comes out to your paycheck. And that's what you all agree. Let's put my paycheck in this high-yield savings. And that's gonna be our big bucket of savings throughout the next couple of years. And we need to pull from it. Yes, that's what Winston and I do. We have a high—

I know, but you, you, you aren't putting, you already were putting 15% of your income away before. For that, and you were already— you had a house mortgage before that.

Yeah, but I'm saying the way—

she's at Baby Step 3. Okay, so you should not be saving money in addition to 14%, 15% of your income. That's fair, except for miscellaneous living expenses.

But I am saying a different account that you guys put the amount of money maybe that goes to your pay— that's your paycheck to be saving in general later on in the Baby Steps, that's fine to have another account to do that.

But both your names are on it, and the amount that's going into it happens It needs to be some amount, but it doesn't need to be, "We need to hide your check over here in a failed business checking account." Yuck.

I'm trying to paint another picture for you, Michelle.

Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. I'm Dave Ramsey. Rachel Cruz, Ramsey personality, my daughter, is my co-host today. Open phones at 888-825-5225. Steven is in Tulsa. Hi Steven, how are you?

Hey guys, thank you for taking my call.

Sure, what's up?

So my brothers and I were working on a plan. We're trying to figure out the best and most efficient way to buy my parents out of our family business so they can retire.

Cool. Okay, so what does the business net profit?

Net a year is right around $1 million. Gross is— last year gross was about $8 million.

Okay, and what are they wanting to be paid?

They haven't settled on a number. The company was evaluated at around $14 million. No, it's not. They— I wouldn't—

not even close. A million-dollar profit company is not worth $14 million on any planet. So with 600 acres of land, well, you might have a piece of real estate that's worth some money, but the company itself is generating a million dollars, right? And if you're— if you would be crazy to pay $14 million for that. So what is the land worth?

Sure.

Yeah, the land itself is the bulk of that. I'd say that's at least $9 million, $9-10 million.

Okay, that'd be about right if it's $10 million. So a company that's netting a million is probably worth about $4 million, okay? And the land is worth $9 million. So you have two transactions is my point. You have a real estate transaction.

Yeah, okay, I see.

You have a real estate transaction and the purchase of the actual business. 'Cause you could pick the business. What kind of business is this? Farming?

Yeah, it's farming. It's a specialty crop.

Okay. I was gonna say you could pick it up and go to somewhere else. That's not possible. Okay.

But, but yeah, your parents own the land outright, Steven?

No, that's, that's another thing. They, some, several of the acreage they do own outright, but the majority of it has a loan on it.

How much debt is against the $10 million in real estate? State?

It's right around $2 million, so they have a good amount of equity, but yeah, and a good amount of debt for a small company.

Yeah, and yeah, yeah, yeah, yeah, yeah, yeah, okay, all right, I'm trying to think how to structure this. All right, let's go back to the easiest one, okay? The easiest one is the business itself, not counting the land. Land. Okay, if you were to give them $4 million for the property— or not for the property, but value the property at $10 million, and we're going to give them $4 million— then the way I would do that is I would take— I would tell you and your brothers to take a bare minimum wage for the work that you do. Whatever your— what is your position with the company?

Um, operations manager.

And what do you get paid for being operations manager?

We each get paid around $100,000.

Okay, so if you— and you can live on that?

Yes.

Okay, so I would tell you to continue to take $100,000 each as your salaries, which nets the company $1 million. Am I correct? Yes. Okay, and I would give them the $1 million for 4 years. You get 100% of profits or 90% of profits for 4 years until we get to $4 million. If we get— if we have a better year and we have a great crop, we might get there in 3 years, we might get there in 3 and a half. But you're gonna get out of there. You get a percentage of profits, the lion's share, the biggest portion of the profits, 90% or so, until you get to $4 million. Mom and Dad, that's how you buy them out of the business. Then we've got a $10 million real estate transaction to do. That's a separate transaction. That's much more complicated, right? 'Cause you take payments on $10 million out of your million-dollar profits and you don't have any profit anymore.

Yeah.

So this business is not viable. It's not a profitable business if someone came in and borrowed to buy the land and the business and borrowed $14 million. They would lose money. Right. And so, um, the business cannot afford to pay market value for the land and make a profit. Profit. Right. So what are they going to do? They're going to will it to you? Are they going to take $4 million as their retirement and then give you boys the dirt when they die, and you guys work to pay that $2 million off? That's what I would recommend, but I don't know if your parents are that generous or can see their way to do that.

I, I believe that, that, uh, that's, that's the play, honestly. Um, they don't have, you know, they've been running this business for a while, so they don't have any, hardly any retirement. The business is their retirement.

So I would see that as a pretty If they got $4 million in a mutual fund 4 years from now and they live off of that and they give you guys the land as a part of their estate planning, they could do it pre-death unified estate tax gifts and that kind of thing. There's all kinds of ways you can do it. And we can even do an LLC and do partial interest and devalue those interests. There's all kinds of stuff an estate planner can teach you to do to get that land transferred to y'all. And then you guys, after you get your parents paid off, go get that mortgage paid off quick, and you're sitting there with all this debt free, and this is a stinking cash cow now. You're killing it.

It's wonderful. Awesome. Awesome. Thank you. Uh, thank you for your help.

Yeah, that's what I would do. But if they want to be paid $14 million, I don't think you can do it. I think you'll go broke.

He can't, but could they go out and get—

they couldn't get— no one would give—

would do that. Yeah, is what you were saying.

What you'd have to do is sell the land and sell the business. But you can't sell the business separate from the land because it is a special type of crop on that land. So they are inextricably tied together. Where like, you know, Ramsey could operate in any building. We happen to own the building, but that's a separate thing than Ramsey. So you could pick this up and put it in another office building somewhere, right? And then, so the real estate doesn't destroy the business or vice versa. But where it's tied together with a specialty crop in particular— It's hard. I don't know, maybe they're growing avocados or something. It was California, right? So I don't know. I didn't ask him what the crop was, but it's probably some kind of something that has been done there for almost generational on that piece of dirt. So those trees or those plants are— An essential part of it. They're mature to produce the crop that they're producing, and you couldn't just go do that. Somewhere else, probably. I'm not an agricultural expert, but that's common sense, I guess. Wow, interesting. Very interesting. Yeah, yeah. So one of the things we've worked with a lot in our EntreLeadership materials is succession planning, and we've done a bunch of it here at Ramsey.

I mean, you're looking at part of it right now. Rachel is one of the Ramsey personalities. The, the ability to carry on a brand after I'm not are not here for whatever reason. And so you've got to have a plan to carry on the brand. You got to have a plan to carry on the leadership. You got to have a plan to carry on the ownership. And Rachel and our brother Daniel and I just did a panel at the EntreLeadership Summit in Disney 2 weeks ago for 3,000 business owners, and we're talking about family business.

Mm-hmm. Yeah, and I think what's hard in family business, depending on how it's structured, is that for a lot of people, they grow a business and that's their retirement. And so when you hand it off, purchasing the business is usually the name of the game in family business. And so making sure you sit down and you do it well with an attorney, right? You said the estate attorney, but lots of communication on the front end too, that everyone understands what's happening.

It's really, really important. Everyone. All the spouses and everyone understands. If you're a business owner who's serious about growth, you've got to be at EntreLeadership Summit 2027. Summit is our world-class leadership conference where you will learn from the people who have influenced the way we lead at Ramsey. You'll also connect with like-minded business owners who are facing the same challenges as you. To get your tickets for May 2027, go to entreleadership.com/summit. Thanks for joining us, America. We're so glad you're here. If you're buying or selling a home, it's a big deal. You need to get someone in your corner that really knows their stuff, not somebody got a license 3 weeks ago and you knew them in high school. No, that's not what we're doing. We're getting a pro that sells 100 houses a year, something like that. Get somebody that's high octane, high protein. Ramsey Trusted only has high octane, high protein octane, high-protein real estate agents in our program. The Ramsey Trusted Program is the only way to find a top agent that we have interviewed, we have done the due diligence on them. It's a free service. Find a local pro, a Ramsey Trusted real estate pro, for free at ramsaysolutions.com/agent. Jake's in Columbus, Ohio.

Hi Jake, how are you?

Fantastic, how are you doing?

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

So about a couple of years ago, I decided to purchase a home with my mother and with the agreement that she'd only be there for like 2 to 3 years and then it essentially transferred into my name. Um, so recently we've been having more arguments because she likes to run the household her way. I like to do it my way. And she pulled from her 401k to pay for the down payment for the house. So she only has about $8,000 in retirement. So my question is, I'm trying to figure out how we can get out of this with both of us not being scathed.

Well, I mean, how much did she put into the house? Um, I believe a down payment was about $10,000. Okay. And so what do you owe on the house now?

Um, $239,000 the last time that I checked. Mm-hmm.

And what's it worth today?

Um, the last thing I saw, it was $259,000 to $260,000. Okay.

So if you sold the house and she got her $10,000 back or whatever she put down back, and then you split any other profits, what would be wrong with that?

Yeah, that's fair. Um, I guess it's mostly just, I'm concerned because she's 57 and only has about $8,000 in retirement and, you know, I I want to help her the best way that I can.

Yeah, but keeping the house doesn't affect that positively. Yeah. She's got to get on her own and start putting money away for retirement. That's what fixes that. The house is not causing her to have retirement or be broke. Yeah. What does she make?

Um, I think, I'm not sure what she makes now. She made about $40,000 last year. Last year. But, um, my dad passed away when I was 16. I was like 11 years ago.

Wow, I'm sorry. It's all right. And so she, she has struggled ever since?

Yes and no.

She, for a time period, had a really well-paying job, um, but the amount of hours she worked, she said, kind of just burn her out. But that's where most of her retirement money came from in the first place was just from that job.

So how often is she working?

What's her work schedule look like right now?

Um, so she works— she has two different jobs, but they're both like part-time. Um, just one, she's an accountant for a restaurant, and the other one, she's kind of like a personal assistant.

The problem is, is your mom is a widow with a broken heart, and she needs to dream again because she's not got any income, and she's 55 years old. She's still very young. Yeah. And she desperately needs to say, what am I going to do with my life the next 20 years? I need a career where I make— where I'm working towards making $100,000 a year, not working two part-time jobs and living with my son. She's part of the problem.

She's emotionally just getting by. Well, she says she doesn't want a career.

She needs a career. Yeah, she needs something to put her hand to give her meaning and give her something to drive for. She's too young to sit on her butt. She can't— she can't afford it. So consequently, her career has been deteriorating rather than going up, right? And so this is what she needs. So it will be good for you guys. It'll be good for her because it will force her to face all of this, for y'all to separate. This out. This house does need to be sold. Her— if you give her— how old you're? 27, 28, right? Yes. If you give her all the money from the house and just go live your life, you're okay. Yeah. So give her all the money and tell her to put it in— help her put it in some good investments and help her to pay for a class and go take a class at the community college and start to— what do you want to be, Namom? Do you want to be a nurse now? Do you want to— what is it you want to do with your life? You're going to have to do something.

And so it's time to sign up and dream. But the, the plan that you guys had before Dad died is over. Then now we need a new, different plan. We need a new plan. And it's heartbreaking, but it is her reality. And she's perfectly capable. Her biggest problem is she's just still living with the heartbreak. Am I wrong?

Yeah, because they divorced when I was baby. So it wasn't— okay, so she—

okay, so but she's never really done anything since then, then, right?

Well, she had, like I said, like that— I think she was only there for like 6 years, 6 or 7 years, the one job that she had. I was saying that she actually had a good income from, um, but yeah, after that she hasn't really had anything that was like—

what are you doing, Jake?

What's your What's your job? I work as a utility locator. I locate power lines.

Okay. Okay. Yeah, I think it's good for both of you to sell this house. You both need separate financial lives instead of trying to mingle it together. And, you know, and I think for both of you to encourage each other in this new endeavor for her, and you encourage her, but there's only so much you can do, Jake. You're not going to be able to change her. You can't make her go do something, but you You can speak and be encouraging in your conversations with her and what you see in her and what she's good at, what she loves, I mean, all of it. So, but I would for sure sell this house.

Yeah, prospering for someone— this is the second call we've taken today on a 55-year-old lady, right? Mm-hmm. Prospering for someone is not merely making more money. You're prospering when your spiritual life is full, your relational life is full, your—

Taking care of your body.

Your meaning, your physical life is full. Yes, all of it, yeah. That is prospering. But these things are holistic in that they are tied together. And so when you allow one area of your life to completely deteriorate, 100% of the time, some of the other areas are also deteriorating. And so, you get out of shape. You know, you've given up on God, so you walked away from your spiritual life.

You isolate yourself from friends.

You pull away from relationships. All of these things are— and what we find is, is that people that are successful work the opposite side of that. And they're very intentional about building friendships. They're very intentional about their physical health. They're very intentional about their spiritual walk. They're very intentional about— about their career and their money income. And they do all tie together. If you have only one of those working in the wheel of life, as Zig Ziglar used to call it, these different areas of it, you only have goals in one area of your life or two areas of your life, the other side of the wheel is flat and you have, anytime you have a flat tire, you have friction. And it's a problem. And so—

You know, we were just having a, we did a podcast with a guy yesterday. You did one interview and I did another, and he was talking about how he interviews very high successful people, billionaires, people that have sold companies, you know what I mean? Just insane. And he said, "And you can sit with them and you feel almost like this energy from some. Some are still anxious and discontent and nothing is satisfying them." And he said, "All these buckets of their life, you can tell, are absent, some of them. They're not taking care of themselves physically.

They don't have good relationships." And other ones, you get this holistic feeling. And he said, "And you feel a peace.

There's something about this well-roundedness." And again, there's certain seasons of life, you're gonna be working on your marriage more, or certain seasons in your life, you're gonna be working on your career more. you know, it goes through seasons. But overall, the overall scope of your life, having— he would call these buckets, he said, all of them full. And like, there's a, there's a leveling to that and a beauty, a grounding that you really do feel. And it's those people that live a peaceful life.

Yeah, absolutely. That's how it works. So that, that's what, Jake, that's what we want for your mom. And That's her advice. 5 years from today, you'll be the same person you are today, except for the books you read, the people you meet, the goals you set, the decisions you do towards those goals. That's Charlie Tremendous Jones, and he's— he was exactly right. All right, let's cut to the chase. It's easy to get discouraged about crazy house prices and interest rates, 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 They 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. Ramsey Show question of the day is brought to you by Yrefi. Out-of-control private student loans can make it feel like you're stuck financially, but Yrefi helps borrowers explore refinancing with low fixed rates and payments that make sense for their budget. Visit yrefi.com/ramsey Yrefy.com/Ramsey. Might not be in all states.

Today's question comes from Sarah in Illinois. My boyfriend and I have been together for 3 years, and he recently took a job 4 hours away. I own my condo and still pay about $1,500 a month in the mortgage, even though I'm at his place 60% of the time. He's asked me to pay for a bigger apartment since we both work from home and need more space when I'm there. There. While I still have my own bills, I understand the larger— I understand the larger place benefits both of us. Should I help pay for the new apartment? No, Sarah, I would not. That's his apartment, and you have yours. And if he wants a bigger one, that's great.

But, and if he wants his girlfriend to live there, maybe she should be his wife. Oh, that changes the equation.

Yeah, no, I wouldn't be mingling bills. I wouldn't be trying to pay a rent. Because here's the thing, if you guys break up, and then he's stuck with that rent that he can't afford, what's he gonna do? So it's way better when you are dating to keep your finances separate. You pay your stuff, he pays his. And if he wants a bigger apartment, so that you all can work there together, and all the things—

he wants you to live in that city, and you sell your condo. And we get a place there. Oh, that would be a great idea after we're married. So this is what's putting the problem on it. Yeah, put a ring on it. That's the problem, because it sets you up for a— you know, you're getting the bad end of this deal all the way around. It's killer for you.

So, and it—

this used to be, you know, when I started the show, Rachel, the The biggest thing that came up was credit card debt. Cut up your credit cards. And I still say that. And then, the next thing was, we laughed and called it the— instead of the Dave Ramsey Show, in the old days, we called it the Sell the Car Show, because like the answer to every question was, "Sell the car. Sell the car." Now, the answer to every question is, "Get married." It's so true, though.

The amount of relational mess that happens, the entanglement of dating people, And when you are dating, if you're not married, keep it separate. When you are married, combine it. It's just that easy. Stop confusing it.

Yeah, it's— because the data is in. It's in. I mean, the research is in. There's stacks and stacks of paper that says you're screwed. That's what it says. Every bit of the data says you are messed up. Because again, I covered this in another hour. But a lady in her 30s has a net worth, if she's not married and she's living with someone and/or does not marry, a net worth that is about 1/10 of her married friends.

And the guy is what, 5 times— has a fifth of his net worth.

And a guy has about 25% of the net worth he should have, yeah. And so there's a thing we used to call in in the literature, the marriage advantage. And it's still there, but it's even more pronounced now in the financial realm, but it's pronounced in other realms as well. Like, for instance, physical health. A man that is married lives 7 years longer than a man that's not, on average. That's just a statistic. Okay? I mean, you could argue why, we can have lots of fun with that. And—

Women help men, that's why. That's why, yeah.

Help them be better people. Are you gonna eat that? You know, I mean, That's real. And so, the—

Now, don't get married to someone who's a loser too. So, but don't be dating those people as well. Like, we're not saying just because you're—

I don't think that's her problem.

No, but just in general, we're just like making generalities. So, remember, be smart about it. If you enter into a lifelong covenant, make sure it's someone worth doing that. But people you're dating long-term should be worth that. So, Yeah, but here's what's interesting.

I'll start here for Sarah's sake. Look at this. Okay. He takes a job and leaves. Now follow me. Oh, now pay for it.

Now pay for it.

Now pay for following me. Mm-hmm. Yeah. I mean, yeah. What a prince. Yeah. There we go. It's— it's all right there on the paper. I'm just saying, David is in Phoenix. Hey, David.

How are you? Hi Dave, hi Rachel, good. Um, it's a pleasure to speak with the both of you. Uh, I've, uh, I've heard that, uh, I've heard Dave talk before about the If Dave Dies meeting, and it got me really thinking about my own family. Um, and I feel like I need to have a similar conversation with my parents soon, um, as they get older. Um, just to give some context, I'm 23 years old, I have 3 siblings, uh, my parents are 72 and 68 years old, uh, my oldest sister is in her early 50s, and I also have a brother and sister in their 20s who both have Asperger's syndrome, and they still live with my my parents. My parents are both retired, and to my understanding, they have a net worth of around $2 million. I'd like to have a family conversation sometime this year so everyone can get on the same page, especially my, my parents and my oldest sister, about the expectations for responsibilities and how the assets would be handled when they eventually pass away. Because as of right now, we're both kind of in the dark. So I want to know, uh, what are the most important questions that I should be asking, and what are some of the key topics discussed in the Ramsey family meetings that would be most important for any family to cover?

It's a great question.

You have to lay a foundation with your family first before you have that other part of the conversation. And the first part of the foundation is, Mom and Dad, I am not wanting to have this conversation because I want any of your money. Mm-hmm. I don't need any of your money. I am concerned about my two brothers— my— is it a brother and a sister that have Asperger's?

Yeah, it's a brother and a sister.

I'm concerned about my brother and sister and how they're gonna be cared for and what your wishes are. And if I don't know your wishes in detail, it will be hard for me to honor your memory. And I'm deeply concerned that I can do the right thing and that my older sister and I are in agreement on how we're going to do exactly what you want us to what you want to do when you pass away, okay? And they need to hear that that's a foundational thing. You are not coming at this like, "I want some of the money." "Oh no, we're not going to talk about it because we're giving it to the two that are disabled," you know? And so, you know, they'll get their back up. You know, you'll get a resistance there, a defensiveness that we don't even need to start with. So let's just lay that down. Say, "The only reason for this is for me to have the information to be able to I'm going to honor your wishes and execute and ensure that what you've wished in the will, even if I'm not the executor.

And to make sure that brother and sister have the documents in place that they're going to be taken care of. You know, I want to make sure that there's, yeah, that things are laid out from a legal perspective.

Once I know what you want, then I'm going to help you get what you want. Now, then do we have a proper will, which in this case would include probably special needs trusts to take care of the two special needs people, right? Okay. And then how's that money going to be invested? What do you want done with that property? And what do you want done with that investment account? And how do you want it handled? And who do you want us to contact? And who's the executor?

You know, is it sister that's going to be, you know, doing all the details? Is my older sister the executor?

That's fine. If you don't want me to do anything with it, I won't do anything with it. All of that's okay. I just want to know that for your all's peace of mind, that we're all on the same page. Page. Okay. And then what we're going to do once we're all on the same page, the Ramsey thing is we just sit down and part of the meeting is we go through the real estate that we own and we look at it and we go, okay, here's what the will says about this real estate, what portions of it are, you know, in a trust and which portions of it are in LLCs, and what portions have already been moved into the children's trust because we've done some stuff there from an estate planning standpoint, tax tax-wise. Here's the life insurance that's in place and here's the beneficiaries on it and where it will go. In my case, there's not any. And, you know, what do you want to have happen with the home place? What do you want to have happen with this or that? And it can go all the way down to my wife's 97-year-old dad told the kids about 8 or 10 years ago, his kids, to walk through the house and put a sticker on the back of if they wanted it.

And so the house has got all these sticky notes in the backs of the pictures and the backs of the figurines and stuff.

Yeah. Now, I will say, it's funny he asks— the meeting is not called "If Dave Dies," it's "When Dave Dies." Dave will not live forever.

If Dave dies this year. As long as you know. It's "If Dave Dies This Year." Oh, okay, that's it. It's the Monty Python meeting. I'm feeling much better.

We want him to live forever.

It's just a flesh wound.

But it's not gonna happen, but we love him.

Hey, what's up guys? It's Jade Warshaw. Listen, summer spending adds up so fast between vacations and road trips and camp fees and events and all the extra gas and grocery grocery runs, money can get tight before you know it. To really get your money under control and keep it that way, you're gonna need a plan. And that's what you'll get with the EveryDollar budget app. It helps you track your spending, free up cash to put toward debt and savings, and it's the simplest way to make a plan for your money before the month begins. So no more wondering where your money's going. You're telling it where to go. Download EveryDollar in the App Store or Google Play and start for free today.

Our Scripture of the Day, John 14:27. 7, peace I leave with you, my peace I give to you. I do not give to you as the world gives. Do not let your hearts be troubled and do not be afraid. Babe Ruth said, never let the fear of striking out keep you from playing the game. Brianna is with us in Sioux Falls, South Dakota. Hi Brianna, how are you? I'm good, how are you? Better than I deserve.

What's up? Um, I'm wondering if I should get a work from home job. I am a mom of 3 under 2, and we're going under every time we get paid. Oh my goodness, you have twins? Uh, no, I just had a baby. He's 3 months— I just bought 3 months old. Oh wow.

Okay, so how much is the new job work from home is gonna pay?

Um, I don't know, I'd have to see and find one, I guess. Um, but I did look into it, and I'd have to make at $3,000 a month for it to be worth it, because right now we are on, um, like SNAP and WIC and Medicaid. So I'd have to be able to make enough to cover all of that. What does your husband make? Um, he makes roughly $43,000 after taxes. Okay. And we're about $34,000 in debt. What does he do? He is a bricklayer. He works for the union.

So with $43,000 income, you qualify for every part of welfare? I didn't—

I didn't know that. Yes, through the— through the winter is when we qualify. We're just getting out of the winter because like we went through about 2 or 3 months where the max amount of money that we made was maybe $800 for that whole month. So we qualified for all of that. Rick and Medicaid, you call it.

But when in the summer when he's working, you don't qualify? Yes. Yeah. Okay, that makes more sense now. I'm, now I'm tracking with you. All right. Yeah. Um, so he makes a lot more in the summer, like a bazillion times more. So, um, how long has he been doing that?

Um, he's been with the same company for about 5 years. Now, 6 years maybe.

All right, so I just started working. Yeah, my first piece of advice for you all would be to pan back from this and say, um, we're a young couple with 3 children and we're going to have to make some overall decisions about his career that allow us to feed our children without the government doing it. So what is he going to do in the winter when he's not laying brick?

In other words, um, we've gotten by, by God's grace at this point.

No, you got by, by snap, because he wasn't working in the winter. So he needs to be working in the winter. That's my point.

Is he not doing anything in the winter? Yep.

Uh, he'll do side jobs. Yeah, but he didn't— not enough— have anything this winter.

Yeah, he needs to be making $1,000 a month somewhere. I mean, $1,000 a week, you know what I mean? In the winter, waiting tables.

I mean, doing anything here. And what are we going to be doing when we're 44? Because this plan's not real good. Yep. It's leaving your family very vulnerable. Are you stressed? And I don't know how you're going to work at home with 3 kids under 2 and get any work done.

Yeah. Are you—

did you have a career before?

Uh, yes, I actually— that's why we have— we have about $12,000 in student loans because I, uh, was a medical assistant. Okay, but you're saying with daycare for 3—

to 3 under 2, that's the most priciest age to put them in daycare, is what you're saying? It's just— it's not making sense from a—

yeah, you can't go into the workplace. I understand that. I don't have a problem with that assessment, but I, I really want you I asked to visit this instead of just going and saying our plan— that we didn't have a plan— was, uh, him, he's a bricklayer and he doesn't work much in the winter, and, uh, we keep having babies. This is not a plan. It's, it's, it's put you guys in— it's painted you into a corner, and your life is not fun. And so I want, I want good things for you guys, and it's going to involve him making some changes in views on What's he going to be doing in the next 5 years that doubles his income? Or in the next 10 years that doubles his income and that sustains his family through the winter? He needs to be asking himself that. You two as a couple need to be asking yourselves that. And then that starts the whole conversation. So part of your debt is the student loan debt. What's the rest of it?

Um, $17,000 is in a truck loan, and then we have $4,000 in a personal that got us through one winter. Then, um, roughly about $15,000, um, in medical. Some of that's in collections, and then we owe family about $1,000. Okay.

All right, I'm gonna— I'm gonna be mean.

Are you ready? I am. I'm gonna say you're gonna sell the truck.

No, I'm gonna say it worse than that, okay? You do not get to own a $17,000 truck when you're taking welfare to pay for your kids food. I agree, that is not okay.

My husband made that decision, um, about 3 years ago. This truck has eaten us alive since we got it. Everything, it's got to go. Yeah, the only— so I'm gonna, I guess, and then if this is going to be the thing, I've been telling him that we have to get rid of it as well. Yeah, but if we only get about 10 grand for it, we're still going to have to pay that set outright when we sell the truck, and we don't have any savings at all.

You'll be borrowing it from the place that has the truck loan to cover the difference, and I bet you can get more than that for it if you sell at private sale. But he's been looking up trade-in and looking up what some— what Carvana will give him for it, and that's nothing compared to what he can actually get for it. A good working truck will bring a lot of money in Sioux Falls, South Dakota. Okay, and so he can get a lot more than $10,000 for it. And you're gonna have— you probably are in the hole some. I'm not arguing that point. You have to borrow a little money to cover that hole, but I'd rather be $4,000 or $5,000 in debt than $17,000. And again, I'm addressing head-on the decision-making paradigm that you guys are using to run your life. And what you're doing is you're going, I'm gonna do this over here, and I'm gonna do this over here, I'm gonna do this over here. But when you tie those three things together, they're not logical. Anymore. And it's creating pain for you guys, and I don't want that for you.

I want you to win. Well, and you wanna make sure your money habits and decisions, kind of what you're saying, regardless of what happens, are steady. Meaning that before they had kids, she was working as a medical assistant. He's a bricklayer, can kind of do, you know, seasonally, I'm sure they were fine, right? Like, his seasonal work and her, they could just make it. And then you pull her out of the workforce with 3 babies, babies. And suddenly, your paradigm has to shift, to your point. You can't like—

It's a lot of dumping. You can't have that.

Yeah, you cannot continue to do what you've been doing. And I'm talking to him. Yeah, what you did 3 years ago, meaning your truck, your choices on restaurants. I mean, like all of it, it all changes because your life has changed.

And your choices on side jobs in the winter. And/or an overall career change over the next 5 years that causes your family to be able to stabilize and sustain.

Yeah, that gets you to 70. I mean, the manual side of the trades is wonderful, is amazing. And so there's a lot of opportunity.

There are a lot better than $40 grand a year. Yep. Yeah. And so, but yeah, don't get stuck in what I'm doing is okay when what I'm doing is not okay. Mm-hmm. That's the thing. And, and I'm not hollering at you, I'm not hollering at him for that matter, but, but, you know, when he was by himself and wasn't married and he was laying brick and he had a little downtime in the winter, he'd work work it out. But now he's got responsibilities. And, um, and I don't even know how you're coherent.

Yeah, he has sentence of with a 3-month-old and 2 toddlers. I mean, 2 babies. Like, that's like, you guys, you have a lot on your plates. And honestly, if you were just a full-time mom taking care of the household and making sure those babies are alive at the end of the day, right? I mean, like, that's a full-time job. So I understand the money needs to happen, and, and I hope that, yeah, there's a good situation that you can bring in some, but I mean, honestly, call me old school, but I'm leaning on him, dude. Yeah, I am too. Get to work. I am too. Get to work. I got 3 babies at home that I'm taking care of.

Yeah. That's no joke. And it's not just, it's not that he's not working hard now, but it's get to work in a way that it brings in the money to take care of your family and get your truck sold, dude.

Yeah, but when you bring $800 home a month.

I know, get your truck sold and then you get to work. Yeah. You gotta get some stuff going here. And get you a $5,000 truck.

That's the thing. Mm, call us back, Brianna, if you guys need anything. We are—

Yeah, hang on. We're cheering for you, buddy. We'll send you a copy of The Total Money Makeover and get you on EveryDollar and try to help you if we can. That puts this hour of The Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.