Transcript of Focus On What You Can Control With Your Money

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Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network in the Fairwinds Credit Union studio, this is The Ramsey Show. I'm Rachel Cruze, hosting this hour with Dr. John Delony, and we'll be answering your questions about life, and money. So give us a call at 888-825-5225, and we'll be talking relationships, money, anything and everything.

All of it. Let's do it.

Kicking us off, we got John in Detroit, Michigan. Hi, John.

Detroit, Rock City. What's up, John?

Hey, how are you guys?

Good.

We're doing great. How can we help?

Doing well. So a little bit of backstory for you. I, uh, I work in a family business doing dumpster rentals and demolitions. I've got kind of this, uh, storm cloud off in the distance, so to speak, where there's a slight chance that things might go underwater in about 6 months due to some, uh, outside legal issues with a separate business that my stepdad lives off of. So his lifestyle cannot be supported by what this business currently makes. The main issue I have is that I currently am a cosigner on a piece of construction equipment, and I want to—

Mm-hmm.

set myself up to make sure that I can cover that if things do kind of go underwater.

Well, you got a 6-month runway here, so what's keeping you from screaming and yelling and running right into the middle of this problem?

Well, I think the main thing is that for now things are still good, so I don't want to necessarily jump in and start forking over money for something that at the moment is still Being paid, if you will.

I, I, I get that. I'm trying to get to the, I'm trying to get to either, and, and I'm saying this with a smile on my face, right? So I'm not trying to be ugly. Either you don't like this business and you don't like, or you don't like doing business with this person and in a somewhat anxious, maybe overdramatic, over like it, any of our businesses could have problems in 6 months, or you actually have a problem right now. You just might not have to— you might be able to put it off for 6 months. You get what I'm saying?

Right. Yeah, I do. I think, uh, I don't, I don't necessarily have any, any problems working with him. I think co-signing was a mistake. I'm kind of a newer listener, um, so I probably wouldn't have done that if I could go back. But to kind of give you an idea of what the numbers look like, um, my stepdad's lifestyle is easily something that's You know, in the half-million-dollar-a-year territory. And, uh, this business in terms of profit year to date has only generated $200,000 in profit.

But those are his personal expenses. What does that have to do with the business?

The business that he is in the legal dispute with is what he pulls his income from. So if that disappears, his only income would have to come out of the profit of this existing business.

Yeah. Which will be $200,000. And is that after you're paid?

That's after I'm paid.

Yeah. Okay. So does he— why, why is he not calling the show being like, wow, my income's about to go up? He's the one that's going to have $200,000. It's, it's going to be his issue, John. But you think he's going to take—

he's—

you think he's going to dip into your current business so much, possibly even go into debt to keep up his lifestyle, and you're scared for your business?

No. So they're both his businesses. I cosigned on a $100,000.

I know, but I'm saying, why do you, why do you think he's not going to keep up the payment on the things that you cosigned? Do you think that, like, what makes you think your business is going to fail? Because he'll just have to adjust his lifestyle, or you don't think he will?

I think it's more of a, I'm not sure if he would end up adjusting his lifestyle. I don't know if that's something that—

So what would end up happening? So, so say he doesn't adjust his lifestyle, then what's your fear, that he doesn't have an income and can't pay on the things that you cosigned? Is that the ultimate?

My ultimate thing that I'm just trying to prepare for is what happens if me as the cosigner, I end up getting stuck with the loan.

Okay.

That's essentially all I'm worried about.

There you go. So let's live in that world, which is—

How much is it?

You cosigned on something. Yeah.

How much did you cosign on?

The original loan amount was $84,000. And then as of right now, it is about 13 months in with about $60,000 left.

$60,000.

Okay.

And how are you financially, John?

So right now, um, I'm on Baby Step 3, although I guess that, you know, the more I talk about it, I wonder if I'm still on Baby Step 2 now that we're having this conversation. But, uh, I've got about $6,000 in liquid cash, and then I've got a Roth IRA for about $12,000, and that's pretty much what I've got in terms of cash at the moment.

Yeah. And how much is the payment per month on the on the equipment you co-signed?

It's about $1,750.

Okay. And how much could you, I mean, if it got down to it and he's not able to pay his portion or his payment on this loan, then yes, it does go to you. And so your plan then is what? I mean, is this why you called to see what to do with that $1,750?

Right. So essentially in 6 months' time, the loan would have an estimated balance of about $49,000. And it's just kind of looking to, Prepare for that. And, you know, kind of a worst-case eventuality, not necessarily that I'm worried about at this second, but just so—

What would the piece of equipment be worth in 6 months?

Uh, I would say probably around $30,000 to $35,000 would be my best guess.

So then the nightmare scenario is that you're out $14,000, right? You sell this thing, correct? And you have to come up with $14,000. You have 6 of it, you have 6 months from now, so you can save up, and you're building an emergency fund anyway.

Mm-hmm. Right?

Yeah.

That seems like the most stress-free approach.

Yeah, because I mean, at the end of the day, if you, if you lost this equipment, would it affect your business drastically?

Uh, it really, I, it wouldn't affect me really hardly at all. I'm more of just an employee who kind of got into—

Stuck with the—

Bed with a cosign, so to speak.

You know what I mean?

Nope, totally. So I think you plan for the worst, which would be that he stops paying. And then you would be on the hook for it. So then you would have to come forward and sell the assets to make good for the loan. And then you'll have the difference by then. Because if you save, you know, $2,000 for the next 7 months, $3,000, right? You'll be fine to have the difference. So that's probably what I would plan for. But also, I'll say this, Jon. Yeah, this is the stress of cosigning, is that the person needs a cosigner because the bank is not trusting fully that they're going to have the amount. that they're gonna be able to pay it. And so, I'll say that you're feeling the stress of why we tell people not to cosign and the reality of what could happen. But I also wonder, John, if it may not even come to that reality in 6 months, if the father-in-law, however the lawsuit pans out for his other business, then it comes to this other, you know, $200,000 lifestyle change that he'll have to make. And hopefully he makes the payment on this equipment for the other business he owns.

Like, that's what a rational person would do, but I'm not sure how rational he is.

Yeah, projecting out 6 months of a future calamity and dragging dragging it back to right now and trying to solve it in the present. That, I mean, that's, that's the definition of anxiety, right? Um, and I, Rachel, you know me, I struggle with this more than anybody on the planet, right? What happens if AI, like, that's my whole world.

So this is—

You have to talk 'em off a cliff daily.

This is the pot talking to the kettle here, brother.

You're like, John, it's fine.

But like, what you can solve right now is, all right, there's a potential that one day I'm gonna be on the hook for the sale of this thing minus the difference. And if I have that in my emergency fund, Yep. I can breathe. And so I would, I, if I'm in your seat right now, A, I would start looking for a new job cuz I wouldn't work with somebody that I believe is so untrustworthy that they may nuke everything because they have to adjust their lifestyle. The second thing is I would work really hard to get that money in an emergency fund and then I would breathe and then I'd get on about my life.

Yeah. Planning for it is wise, but sitting and wringing your hands about something that hasn't happened yet, I wouldn't, I wouldn't go there emotionally. But planning for something that could, I mean, there's, there's wisdom in that. And again, that is why Co-signing, you guys, is never, never a good idea.

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Next up, we have Angela in Dallas, Texas. Hi, Angela. Welcome to the show.

Hi there. Thank you.

Yes, absolutely. Thanks for calling in. How can we help?

Um, so I am calling on behalf of my parents. There are 7 kids in my family and we are trying to help get my parents set up for retirement and get them in a, in a good position.

Okay.

Because there's 7 kids, it's kind of tricky. My parents don't own a lot of assets. They only own their home outright and their vehicles. They do have about $50,000 in debt and And that's all on credit cards. Some of it is medical debt. Some of it is mismanagement of spending and lack of income. My dad is 77. My mom is 72. And they do get Social Security, but they don't bring in very much income because my dad is older. He has worked his whole life and he still works a little bit, but— business has been pretty slow for him.

Mm-hmm.

And so paying off their debt is a struggle at the moment. And then medical expenses start to creep up. And so us kids, we're trying to figure out how to support them in a way that doesn't cause division among the siblings and help my parents and just not really knowing what to do. They don't have a will. Their home is not in a trust or in a will. Um, and they are needing money for, you know, their daily cost of living as well as paying off that roughly $50,000 in debt.

Mm-hmm.

And with my dad's lack of income at the moment, um, some of the kids are struggling with, do we support them financially? Um, do we give them each a fixed amount per month? Should we force them to get the money out of their own home in the form of reverse mortgage?

Um, so let me, let me jump in here, Angela. Let me ask you this one question. This is a question I ask everybody in this situation. Are your parents even open to help?

Yes, they are. Um, I would say mostly my dad is. My mom is too, but her idea of help is a little bit different. Um, my, my dad is very open to all ideas, and my mom is kind of like, I just want y'all you kids to give us—

to take care of monthly money.

Yeah, take care of us. And she is not open to changing, touching, touching the house, a reverse mortgage at all.

Don't do it. Don't do a reverse mortgage. Please don't do that. Okay. Are you married?

I am.

Okay. Here's— and Rachel, push back if you think I'm out of line here. I think the most important thing, like in order of steps, is for you and your spouse to determine what y'all's values are, what dollar amount you could afford to give a one-time gift or a, an, like, whatever. Like y'all decide in your home.

Regardless of the siblings.

Regardless of the siblings.

Yeah.

Getting 7 people, this is, I mean, just turn the news on. You can't get 7 people to agree on, on, on whether 4 plus 4 is 8. Right. And so that's gonna be a chore in and of itself. If there's one, The, the best way I've ever seen it done was my Uncle Jim. There was, there's 4 siblings, my dad, 2, 2 older brothers and a younger sister. And my old, the eldest uncle called a meeting and said, here's how this is gonna go. And all 4 siblings were united and it was awesome. I've heard of that happening one time and that was in my, my, yeah, family. Other than that, you're gonna have somebody who wants to just never say no to them. You're gonna have somebody that wants to teach them a lesson and you're gonna have 2 people who are like, well, when we were kids, they never. And so I think the best path for you, uh, and to not make yourself insane is to say, here's what we can do. And then pass that along to the siblings. And either you take the lead and move forward, or you just say, here's what we're gonna do independent of the rest of y'all.

And y'all, everybody do the best you can or with, or whatever.

Right?

Yeah. What's your, what's your gut on that, Angela? What's just like, what do you think? Like, what do you guys financially, Are you in a spot to even have the conversation of giving them money each month? And/or do you even feel the need to? 'Cause, you know what I mean? Like, everyone has a different level of what giving looks like and people's take on enabling a situation versus help, right? I mean, everyone kinda has a different span on how they think. What is your gut? I'm just curious.

Yeah, those are fantastic questions. And that's definitely something that all of us have already been discussing. Um, and this has kind of been 2 or 3 years in discussion and there's always division. So then the conversation gets dropped and then I bring it up again and then it gets dropped and I bring it up again. So, um, for me and my husband, um, we had just told my parents, we are going to start giving you guys $200 a month. And we started that last month, September, um, September 1st.

Mm-hmm.

And then we said for the next, um, let's say 6 months to a year, we are going start doing that. And if all 7 siblings can also do that, you know, we'll help my parents out a little bit. And there kind of became some division where some kids said, I don't have any money to give.

Mm-hmm.

And then some kids said, well, I already gave my parents money in the form of $500 a few years ago, so why should I give monthly? Then there's other siblings, and including spouses, because now the spouse— all of us are married, One, um, spouses feel like, well, why don't your parents just sell their home? Well, why don't your parents just sell their vehicle? Why don't your parents— um, how did they get in this mess themselves?

Angela, you trying to solve 6 other, 6 other family units?

It's like 12 people. Like, yeah, multiply it by—

and their baggage and their issues. Yeah, it's just a complete and utter distraction from you having peace inside your own marriage, you having peace inside your own financial world and your relationship with your parents. And y'all have decided, y'all made a, y'all said $200. I, I would let that stand and do what y'all think is right and what y'all wanna do.

And, and if enough, you know, if there's one sibling that wants to be loud about their opinion on selling their house, they can call the parents. Call the parents. This is what you gotta do.

Yeah.

That's right. But you, you can't walk around and own it all. Even if you think, okay, ultimately they're gonna have to sell their house. We know how this ends. They're gonna move in with one of us cuz we know how this ends. Right? And you, you asked an important question at the end. How do I do all of this without division? You can't.

Mm-hmm.

You can just face the division that you know is coming, whether it's your mom mad at you that, that she has to change her lifestyle in her 70s based on how she lived the last 50 years. based on your siblings getting mad, or you're not helping enough, or helping too much. The only thing you can do is face this division as a person with dignity, and respect, and honor.

That's it. And with your own self-integrity.

That's right.

There's something about when you are going into any level of, I think, I don't know if conflict's the right word, but you're going in to help someone, or to have a hard conversation, like, whatever that is, to know, like, you're doing it. Yes, it's gonna help them, obviously, but It's like, this is where I feel aligned within myself. And this is what I know financially is okay for my family. This feels right for me. And you act on that, right? It's like this self-integrity, and you do it for you. And it's not so that the hope that my other siblings are also gonna pitch in $200, or the hope that mom and dad are gonna change once they like have things.

'Cause neither of those things are gonna happen.

That's right, that's right. It is out of just what you and your husband say, this is what we can do, and this is what we feel good about doing too, that it doesn't feel icky. or doesn't feel cheap, like maybe we could give a lot more, but we wanna teach 'em a lesson, right? Like there's, it is just pure, this is it, and this is what we feel good about. And I think that that's—

That's really all you can control.

Such an important part.

I know, which is so difficult. And I feel like we get more and more of these calls of grown children looking to the parents' generation. I think we're gonna get more and more and more and more in the next few years. And being like, I don't know what to do. Yes. And, but that self-integrity piece, which it sounds like you have, Angela, I feel like you guys have had good discussions within, you know, you and your husband, You got to an amount on your own, like all of it. But I think that the relational dynamic, it does weigh when it's siblings and there's not peace and there's not unity. Like, that's hard. But to Jon's point, like, it's virtually impossible to get 14 people to agree on something.

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So one of the things that has helped people so often when they're trying to get in control of their money is to actually know where their money's going, which is a pretty simple solution, but it's one that when you actually practically live it out on a day-to-day basis, changes so much. Your knowledge, your habits, all of it when it comes to money. And that's one reason I love EveryDollar. So EveryDollar, it's not just a budgeting tool to have, but it also will walk you through your entire financial plan. And so whether you are feeling stuck financially and you just don't know your next move, or maybe you're doing great and you're thriving, but you still want to be intentional. Because regardless of where you are on the Baby Steps, knowing where your money's going is so, so important. So make sure you check out EveryDollar. You can download it for free in the App Store or Google Play. All right, we have Raquel in Washington, D.C. up next. Hi, welcome to the show.

Hey, how are you?

Hi, we're doing great. How can we help?

Okay, so my question is, if we know we aren't staying in the house we're in currently, do we focus on paying it off, or do we focus on investing the money towards the house instead, the next house?

When do you guys plan on moving?

So I think it will vary. I think if we pay this house off, we will probably stay a few years longer, maybe like 6 to 7 years. But if we're gonna pay it off now, then I think it will—

I mean, if we aren't gonna pay it off, maybe about 4 years we would stay.

What's the impetus for the move?

So it's just, well, we don't have kids now, so we kind of want to be in a better area when we have kids, and then just more rooms, bigger space.

Gotcha.

Yeah, I like the idea always, Raquel, because are you guys— you guys don't have any, um, consumer debt? Are you completely debt-free but the house?

Yeah.

Nice.

So great. And how much do you guys make a year?

$215,000.

Okay, and how much is left on the mortgage?

$350,000.

Very nice. Okay, so if you guys did pay it off and kind of work towards that, do you, have you looked at a timeline of how long that would take you?

So we think it should take us about 3 years max to pay it off.

Wow, yeah. I would, yeah, so I would do that. in a heartbeat because what that forces, you don't lose that money, right? It's just equity. Now, will it grow slower in real estate than how the market's performed?

Maybe.

Maybe, but there's just, there's something not only having the peace of having a paid-off home where you don't have to worry about it, but again, it's kind of this forced savings account, if you will. Because if you're, sometimes we're like, okay, yeah, I'm gonna invest the difference instead of paying off my mortgage. But honestly, what sometimes comes up is, a great trip, you know, a once-in-a-lifetime thing over here to do, or to, let's upgrade and do this instead of that. Like, instead of investing, let's do some renovations, or instead of investing, let's buy a new car, right? Like, that money easily can be swayed in other directions. But when it is focused on just one thing, especially your house, knowing that it's locked in, in equity, if you will, as you're paying down that mortgage, it's just that—

Mm-hmm.

that forced savings account, which it always feels like a safe plan because you're not really in the equation when that happens. And when we get in the equation, sometimes we can go off track, if you will.

And it's easy to look out 4 years and say—

That's a good point too.

We're gonna have— let me just tell you from my personal life, when my wife and I started, we're like, we're gonna start having kids. It didn't happen for 3, almost 4 years. In that time, I think we moved 2 different jobs, um, had multiple different places where we lived. And sometime, and there was a season, there was over a year when we lived in a 900-square-foot apartment with a 2-year-old. And that's, we still look back as one of the coolest experiences we ever had. And there was times we lived in a tiny, tiny little rent house, maybe 900. It was a little bitty old place. We loved it. And so all that to say is if you put, project out, In 4 years, who knows what's gonna happen to your jobs? Who knows what's gonna happen to the market? Who knows what's gonna happen to any number of things?

Mm-hmm.

But the one thing nobody will be able to take away from you is a paid-off house.

Yeah, that's true.

And so if you're thinking of control the controllables now, who knows what will happen in 3 years, 5 years, 7 years, whoever. But I know I've got this thing taken care of here. And so I like that just from a sense of peace. And if y'all do end up having kids, amazing, great. I know you want bigger bedrooms and this and a different kitchen, all that.

Mm-hmm.

All that. That's awesome. But man, in a paid-for house where there's no family stress, your kids are gonna thrive like kids have for centuries.

And that's true.

You know, without each having their own bathroom and their own, I don't know, kitchenette in each room or whatever, their own helipad for their helicopter to land or whatever. Like, I, I, I love, love, love that idea. If you told me you were gonna move in 18 months cuz one of y'all was gonna be changing jobs or something, I would tell you to save your money.

Mm-hmm.

Yeah, and Raquel too, you know, if you guys decide to move later down, the money's not lost. It's just equity that's gonna be put into another home as well, you know? And I wanna make sure though, you guys are investing in retirement too, right? As part of this?

Okay, yeah. So we're currently, well, we're meeting this week to make sure we have everything aligned with the SmartVestor Pro.

Oh, great.

Our other thing, 'cause we are sitting on some money that we're just sitting on. So we're trying to meet with the SmartVestor Pro this week to make sure sure we are actually getting our money out there in the market. And that could also be part of the press because we feel like we haven't done it as much, you know, so far.

Yeah, yeah, yeah.

So we're like, okay, well, should we be investing instead?

Yeah, so that may—

We can do it at the same time, obviously, but it would just be, you know, a little less in the market.

Yeah, that— and that may make you feel better because we, we recommend 15% of your income going into retirement. So if you haven't been meeting that, it may feel like, gosh, we should— that pull of we should be putting more money in the market. may actually solve itself once you actually put, you know, an adequate amount and then anything extra throwing at the house. So you may actually get the best of both worlds after meeting with your SmartVestor Pro, because you may be investing more than you are now, which will feel great. All right, let's go to Grady in Portland. Hi, welcome to the show.

Hey.

Hello, thanks for calling in. Thanks for having me on. Yes, absolutely, how can we help?

I'm currently a self-employed Doing landscaping, and I'm just wondering how I can reduce my federal income tax.

How to reduce your federal income tax?

Just my federal tax, sorry.

Just your taxes? Well, yeah, I mean, you'll, you pay obviously income tax, self-employment tax. I mean, they're all pretty base amounts. I mean, you can do some write-offs in small business, but you do want to make sure those are legitimate. So if you ever get audited, It doesn't look sketchy, but what's your bigger question?

Are you just—

are you—

how old are you?

I'm 19.

Okay, so you're realizing the world sucks. Okay, that's what you're realizing.

I was like, I don't know.

Yeah, listen, brother, if you were here, I would just stop talking and I would give you a humongous hug and say welcome to it, man. Yeah, listen, last year I, I got at the end of the year, I looked at all the taxes I had paid And I called a friend and I said, I have to tell one person how much taxes I wrote last year. And I told him and he, it was a long silent pause and he goes, man, that sucks. Like, like, and there's, I know that you probably are on Instagram and TikTok about all these super hacks and whatever. There is some of that stuff. You can depreciate your lawnmowers and stuff like that, but it's not gonna be what you think it is in terms of, there's not some secret thing that you can do to hide federal money. You just pay Caesar what's Caesar's and get on about your life.

I do wanna make sure you're— are you doing quarterly payments with your business?

Uh, I just started doing quarterly payments.

Good.

Okay.

That's where most small businesses starting out mess up. Okay. That's great. How much money did you make last year in it, in the business?

Uh, last year wasn't a great year.

Uh, probably $60,000. This year I'm gonna Double that, if not more.

Way to go.

Oh my gosh, well done. Do you have anyone working for you or is it just you?

Just me.

Attaboy, dude.

Way to go.

That's awesome. That's so great.

Yeah. Okay, so you're in Portland too, which has really high state income tax. Is that right?

Yeah. Yeah, we got, um, yeah, I'll pay a good chunk this year and I'm just wondering like, how can I try to reduce that? Bought a new truck this year already.

New trailers, new mowers.

Yeah, you can do some write-offs for the business itself.

Yeah. Sit down with a, with a, with a, a tax professional, go to ramseysolutions.com/tax and you can get with a tax pro in your area that will help you with those kind of things. Because as a small business owner, you can write a lot of that stuff off and that will help, but it's not gonna help on like— The tax pill you swallow.

Yeah, yeah, yeah, yeah. Yeah, it's a hard reality. But honestly, Grady, I think one of the things to remember is, which again, if you meet with a Ramsey Trusted Agent, I'm never gonna recommend this. Don't ever try to like skirt the system.

No, pay your taxes and get on with it.

Pay your taxes. And the quarterly payments is really big for small businesses. So many people get in trouble with taxes, not trying to maliciously, it's just mismanagement. So the fact that you're on those quarterly payments, that's gonna help you plan so well. So dude, well done. $120K in one year, Grady, that's awesome. Hey guys, it's Rachel Cruze. If you're working the Baby Steps, every major expense deserves a second look, and healthcare is one of the biggest expenses in most families' budgets. And that is why I recommend that you check out Christian Healthcare Ministries. CHM isn't insurance. It's a health cost-sharing ministry. That means members help pay one another's medical bills, and they've been serving Christians since 1981. CHM programs start at just $115 a month. And here's why that matters. If you are paying more than you need to for healthcare, that money could be going toward paying off debt, building your emergency fund, or reaching your next financial goal. And your monthly cost isn't based on your medical history or where you live. Y'all, a lot of families find CHM gives them more room in the budget. That's why so many members say they're better with CHM.

And right now, new members can receive a 50% credit towards their first month of membership. Go to chministries.org/budget and use promo code Ramsey. That's chministries.org/budget and promo code Ramsey. If you're new to The Ramsey Show, one thing you should know is that we answer majority of questions through the lens of the 7 Baby Steps. So, when it comes to your money, there really is this— it's a proven plan over 3 decades of really getting people to this place. If you feel stuck, you're in debt, paycheck to paycheck, no savings, all the way to a paid-off house, kids' college is being funded, you're funding retirement, and you have a plan for the future, and you're able to be extremely generous. So, in a specific order called the Baby Steps. So, make sure to check those out. We'll leave a link down below if you're listening on podcast or watching on YouTube. So that you can check that out and apply it to your life and your money to help you get control. All right, let's go to Joe in Flint, Michigan. Hi, Joe, welcome to the show.

Hey, Rachel and John, thanks for having me. I really appreciate it.

Yes, absolutely. How can we help?

Well, I just wanted to start off with my obligatory thank you. I really appreciate everything you guys do. And I'm a big emotional guy, so if I start crying, just know that they're happy tears right now.

Oh, you're nice to John.

Me too, brother.

He's emotional too.

I'll cry with you.

Well, John, I'm so glad I'm glad to be talking to you especially, and no offense, Rachel, but, um, it was, you know, 5 years ago I, uh, I was freshly out of a toxic marriage, um, single father of 5 kids. And I mean, I was as close to the end of the rope as I'd ever been. And I saw a video of you, uh, you know, I'd heard of Ramsey and whatnot, but I saw a video of you looking into the camera and you said something like, you know, you are worth more than your bank balance or something like that. And that brought me to the program and here I am now. But, uh, anyway.

I'm glad.

I'm glad you're here, brother. I'm glad you're here.

Thank you. I appreciate that. Um, I, uh, I see the shining city at the top of the hill. I'm, uh, I'm probably a year and a half away from being debt-free except my mortgage. And, um, you know, that, that's due to you guys. But my question is, um, my employer, they offer a Roth 401 and they do an automatic contribution, not a match. And through the years, uh, through growth in the markets and everything, that's actually, um, I logged in a few weeks ago and I see it's actually up to about $16,000. just their contributions. And I'm looking at all the different categories that I can put it in. And I'm just wondering how to optimize that for the Ramsey program, you know, the 4 different ways you recommend investing. I see, um, you know, it shows like target growth or target retire this year. I see, you know, mid-cap, small-cap, large-cap, and then there's like real estate funds and all this different, different stuff I can put it in. And I was just wondering what would be the best way to do that.

Crypto, all of it in crypto, brother.

Every dime, right?

That and a few Pokémon cards, then you're covered. It's called diversified.

Should I, uh, should I get the, uh, some, some gorilla NFTs?

Correct. And if you can get your hands on a few Beanie Babies too, that would be dope. You would, you would, you would have all of your bases covered.

Yes, naturally. I have a garage full of those. Oh my gosh.

Don't do anything that I just said. None of that.

No, I do not recommend or endorse anything that came out of your mouth just about the last 30 seconds. Everything else, I trust him. Don't trust him on that. No, yeah, when you look at it, really, the 4 different types of mutual funds that we look at diversifying is growth, growth and income, aggressive growth, and international. So, those are really the 4. And when you meet with financial planners, which I probably recommend you would, once you get to Baby Step 4, Joe, to meet with a SmartVestor Pro. You can go to ramseysolutions.com and find someone.

Okay.

Because you may be investing more beyond just what they, which you should be, more than just their automatic contributions.

As soon as I'm done with my debt, it's, you know, all bets are off. I'm throwing everything I can at it.

That's awesome. Yep, totally. Absolutely. But yeah, those are really the 4 buckets we would recommend. My question to you is, how much are they putting in? When you say automatic contributions, I'm curious what, if they're doing it by percentage or?

No. So it, it ends up they put in like 70 cents per hour that you work, so it ends up being $1,200 to $1,400 a year.

Okay.

But, uh, so their actual contributions, um, are about $5,900, uh, over the past few years. But through, you know, the markets, it's actually gone up to almost $16,000.

Yeah, absolutely. Yeah. So, so when I would be looking at this, if I was calculating up to that 15% of your income going into retirement, I almost would treat this kind of in a way like a pension where we say it counts for half of whatever that they're putting in, counts half, the percentage is half towards your 15%, whatever percentage. And so I almost would do that because it's not your money. It's just free money, but it still is counting towards your retirement. So when you're looking at it all together, you may, yeah, I would factor that in. So I wouldn't factor in what they're putting in as just your 15%. I would be doing more on top of that as well when you get to that point of Baby Step 4. So Joe, well done though. How incredible. So 5 years later, how are the kids?

Oh, they're great. You know, we, it was a long, tenuous divorce and, you know, we said some things we didn't necessarily mean to say, but you're coming out the other side of it. Everybody's happy, healthy, well-adjusted, and I couldn't be happier.

Let me say this. You said at the beginning of the call, you're grateful to us and we did this. Make no mistake, brother. Rachel and I, Dave, George, Jade, we run our mouths on a microphone. You're the ones out there day in and day out grinding this thing out. 5 kids, single dad, making all the breakfasts, all the lunches, all of the nighttime routines, all— dude, that's you.

Paying off debt in the middle of it. I mean, all of it's amazing.

Hear me say, brother, I'm so proud of you, dude. Dude, like, like I'm beaming now. Like, you are a shining example of a man picking up life after the storm and saying, okay, I can only control me and I'm gonna head into the middle of what comes next. I'm proud of you, dude. That's awesome.

Well, thank you. I really appreciate that. And I, I have to say, so I was a single dad at the time, uh, but let me just clarify, I found the most amazing woman.

Oh yeah, yeah. Remarried.

I've ever been.

Yeah.

She, she has the biggest heart of anybody I've ever met. She welcomed me and my 5 straggling My friend calls them a gaggle of kids. She welcomed us into her home and the future is great.

We love it. We love a redemption story.

Congratulations, dude.

Amazing, Joe. Thanks for calling. All right, let's go to Jessica in Boston. Hi, Jessica.

Welcome.

Hey, guys, how are you? Thanks for taking my call.

Absolutely. How can we help?

So, my husband and I are 26 and 27. We've been married for 4 months. We don't have any debt, and our goals for the coming years are to hopefully purchase our first home in about 2 years and start having children in around 3 years. So my question is how to balance our financial plan between those 2 goals, and how should an emergency fund change in preparation for having kids?

Yeah, it's a great question. So we recommend having 3 to 6 months of expenses saved. So, I think for you guys at that point, I think 3 months would probably be just fine. Once you get pregnant, if you feel like you wanna up it a little bit to have some cushion, you can do that. But once that 3-month emergency fund is funded, then that's when we move on to Baby Step 3B. And that's where you're gonna be saving for a down payment for your home. So, really, the order doesn't change because of the kids necessarily. The only thing that would change is once you get pregnant, if you're like, I kind of want some more in the emergency fund because it just would feel better. I'd rather go up to 5 months versus 3, then you can do that. But considering you guys are so young, you're not homeowners right now, I mean, a 3-month emergency fund is totally fine to shoot for. So that being your first goal, and then second is the down payment. And then when the kids come, it's just an extra cherry on top.

Is there anything else that you would consider throwing into that emergency fund calculation? Daycare expenses. We do have health insurance, but potentially any health expenses. And I guess it makes me nervous to have really no idea how much all that stuff is going to cost.

A billion dollars. A billion.

It's so much.

I'm very worried about it. So daycare should become part of your monthly budget. So that would be a rhythm of your lifestyle, not as much in an emergency fund. So, that will be something you guys will calculate if you go back to work. That will be coming just out of your income. That should not be coming out of an emergency fund. And then, yes, I mean, some medical bills. I mean, I think you can, you know, I would ask, depending on your insurance plan, probably out of pocket, which you guys are gonna have to pay, because it's everything from your OB visits all the way to labor and delivery. And so, kind of figuring out, okay, where, you know, what are the thresholds? What will insurance cover? What will it not? And if you want that money set aside, for sure.

I do.

That's great, yeah. to have it. Because technically, a baby, I wouldn't say really is an emergency, 'cause an emergency is unexpected, and you have 9 months to expect it. So, I hope it goes well for you guys, Jessica, and well done being so young and, gosh, financially just so on target.

Thank you.

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Welcome back to the Ramsey Show and the Fairwinds Credit Credit Union Studio. I am Rachel Cruze, hosting this hour with Dr. John Delony, and we're answering your questions. You can call us at 888-825-5225. All right, we have Melissa in Detroit, Michigan up next. Hi, Melissa, welcome to the show.

Hi, you guys, how are you? Thanks for taking the call.

Absolutely, how can we help?

Well, my husband came to me this past week and said that my father-in-law is offering us Yes. Quite a large sum of money to help us purchase a home. So, we've been thinking about moving for, gosh, like probably the past 5 or 6 years. And this particular situation, the home that we're looking at is owned by a friend of our— my father-in-law, and they want to give us a really great price on it, but he wants to gift us My father-in-law wants to gift us this big sum of money as like an early inheritance.

Okay, so you would take it now versus when they pass?

Yes.

Okay.

So, but my question is, is this something we should or shouldn't do? What kind of things should we be even thinking about? It seems Awesome. I mean, this— I don't want to look a gift horse in the mouth, but I kind of do. I want to make sure we're thinking through this clearly. And I've never bought a home before. When I moved in here, my husband already owned the home, so I'm brand new to the whole process. And I'm just wondering, what should we be considering?

Is this a loan or a gift?

It's a gift.

It's a gift. Okay, because the screen says loan.

It's a gift.

Okay.

Yeah.

We'll probably, once we sell our own home, we'll probably give some of it back, about half of it back from the sale of our home. Why would you do that? I guess, I don't know. The gift is so that it can be done without us having to have our home sold first.

Then it's not a gift.

So I guess he's loaning you guys $400,000 until your home sells.

Yes, I guess. But he doesn't— he doesn't want— he's giving us the option to pay it back or not. He doesn't care.

Okay. And if you don't pay it back, that's the inheritance piece, that it'll just come out of your husband's portion of the inheritance?

Correct.

I got you.

Here's what I— here's what I already don't like about it is It's, man, if, if, if your father-in-law sat y'all down and said, hey, I've been saving, this is a dream of mine to give y'all $400 grand to get launched out into your new life together. And there's no strings attached. Here you go. This is a gift. And this, and I was gonna leave you $2 million. I'm gonna leave you $1.6 now. That would be, I would be all about that. That'd be great. But it already feels messy to the point that If you get this $400,000 and then you sell your house and you've got a couple of hundred grand in an account that you think I'm gonna put in a college fund, or we're gonna buy a little bit bigger house knowing that we're gonna sell this other house, et cetera. And there's always gonna be this looming, well, are y'all gonna pay it back? Or is it gonna be that it wasn't decisive enough for you? Is that what you mean? In the front end? Yes. That gets so messy, so weirded out. And if your husband's like, well, we gotta pay back something and dad gave us this one time.

That's where I start getting real icky about it.

Okay. We don't feel that pressure.

Okay.

From him. Um, so I don't know if—

So it really is just a gift. He's just—

If it's a pure form of wealth or a gift and he's wealthy and he's got it, I, I love that. But there can't be any strings attached to it.

Yeah. And then this other, and then the, um, the other thing Melissa is sometimes people get in trouble when they get a quote unquote good deal from a home, from a family friend. If that was not a home you guys would originally purchase with this money, don't feel pressured into a situation just because it's quote unquote a good deal. Because when you buy a home, it's the largest financial transaction you guys are going to make, and you want to love it. You want it to be yours that you picked and that you love. And maybe you do. Maybe you guys love this house and you're getting a deal and it's the best of both worlds. But we see that a lot too within friends and family of like, oh, it's my grandmother's house. I can buy it for a good deal. But you wouldn't have picked it necessarily in the first place. It's just the long-term implications of doing something this large of a transaction, um, is something to think about too. I just want to make sure that—

Get an inspection, do an appraisal, do, do all the stuff like you would normally buy a regular house.

Sure, sure. Um, the, the whole reason for, for him even wanting to help us do this is so we can just be in the house free and clear with no payment.

Yeah, that's amazing.

That's, that's, I mean, It's just awesome. And the house is about $200,000 more valuable than our current home. So, my husband's thinking we'll live here until the kids graduate from high school. And if we wanna move at that point, we can. We still have this awesome asset now that we didn't have before. But we're just trying to make sure we're thinking through all of it.

There's gift tax implications as well. So, I would make sure with an estate attorney, the way the house is deeded, of that is clean and clear. Um, because sometimes those wires can get crossed and just making sure that, okay, that the transaction is done with, at the, at the end, it's exactly how you guys would want it done.

Sure.

And I want, I want y'all to be able to, how old are your kids?

They're 13 and 10.

Okay. I want your 10-year-old to, and I'm, I'm making this up. I wouldn't wish this on anybody. Okay. I, I want your 10-year-old if when he turns 11, if he needs some special education stuff and y'all end up having to sell this house in a year, I want that to be okay.

Yeah. Okay.

I don't want you to feel imprisoned in this house because dad gave me this money to buy his buddy's house and now this is where we have to live no matter what. And we have to start compromising on things that really matter to us because of the— if somebody's gonna give you a gift and they're gonna shake your hands and say, go knock your lights out, that's awesome. I love, like, I would love to be able to do that for my kids.

That's the situation we're in and that's That's why I feel like it's so good.

It's too good to be true, right? Well, it's a rare thing. But honestly, Melissa, I'm like, that's part of when we talk about changing your family tree and people on Baby Step 7, especially people that hit that step early and they are able to invest and build wealth. Like, that is, that's the stuff, right? Without enabling your kids and all the things that people think about. But man, to set your family up so well that if you don't have a mortgage payment, Melissa, you guys invest. like crazy. You build your own wealth to be able to do this for your kids, right? Like, that's where you start to pass down an insane amount of this, you know, generational change, not just with tangible money, but also, man, the gift and the freedom of— and the generosity and the peace and like all of that that comes with it. It's an amazing gift.

Here's what I want you to do, Melissa. I want you to write down, like, on a notes app on your phone, on a yellow pad, however you wanna do it, to do it. Write down the questions you have. And here's a good litmus test for you. If you can sit down with your father-in-law and your mother-in-law and y'all sit across the table and you are able to say, okay, I've got 7 questions. Number 1, I don't want this to change our relationship because I love being your daughter-in-law. Can you promise me this gift won't change our relationship?

Mm-hmm.

Number 2, if something was to ever happen and we had to sell this home for whatever reason, would we have your Number 3, right? I want y'all to go through.

Sure.

And if you can't ask those questions, then that tells me there may be strings attached to this gift. If, if you can ask those questions and the relationship is the most important thing, and this is just an awesome thing that they're able to bless you with, man, I'd say run screaming in through that front door and cheer, 'cause this is pretty awesome.

Okay, George, we hear from so many people that are trying to live out the Ramsey plan, right? They're getting out of debt and everything, but the hard thing is there's not many banks out there that actually support the way we teach people to handle money.

Yeah, most banks, they don't want you to win with money, so they charge a bunch of nuisance fees. There's all this fine print, and worst of all, they are pushing debt products at you nonstop.

Yes, but the good thing is, is that Fairwinds isn't like most banks.

They're not like the other guys.

They're not like the other guys. Yeah, they are not pushing debt, and they actually want you to win with the Baby Steps. And so what's great too is they created the Smart Bundle for Ramsey fans, which includes a high-yield savings account and no monthly fee checking Which is huge because it's rare to have a checking account tied to a high-yield savings account.

You can get all of that with Fairwinds. And for the nerds out there, you can have 10 different high-yield savings accounts for different goals. So you got your emergency fund, the car upgrade fund, the vacation fund.

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That's a conversation starter.

It's so good. Well, and when you swipe or you tap, you know, every time you take it out of your wallet, you're remembering that you are living like no one else and you're being intentional with your money.

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All right, today's question comes from Michael in Oklahoma. Michael writes, we recently sold our home and we're trying to figure out the best place to park the $300,000 we got at We don't plan to buy until we're ready to retire 4 years from now. Where do you recommend we place these funds to earn interest until we buy again?

So kind of our rule of thumb is that 4 to 5 year mark. If it's anything less than that, just a good high-yield savings account is probably where you'd park it just to be safe for the ups and downs of the stock market versus investing. But man, that 4 years is is right on the cusp of, I mean, the past 4 years, I know we can't, we don't have a crystal ball. We don't know what's gonna happen in the future, but—

Yeah, if you put $300 grand in the market 4 years ago.

It did pretty well.

Yeah, it would be great.

So you don't know what it's gonna do, but I mean, I would say, I don't know. I think if it was 4 years, I think I'd be tempted to drop it like in an index fund or part of it.

Would you?

Yeah.

See, I would be tempted to put it in an HSA.

Yeah.

A high-yield savings account and just call it.

Yeah.

Not an HSA, not a health savings account, but a high-yield savings account.

High-yield savings, yeah, yeah.

But I, Rachel, I have an allergy to risk that Rachel doesn't have.

Yeah, because 4 years, it's that 4 to 5 year— I mean, you could go— yeah, so I'd say whatever your comfort is for you to sleep well at night. Jon needs his—

I like to put it under my pillow.

I was gonna say that he can just see it and know it's not going anywhere. It's right here. I feel safe. I feel safe. Where I'm like, man, that 4 years is a long time for $300,000 and what it could do. So, So, I would probably put some in like an index fund and then maybe some in a high-yield savings and see what happens.

So, here's your job, Michael from Oklahoma. Call us back in 4 years with whatever you decided to do. And Lord willing, Rachel hasn't fired me yet. I will still be here and we'll decide who—

Who won.

Who was right.

Yeah, I don't have that kind of power. All right, let's go to Erica in Kansas City. Hi, Erica. Welcome to the show.

Hi there.

Hello. Thanks for calling in. How can we help?

Yeah, I was wondering if you guys could help us think about how we should be investing in our home as far as renovations go. We bought a home a couple of years ago and we're kind of redoing everything ourselves. But our bigger projects, our more expensive projects are coming up now. So we can refinish floors and do our paint and that's fine. costs whatever it costs and windows and things. But we're getting ready to do our kitchen and my husband and I have different, how do you say that? We have different approaches.

Standards.

Yeah, well, yeah.

Standards. He needs a microwave and a pizza box. That's what he needs.

That's right. That's what he needs. And I need custom cabinets and I need a table.

Yes, you do.

Yes, yes. That's fair. That's fair. Well, I think it would be, I always like to know ranges of like, okay, if we redo the kitchen, ranges of countertops, what's the cheapest you go? What's the most expensive? Where do we kind of feel comfortable landing? Pick a number for fun on a sheet of paper, right? Same with cabinets, same with flooring, same with appliances. Like, go down the list of your big-ticket items. And like everything, you can get the cheapest of the cheap, right? Maybe you get a used refrigerator, or you can get a Sub-Zero, right?

Right, exactly.

Yeah, it's that range. And I would go through, Erica, just for fun, it's, you're not actually making these decisions, but you guys together be like, okay, here's the range of price. This amount in the middle would get us this. And if you're like, yeah, that's great, I love that. Okay, let's write that number down. And like, right, go through and do all of that and just see how much that total is. And is it realistic in the timeframe of saving up that amount of money for when you guys want the remodel? And if it's too big of a number, which I feel like it usually is, which sucks, that is life. Then you go through and adjust and be like, okay, I may not need, you know, these countertops. I could get— we could get away with these instead, right? And you can lower the price, quote unquote, on the sheet of paper a little bit there and just see, okay, does the amount of the remodel match our timeline and what we can realistically save? And that, for me, I think that's probably the biggest indicator. I feel like it's less of a— it's more of what we can afford, less of a value of like, oh, that's stupid, we don't need that.

'Cause if you're like, listen, if you want it, Erika, And you guys have the money for it, do it. You're going to be living in the kitchen, but you're probably not going to be able to get the dream every single thing because that's not reality either.

I like to look at— oh, go ahead. Go ahead.

Oh, sorry. I think for us, like we have, we can spend the range. It's not really a matter of what we can afford. It's more of a every time we come up to a project, I come to it like, okay, we got to spend money anyway. We might as well spend it. But he looked at it as a, this house is an investment. If we spend over this amount that we don't know over here, we're not gonna be able to get money out of our house.

Okay. So he's like, yeah, he's functioning in like a resale mindset. Now I would not— Yeah.

I might be too, a little bit.

Yeah. So I would not price yourself out of the neighborhood, right? So yeah, I was gonna say, I, I would not do that, but I also—

I would pull comps, number one, and see like, so if you have a $250,000 house and you're gonna put $100,000 kitchen, new, uh, laundry room and an extra bathroom in there, and the most expensive comp in your neighborhood is $275,000, then you're gonna be way— you'll have put way more money in that house than you'll probably get back.

So there's a realistic of that. Right. But also some people, I'm not saying this is your husband, Erica, but some people are like, oh, are the worst. We're not gonna do this cuz of the resale value. We're not gonna put in a pool and have memories for the next generation cuz it's not good resale value. It's like, oh my gosh, you just have to live sometimes. So, there's a wisdom, and don't price yourself out of the neighborhood, Erika. But then there's also, on his end, I'm like, dude, not every decision you make is through a frame of like math and Excel sheets. Sometimes, if you have the money, enjoy.

Enjoy it. So, I will tell you, I just did a whole bunch of work at my house, and I did have a real estate pro, a Range Real Estate pro, pull comps just to make sure I was in some ballpark.

I thought you were gonna say your contractor.

No, not the contractor. Yeah, no. Rachel's husband was my contractor. But, and then let me tell you, I didn't look at that again. I looked at what me and my wife had decided we were gonna spend and what we wanted. And that's a house I wanna live in for a long time. And so I wanted it how we wanted it. And so I wasn't dumb on either side of the thing, but I wanted us to not—

Have information.

I wanna have information and not be stupid, but also that's my house that I'm gonna, my kids are raising. I hope my grandkids come play there one day and they may not, the world may change, but I don't wanna be walking up that sidewalk Every, every morning for the next 5 years thinking, man, I shoulda, I shoulda, especially when I had the money already in savings now. So there's a—

That's kind of the land we're living in too.

Okay. Yeah. So how do you help the husband?

Listen, brother, if I don't—

John, use your degree. You're a psychologist, John. Get in his mind.

Okay, I'm gonna get in, I'm gonna get in his mind. When it comes to things in a kitchen, the answer is yes, always. That's the thing. And I don't wanna be sexist. I don't wanna gender it. But if my wife says, I wanna do this to the kitchen, I wanna do this to the master bathroom. The answer to that question is always, you got it. Let's figure that out.

And I like you.

Yeah.

And so that's, that's my clinical answer to that, which is terrible. But also there is like, like, man, I, let me say this. Like, okay. So I was this guy at my very first house. I was always crunching this and moving this. And what if we did this?

I wanna put this floor in, but I don't like this.

And my dog peed in the carpet, so I had to change it up. But I gotta— and I was talking to a buddy who's a banker, close buddy of mine, and I was going through all this stuff.

Yeah, yeah, yeah.

And then he said this one line to me. I think I was 26 years old and it changed my life. He said, dude, and this is a guy who lives, uh, he has like his, uh, his mattress flipping it, like when he rotates his mattress in a spreadsheet. That's this guy. And he said, He said, bro, get your wife a home. And I was like, what? And he said, do all that other stuff later. Get your wife a home. And what that changed it for me is, yes, like if you're buying a rental property, you gotta use the formulas. And if you're trying to ROI this thing, you don't wanna be dumb and, and do $500,000 worth of renovations on a $200,000 house. All that's true. And get a house that you both love, both love living in, man. And if it's nicer cabinets, get the nicer cabinets, man.

Yeah.

Man, it's, I don't know.

Yeah, and there's a value system to the longevity and the enjoyment of your home, Erika, that you prioritize for you. And so there is a marriage conversation to be had of a value system at which how do we compromise and get to this place that we both feel good about the home that we are creating this life in, right?

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So one of the most fun events that we get to do, I think our Money and Marriage event is always So fun, Sean. We have that in October. But a really different event that we did for the first time last year was the Live Like No One Else Cruise. And this cruise is a week-long cruise. The entire ship is just people on Baby Steps 4 and beyond. And we talk so much about sacrifice and getting out of debt and getting your emergency fund, all of that. And then when it's done, you wanna be able to celebrate. And so, we wanted to create a place where you could do that. And so, this is a week-long cruise. It is a very fantastic ship. It's actually the same ship that we were all on last year. And it's beautiful. It's so nice. My family's coming for some of it.

My family's coming. Yeah, it's such a blast.

It is just a wonder— yeah, there it is. Beautiful, beautiful ship. And we're gonna be heading to the Bahamas, or not yet. Yes, to the Bahamas, Jamaica, Grand Cayman, and Cozumel. And so, it's 7 nights, Western Caribbean cruise, March 14th through the 21st. And cabins are limited. And so, if you want one, if you want to come with us, it's around the spring break time, so you can even bring your family. But gosh, this is a full week. All the Ramsey personalities will be on there. And Dave and Shara and my parents will be there as well. And so, it is so fun. So, if you've paid off all of your debts but the house, and again, you're on Baby Step 4, this cruise is for you. So, all-inclusive pricing starts at $2,105 per passenger. And that's all your food, entertainment, taxes, tip, cabin, all of that. That's the other great thing about a ship. It's all included right there.

It's all there.

Yes.

And my favorite parts were just, I'm eating with my kids and sitting down with all sorts of baby— like, just good people from all over the world. And it was just fun just getting to do life with folks for a week. And there was— we have great fun, hilarious, events, evening shows. We have teachings that go on all week. Everybody's doing Q&As and it's just awesome.

It's a great week. It really is. We had a blast. And the people on the ship, you all are just the passengers that come.

It was the best.

The kindest, most wonderful people. Even the cruise ship staff talked about how generous.

It was the most generous cruise they've ever experienced.

Because people would, on top of their services, right, at the spa or something, they would tip insane. And it just was, it was so fun, truly living out this idea that you get to live like no one else. So, come hang out with us for a week in March. Again, you can go to ramseysolutions.com/events, book your cabin, come hang out with us for a week. All right, next up, we are going to Allentown and talking to Shanice. Hi, welcome to the show.

Hi, how are you guys?

Hi, we're doing great. Welcome, welcome. How can we help?

Yes, so I am newly engaged.

Congrats!

Thank you, thank you. We have been engaged now for a year. We actually just recently celebrated our year anniversary being engaged on Saturday.

Oh, an engagement anniversary! That's very nice.

Man, the kids will come up with any reason to celebrate.

I love it. When's the wedding?

Next year.

Okay, so great, so great.

Yes, yes. So my fiancé he is coming into our relationship with 3 kids, and I am coming into the relationship with no children. And so, he, for a very long time, has handled finances by himself as a single dad, you know, raising his kids by himself. And of course, he does co-parenting and such, but he's used to pretty much doing everything by himself with the kids. I, on the other hand, am trying to get us to combine our finances and begin and like the whole joint bank account situation. But it's been a little difficult, to be honest. So I think our issue is that he— I'm not sure if he's ready to go ahead and combine our finances together. We both have our own, I guess, childhood traumas as far as finances. And for me, I've been actively working through those things the past few years. And my fiancé is realizing, oh my goodness, I have bad habits.

Mm-hmm.

So my question is, how do we work through the bad habits together as a couple? And then how do we learn to combine finances considering the fact that, you know, this is something that's really, really new. And I think we're just trying to align financially and there's still like a, I don't know, there's disconnect.

It disconnects a little bit.

Great question.

Yeah, yeah. And it's been a little tough.

Okay, well, we really never recommend combining finances until you're actually married. So, the fact you guys haven't yet, I think, is a good thing because there's really no legal protection. There's nothing. And if you combine everything now, you start paying on each other's stuff and all of it gets entangled. And then, for some reason, if it doesn't work out, then you've, you know, you've entangled your finances with this person and untangling it can be a mess. And you've maybe, you know, wasted some money on, you know, if you help pay off his debt, as an example. So, keeping everything separate.

Mm-hmm.

until you are married. So, that would be the conversation I would work towards with him is, when we get married, what are then the hurdles at that point that we have to jump over, really, to make this transition the easiest? So, I'm assuming it's gonna be the same issues that you're dealing with today. They're probably not gonna change unless he does some work and you guys figure out some new patterns. So, today, what causes him Hesitation because, because of his bad habits?

I think it's bad habits.

And what does bad habits mean? Is that like gambling or is that spending too much? Is that like, what does that mean?

He's a spender, I'm a saver.

Okay.

So I, for instance, I'm like, nope, we should save this weekend, not eat out. I will cook and save, you know, on, you know, that, that expense. And he's like, no, let's go out to eat. Um, or he's like constantly planning like where, where, what's the next trip that we can do? And I'm like, Nope, we're not gonna do a trip because right now we should be saving. You know, so—

You sound like my marriage, except I'm him and you're Winston.

So here, here's the thing. I think, um, like a good exercise for both of you. One, we'll send you the, um, Financial Peace University, the digital course, and y'all can sit down and watch. I think there's 7 or 8 videos.

Um, okay.

Y'all can watch 'em together. And here's what it will do. A, it will give you philosophy and it will give you like an ironclad plan. And what I love, especially for engaged couples to watch this, is it will, it will definitely invoke some big-time questions between the two of you.

Definitely.

If, if he, if one of y'all says, I'm not doing that, well then that's like a pause the video. And that's an important thing for y'all to talk about. It's different when somebody says, I would love to do that. I don't even know where to start. Start, 'cause then the, then the video series will give you plans. Okay? And this is a class that's been taught to millions of people and it'll be great. I have to say though, this, when folks ask me, hey, can you help me and my spouse work on our communication? Almost always what they're really asking me is, can you give me something, another way to say this so I can get my spouse to do what I want them to do?

Mm-hmm. That part.

And so, So the— what I'm hearing, the question beneath your question is, I think there's a real possibility that the person I want to marry will not fully share their life with me. And so where it can be what I call proxy wars is, I want to go out, I want to cook at home, I want to do that. And what that tells me is that there's a thing beneath the thing, and that is we aren't aligned on a future that we are building together.

Yeah.

hitting the spot, like what she was saying about the childhood trauma of like, you're not feeling safe. So, you're like, save the money to make sure that we're okay. He's feeling deprived and not respected because he has a plan and he's actually providing because his parents did. You know what I mean? Like, there's all these stories that we make up that come out as money problems, but all that is under— so, I agree with what you're saying of like, can you get to the thing beneath the thing?

Right. And often, that can be done by y'all going out and saying, hey, let's go 5 years out in the future. future? What's our dream? How much money would you like to have in a savings account? What trips would you like to take? And let's just, let's just for a second dream with no math, and then let's just do math and say, okay, what, what must be true then for these things? What number would make you feel safe?

Can I ask you real quick, Shanice, is, is he irresponsible with spending? Does he have the money or is he going into debt to do this stuff?

No, he's, he's not. Always going into debt to do these things.

Okay, that's good.

But we both have debt from bad decisions he's made in the past.

Gotcha. So, I think him earning some trust with you, working towards a life that is— where he's getting out of debt, so that his spending— because the spender in him is always gonna be there, that enjoyment and experiences and all of it. So, how do you get that part of him in a healthy spot where he's still gonna be that and you're still gonna be you? And that's the beautiful thing about marriage is opposites attract. You're going to be different and you need each other.

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Next up, we have Steve in New York City. Hi, Steve. Welcome to the show.

Hey, thank you so much. So cool to get in.

Oh, so glad you called.

I feel like I made it.

I hope that's not your standard reply. You can do better. No, I'm just kidding. Thanks for calling. How can we help?

You got it.

What's going on?

A union-administered 401. Um, I put 22% in that right now. Um, for various reasons, I'm trying to make up some lost ground here. The union requires my employer to put in 3%, whether I contribute or not. My issue is they don't make a lot of money with that 401, and I have no control over how it's invested. So last year it only did 8%. Oh, so my question is, would I be better off taking that 22%, putting it somewhere else?

Yeah, absolutely. Well, would you—

I fund the Roth every year also.

Oh good, well done, Steve. Would you lose the 3% match? No, no, you would still get that.

That goes in no matter what.

So what, what, what made you decide to do the 22%? In the union because it's just a 401?

Yeah. And it, it saves me tax-wise. Um, and it's what I thought I could stomach and still get by.

Okay.

You know, month to month.

How much catch-up are you trying to do?

Well, it depends on how you look at it. If I retired now, I could make it, but it would be tight. So I plan to work until 67 at least.

How old are you now?

Another couple years. 65.

Okay.

Yeah, so if you went on your own and did like a brokerage, right, you'd be paying taxes on, on both sides of the equation. But I still think you're probably gonna be better off than 8%. I mean, Steve, I mean, on average, like, what was it last year?

Was 22%, you know?

So I'm like, I know you can— yeah, so the investments suck. Yes, of what they have have it in. So I would go up to the 3% match of the 401, and then beyond that, the Roth IRA. And then if you still have 15% left that you need to, in that 15% range, gosh, I may just, I may just do, yeah, open up a brokerage account and do some growth stock mutual funds or an index fund. Because I just think you're going to get a better—

Yeah, I have a brokerage account that did 22% last year.

Yep, yep. So I almost think it would be worth it because, because what sucks about unions, And their investment strategy is that you don't have a choice of what they put it in. And same with some pensions as well. And so that's why we always say, don't put a large amount of your 15% in those because you don't have that control. But yeah, 8% is, that's tough.

All in all, it's a good deal with them. I have a pension from a prior union. It's small now. I gave up most of that in a divorce. force. That explains the lost ground. And, um, I have 2 other pensions with this union.

Okay.

When I leave, I'll only have 10 years in. So, you know, they're, they're small, but they're very helpful.

Well, sure. But you don't have the control over where that money's being invested. So, no.

And I can't take those in a lump either. Those are, those are, you know, defined benefit plans and that's that.

Okay. Okay.

Yeah.

I think if it were me, I think I would make other decisions. with that money. So I probably would do the 3% match that you had. And then the rest of it, yeah, I—

Yeah, exactly. It isn't even a match. That's, they put that in whether, I don't have to put any money in.

Oh, it's automatic. Okay. So yeah, so I mean, how much do you make a year, Steve?

I just got bumped up a bit. I'll be at about $150,000 this year.

$150,000, okay. So, Let me think.

Okay.

Yeah, 'cause 3% and then the $7,500 into the Roth, you'll have some extra left 'cause you'll probably be investing. If you do the 15% until your house is paid off, if you follow the Baby Steps, then—

Yeah, that's, I'm almost ready with that too.

Okay, awesome.

We could throw that in there too if you want. I don't know if I should take money off the brokerage and just pay off the mortgage. I only owe $17,000 on it.

Okay, no, I would work your way through that, but I would take down your 22% that you've been doing down to 15%.

15.

Do the $7,500 into the Roth. You know, add that, you can add some of that 3% from the employer, but they're automatically doing it. Yeah, I mean, sorry, I'm jumbling here. I'd do Roth IRA.

Okay.

I would do Roth IRA. I would stop the union 401 because it's just this terrible rate of return. Put the rest remaining of your 15% into a brokerage account. And you could just put it in a, again, just like an index fund and it just goes into the S&P 500. $100,000, and then pay off your house. And then once the house is paid off, which hopefully you can do, gosh, in probably what, 8 months or something?

Or— Oh, it'll be less than that.

Less than that, yeah. Then you can start throwing some more into that brokerage and just get it going. So the benefit of the 401, of saving on tax, of that pre-tax money going in, I don't think it's gonna come out well from a math standpoint if you are that much in gain from a rate of return.

Yeah, I guess, what do I need, an accountant to crunch that number for me?

I would get with a SmartVestor Pro there in New York.

Yeah, if you go to ramseysolutions.com, you can check one out. Yeah, they're in New York. And that's probably what I would do is run those numbers because depending on when you want to retire and everything, but man, if it's 8% in a 22% market, it's going to be half of that. You know, it's just, It, it's, there's just too much to be gained, I think, by sitting in something like that.

So. Yeah, I, I would, I use a SmartVestor Pro. Rachel uses a SmartVestor Pro. George, Jay, we all, I mean, we all, that's who we all sit down with. And so I, I trust them with my family's, that teaching and my particular agent with my, with my family's future. Yeah. So, um, that's me putting my money where my mouth is. And same with Rachel, same with all of us. 100%. So, um, that's, Dave's got a SmartVestor Pro. So that's, that's what I would do. I'd sit down with them and crunch those numbers.

But yeah, and a SmartVestor Pro is someone who can advise you when it comes to your investments. So they're financial planners, investment advisors that look at this, not only this part of your life when it comes to investments, but even the overall picture. So other assets that you have, they can even look at your tax standpoint. I mean, they're able to look at your entire financial picture. They, you know, we really push when it comes to investing with them, but a great financial planner is going to look at your entire picture. And if you're on Baby Steps 4 and beyond, you guys, having someone in your corner is so worth it. Do that with anything in the financial space, honestly. Like, if you are selling your house, get a great realtor. You can go to, you know, Ramsey Trusted and check them out. Taxes, when it comes to your insurance, like having people in your corner that do this day in and day out in these niches in the financial industry, it is worth every penny. It really is because they're gonna be able to advise your specific situation. And so that's one—

Yeah.

Reason you were talking about them because they can sit down and actually run those numbers with you.

Steve.

Um, but bigger than running the numbers, they teach you how it all works and why they're doing what they're doing.

Yes.

And, um, I called a year ago and said, hey, I wanna do this instead of this. And my person said, I think that's dumb, but you're the boss. And I hear, I hear the opposite of that so much. People are like, try to get talked out of it and you're stupid and here's why you're dumb. And it, it's almost like the, the investment advisor says like, this is my money.

Mm-hmm.

you're gonna do what I say with your money, right?

Yes, yes.

Instead of, my SmartVestor Pro walked alongside me, we talked about it. And so, I like knowing why I'm doing what I'm doing and how things work.

And to continue to learn. I mean, we even sat with ours in January and he was showing us this whole thing that I was like, I didn't even know that, you know what I mean? Like, it was like tax loss harvesting here and then you can run that and put this here. And I'm like, is this all legal? And they're like, yes, it is. But I'm like, oh my gosh, like, I didn't know some of, like, they literally will teach, they sit there and teach you and show you. And then they'll be like, okay, would you want to do that? Or you want to keep it over here? It's, you know, but you, it's your money. So you get to decide.

They're teachers.

Yes. And someone needs to, you need to feel that positional power when you're sitting down with anybody that it, that this is your life and then they can advise you and teach you, but you get to finally choose what the final answer is.

But I love your, I love you being on top of it enough, Steve, to know like, hey, wait a a minute, in this one little account that I opened myself, I got 22%. How come the one y'all are managing that's supposed to take care of all of us forever got 8%? That tells me something's fishy. Something's not right. And so your instincts are dead on, brother.

Yep, absolutely. So thanks, Steve. Yeah, but all you guys, you can go to ramseysolutions.com and check out our SmartVestors there. Yeah, and anyone else to help you because that is one thing that, again, Again, when you try to do things on your own isolated, and you try to be yourself to every single thing where you're not super knowledgeable, go learn. Like, get someone that you trust in your corner and learn about it. Like, that is such an important part. Don't stay ignorant and just like, I'm gonna just figure it out. Go and find someone who's gonna teach you these things, 'cause it's so important to continue to grow and learn so that you can make great decisions for your family and your finances.

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Welcome back to The Ramsey Show in the Fairwinds Credit Union studio. I am Rachel Cruze, hosting this hour with John Delony. We're answering your questions at 888-825-5225. All right, starting us off from, ooh, Canada, Winnipeg, Canada. We got Anthony on the line. Hi, Anthony.

Welcome to Hello, how are you?

Hi, we're doing great. How can we help?

Um, so I'm— my question is, how do I convince my wife to go through the Baby Steps when most of our financial struggles have been caused by me, like our debt?

Hmm.

So she doesn't trust you with the finances?

Yeah, like she trusts me to kind of make the plan until it comes into crossing over to kind of making sacrifices. on her end financially. Like, we're not fully combined because of my debt. She doesn't want to fully combine our finances yet.

Did you, did you take out debts behind her back without her knowing?

Not behind her back. A lot of, like, a decent amount was from before we were married and then just ongoing. I don't know. Maybe it was not behind her back, but not fully informing her of stuff that I was buying that was with debt, not with my cash.

So she was surprised to know the amount of debt that you have.

So behind her back?

Yeah. She knew I had debt, but not how much.

Yeah.

So rebuilding trust always starts with somebody laying everything out on the table.

Mm-hmm.

And so even in this call, you're like, no, it wasn't behind her back. I just did it and she didn't know about it and she thought it was cash, but it was really credit cards. Right? So it's, it's at some point you'll have to come to her and say the words, I, I didn't treat you with dignity. I didn't treat you honestly. I did stuff on my own without you, and I'm sorry. And together we can work on moving forward. And that would take you requesting, will you give me a roadmap back to trust? What does that look like? Because I don't wanna owe anybody any money anymore.

Mm-hmm.

I want our family to not have any anxiety and stress inside of the walls of our home. I want it to be the, the warmest, safest place from the craziness that's out in the world right now. Can you gimme a roadmap back to what that would look like.

And that—

in, in— it's— that's— I mean, it's AA language. It's, it's submission. I have messed this up and I need to make this right. It's making amends, right? And short of that, it's going to feel like another scheme, another thing. I can't fully trust you. I'm going to do my thing, you do your thing.

Especially if you're asking her to make sacrifices on her end. Yeah, she's probably like, what?

Like, oh, you got to have all your fun with your credit cards and now I have to sell my car, right? And so that's a tough If it's, if it's—

If there's not trust there.

If there's not trust and it's not from an emotional center that is, I messed up and I wanna make this right.

Mm-hmm. Yeah.

Yeah.

That makes sense.

Yeah.

And she works very hard, makes, makes some decent money, but doesn't have much to show for it because, um, she's, she's paying more than her fair share of our bills because I'm paying so much to my debts. So it's hard. It's hard.

Okay. How much are, how much do you make a year?

So I make $85,000 before any bonus. And what does she make? And she makes around $90,000.

Around $90,000. Okay. And how much debt do you have?

So in total, I have $10,000 on credit cards. This is between the both of us approximately. See, I don't know exactly how much she has. I know it's not a lot. She has a little bit, but total is $10,000 on credit cards, $10,000 on lines of credit. And then we did a debt consolidation loan last year, so that was $22,000.

Okay.

And then we owe my parents, or I owe my parents, $10,000.

Okay, so about $52,000.

And there's also, she does have a car loan.

How much is that for?

That's $28,000.

$28,000, okay.

So what were you buying, man?

I mean, you know what, it was, Basically, I, you know, I was— I'm making okay money now, but before I wasn't, and I was just, you know, buying, eating out a lot, and I need this for the house, I'm just gonna buy it, or I need this thing, or I want this thing.

Yeah, but you got to a point where you called your mom and asked for $10,000.

Mm-hmm.

Yeah, that was— well, and then that gets us into— we bought a house here earlier in the year, and, and you I used, uh, kind of a gift from my parents to pay down some of our debts in order to buy this house. So—

Was it a gift or was it a loan?

Uh, it was a gift with, uh, there was no expectation that it'd be paid back, but I want to pay it back here. Um, I don't know if there was an understanding of it being a loan from their end. Um, my understanding was—

But you just feel a conviction of like you want to, Yeah, yeah, I don't, I don't like it.

It's looming over me, you know.

So Anthony, so if you said she's covering most of the bills with her income, is most of your income able then to go to your debt? Because if that's the case, if y'all can live off her income and your income goes straight to all this debt, you guys have it paid off in a year.

Well, I mean, you know, like, I don't know if it is most of her income on this. I think she wants to save a lot because she does make a decent amount. I think we're actually relatively split on expenses here overall. But I think we need to cut expenses and stuff. That's where I'm trying to get into the Baby Steps. But obviously it's hard to convince her with no trust on my end here.

Yeah, yeah. The rebuilding of trust is going to be key. And then once that starts to happen, and I don't know what she needs to see, if she needs to see you throwing a lot at this debt, you working an extra job to, you know what I mean? Like, I don't know what that looks like for her.

Mm-hmm.

But understanding that's gonna be really big. And then, you know, as you know, the quickest way to get out of debt when it comes to a married couple is that you throw both incomes in the center of the table and say, okay, how can we use as much of this to get out of debt as quickly as possible? What do we have to cut? What, you know, what are things that we're used to? Like what you're saying, and remove those things. And until then, Anthony, it's just gonna be a little bit of an uphill climb from a baby steps perspective. And so, for some people, I don't know, Jon, what do you think? It's like the chicken and the egg. For some people, they jump into a new process of life, and with this specifically, their money, and suddenly, they feel more unity than ever. And they, you know, it helps rebuild trust. It has helped. It's a— a system at which these 2 people that were so on 2 different islands for the first time come together on something so vulnerable like money, and it helps their marriage. Some people, I feel like, heal from things like what he's talking about, and then they get into the baby.

Does that make sense? Like, I don't know which is which.

Well, I think you have to have— I mean, Anthony, y'all first have to agree, do y'all wanna do life together or not?

Yeah.

And if y'all agree on, yes, we wanna do life together, then the next question is, what do we want that life to look like and feel like? And if y'all can agree on, we want it to feel stress-free, we want it to feel warm, we want to feel connected, that's awesome. A way to do that, or the way to do that, is to put all of our money in one big pot. And we have agreed on safety feels like this much money in retirement, and safety feels like saving this much every month, and safety feels like not owing anybody But you're, you're, you're trying to solve a problem like 4 rings up. And so you're coming at her with another plan, another scheme, another, now I've got it figured out, honey. And she's watched so many times you not having a scheme. Y'all gotta get connected and say, do we wanna do life together? And I think that for you starts with saying, I'm sorry, I did things on my own. This marriage was about me. And, and your wife was a, was a supporting actress to your story. life instead of both of y'all were co-stars in this world that y'all are co-creating, and then say, here's my dream for us, that we share everything.

Vision for the future, dreams, kids, finances, all of it is us building a life together. Would you go with, with me on that vision? And I think that's where you start the conversation. And then the Baby Steps is just a great path and a great tool to help that all come together.

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

Did you file an extension on your 2025 taxes? Well, the October 15th deadline is coming up quick, but the good news is you have a couple of options to get it handled. If your taxes are pretty straightforward, Ramsey SmartTax makes filing affordable and really simple, and it has built-in support if you get stuck in it, in the process. So, Ramsey SmartTax really is amazing, you guys, seriously. If you don't have a complicated tax situation, there's so many, so many easy ways to do it through Ramsey SmartTax. But if your taxes are a little bit more overwhelming and complicated, you may need a tax pro, and nobody wants to face the IRS without backup. So, make sure you figure out which tax situation you're in. You can take our tax quiz at ramseysolutions.com/taxquiz to decide. Hey, do I, can I just do Ramsey SmartTax or do I need a tax pro in my corner? All right, let's go to Jim in Pittsburgh. Hi, Jim, welcome to the show.

Hi, how you doing?

Hi, we're doing great. How can we help?

So I'm 28, I own a plumbing company. My household income's about $240,000 a year. My wife does not work, she stays home with the baby. And I'm in a good bit of debt, about $920,000. And this has come from, similar to Dave, a real estate investing spiel over the last 3 to 4 years.

Hmm.

And about $800,000 of that is from real estate with a $25,000 car loan, and then about $90,000 in business credit cards that are personally guaranteed. And I have some equity in the real estate, about $170,000. And a good household income. But, um, I just today had an offer fall through on a property, and I'm just done with, uh, the lack of peace that this is bringing me. So just wanted to call and kind of pick your brain on advice for how to get out of this.

Oh, Jim, I'm so sorry. Oh, how old are your kids?

Oh, just one, and he's 1 year old.

A year old. Okay. Um, how many properties is it?

It is 4 properties with, uh, about 17 units spread across those 4 individual units.

So you bought multifamily?

Yes.

Okay. Um, and where are you to the point of not being able to pay the payments?

I can, uh, I can pay the I can make the payments just fine, actually. It's just that—

It's just the stress of having that much leverage.

Yes, exactly.

Okay, well, that's a good thing.

Can you sell them?

Yeah, that you're not behind. There's no, there's no like major urgency of having to do a foreclosure or short sale. You can keep up the payments. So yeah, what would it be like to put everything on the market? And even if you don't, even if you don't make a huge profit out of it, you get them out of your life.

Yeah, I'm talking to an agent this week about getting them listed. And that's my first step there. But I just have some of that credit card debt as well. And I'd ideally like to walk away with some money to pay that off as well.

Sure. But if not, you're making $240,000. You could pay it off in a year.

Right?

I mean, from the credit card debt perspective, that's not what's really scaring me. Because I think your income, you can cash flow some massive payments and get that out of the way. It's the almost million dollars, you know, of debt that's sitting there. And yeah, exactly what happened to Dave. But the banks just called all his notes, pretty like domino effect.

Yeah, so you're like out ahead of Dave right now. You have a chance to get out of this. If you just say, dude, I was playing a dumb game for 3 or 4 years, I'm out of the game. I'm gonna sell all this stuff. Yeah. Even if you've, you've calculated for yourself $170 grand in equity spread across these 4 properties, even if you walk away with $25 grand, I would tell you that's a soul tax for your family that you don't owe anybody anything. And except for this credit card debt, and you can just move to knock that stuff out, man.

Okay.

But I get this. I, I, I would not cling to the imaginary number that you've calculated that is this thing called equity across 4 properties. properties that adds up to $170,000. Because in your head, you've already spent that $170,000 on clearing all your debts, probably get a new car. Like you've already spent it. I wouldn't do that. I would just go in order. I'm going to list all these properties and get 'em sold as quickly as possible.

Okay. All right.

Yeah. And if you can, you know, find a great realtor and you get a great price and there's equity, then that's, that's great.

Of course.

But don't stay in the game, right? And, and keep this debt over your head for another year just to figure out, squeeze out any little, you know, dollar you can of equity. So get a great agent in your corner. If you go to ramseysolutions.com/realestates and find a great pro and work with it and get as much bang for the buck if you can in the shortest amount of time though, because to your point, Jim, you're 28, you got a 1-year-old and having almost $1 million, you know, over your head or no, yeah, almost $1 million. Gosh.

And 17 tenants rotating in and out and all that. Yeah, that's a lot.

It's a lot. It's a lot.

And on the other side of it, like paint this picture, for yourself. You owe nobody anything and you make a quarter million dollars and you have a 1-year-old and your wife gets to stay at home because she wants to, not because she has to. Like, man, that's just, dude, that's just peace. It's just peace, man. And your whole family will wear that. So man, that's what I'd be aiming for.

And what a gift that you're not in crisis mode, right? Of having to do short sales or anything. Because that's always the risk, right? If something turns the corner, not in a good way. So yep, I'd get out of it, Jim. I think that's a smart move long-term. You're 28. Just call it your stupid decade of messing with debt and move forward.

And be done with it forever. Yep.

All right, let's go to Delaware. We got Mark on the line. Hi, Mark. Welcome to the show.

Hey, Rachel. Hey, Dr. John. Thanks for taking my call. Hey, quick question. Baby Step 7 here, and I'm stumped. I have about $1.5 million in investments. My wife and I have been big savers, big fans of Ramsey's organization for years. And we're with a big major firm, and they're now offering us to have wealth management. The wealth management is very Ramsey-esque, similar to what I'm doing, but they, you know, are more diversified in the sales pitch. I'm not sure if I should do this for our family to go into the wealth management. The wealth management is approximately 0.85% a year, so it works out to be about $12,000 a year that they'll take out of the accounts. And I really am at a loss because I AI'd it. their proposal and what I've been doing for the last year, 5 years, and 10 years. And last year I beat them a little bit, and then 5 and 10, it was close. So I'm at a loss if I should take advantage of this or not.

And what are they gonna give you? What services do they provide in this?

Basically, it's the intangibles, whether you're talking to a live person, they're, you know, they have this wide array of, you know, different investment choices to put in there. there. And I don't know if it's worth the human asset where we've been plugging away and doing fine on our end.

So you haven't used a financial, you know, advisor at any level? You've just used a firm for a brokerage account, is that right?

Yeah, yeah, exactly. I do my— I basically do, um, domestic index funds.

Yeah, yeah.

I just don't know if it's— I've never been pitched like this before. It's like, whoa.

Yeah, well, I'll say, I— since I don't know the actual company and the exact you know, specific people you're gonna work with. I, let me recommend the philosophy overall, and then you can narrow down to figure out if this person fits that criteria. But we have long been fans of, yes, having a financial planner, financial investment professional in your corner because—

Gotcha.

I do think, yes, that they end up making you more in the long run. They're gonna be able to see things that maybe you don't see, understand things about the industry that's ever-changing, that literally, it's their full-time job to know. And there's a— once you build that level of trust with someone over, especially a long period of time, right, where they have taught you things, they have advised you well, and when they're able to speak into your money because of the— because, again, not only just the changing of the industry, but they just know things and understand and are educated educated, you know, on things that just the average person may not, right? I mean, like, and we even said in the last segment, truly, in January, we sat down with our SmartVestor Pro, um, and he taught us, he taught me something. And I was like, oh my gosh, I didn't realize you could do that. Well, then yeah, let's do this. And I would have never known that.

Um, and so there's so many, there's so many things.

Yes.

Yes.

They're just choices.

And you've done great, Mark, up until this point, you And if you just lived your life and you just had money in that, you know, index fund, you're gonna be fine. But I think you could honestly probably get more bang for your buck having somebody in your corner that's advising and showing you and teaching you. That is worth it. And you know, and you could look up in 5 years and be like, it's not worth it, right? It's not, it doesn't have to be a forever relationship if you don't want it to be, right? So, I don't know, there's just something powerful about having that human. And again, it's someone that you trust, but check out— our SmartVestor Pros at ramseysolutions.com, because those are ones that I can, with confidence, hand you over to.

Hey guys, Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to ramseysolutions.com and try Ask Ramsey today. That's ramseysolutions.com. Ask Ramsey.

Up next, we have Kim in Las Vegas. Hi, Kim. Welcome to the show.

Hi. Hi, thanks. I'm really hopeful you guys can give me some brilliant ideas because I don't know what to do.

Okay, what's going on?

We'll give you some ideas. I can't guarantee they're gonna be brilliant, Kim.

We're gonna try.

I'm banking on it, so let's hope for brilliant. Um, my husband came clean to me about 3 years ago that he had a gambling addiction, and at that point he put us about $500,000 in debt. Oh, over the last 3 years I thought things were getting better, but in the last year our debt has gone up over another $150,000. So we are well over $1 million in debt now. My overarching question is, should we sell the house? And I don't even know if that's— by the time we pay off the house and the liens, we're not even going to be able to touch our really high-interest credit card payments. So I don't know what to do. And we're drowning.

I'm so sorry.

What a catastrophic mess.

Oh yeah.

I guess let me, let me, let me ask this in reverse. Are you, are you going to stay married?

Well, first off, Nevada, it— well, as a Christian, I don't believe in it. And I do love my husband, even though he's a complete idiot. Yeah. And in Nevada, we would split the debt anyways. And if we were trying to support 2 households with our kids, it wouldn't make sense. There's just, it doesn't, it would be a dumb idea.

Okay. Because, because there's a, there's a path that we walk where you're figuring out how to dig out of your mess. And then there's a path that we walk that y'all are trying to figure out y'all's mess. My, the bigger, the biggest concern I have right here is I, I can't in good conscience tell you to sell your house right now. Because I, I, he sounds like a guy that would go gamble it all away.

Yeah. Go pick it back up exactly where Well, here's the thing.

He's not gambling. He's gambling in a different way now. Let's say he decided that he doesn't go to the casinos and gamble, but what he started was one of those like card selling businesses. So he's buying packs of like Pokémon cards and ripping them and then trying to sell those cards and baseball cards and football cards. It's a totally— it's a different version of gambling. It is still gambling, but—

But so let me say it this way.

Yeah.

I'll put it this way. The way— I call this financial infidelity. And no relationship at all, especially a marriage, can do any— make any sort of forward progress if there's not 2 things: safety and trust. And right now, your household has neither of those things because you don't trust the guy as far as you can see him, and you shouldn't. He's been untrustworthy. And there is a radical safety component to this, right? Like, there, there's this huge debt, but I mean, you're, you're incredibly unsafe. And so I, I, that, that's my big concern here. If you said, hey, he is in treatment, he is 90 days sober, he's 120 days sober, he's—

Going to groups, going—

Yeah. He's got no, absolutely no way to access capital for the next year, and that's the arrangement that I've made with him, and I wanna be his spouse, all that. Great. Good. Then I would say, okay, let's get about selling big assets. Let's get about moving stuff around and all that. I don't hear that's even there yet. And it, and it would be like handing, like if I had a buddy who's, I've got multiple friends in recovery, it would be like me handing them drink after drink. Like that would be unwise to hand somebody that much cash after selling your house. You You see what I'm saying?

Yeah, I guess I do.

How much is your house worth?

Um, probably it's about $750,000. And when I take what we owe on the house and all the liens, it's $598,000.

Okay.

So there's not a lot left after that. And then obviously we'd have to pay rent and all those things. Yeah. Yeah.

So, Kim, what do you need from him to rebuild trust? What are things— 'cause it sounds like you've just said, I love him, and it is what it is. And so, he's gonna keep doing what he's doing. And he's kind of like, getting his fill over here and all. It's almost like he hasn't crashed and burned. Does he feel that? Like, I'm just curious where he is with all of it. Because I would pray in a situation—

Yeah, yeah. Part of the problem is he— I mean, he has a lot of guilt and shame, um, but because of his old ways, of all the years that he was hiding it from me, that's kind of what he just continues to do. I, I keep calling it he robs Peter to pay Paul, and he keeps just scooting stuff around behind my back. And we don't have really open, honest conversations because typically I just start crying and I get really angry and I panic and I freak out over everything. And I know he feels And I would like to say he's willing to do whatever it's going to take, although thus far he hasn't shown it. And he wants me to give him trust. I told him I wanted to separate bank accounts and he freaked out on me. And I know I'm in the right, but I need a third party at some point to tell him he's an idiot and I'm in the right and I get to run the show now. But right here—

Here's the show you have to run right now. You have to get a separate bank account. I'm worried about your safety as a woman and as a mother.

Um, with children, yeah.

Because you can wake up tomorrow and have no rent money and no— I mean, no mortgage money and no grocery money, and y'all gonna be out on the street. And so—

Yeah, well, we're just about there.

So listen, so the, the, the thing you can control here, the one thing you've proven to yourself and he's proven to you over and over, is you cannot control him. You can't scream at him. You can't cry. You can't be heartbroken. You can't be stunned. None of those things change him. The only person you can control here is you. And so that starts with you being an advocate for yourself. Do I have rent money? Do I have food money? Period. And he can freak out all he wants. He's lost the right to— this is a very financially abusive situation. you're living in. And I'm speaking this directly because I'm trying to shake you out of this prison that you— that's wrapped around you right now, okay? It's incredibly unsafe. And I've never had one of these situations that's this bad that you fully know how bad it really is.

Yeah, well, actually, as of like 8 o'clock this morning, I found out there was another $100,000 that was pulled out.

I promise you it's worse than you think. it is. And so again, you're looking at big picture stuff. I want you to start very small.

4 walls.

Do me and my kids have a place to live, food to eat, water, electricity? And can we— I get to and from work?

Do you work, Kim?

Yeah.

How much do you make?

Um, I, I make about $215.

Okay, so from this day From this day on, your check from your work, Kim, needs to go in a separate account. Okay? And that's not you being unreasonable. That's not you being a bad wife. That is you doing actually the healthy step of exactly what John is saying. You need to go down to the bank.

But if you separate it, I don't want— I guess part of my problem is if we separate it, do I just pay the bills that are under my name? Like, because all of our stuff is so tied up. He emptied my 401 at my job without me knowing. Like, I, I— all this stuff is so mixed up. I don't even know what's under my name. I don't even know what those—

Have you checked your credit report?

Yeah, I keep, I keep an eye on it.

Okay, so Equifax.

Yeah, yeah.

So you can check it. So I would make sure.

And I would put a freeze on it.

Put it— yeah.

So that way they have to contact you if somebody wants to take out a loan.

Credit card in your name or anything. Yes.

Oh, I didn't know that was a thing.

And so put a freeze on it. And then I would go through and begin looking at what do— what is in your name. And I know every state has different laws, but like, there— if there's credit cards out, if there's 401 loans out with your name on them, then yeah, I would begin making a plan. But all of this plan, it's— the mess is so big. I'm worried about your safety right now. If a guy will go behind his wife's back and empty out her retirement plan, and then hold her, sob with her, commit to change, and then go run another couple hundred thousand dollars in the hole behind her back. Like, there's—

And he needs healing, Kim.

He desperately needs healing.

Baseball cards trading and Pokémon, like, that is not healing. And so, there would be some conditions for me as a wife, that you will go to treatment, that you will go to weekly group. Like, I need proof that you are on a journey of healing, because 'Cause if not, your marriage is not a healthy place.

He has ended the marriage that you had. Now he gets to decide, does he wanna be a part of rebuilding a new one? And you've gotta give him that roadmap to trust, but that comes after you and your kids are safe.

You've heard from me and the Ramsey personalities for years, but nothing beats actually getting together in person. That's why we created the Live Like No One Else Cruise. For 7 days, we're vacationing with you and 2,500 Ramsey people in the Western Caribbean with live shows, Us. New content.

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Our scripture of the day is Hebrews 13:16, do not forget to do good and to share, for with such sacrifices God is well pleased. Nathan Morris said, the speed of your success is limited only by your dedication and what you're willing to sacrifice. Very good. All right, let's go to Brittany in Columbus, Ohio.

Hi, Ginger.

Hi, Brittany. Welcome to the show.

Hi, thank you so much for taking my call. My husband and I, um, we would like some financial advice and parenting advice. Our 18-year-old daughter, she, um, was pregnant— became pregnant when she was 17 and still in high school. And she is a go-getter. She graduated high school while maintaining a job. She Um, got found a job right out of high school in her profession of choice. She is doing awesome.

That is so great.

That's great.

And hey, yeah, I've worked with— I've worked with teenagers in that situation, and that also means she had 2 parents that were by her side. So kudos to you 2 also.

Yes, absolutely. We just want to support her all the way. However, um, we have told her that we would support her financially with Um, however, you know, and the father is very much involved, which we appreciate and love. However, he does not have a job and cannot hold a job. So my husband and I came to the rough conclusion that we should probably cut her off financially so she could see what it is like to have that kind of work ethic as a—

in partner.

And I don't know, we're just struggling with that. Is that a right answer to do?

I mean, it kind of makes sense. Scare the crap out of her so she doesn't marry him if he's not a— if he won't provide. I mean, I get the— I get how you got there.

I would go there except there's a baby involved.

Absolutely.

And so that's where my hesitation is.

We're having trouble with it. Now, the father, he is 20 years old, so he's very capable. We're just having a— and we did offer for them to live with us, which they did, under the condition they both had jobs, which he could not fulfill. So we asked him to leave, which she followed him, and we expected that. But we just have a really tough time coming to the— to support her financially when she has a partner. I—

John doesn't agree.

And they're not married. They're not married. If it was married, I would know. I would absolutely have no question about, you know, cutting off the finances. But they're not married. So how— if they're not married but he's very much—

Because you naturally feel like you're enabling him not to get a job because he's attached to her and the money that you're giving her as part of how they're sustaining their life?

Yeah. And I guess the, I mean, there's gonna be, I'm just thinking through this. There's, and so I'm gonna be thinking about it in real time. It's such a great question. I appreciate you letting me wrestle and me and Rachel wrestle through it with you. Anytime I wanna make a statement, I always wanna be as careful as I can with what are the second and third order impacts of my statement? statement, right?

Mm-hmm.

And so I'm 100— you, you've heard me say this 1,000 times on this show, 18-year-olds who wanna make grownup decisions, then they've gotta, they've gotta, they gotta understand the weight of adult decisions, right?

Absolutely.

My fear here is the baby would wear the cost cuz dad's not gonna go get a job. He gave up free housing. That's not gonna force him. So what's gonna happen is he's gonna stay at home with this baby and baby's gonna be raised by that. And maybe that's the arrangement they set up, that he's gonna be a stay-at-home dad, but your daughter's gonna have to go get second and third and fourth jobs. And, but at the end of the day, the baby wears the weight here. That's my fear.

Yeah, that's ours too. We don't want the baby to go without.

It is.

It, it, and we, we've not let that happen, but I do. question their spending since they really don't have bills. And she is making money.

How are you supporting them?

She— well, right now we're paying her bills such as her car payment, car insurance, her phone bill. We— whenever she asks for money, which is quite frequently, we give it to her without question.

Okay.

Over the last 2 weeks, we gave her $200. Okay.

Yeah.

Um, I, I would probably stop some of that.

Last night she just texted me and said she needed formula. Like, how do you say no to that?

Right.

I, I might say, I will purchase formula, I will purchase diapers, and I will have them sent to my grandbaby's apartment.

Okay.

Right. And that way I can be in—

And diapers and Amazon. You have an Amazon deliver, right? For the, the stuff the baby needs.

And that way you're not handing over cash, so you don't know how it's gonna get spent. And you don't, that kind of stuff. Um, and again, I'm, I, I, I'm making this up in real time. If I had some time to think through it, I might come to a different conclusion, but I, I wanna make sure as a grandparent that that little baby is not gonna wear the cost of a, of a, of a, a 20-year-old dad who's just not doing anything. Um, but then I'd sit down with my daughter and say, okay, at the end of, you have 30 days or 60 days or whatever. Um, this comes to an end and we love you and the greatest, and you're, you and that baby are always welcome back in our house. He is not, cuz he's making grownup choices.

Okay.

My, my, what, what I've seen in the past working with young teen moms is A, a fear that they have nowhere to go. So I wanna alleviate that for her.

Okay.

And B, that I—

Yeah, absolutely.

We told her that.

Yes.

Right. And I, and B is the, is I wanna make sure baby's okay. And that's just a tricky balance that you're— that y'all will navigate.

Do you know how much she makes, Brittany, a year?

What a mess.

I do not. She, um, just started, so it's probably pretty low. Um, it is a job that requires clientele, so she does have to build that up. Um, I would say not— I mean, she's 18, not, not probably much, but enough where she didn't have bills. She should be okay.

So I wonder if there there's like some— it almost feels, which feels funny saying about an 18-year-old, 'cause she has a kid, right? And you feel like she should be an adult in the adult world. But I do wonder if there's a structure you help her in with when it comes to money of, hey, we're gonna do EveryDollar and share an account, and I wanna see your budget every month. And I wanna see where you're planning on spending that income. And And alongside that, because of that, then we will help in X, Y, and Z. We'll pay the car payment maybe or something for a few months, right? To see, I just want her to be able to build skills and know how to do this well as an adult versus just being like, go into the real world and figure it out. So, I just wondered too, if there's some type of structure you could put her in. And as she does it, that may feel too conditional. I don't know. No, I love it. It's like, we will help you with this. If you do a budget every month and track your transactions, then we will help you here.

But the moment she just is like, I'm gonna just do whatever I want with my income, and then runs outta money, can't buy formula for her kid, that's not gonna work long-term, right? With the tools that she's gonna need.

Right.

So, I'm wondering how you can like support her in that way for her to learn how to do this while walking alongside her. And then eventually, you let her fly and be free.

What's—

when you've sat down and you and your husband have sat down and talked with this, with Dad, why won't Dad keep a job? Why won't Dad get a job?

We don't know.

Does he get fired or does he quit?

He's very capable. And he's— while they were living in our house for about 3, 4 months, he got fired from one job for showing up too late too many times. And then he walked out of his second job that he had.

Wow.

And we continued to let him live with us for a couple weeks, and then we're finally like, okay, we— it's not working out.

Did that strain the relationship with your daughter and you when that happened, when he moved out?

No, she understood. I mean, you know, she was pregnant for a long time, so we already had this kind of planned, and we already went over everything. with them the conditions, and, and so she knew that was part of the conditions. Okay. Um, but no, I think our relationship is fine. Um, but she did move out to go be with him.

Yeah. Yeah.

Okay.

So yeah, I, I like Rachel's plan for scaffolding, as the nerds call it. Like, I'm gonna, I'm gonna walk alongside you and I'll, I will support you as much as you will follow the plan I'm gonna put in front of you. But make sure that baby's okay.

Yep, thanks for the call, Brittany. All right, well, this concludes this hour of the show. Remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.