Transcript of Following a Proven Plan Is the Fastest Way To Build Wealth

Brought to you by the EveryDollar app. Start budgeting for free today. Normal is broke and common sense is weird, so we're here to help you transform your life. From the Ramsey Network and the Fairwinds Credit Union studio, this is the Ramsey Show. Dr. John Delony, number one bestselling author, host of the Dr.

John Delony Show, Ramsey personality, He's my co-host today.

Open phones here at 888-825-5225. The call is free, and some say the advice is worth exactly what you pay for it. Joshua is in Dallas. Hi, Joshua, how are you?

Oh, I'm more blessed than stressed. How are y'all?

Just the same, sir. How can we help?

Well, first of all, I just want to say that my wife and I actually, back in 2022, stopped by the Ramsey Show, watched y'all live, and it was you and John, and man, y'all were just the kindest people, and you left a huge impact on me and my family.

Well, thank you.

I don't think anyone's ever called us kind. That was awesome. Thanks, man.

Yeah, absolutely.

Maybe John, but not me.

Well, my, my wife and I have about $297,800 in debt, and our expenses are about to increase more than we bring home. And so, um, we have a 5-month-old daughter who's about to be going to a nursery, um, and that's going to cost us about $1,300 a month, which is going to put us upside down about $700 a month. Right now I am on the road every day for about 2 hours and 15 minutes to 2 hours and 30 minutes driving to and from work. To make $55,000 before taxes. Bringing home, I bring home about $40,000 or so. Truthfully, I'm wanting to know the best way that I can clean up this mess. I'd love to find a way to not have to drive as much so I can be home with my wife and baby. I know there are jobs out in my area where I can make just as much if not more, um, and not be on the road. I've put in applications places, but I'm not really seeing a lot of traction with any of that.

Okay. All right. Um, so what kind of debt do you guys have?

Well, a large majority of it, um, are student loans. We've got about, uh, $242,000 in student loans.

Who's the doctor?

Neither of us. Uh, but we both have our master's. In what? And So my wife has her master's in school counseling. She would like to be an LPC someday, but this debt is actually getting in the way of that. And I have my Master of Divinity where I'd like to go, and I'd like to be a lead pastor. My hesitation with doing that right now, unfortunately, is, you know, we can't really take a pay cut. So I know whatever job I end up in is not going to be my forever job right now, but we have a mess to clean up and I'm ready to work.

Are you working a pulpit on the weekends just to serve?

I do serve. Yes, sir.

I mean, are you speaking? Are you preaching?

No, sir.

Okay. You need to be if you want to be a pastor someday.

Yes, sir. I'm in communication with, with some pastors at my church now for some opportunities and even some scholarly research opportunities as well, which—

Scholarly research opportunities won't get you into a senior pastor role.

Yes, sir.

No one out— no, no pastor search committee has ever gone, "Oh, he's a scholarly research guy." It's never happened. They want to see you preach, and can you serve their local congregations? What they want to see.

And you'll— many churches will pay you well more than $50,000 for that.

Way more.

Way more.

But you're not qualified yet because they can't see— they can't see you doing it at this stage because you've never done it. So the Master's in Divinity does not put you into a pulpit as a senior pastor. Period. It does not.

A lot of preaching, a lot of serving.

A lot of serving and people— hospital visits. He's the associate pastor over at this other church that's larger than our church, and our church is looking for a senior pastor. We'll take the associate pastor off their hands, move them over here. That's how that is done.

And is your wife going to go be a school counselor? Is she going back?

Yeah, she is going back for this, um, you know, upcoming school year.

She And what does that pay? That pay $50,000 or $60,000?

Yeah. Uh, she's, she's making about $62,000 to $65,000 before.

And what is your, what other debt other than the student loans?

We have medical debt. Um, we had a high-risk pregnancy where we found out that we were pregnant as I also found out I was losing my job. Hmm. So, uh, that's $14,500. Okay. We also have a stupid tax in cars. We've got about $35,400 in cars and $6,000 on the credit card.

Okay. And so, well, when she goes back, you're negative because of the student loans and the cars. So, you know, there's a couple things going on. I don't want to drive 2.5 hours for anything. Okay, period, if I'm you. So I'm looking for a new position today. I'm gonna work diligently and get to be near my home, or I'm gonna move next to the work. But I think instead you need to find a new job. And she's got a job that's close by at her school counselor, right?

Yes.

Okay, so you need to find a new job. That's thing one. No kidding, you were already working on that, but that's a big deal because that 2.5 hours gives you opportunity to do other things like a side hustle, which can add money to this. You got sell $35,000 car. It's gone. It's got to go, obviously. And by the way, that's going to help you get right side up because that payment happens to be over $500, doesn't it?

Well, it's, it's two cars. Um, it's her car payment is about $400. Um, and I'm, I'm blessed that my grandmother is actually paying for my car. If something happened to her, um, you know, I would sell the vehicle. My car engine failed and I fell into the shiny trap.

Okay, so what do you owe on your wife's car?

On my wife's car, we owe $17,000.

Yeah, okay. Well, you're gonna have to pick up extra jobs, you're gonna have to get closer to home so you can do that to get this thing right side up. And you're gonna have to start talking about shedding some things. And I don't— and Granny paying for my car is not sustainable adult behavior.

I would agree.

So short-term we can do that, but I want a plan to be out of that plan. And the plan is not she dies and I have to sell it. That's not the plan. The plan is I want to fix this by getting out of it, get my own car. But that's a little further down the road. Right now we're trying to get this $700 thing covered immediately, and that comes from selling some stuff and picking up an extra job and quickly as possible finding a new job in the area that pays as much or more. Meanwhile, if you want to long-term work on your career as a senior pastor, you're gonna have to start filling a pulpit on Sunday.

And that might be the side hustle. Like, I'm gonna go find a church that's in between pastors, and I'll preach on the weekends. We'll come up with a dollar amount, and I'll be there 50 weeks out of the year, and that's how that works.

A lot of churches will do that.

A lot of churches do that, and I, I don't know anybody, not a person do I know right now who has got, gotten a job by a cold, uh, application. No, they are knocking on doors and they're shaking hands. I regularly get emails from former higher ed colleagues who are looking to move to a new school, to looking to get out of working at university systems and saying, hey, can you put in a word for me here? Can you call this person from here? It's all, all jobs right now are network.

All of them. We're gonna send you a copy of Ken Coleman's book, The Proximity Principle, which explains that. That is how you get a job. It's not by filling out applications. Filling out applications is a complete waste of time.

For the sake of your family, you gotta start shaking hands, making phone calls, and sending text messages. Hey, I want to talk to you for a second about love, and not love like in Titanic or something. I mean responsible love, the kind of love that moves you to take care of the people closest to you. And one of the most important ways to show that kind of love is by having term life insurance. If you have anyone depending on you, a spouse, kids, anyone, you need term life insurance. Term life insurance gives your family real protection if the unthinkable happens so they can spend their time grieving and not worrying about how the bills are going to get paid. Zander is a broker who works for you, shopping the top companies to find the right coverage options for your needs and your budget. In many cases, there are options available with no medical exam and instant approval. My wife and I had term life insurance through Zander for years, long before I worked at Ramsey, because we trust them. Getting term life insurance is a way of saying I love you when you can no longer say it yourself.

Go to zander.com or call 1-800-356- 4282 to find the coverage that fits your family.

David is in Minneapolis. Hi David, how are you?

I'm doing fantastic, John. Dave, Dave, how are you today?

Better than we deserve. What's up, man?

Yeah, so my wife and I, we've, uh, been, been listening to you guys for a while, following along, and we're into step 4 now. Uh, and we've, uh, in doing so, we started actually repping youth sports, uh, was our side hustle. And we're curious, do you, when you get to step 4 and you're looking at saving the 15%, do you keep up with the side hustle and the overtime? And do you include all of that, that, that intensity when you, when you get into that 15%? Because it, it kind of drastically changes the number that we're looking to save. Yeah, um, through that.

Well, I mean, you can just— you can decide what your career path looks like. I would not sign up for an extra job as my life goal. Sure. In other words, extending it in perpetuous. So no, when we go to Baby Steps 4, 5, and 6, you move from intense to intentional. Now, if intentional is I'm gonna do some sports reffing, but not as much as I used to, because I want to put more into my 401 while I'm adjusting my main career so that I don't have to work extra ever. You know, but, but you can choose a side hustle just because, but I would not require it, and I would want you to dial back on it. It sounds like you've been putting in a lot of hours.

Or if you, if you have this 15% to put down on your house and y'all have this fixed number, you want to run through that finish line. You just can't sprint forever is the thing.

Right. So we're kind of in a weird spot. So I'm a, I'm a union sheet metal worker and, and with our, with our, through our package, right? I put like 40 something, it's $46,000 a year into the three pensions. Right. So if we're doing the math off of what— how you guys say you cut that in half, right? Yeah, that's like 12% right there, even cut in half. Okay. Uh, my yearly is $140-ish. Um, my wife is $55,000, and then we bring in anywhere between $20,000 and $30,000 through the reffing, uh, multiple sports.

So I mean, would you want to stop refing. Do you want to stop?

I don't know about stopping the reffing. It's kind of, it's kind of fun. You get exercise and you get paid to do it.

I kind of, I kind of thought, I kind of thought I heard that a little bit.

Does she want you to stop?

Yeah, a little bit. Uh, she wants me home a little bit more.

Yeah, I think you, I think you dial it back. I think you dial it back from intense to intentional, and you say, I'm gonna throw some over here so I've got bigger nest egg that is non-union. And the more— the larger that is, the more comfortable I get. Uh, the less I'm counting on the union pension, the more comfortable I am. Less I'm counting on anybody's pension and more on my own nest egg, the more comfortable I am. Not just union.

David, you know what I would love for you and your wife to do? Y'all have just been through a big thing. Y'all worked your butts off to to pay off your debts, to get an emergency fund. What if you guys imagined we have a brand new marriage? Y'all go out for a half day and just say, hey, what do we want our life to feel like? We, we, we are the drivers in our, uh, in the driver's seat of our own life. What do we want our marriage to feel like? And what do we want to feel like when I get home from an exhausting day of sheet metal working? What do you want to, or like, you get what I'm saying? Y'all get to create this thing and then reverse engineer it with, we gotta go to work. You got your jobs. A couple days a week. I love reffing. I love it. And she's like, a couple days. I actually like you. That's why I married you. I want you around. And y'all can have that conversation. It's not like this life is happening to you now. Now y'all get to decide what this thing looks like and feels like.

And there'll be seasons of sprints and seasons of walking, but I want y'all to stop for a second and pause and celebrate the crap outta yourselves and plan it moving forward.

Absolutely.

And Dave, real quick, can you walk through just for someone who's new, the baby steps from the, like he called, said, I'm baby step 4 now. Can you walk us through that?

Sure, Baby Step 1, $1,000. Save $1,000, a little starter, beginner emergency fund. Just get a little distance between you and everything-can-go-wrong Murphy, right? And then once you've got that, you need to do that like in the first month. Yes, right, you're on a budget, you're gonna squeeze $1,000, sell some stuff, put some stuff on Craigslist, whatever, all that, Facebook Marketplace, whatever it is, right? Then we're gonna— the important one that everyone knows us for is you're gonna get out of debt everything but the house, and that's Baby Step 2. List your debts smallest to largest, attack them with a a vengeance, working all the time, selling everything, not going to a restaurant, not going on vacation. We're getting out of debt. And you clear your debts, and that's what they've done. They're debt-free. That's a cool place to be.

It's so cool.

Yeah, and zero debt. And when you got zero debt, now you have control— other than your home— you have control of your most powerful wealth-building tool, which is your income. You're not giving it all to freaking Ford Motor Credit. And to Citibank, "What's in your wallet?" "My money!" Yeah, that's it. So there we go, right? So we're gonna be out of debt, then we're gonna build an emergency fund, Grandma's rainy day fund of 3 to 6 months of expenses, a proper one. And that's taking the $1,000 account, adding to it. That's where they are. They've just completed that.

They're their own bank now, to an extent.

Yeah, they have no payments and they have an emergency fund, a good one. So good. So I mean, think what if you're out there and you're brand new and you got a bunch of payments, think what it would feel like Like no one standing on your chest if you had no payments and $20,000 in the bank. Yeah, yeah, that's a big deal. That's where he is. And now he's trying to— trying to exhale off the ref thing and can't figure it out because he's been so freaking intense to get there.

Yeah.

And that's exactly the way it should be. He's been driving 160 miles an hour and he's trying to slow down to 50.

But if you— that's a great analogy. When you're driving 110, right? You drive 160, I'll drive 110. And you go, you slow down to 70 because your app says there's a policeman down the road.

Feels like you're walking.

Feels like you're crawling down the highway.

I went to turtle mode.

Yeah.

Yeah.

You're still going 70. A wreck's still going to kill you. You're going fast, but not that fast.

Yeah, it's different. So then you do baby steps. You're intense, like crazy intense in those first 3. Then you move from intense to intentional, meaning we're going to do things on purpose, but we don't have to be so freaked out. Now we can save up and go on vacation. Now we can save up and move up in car a little bit in cash. Now we can buy that couch in cash.

Or like his wife was talking about, now you can just not have to work all the time. We can watch Office reruns together at night, just us sitting on the couch.

And where did that come from?

I don't know. But I like— it's not even about purchasing. You get to decide what you want to do with your life now.

Exactly.

That's awesome.

You decide. So, and Baby Steps 4, 5, and 6 you do simultaneously. 4 is 15% of your income going into retirement. 5 is save for kids' college. 6 is pay off the house. The average person work— and 7 is when your house is paid off, just become wealthy and outrageously generous. And be generous along the way, but now be outrageously generous. And so, the average person working this stuff, the book Total Money Makeover came out in 2003. 20 million copies now, that outlines those Baby Steps. Tens of millions of people have done this now. The average person doing it is paying off their home at Baby Step 6 in about 7 years. Yeah. From the time they start this, going from intense to intentional. Now that's the average. Some take a little longer, some take a little less. And then that sets you up to be able to invest even heavier than your 15%, and the average person is becoming a millionaire, a net worth of $1 million or greater, in about 14 years. That's what we're seeing. So this is not an easy plan. It's just one that works every time.

Every time.

Every single time. That's how you do it, folks. And so these are principles, God's and Grandma's ways of handling money.

My wife told a couple of friends of ours this at one point, and I loved what she said. They were, they were in their 30s and they were like, man, we should have been doctors. We should have gone back to med school. And I am always the eternal optimist. Like, why don't you just go? And one of them said, because we'd be both be 42 when we graduate. And my wife said, that's not the right— you're not looking at this right. Y'all are going to be 42 anyway. The question you need to ask yourself is, do you want to be doctors when you're 42 or not? The reason I bring that up here is You're gonna be 7 years from now in 7 years. Do you want to not have a house payment? Because that, that journey starts today if that's what you wanna do. Exactly. You're gonna be you in 15 years. Your, your spouse and you are gonna be married in 15 years. Do y'all wanna be millionaires or not? And that, that, that journey starts with step 1 today. Yeah.

Right. And do we wanna be on the same page?

Do you wanna be on the same page?

Same team. The most difficult subject in marriage, which is money. Yeah. Are we gonna talk about it? Are we gonna, get on, get aligned on our values and enjoy each other in the process. These are all the byproducts of what occur on this journey.

Yeah.

Here's what nobody warns you about. You're behind on payments, you signed up with some debt settlement company, you're making your monthly payments to them, and then one morning a process server knocks on your door. Surprise! You just got sued by a creditor. And that company you trusted? Not a law firm. They're not built to represent you if things escalate. And now you're scrambling to figure out what to do next. And that's why I tell people about Guardian Litigation Group. Guardian Litigation is not a call center. They're actual attorneys at a law firm. And from day one, you're assigned a real attorney who can represent you if a creditor takes you to court. No scrambling when things go sideways, just real legal protection built in from the start. And look, the best way out of debt is still the budget, the plan, the Baby Steps. But if you're already in default and legal threats are coming your way, Guardian has your back. Their attorneys have helped over 55,000 people settle more than $600 million in debt. So get real legal help at guardianlit.com/ramsey. That's guardianlit.com/ramsey.

Attorney advertising. Results may vary and no specific outcome is guaranteed.

Justin is in Pittsburgh.

Hey Justin, how are you?

I'm great, Dave.

How are you? Better than I deserve. How can I help?

Well, um, first of all, thank you guys so much for taking my call. I really respect your opinions on, um, all these financial matters. And, uh, just real quick, um, we're having a— I have a parenting question. Um, my very intelligent, my very hardworking, uh, soon-to-be 21-year-old daughter is going to be a junior in college And she has informed us that she is— she would like to switch to her third college for this coming year, switching to an online program, and that she is ready to move out of the house. And my wife and I are really struggling with the moving out piece of that puzzle because we don't feel like it's a good financial decision. And I just was hoping to get some input from the two of you. Are we— kind of overreacting to the situation? Should we be open to it, or should we be advising her in some way that— I, I just don't know the answer right now.

How old is— again, did you say she was?

21.

21. She's going to be 21.

She's a junior in college studying what?

She's going to be an occupational therapist.

And how's she supporting herself when she moves out?

Well, that is the question. She's currently working, um, in a— at a nursing home as like a, a personal care aide, uh, sort of position where Um, she told us she's making about $3,000 a month, um, which she thinks when that, that's going to be enough to sustain a life. Um, at this point my wife and I have been cash flowing college, uh, for her without a problem. Um, I think we would still intend to do that, but when she talks about moving out, that kind of tells me that she's, you know, she said that she's ready to be an adult and Um, you know, that means that she's going to take on more of a financial responsibility, and I don't think that that $3,000 a month is going to be enough to sustain that life.

This your oldest child?

She is. Yeah.

I, I— here's the, the conundrum you find yourself in is, are you going to use money as an anchor, or are you going to use, um, tuition to punish, or are you going to look at it at a at a legal adult and say, this isn't the decision we would make, but we're gonna be your biggest cheerleaders. Cause I, I'll tell you the, the greatest way she can figure out how the world works is to go figure out how the world works.

Okay.

And I, I've, I've heard a ton of kids who are like, I'm moving out and I just start rattling off numbers and their eyes get real big. She's making 3 grand. She's not gonna have a great life, right? She's gonna have one bedroom apartment and it's gonna be really tough. Um, I, I would give her some pretty strict boundaries, like, We'll keep covering tuition, but you're gonna be on your own for this stuff. And I will walk with you every step of the way for how cell phone works and how insurance works and all that kind of stuff. The risk you run right now is you say no and she walks anyway and you've lost your relationship too. And it's not like she's doing drugs. I mean, she's working in a nursing home. Sounds like she wants to work full-time and take classes online.

Incredibly hard worker.

Yeah. So it sounds like she's a kid.

She's bright and she's mature.

Yeah. Great character.

Yeah, that— the 100%, she should move out, and 100%, you should support her. I'm with John on that. The only thing I would do is, you know, let's go shopping for apartments together, and let's— I'll help you build your budget on $3,000. I want you to know— I want you to know what you're— what you're moving into, because you don't want to be— you know, if you're gonna make this decision, we would rather you stay until you finish college. You know that. And if you want to stay until you finish college, you're welcome. That's what you're— that's what— that's your message, right? And, but if you're going to go do this, let me walk with you, and I'm not going to tell you what to do. I just want to see that you've considered all the variables that have to be in this budget. Here's what the electric bill is going to be at that apartment. Here's what the apartment costs. Here's what the contents insurance costs, which is about $500 a year. "Okay, here's what your cell phone's gonna cost. Here's what this is gonna cost. And let's build a— let's see what your life looks like on $3,000 a month or more if she's working more.

That's fine. But let's figure out what you've got to do to exist and let's do this. Let's begin with the end in mind," as Stephen Covey would say in The 7 Habits of Highly Effective People, right? And so Let's plan it all out, and I'll walk with you and coach you. You may, when we do the budget, it's possible you may want to delay this because you may look at the budget and realize it's harder to do this than it is in your mind right now. So if she's going to do this, I want her to deal with— I want her to do it based on reality, not based on fuzzy dreams and feelings.

That's what I feel like it's been up to this point.

I think it has too.

"Will EveryDollar allow me to kind of put out a projected budget like that?" Yeah, she needs to build one.

She's 21, she needs to have one.

She needs to build an EveryDollar budget.

Well, for me to help her, will EveryDollar allow her to do this?

Yeah, she can build it and then you look over her shoulder and say, "Okay, have you checked that? Have you thought about that? Have you thought about that?" And I'll go with you and let's look at the apartment. Do you feel safe here for this price? Okay, because I don't want my daughter in an unsafe situation, and so we're gonna, you know, and we're not We're not going to supplement your living. You're gonna have to do it on your own if you move out.

And that, that, that, those two lines, we're gonna be your biggest cheerleaders. And so we'll walk with you through this thing. We'll help you every step of the way. And financially, here's where, here's what we're gonna provide for you.

Tuition.

Yeah. Tuition.

That's it.

That's it. Right. And, and you, you being an adult enough to, you, you modeling what adult is, is we're gonna, we're gonna live in reality. You just— we're all clear.

Yeah. And if the budget works and she can live on the budget, celebrate her. And then that's going to actually give me, if I'm you, more peace. Because right now you're worried about it. I'm a little worried about that. This is a dream that's going to turn into a freaking nightmare.

That's, that's my fear.

Yeah. Yeah. And your wife has gone even further. She's like, she's going to be in a ditch in a cardboard box.

You know, this is— that's what happens. Yeah. So.

Um, and that— this is the way this stuff goes. And, and this is all with a good kid.

Yeah, yeah. Hey, can I give you one more thing to tell her?

Sure thing.

This would be really like— this would be, um, handing the maturity baton to her. Look at her with your wife and say, hey, we're really sad you're going, we love having you here.

Okay.

Because there is financial stuff, but I promise you, part of this is that's our oldest, that's our kid, if, if she leaves, who are we? What's our house gonna feel like? She probably helps. She sounds like a great human being, right?

She really is.

Yeah.

So if you're gonna be sad, what you're thinking is you raise them to be independent and dadgum, if it doesn't work, I know.

And so like, I, I never occurred to me in a million years that if I found out about a new hunting or fishing spot, the first person I would think to call would be my 16-year-old son. And it is now. It never would've occurred like that. If you, if you lay out 10 people I can go hang out in the woods with, he's gonna be my number one pick. Cuz I like being out there with him. He's funny. He makes fun of me back good. We have a good time. I trust him. All that. It never would've occurred to me. And so if you and your wife are also wrestling with grief, like, oh, our oldest is about to fly the nest. Um, and she had to be, we didn't kick her out. She had to be the one to say, hey, I'm ready to fly. Look her in the eye and say, we're gonna miss you. We're gonna be sad. That'll be a gift to her. That'll humanize you and your wife and it will start the grieving process for you and your wife. You're losing losing a cool human being that's been a part of your life for almost a quarter century.

You're not losing them, they're just moving to an apartment.

That's true. Yeah, you got it. You still got tuition payments.

Yeah, they're still on a dead gum leash. But I, I— David, you're right. I mean, when we dropped our oldest off at college, 2 and a half hours away, we cried halfway home. We dropped Rachel, the next one, off from college, we cried one exit.

Yeah.

When the third one got ready to go to college, we pointed towards it and said, "It's that way." He drove himself.

That's right.

Yeah, yeah.

It's like, it gets easier.

It does. But man, I, yeah. Dave, I even think there's—

That's what a great dad.

A great dad, great mom. They've raised a great kid. I mean, if my 21-year-old who's working full-time in a nursing home says, hey, I wanna take classes at night in a different situation so that I can keep doing, man, I wanna celebrate and cheer that. But that's gonna be a bummer when your kids move out. I love, Dave, I love the idea of a 21-year-old Yes, crashing and burning too, a little bit. Like realizing this is a struggle and I gotta get another job on top of this one.

Like, don't do it based on a feeling, do it based on math. That's right. And then you, you're staring the reality in the face and still choosing that reality. Now we've got a good decision.

That's right.

But if that, that may lead her back home, maybe she may say, I don't think I want to do this, or you may watch her just soar. Yeah, could happen.

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

This is a paid advertisement. The Churchill Certified Homebuyer Program is available for qualifying borrowers and select loan types only. NMLS ID 1591, NMLSConsumerAccess.org, equal housing lender, 1749 Mallory Lane, Suite 100, Brentwood, Tennessee 37027.

If you're working the baby steps and you're following the Ramsey Plan to get out of debt and build wealth, the fastest way to do it is by using EveryDollar. EveryDollar will coach you every step of the way, plus it gives you a detailed plan for your dollars every month before the month begins, and you're on the same page as your spouse. You can track your progress, you can get personalized recommendations, coaching for your situation. We're gonna give you the whole Ramsey thing spoon-fed in EveryDollar. And you can start EveryDollar for free by downloading it in the App Store or Google Play. Really important that you plug this in if you're going to do this stuff. Maybe you just enjoy listening to the show. Thank you for doing that. We appreciate it. But if you're going to actually do the stuff we're talking about here, you need to be doing it together if you're married, and you need to be doing it with a detailed plan. And this is the tool, and it's free. Every dollar for free. Download it in the App Store or Google Play. Rachel is in Nashville. Hi, Rachel, how are you?

I'm good. Hey Dave, how are you?

Better than I deserve. What's up?

So my husband and I, I'm 26 and he's 23. Um, we are curious as to like, we just kind of want your opinion or your thoughts on whether it's better to like buy or build our first, uh, our first home.

Um, how long you been married?

Uh, 3 years.

What price range are you looking in?

See, that's, that's up in the air right now too. Um, we were, there's 3 options we were kind of thinking of and it was either to just buy a home and start building equity, a small home, like a 3-bed, 2-bath kind of thing. Cause he works from home, so he'd need an office. Um, or we could build like a small slab house, while we cash flow our like barn dominion build that we would prefer to do. Um, or we could get a construction loan. Those are the kind of the 3 options we were looking into. Um, last year we made $86,000. Um, he's been doubling his income every year in his business. Um, since he started 2 years ago, he made $26,000 the first year and then $48,000 the second year. Good.

Um, good for you guys.

Okay, we're on track for about 60.

It's really— you're in a good place, and I can just give you the pluses and minuses, and you can decide, all right, which way you want to go. The positives of buying a— just buying a 3-bedroom, 2-bath and getting started, and then just start piling up some cash and doing the barndominium as stage 2. Sell that house when you get ready to do the other one, and— but just get started in homeownership. It's simple, it's clean, it's not going to extract a lot of bandwidth from your life. Okay. Did you say he started a business? Yes. Okay, then I'm probably going to go that way if it's me, because I don't want him taking his eyes off this business that's prospering because he's over screwing around building a barn-dominium all the time. Yeah. And if you tell— you can't do two things at once and do— be any good at them. Okay. So I want him to continue to grow this business. It's the goose, man. It's laying the golden eggs. Let's, let's just kick that thing into high gear for the next 3 or 4 years. And then, then you can write a check for a good contractor and bring in the barn-dominium thing.

Now, if you're going to build, the downside is it is a, it is a great strain on most marriages when you build a home. You're going to fight.

Okay.

Yes. Count on it because you're going to have disagreements about this. And for some reason, we decide that we're going to kill each other over the color of the kitchen. I don't know why, but we do. It's like, like we die. We die on the most unusual of hills. Right. And so you need to back up from that and commit to Hey, we're gonna be nice to each other through this process. We're both gonna have a vote. You don't get to scream, "I deserve this," either one of you, all that crap, okay? So then when you do that, then the next thing you need to do is there's 3 things that drive a build. Otherwise, you're gonna drive yourself crazy and you're gonna have scope creep and then things gonna end up being a financial nightmare. One is you lay out a detailed blueprint of exactly what we're going to build. And you go over it and over it and over it and over it, and you tear it up and you do it again. And you— you— it is very cheap to build a house or a barndominium on paper, and it's very cheap to change it on paper.

But if you make it up as you go, it's super expensive. 73,000 change orders, right? No.

Yeah.

So that's a piece of paper number 1, then that will lead you to piece of paper number 2, which is a detailed budget of exactly what's going to be the dishwasher, exactly what are we going to spend on lighting, exactly what is the bid for the concrete, who's putting up the structure and what's that going to cost, what's the roof and what's the bid on that. Get hard bids and you build a budget that you need to hit, that budget. You know, there's going to be a couple of things change. But the last house I built, I hit within 2% because we made the budget in great detail before we broke ground. Okay. In detail. And we're in agreement on that. Sharon and me, this is what we're going to spend. The decorator comes in with the idea. Toughies. Okay, toughies. This is what the budget is. We decided ahead of time. Decorator, you're going to operate within the budget. You don't get to set the budget. Contractor, you're gonna operate within the budget. You don't get to set the budget. So these are the pieces of paper we managed to. Then the third piece is the schedule and how long is it gonna take to build this.

And before we broke ground in June, we knew that February 14th was the day, Valentine's Day, we were gonna start installing trim. We knew when the plumbing rough-in was gonna be done. We knew when the roof was going on to the day. It was all scheduled out throughout the next 14 months, and we built a— we ran a 14-month schedule and finished it in 12. We came in within 2% of budget, and we finished early. And the builder loved us because we actually did what we said we were gonna do. We didn't drive him crazy. There was very little drama. All the drama happened on the paper before we broke ground. So budget, blueprint, schedule, and then freaking stick to them. Otherwise this thing will cost you twice as much as it should and you're gonna go broke doing it. But I recommend that be your second project, not your first. Your first one should be you guys go buy a house and grow a business.

I— Dave, I think you just broke her brain a little bit. I mean, barndominiums look so cool when you're scrolling on Instagram, and then when somebody pulls apart All the little pieces. It's like, oh, okay. Okay.

Yeah.

And a lot of glamor.

This is me. I can be, sometimes my wife says I'm way too risky on some things and too risk-averse on others. I would wanna see that, that business have a couple more years of oomph to it before I leveraged on a brand new build. Because I would hate for y'all to have planned, because the temptation's gonna be, it doubles every year. And if you're on track to hit $160,000 this year because you hit $80,000 last year, it's going to be re— it would take an act of God's worth of discipline to say we're not going to go ahead and pretend you're going to make, you know, $320,000 next year.

Yeah.

All right. I would love to—

you'll build a much better place if you wait 2 years.

Yeah. You can have the place of your dreams in a few years, especially if you got cash.

Yeah. And you put yourself in a cash position. Meanwhile, you're sitting in a home that Anyone else will be happy with.

3/2s are always pretty easy to move.

It's— yeah, it's a great property. Yeah, it's like the ultimate American property, you know? So— and barnominiums, by the way, are not correct. Yeah. So they're like what's called a white elephant. No one wants them but the guy that built them. Okay, that's it. And because selling a used boat that you know, that you— that you carved out in your basement. Yeah, yeah, that's the one.

Yeah.

Where did—

of those 3 things you identified, where do most people get sideways when it comes to building their own thing?

All 3.

All 3.

They change. They don't spend enough time on the blueprint. And so they build by change order, which doubles your cost and doubles the length of time that you're building, which also doubles your cost, right? Yeah. So you get scope creep on the money is the problem with all 3. And so you don't stick to the budget because your budget's not realistic because you didn't lay it all out and you didn't do it. But I can hand the electrician the blueprint a year in advance and he can give me a bid. Yeah, I can hand the roofer a blueprint a year in advance, he can give me a bid. Now he may price adjust it a little bit later, but I'm gonna be real close.

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

Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. John Delony, Dr. John Delony, number one bestselling author, is my co-host today. Edgar is in Fort Worth, Texas. Hi Edgar, how are you?

Good. How are you, man?

Better than I deserve.

What's up? So, uh, my question was, obviously we follow you, we've been watching you for a little while, but How do we get started on this? You know, I like your steps. I like the thought of being financially free, not having a mortgage, but how do we get started? How do we get that discipline into getting to where you guys are, where like a bunch of your people that call, you know, how do we get there?

Dude, you're the man, Edgar. What brought you to this point?

I don't know. Uh, the thought of being financially free. Like I said, obviously I feel like the biggest The biggest debt that we have is our house. I wish I didn't have that. I mean, even some of my neighbors that are older, you know, one day he was telling me that he paid his house cash and I was like, dude, how? How do you do all this? How? And he obviously he's older than me, but I want to be there, you know.

Dude, you came to the right place, brother.

So, um, go ahead. I mean, there's two questions in the question. Question number one is philosophically, psychologically, how do you create discipline? And that's a great discussion. And then the second question is just, what's the first thing I do? Well, the first thing you do is you do a budget on EveryDollar with your wife, and you will find as soon as you do that tonight— it's free to download— that you're gonna find several thousand dollars in margin in your life. And then what do we do with that margin? Well, we're going to apply it to Baby Steps. And first Baby Step's $1,000. Second one, let's get all the— everything paid off except the house. And then when that's done, we're gonna build an emergency fund. So how much do you have in savings?

I have about maybe $30,000. Yes, sir.

How much do you have in debt, not counting your house?

So that's the thing. I feel like, honestly, I'm— I can't tell you the correct number, but I think our biggest debt is her car, maybe $14,000. And then, well, the biggest one's the house, obviously.

But yeah, not counting the house, you got $14,000 on a car. What else you got?

Maybe a couple credit cards over $2,000.

Okay, well, the first thing you do if you're lost is you have to find that sign in the mall that has a red arrow on it that says, "You are here." And that means you need to get a detailed list out and figure out where you are exactly. And you and your wife go over that. You say, "Okay, here's our debts. We've got these 5 debts." And to the penny, figure them out. What is it? What does it take to get debt-free? Okay, and it sounds like $30,000 will get you out of debt.

It does, but it's also like, I think it's more of the mindset of like, okay, I know that, but I'm talking about the money.

You got the math here. I'm not talking about your brain. I'm talking about your math. The math is once you decide to do this and the two of you are sitting down looking at your EveryDollar budget, I would write checks and be debt-free Tonight. Yeah. And then knowing that I'm going to live on this budget without any payments, and I'm gonna rebuild my emergency fund as Baby Step 3 of 3 to 6 months of expenses. So as soon as you write checks and you're debt-free, you're gonna be working on Baby Step 3. And when you finish that, which will just be a few months, then you will start your investing in Baby Step 4. And you just start following the stuff you hear us talk about here on the air. In detail. But if you don't think you're going to follow through, you won't start.

What's your hangup with the discipline part?

I don't know, honestly. I feel like coming from nothing, you know, I mean, I'm not rich, we're not rich, we don't come from rich parents, none of that. So saving up even to now, 30, you know, 30 grand, the fact of knowing that, okay, I can be debt-free, but it took me so long to get there.

So what's your income?

Uh, I think together we're like $120,000 was what we made last year.

Okay, so if you didn't have any payments but a house payment, couldn't you save some stinking money, Edgar? I mean, mathematically, hello, sure you could.

Here's the, here's the thing I think you're struggling with. My dad was a policeman, my wife's parents were teachers. We didn't even know what it was going to feel like. And I grew up— you probably grew up in a home where those people had that kind of stuff, not people like us.

Right.

And you probably got boys that you ran with and you've got survivor's guilt and you got the 'we got out' guilt. All that stuff is going to hold you back. And so here's what I want to tell you. You got to be led with math and with a plan, and you can't let your feelings dictate what you do next. The thing about discipline is I can't be swayed by motivation. I can't, 'cause there's, dude, take exercising. I, I'm pretty disciplined when it comes to my exercise. If I waited to be motivated, I would never work out. 'Cause you know what I'm motivated to do? Sleep in and eat ice cream for breakfast and gummy bears and gummy bears. 'Cause all 3 of those things are awesome. But I have an, an end goal, which is I want to be able to roll around on the floor when I'm 85 with my grandkids. And so I don't wait for motivation, I don't wait for feelings, I do the next right thing. And that next right thing is the plan in front of me.

And I know you could do it.

I know you can.

So the math says you can do it, and I— and you're a guy that was able to save $30,000, so I don't know why you couldn't save $30,000 really fast. You've had no payments.

You've attached identity to look how much money I got in this account. And you've allowed that to say, this is what I'm worth. And actually, if you take away your car payments and you take away your credit card payments and you put that in an emergency fund, you're not as free as you feel like you are because you've just never seen a number that big in a checking account, right?

So here's the thing. Discipline's pretty simple. Um, it, it's, you have to want something other than what you have now. More than what you have now.

Okay.

I have to— I have to want to be a different place more than I want to be where I am. And that moves my butt off center. It's that simple. Where do I want to be? And do I want to be there bad enough to leave the comfort zone? Because the comfort zone is an illusion. It's a place where things die. Mm-hmm. People, lives turn mediocre. You don't want to live in the comfort zone.

Bodies atrophy.

Yeah.

Yeah.

Anything that's inactive is dying. Yes. By definition. And that's what we do in a comfort zone. It's the problem we have in America in general.

Exactly.

The problem in America is you can be half-butt at everything and live a life that is better than 98% of the rest of the world. Right. You can have an incredible life in America and be a complete half-butt. I mean, just mail it in at work, overeat, slob, binge-watching everything that you shouldn't be watching on Netflix, and nobody likes you. You're a spiritual moron, and you can still have an incredible lifestyle.

A comfortable life.

A comfortable lifestyle in America.

And it will catch you.

It will catch you. That's the problem. If instead you were freaking starving to death and you came off a dirt floor in your home— the floor was literally dirt, there was no floor— then you'd be going, 'I ain't going back.' Yep. And there'd be a desperation in your soul, and you'd be scratching and clawing and spitting and flipping and getting stuff done, man. That's right. And that's the change, is leaving mediocre is harder than leaving pain.

And it feels different than you think it's going to feel. Keep going anyway.

When I started, I had great ideas and I knew how to serve people, but I didn't have systems in place yet. At that time, I sold books out of the trunk of my car. It was a lot harder to start a business back then. Shopify makes it easier. Shopify is the business platform powering millions of businesses and about 10% of all e-commerce in the United States. If you've got a product or even just an idea, Shopify makes it simple to get moving. You can build a storefront, write product descriptions, and even improve your product photos all in one place. You don't need 10 different systems duct taped together. Shopify handles everything you need to make sales, from payments to marketing and analytics. Plus, that purple Shop Pay button is one of the best converting checkouts on the planet for fewer abandoned carts. And if you get stuck, Shopify offers 24/7 support. So So if you've been sitting on the sidelines, it's time to turn those ideas into— sign up for your $1 per month trial at shopify.com/ramsey. That's shopify.com/ramsey. Shopify.com/ramsey. Today's Ramsey Show question of the day is brought to you by Yrefi. Defaulted private student loans can derail your money plans, but Yrefi helps borrowers explore refinancing options designed to get them on track again.

Learn more at yrefi.com/ramsey. That's the letter Y refy.com/ramsey. Might not be in all states.

Today's question comes from Antonio in Pennsylvania. He writes, I'm 21 and I graduated from college this month. I'm about $50,000 in debt and I've not started investing yet, but will when I start my new job. What advice would you give recent college graduates on what we can do to be smart early and set ourselves up for success? Maniacally, as crazy as you can. Your friends are gonna think you're nuts. Your parents are gonna think you're nuts. Your old professors will think you're nuts. Do whatever you can to get this student debt paid off as quickly as humanly possible. Make an obnoxious plan, get your first job, and then get a second job. Because here's the thing for—

and then get a third job.

For recent college grads, students used to always say, hey, I'm gonna take a year off and then I'm gonna go get my graduate degree or whatever., I would always tell 'em, just go do it. Because when you graduate and get your first job, your body will adjust to busy. And so if you go get your first job and you go ahead and get a side hustle and get a job on the weekends too, you're 20 freaking 1. You got this thing called energy and you got a metabolism. You can eat Arby's and Taco Bell and still be fine. Here's the thing. Go pay— gross. It is gross. It would cost me a week of my life to do that now. But you're 21.

You can get away with it.

It should just work maniacally. Because you're gonna adjust to, you're gonna be tired no matter what you do. You're gonna adjust to tired. Just go work like crazy and look up at 25, have a whole bunch of money in your emergency fund, have no money that you owe anybody, and then start investing and you'll be a jillionaire. That's what I would tell you to do. What do you think, Dave?

Exactly. That's exactly what I would do. And don't buy a car.

God help you, Dave. I left college.

This is the number one thing we do. We go, I'm outta college. I've got an adult job. I'm gonna get an adult car payment. That's a dumb butt idea right there.

I was driving an E, like a Tercel, '88 Tercel hatchback. And when I graduated college— sexy, Dave— I doubled the amount of debt I had after my first year out of college.

And it was for cars.

With a car. I'd never said no to myself. I was, I was rich. I was making whatever, $40 grand a year. I thought I was a millionaire. Don't—

please God, don't buy a car. Number one mistake people make in the first 2 years out of college is they go buy a new car.

Put every spare penny, pay the student loans off.

Yep. Drive the hoopty. Yes. Drive the hoopty.

Shut up. Ride the bike.

Keep doing it. Drive the hoopty. If you'll drive like no one else and work like no one else, later you can drive like no one else and work like no one else.

And people will tell you, you gotta take— you gotta rest. You're 21. Oh, work like a maniac.

Work like a maniac.

Don't be a wussy. Don't be a wussy. You need to rest. Oh, give me a break. No. Get it done.

Yes.

Get it done, man.

And I'll add something else. I just finished this big project, Dave. Go on dates. That's another good thing. It's a good investment for your life. Find somebody to marry. Cheap dates. That way, if you're driving the same car and you're going on cheap dates, you'll know— you'll know she really likes you.

Yeah.

So yes, do it.

Let's do it. Sheila went out with you and you're driving a hatchback. That's how I—

that's how I knew. I knew this girl's with me, stud, because that car wasn't She is ride or die because that's the car we went on dates with. Or, you know, you're in a bad way when she's like, hey, what if we just took my car? And her car was a used Camry. It wasn't like we were— we were cooking. But no, I knew that girl liked me because of my car.

You know, Sharon and I, I had a 1974 Monte Carlo. It was 1982, by the way. But yeah, we're on our second or third date and that thing had 480,000— I mean, it had 200,000 miles plus on it. It had been hit on every side and fixed. I was on the third transmission and the second engine since I had bought it. I mean, I ran that car.

That's the most East Tennessee thing I've heard today.

And so we're on the third date and I'm explaining to her— I got $1.12 in my checking account, right? And I'm explaining to her how someday I'm gonna be a millionaire. And we went across a railroad track and Murphler fell off my car. I rolled up under the car with a toolbox, put it back on because I'd done it before and would do it again after that too. And she's like, oh, he's the one.

Yeah. How did that happen?

How did that happen? Well, it worked out for her. Rick is in Atlanta. Hey Rick, what's up?

I need your help, Dave. Like Princess Leia says, Obi-Wan, you're my only hope. Um, we are in a position where we thought we would not be. We've paid off everything. We have no debt, no mortgage, no nothing.

Good.

But we're in the process where, thanks to age and other things, We're needing to downsize and get a different house. Okay. We tried to get a HELOC to go ahead and pay for the house that we were thinking about, but because we have no credit, we had no credit score. And so no one will loan us money because we have no credit score. So we're hoping to sell our house and use the proceeds from the house to pay for the house that we're going to buy. I'm 65, he's 66 at the end of the month.

How much in your nest egg?

Um, hello? I took a chunk out of a 403 to pay off the mortgage, and we've just been—

How much in your nest egg?

Not enough. Um, honestly, I don't know.

Um, what's not— I mean, some people think $2 million is not enough. What is in your nest egg?

Is it $50,000? Is it $800,000? Is it a million?

Actually, we don't really have one. We've got, we've got some cash on hand, but we don't have that much money. I just have, I have a pension that comes in. We have also, I have my wife and I, we do Social Security.

And so you cleaned out all of your retirement savings and you have none in order to pay off your mortgage?

No, we've paid off the mortgage.

I know you said you took the money out of the 403 to do it. Right. And now there's nothing in the 403?

There's very little. Very little.

Like $50,000?

I could calculate it. Less than that.

Okay.

Okay.

All right. That's, I got the idea. That's close enough. Okay. So that's not a source of money. What's your home worth?

Last year it appraised a little over $400,000, but it's not in the best of shape. So we're probably going to be less than that.

Okay, and so how are you going to sell it?

We're gonna do what we can. We're clearing stuff out. We're going to try and get everything out and get it as best shape that we can to get it fixed and just sell it as is and hope for the best.

Have you already signed a contract on a new place?

No. Okay. No.

Okay, so listen, dude, you're broke. You have no money except this house and a pension that's coming in, and I don't want you to have a home equity loan. Because if the other deal— if it doesn't sell, you're gonna have a home equity loan for 5 years if this doesn't sell. And so I don't— I wouldn't go with this plan at all. No, I wouldn't do this. What I would do is put your house on the market and sell it and go rent something with the cash in your pocket for 6 months. And, or put your house up for sale. And then when it does sell, run buy something and set up a simultaneous closing. But I would not put a home equity loan on your home, and then go buy something. And then we'll, well, we'll put it on the market in the spring. And then, oh, we got to work on it. And it's gonna be next fall. And then it, the market slows down, and it takes you 2 years to sell it. And you're paying a payment the whole time, and you don't have a payment now, and you have no money now.

Would you recommend someone in his situation buy a house for $250,000 and put $150,000 back in the— yeah, in retirement?

Yeah, yeah, put it back into investments. I don't know if you can put it into retirement or not, but investments for a nest egg. Yeah, so that you're not broke. He's talking about moving down, right? So I would put this— I'd fix this house up as much as you can, get it ready, get it market ready, get a Ramsey Trusted Real Estate Agent to come over and talk to you about it. What you got to do to get it ready, what you put it on the market for, put it up for sale, and when it sells, delay the closing as long as you can, and then go out with money in hand, buy another house contingent upon your house closing the same day, and you close it with the money from the sale of your house. I would not borrow money, period, in this situation. I wouldn't borrow money, period. But I certainly wouldn't in this situation.

This show is sponsored by BetterHelp. Summer is here, and listen, everything changes this time of year. The kids are out of school, the routines go out the window, you're traveling more, you're for sure sleeping less, and if you're not careful, you and your family can end up running on fumes. Here's the truth. If you don't slow down this summer and take care of yourself, all that stress is not just going to disappear. It's going to show up in your body, in your work, in your relationships, your patience. It's going to show up everywhere. This is why I'm a big fan of BetterHelp. BetterHelp is an online therapy platform that matches you with a licensed therapist based on your goals and preferences. All of their therapists follow a strict code of conduct, and you can message your therapist or schedule sessions right in the BetterHelp app. If it's not the right fit, you can switch therapists at any time for no extra cost. Listen, you don't have to carry everything all by yourself this summer. Go to betterhelp.com/ramsey to get 10% off. That's betterhelp, H-E-L-P, .com/ramsey.

When you have the right insurance, it's good defense while your offense is investing. If you only play offense, you lose the game, and if you only play defense, you lose the game. So you need to do both. The right insurance acts as a shield around your loved ones and your wallet. Our free insurance coverage checkup helps you figure out if you have the right coverage or if you're getting ripped off. We give you a personalized action plan with clear next steps. We do not sell insurance. We just tell you what you should do. Go to RamseySolutions.com/checkup, take the coverage checkup, and find out if you have the right kind of insurance. Andrew's in Portland, Oregon. Hey Andrew, what's up?

Hey fellas, thanks for taking my call. I appreciate it. Sure. So I recently got into a major accident and it is putting a financial strain on me in the way of I don't know if I can afford my daughter's tuition anymore. So I was just kind of curious what you guys' thoughts on that were. The caveat is there's an emotional aspect of it to where, like, I rarely see her anymore. Um, when she comes home, she spends all of her time at her mom's. She bails on me for Christmas and stuff like that. So I'm just kind of curious what you guys' thoughts are on that.

I, I would this is tough to do when everything feels like it's happening all at once, but I would do my best to separate things. Okay. And so right now what you're faced with is a mathematical reality. You have a relationship challenge, you've got issues over there on the side, but right now you have a math problem and conflating the two, um, makes it messier and it makes, it, it's just gonna cause more drama. I, you're, you're gonna have a hard conversation either way, but sitting down with your daughter and saying, this has happened and this is my, now my financial reality, I can't continue to do this and having this conversation as soon as possible because school starts up in a few months.

How much is the tuition?

Um, my part— her mom and I are divorced, so my part of it is $12,000 a year. She's going to be—

what do you make?

So, um, I was making $75,000, but I— the, the issue is I've been out of work since November because of this accident, so I'm on disability.

So are you going to be able— are you, are you permanently disabled?

I don't know yet. I'm still working on getting everything healed. There's lawyers involved, so it's, it's, it's a thing. So lots of MRIs, lots of doctor's appointments.

What happened to you? What's broken?

Um, I got hit by a boat when I was snorkeling and I can't say too much because it's still a legal thing, but I'll just say that I got hit by a boat while snorkeling.

So, so I mean, lawyers don't heal you. I'm more trying to figure out Aside from the fact there's obviously a lawsuit and obviously that you're going to get a collection from that at some point, I'm more worried about you. Are you going to be able to get back to work? Are you going to— are you— is your body coming healing enough that you're going to be able to do something?

I mean, it's been 7 months and I've had a couple shots and it hasn't even touched it. So, um, it's kind of looking towards maybe finding a different career path because it's a very physical job that I have.

So that's fair.

Okay.

Okay, all right, so you're living on short-term disability insurance, right?

Yeah, and I just got kicked to COBRA, my health insurance, so I'm paying for COBRA now.

So what is your temporary income?

Um, $3,000 a month.

Okay, and obviously everyone knows you had this accident last— your ex and your daughter know that you had this accident, right?

Correct.

Yeah, okay.

Yeah, and I messaged the mom and said, hey, is there any way that like I can help, you know? And she wasn't very receptive.

Is this part of a settlement or did you— is this just a handshake agreement?

This is just a handshake agreement.

Okay.

Yeah.

Okay. Well, I, yeah, I think as soon as possible you call your daughter like today and say, hun, I don't have any money. I'm I don't have a job because I've got this, this, and this wrong from the wreck or from the accident. And for right now, I'm not gonna be able to pay your tuition, my part of it. Even if I wanted to, I couldn't. And it really has nothing to do with the relationship. It's just you simply, like John said, you simply mathematically do not have the money.

Okay.

Is that, that's correct? Am I missing something? I mean, do you have a million dollars in a bank account I'm missing?

No, I had this money set aside. I sold a place and I moved in with a girlfriend, and so I had this money set aside.

But how much money do you have set aside from that situation?

I have $10,000 left.

$10,000 left from selling the house?

Yes, because she goes to a really expensive school. I've already paid $37,500.

No, no, no, that's not what I'm asking. I'm asking, okay, you sold a house and you got a lump sum, and all you have left of that, all that money, is $10,000. Correct. Where did all that money go?

Tuition. Her tuition.

You only made $50 grand on the sale of the house?

Yes.

Okay. Okay. Um, yeah, I'm not going to be able to pay tuition this next semester.

Okay.

But until I— and until I get an income going and get, um I'm not going to be able to help you, hon. I'd like to, and I know that that's what we talked about, but we also didn't talk about me getting run over with a boat. And so that happened, and I don't have any income, and I don't have the margin to give you a $12,000 gift right now.

And my hope would be that if y'all had the tightest relationship ever and she came and saw you all the time, y'all were always having lunch together once a week, you'd still be having the same conversation.

Exact same conversation.

Yeah. Okay.

I mean, we're not doing this to punish her for not coming around and ditching you at Christmas. This is just you simply don't have the money.

Okay. Yeah, yeah, I appreciate that.

I mean, if she came around all the time, you still wouldn't have the money, correct?

Yeah.

Yeah, yeah. And just so— just make sure you keep that bucketed separate. And the— and, you know, don't— well, you know, you know, and by the way, you never come see me. Well, this is not the same conversation, right?

Right.

Okay.

And steel yourself, brother. She's— you know that she's getting an earful from her mom about all the money you got from the sale of the house that's in some secret account somewhere. And you know that she's— she's a senior, she's going to be upset. She should be upset. All that's right and good and fair. You just have to continue to tell the truth and be a person of integrity, and you're going to weather the storm of an upset 21-year-old. That's just— I mean, that's part of being a parent.

Yeah. Okay.

I hate this. I appreciate it, man.

Yeah, I'm sorry. I hope you heal, man. Dude, I have been— I've been a diver forever, for decades, several hundred dives, and there's nothing scarier than a boat going over the top of your head.

I, I've never had that happen. I can't imagine it.

It's like I'm 40 feet deep or 80 feet deep and I'm still scared of it. It's not coming down there, it's not a submarine, but golly, that, that just gives me chills. He was snorkeling and so he's just below the surface probably, or right at the surface, and this boat— whoa, wow, scary stuff right there. Oh, John's in San Diego. John, what's up?

Hey, Guys, I really appreciate you taking my call. It's an honor to speak to both of you. You too. You guys are my favorite hosts.

Oh, thank you.

So basically a rundown. So I've been a mechanic for 30 years. I lost my job. I was a, I know you talk a lot about diesel mechanics. That was my trade. I started a job at $83,000 a year and I was there for 2 months and I was very foolish and I bought a couple items that I've always been wanting. I'm a guitar player. I lead worship at my church. And I think John Delony, I don't know if I've heard you like guitars also, but—

My wife says I have a problem, but go ahead.

I bought a Gibson J45.

As you should. Only if you can afford it though.

But then you lost your job. So what's that guitar worth?

I lost the job. Um, so it's worth— because I was stupid and I actually etched my initials to prevent me from being tempted to sell it.

I know it's, it's like, what is it worth?

Yeah, well, if you sell it, um, I'd say around probably $1,300 to $1,500.

Okay. And how much debt do you have?

I have a total of 12,000.

Okay. Yeah, sorry, brother, that guitar's got to go. I've sold guitars to pay bills and to get myself out of credit card mess. I've done the exact thing. I hate it, but you got to.

Hey guys, healthcare is one of the biggest stress points in your budget. It's confusing, and most of the time it feels completely out of your control. But there is a better way to handle it. Christian Healthcare Ministries isn't health insurance. It's a health cost-sharing ministry where Christians share each other's medical bills. And it's not a new idea. CHM has been around since 1981. It's predictable and proven, and they've shared over $13 billion in medical bills for their members. Plus, you get more flexibility. There are no network restrictions, and you don't have to wait for open enrollments. Now, let's talk about how CHM helps your budget, because programs start at just $115 a month, and many families save hundreds of dollars a month compared to traditional options. So, if you are tired of feeling stuck, check out Christian Healthcare Ministries. Right now, CHM is offering new members 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 use promo code RAMSEY.

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

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

Better than I deserve. How can we help?

So my husband and I purchased and remodeled a house. And the first contractor that we hired left the job, which caused us to hire another contractor and pay about an additional $75,000 to finish.

Why? You had overdrawn— you'd over-advanced the first contractor?

Yes, essentially.

Why would you do that?

Lesson learned there. They told us that they had ordered materials and things were being delivered, and of course they weren't. So then we ended up with no materials and the money paid. So we have consulted with an attorney and we do have a case that we could take against them. However, he did tell us, you know, be prepared, this could cost upwards of $25,000, you know, hopefully less, but a worst case scenario, that's kind of what he has seen in his experience.

Okay. And, um, That sounds honest. And the contractor that bailed on you that you would be suing, are they wealthy?

That is our concern. So we originally were a little concerned that they may not be able to pay us. The first refund they offered us was a little under $6,000, which obviously was not anywhere close to appropriate. And so Our attorney had asked us some of those questions and he did ask us about assets they have. We know they do own two properties and those are in the business name. So that's something that we're trying to now take into consideration. You know, we are—

I mean, are they mortgaged to the hilt?

Um, one of them is paid for in full, but it is a lot that it looks like they're building a property on. And the other one appears to have about $50,000 in equity from what I can find from their current mortgage owed filed. Um, and then like Zillow estimate.

There's not a construction loan lien against the other property that they're building on?

There is not, nope. I have not found any liens filed on it.

How much money did he walk away with?

So it cost him $75 grand?

Yeah, so in the end, but to finish our house, we had to pay an additional $75,000.

So what would you— you'd be suing for $100 grand, right?

Uh, we would be suing— the case would be for $75,000 if we could have them pay attorney costs costs to include up to that $25,000, that would be $100,000.

Yes, if that's what you're doing. Yeah, I'm going to sue them for everything. If you're going after them, go after them.

Yeah, um, absolutely.

So, and you want to be very, very, very sure that they have the money before you pursue this, right? Or that you could get a property, or you can get something out of it, okay? Because if you get a judgment lien of $100,000 against somebody has no money, it's— it was completely useless, right? And you're going to find the court system to be a complete pain in the butt.

Okay.

We have this idea in America that there is justice in our court system, and it's not been my experience. Um, and so I avoid it if I can. Um, I sometimes I have to defend myself, and I do that all the way to the bottom, right? But, um, yeah, but, but the, uh, um, but yeah, you definitely have been wronged. You definitely should be able to recoup the money morally, emotionally, psychologically, financially. Um, but this is going to be 2 years of your life, and it only is going to get you money if you, if they have an asset that you can get a hold of, right?

And that's kind of where we were, you know. Our attorney told us we can seize assets, but I, you know, okay, do we just file a lien behind?

You'd have to file a lien in Oklahoma. I don't know what you do. You'd have to ask your attorney. But in, in most states— Texas you can't— but in most states you would put, take a lien against that lot lot that's worth $100,000, and either, either in turn they go borrow the money and pay you out, or you have a sheriff's sale and you sell the lot, and whatever the lot brings, you get.

Okay, okay.

And then the same thing again until you get your $100,000. But you're going to be in the foreclosure business and in the taking liens on property business. And because I'm guessing these goobers don't have any money sitting in a checking account, it's not a multimillion-dollar operation. This is a crook. No. Yeah, part of the reason he left is he's incompetent. Part of it's because he's crooked.

Correct.

Okay, can I throw something else out here?

Sure.

This is not— this is not anything to do with math, okay?

Okay.

And I've gotten myself in trouble with this mindset, but it tends to be where my head goes first. Um, you may not recoup your money if you choose to sue them, but I'm thinking about the family that hires this guy that doesn't have the ability to go track down another $75 grand one day. And is there a possibility you can expose this person to protect future families?

Yes. And that has kind of been a thought in our minds as well is, you know, okay, let's say worst case scenario, we broke even, or maybe we're even out a little bit. Could we help protect this from happening to somebody else? I'm honestly surprised it hasn't yet, you know.

Um, yeah, that may be a futile thing, a futile thing, but I don't know. I just, I, I can't stand people who operate. What was the call like when, when you said, hey, you took $75,000 and they said, well, we'll give you $6,000? How did that call even go?

Not very well. I was asking for spreadsheets and receipts and things to understand because we wanted them to finish the job. And we wanted— we were like, we're not asking you to work for free. We want to pay you if we owe you money, but we have to understand where our prior money we've paid you has gone. And they were just not wanting to provide that information, um, you know, just saying that, that basically we were always in agreement. I said, no, we're not, because I have text messages from you that that show that we had a difference in communication. And so they just weren't very friendly.

So their story is you owed us this money, correct? Yeah.

And that we still owed them more even though they couldn't tell us what we owed them more for.

Oh, nice.

And so then ultimately I said, well, I think our funds have been misused somewhere. And then that caused them to say, we're not coming back to finish your house. So we said, okay, well, that's how it is, then we expect the materials we've paid for to be delivered, and we want a refund for any labor that hasn't been done that we've paid for. We want refund for materials that we've paid for that can't be delivered here. And that's where they turned out that there was about $6,000 worth.

So yeah, that gets my blood boiling. I can't stand bullies. I can't— I get like— I can't— yeah, it gets me fired up.

Yeah. And that's what's been hard too, is, you know, there's obviously been a lot of emotion wrapped up in the case, but at the end of the day, we're thinking, well, what's the most financially decision, and we don't— we're not going to go into debt for this. You know, we refuse to take out a loan to pay for the most financially smart decision is forget it and move on, right?

Yeah, that's the most financially smart decision. But then the question is, you know, do you, do you need to punch a hole in the universe here? And some— sometimes you do, you know, right? Sometimes you do. And, um, I have— my wife has done that a couple times.

My wife has told me there's too many holes in the universe, John. Stop punching. But that's it.

Again, that's my thing.

It's going—

it's going to cost you more in emotion, more in money, more in time and running this over and over and over in your head than it's going to benefit you.

Yeah, yeah.

You know, so, and you know, it— you're just not going to go in in 20 minutes in front of Judge Wapner or Judge Judy and they're going to go, oh, you ripped these people off, give 'Give them $75,000.' You know, that's not how this goes, okay? Right. This is a long, drawn-out, blood-sucking process. So be steeled, be emotionally buffered, ready to go in for the long marathon if you're going to do this.

And shout out Dave for the Judge Wapner reference. Yeah, how great is that?

There you go.

That's, that's OG call out right there. Well, I mean, before there was Judy, before there was Judy, there was Judge Wapner. Well done, man.

If you run a business, you already know this. Bad information leads to bad decisions. And right now, AI is everywhere. But AI is only as good as the data behind it. The best AI is built on the best data. That's why I recommend NetSuite. NetSuite is the number one AI cloud ERP, and more than 43,000 businesses businesses run on it, including us here at Ramsey Solutions. Their AI isn't bolted on, it's built in, and it connects everything that runs your business— accounting, inventory, customer data— all in one place. Because when your numbers are connected, AI actually works like it's supposed to. NetSuite's AI helps flag cash flow problems, spot inventory issues, use, close your books faster, and cut down on manual reporting. If your revenue is at least 7 figures, go to netsuite.com/ramsey for a free product tour. That's netsuite.com/ramsey. Welcome back to the Ramsey Show. In the fair winds, The Ramsey Credit Union studio. I'm Dave Ramsey. Dr. John Delony is my co-host. Claire is in Charleston, South Carolina. Hi Claire, how are you?

I'm doing well. How are y'all?

Better than we deserve. What's up?

I really appreciate you guys, uh, giving me some advice on this issue. Um, I see a train coming down the tunnel and I'm stuck on the tracks. My parents are, uh, are a little bit past retirement age and they do not have two nickels to rub together to make a fire, but they are always coming back to me and relying on me to help them out constantly. Um, I even paid their bills for them for a very long time, all their utilities and what have you, for a very long time. I finally had to put my foot down and say no more. This is ridiculous. You guys have made a lot of money and got a lot of money, and they just blow every dime there is and keep coming back to the well. But now the well is, hey, I need money for groceries. Hey, I need money for medicine and things of that nature. I'm debt-free. I've saved up. I've done everything. I've went by your principles. And now I'm not sure what I need to do to help them out.

What is your nest egg? What's your net worth?

Mine is, um, without my house, I have about, about $300,000 saved.

I'm sorry, how much again?

$300,000 saved with my savings account.

How old are you?

I am 45.

And what do you make?

I make $130,000 a year.

And are you single?

I am. It's just me and my daughter.

Okay. And how old are mom and dad?

Uh, mom has turned, uh, 74 and she just went through a really bad bout at the hospital, uh, last year where she can't do anything anymore. And my father, uh, he is 69 and he is, uh, working part-time and he has like a bunch of side hustles, but they They still owe everybody money and taxes and Social Security and just, they owe everybody money. So they're just, they're so stuck.

They owe Social Security?

Yeah.

How do you owe Social Security? They're supposed to be getting Social Security.

I do not know. It was, it was something they did. They were taking Social Security while One of them was working because they were still working full-time while taking Social Security. I don't know the whole thing, but they just keep looking at me.

But they're now, they're now getting Social Security checks, right?

They are, but they're going to start garnishing all of their money because they owe it back.

Social Security overpayment.

Yes. So they're in a really tough spot.

And what's their home worth?

They have no home. They are renting. And I pay for their car for them, so they haven't got to ever worry about that. So I just, I don't know what else to do to help them.

So wait a minute, you're paying a car payment or you bought them a car?

No, no, I bought their car.

Okay. So they have a car.

Cash. Okay.

Mm-hmm.

Right.

But basically you're sure they have no income coming from Social Security, or this is just the story they told?

Well, they, they have income coming in right now. Mm-hmm. And I'm trying to work with the Social Security Administration to, um, to not garnish so much so they can still live.

Mm-hmm.

Um, and all the paperwork, and I'm working on Medicaid, I'm working on all these things trying to help them out. Uh, but I just can't keep all the plates in the air spinning and also deplete everything that I've—

are you their only child?

No, I'm a child. I'm one of 10.

Where's the other ones?

Um, um, some of them are adopted, so, and they're very young, so I'm— they're just now starting their life out. So I've not asked them for anything. The other ones, uh, they are not financially stable whatsoever. I am the only one that has no debt, that has bought a house, that has done all the things and done the responsible things. Everybody else has went kind of sideways.

Okay.

You do not have the money to 100% support two households. You don't make enough.

No, no.

So you're going to have to decide a dollar amount, $1 or more, that you are going to commit to this.

I did that already. Okay.

And, um, and then after that, after that, the answer is just no.

Okay.

It's just no. I'm sorry, Mom, I just don't have the money. I'm sorry, Dad, I have this much money and I'm giving you enough to cover your lights and your groceries. There's that coming in, and I can't cover the other stuff. You're gonna have to do something else. You have to figure it out.

Yeah, because I did that for years and they took the little bit of money they did have and blew it. Well, that's why I guess—

because you get to decide. You get to— you told me 3 times how bad they are with money. Which means you resent giving them money. So zero is a possible amount to give them.

Okay.

Or I'm just trying to honor them and—

No, you're not honoring them. That's bull. That's— Honor your parents from the Bible does not mean give money to people who are misbehaving. That is not what that Bible reference means. It means that we— that we honor the office of father, the office of mother. But if your mother's doing cocaine, we don't give her cocaine and call that honoring your mother. That's bull, okay? So no, you're— they're misbehaving, and we're not going to honor their misbehavior, period. Now you get to decide how involved you still want to be in this. You could go all the way to, uh, I'm going to give you $500 a month, and you're going to give me your Social Security check and control of your money, and you don't get to spend anything except what I say. 'And that way I know you're buying groceries and your lights are kept on, because you people are acting like you're 14 years old and you live in Congress. Actually, there's 14-year-olds that do a better job than you people.' And so you're correct, you know, you can— you can go that far and just take over and take care of them as if they're complete imbeciles, which they may be, okay?

Or you can say, 'I'm going to do nothing. I've done all I'm going to do.' Good luck with it over there. Figure it out, boys and girls. You're freaking adults. You can say that. There's nothing wrong morally with any of that, but you decide where in there. But that your problem, what's driving you crazy, is there is a constant moving target that you have allowed. And once you say no more moving target, then you're going— 100% chance you're gonna get pushback from them. Okay, because they have bound— they're boundaryless people. And when you set a boundary with boundaryless people, 100% of the time they resist it.

And you have in the past, and they've run right through it, right?

Um, well, yes.

Yeah. So I'm gonna get— I'm gonna give you this amount of money and no more, and I'm just gonna send you the check and y'all figure it out.

I'll tell you what I would do. I would buy a grocery cart cards, and I would take— I would pay directly to the light company. I'm not giving anybody money anymore.

Yeah, that's good too. Oh yeah, I'm gonna send you $200 worth of grocery cards from Publix every month, and I'm gonna pay your light bill, uh, through the end of the year.

There's no way that you don't feel bad about what comes next. The person I want you to not feel bad about is you.

Yeah, 100% chance they're gonna piss you off.

¡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. Mary is in Virginia. Hi, Mary, how are you?

Hi, thank you for taking my call.

Sure, what's up?

I, about 2 weeks ago, discovered over $100,000 in debt from my husband that I was previously unaware of. We are a military family and he will retire in 8 months, so I'm trying to wrap my head around all of it and how I can pay that off in 8 months since our economic situation will change drastically then. And I was Um, looking at a HELOC, even though that's not something that I necessarily want to do, but I'm wondering if that is going to be our best option because again, we'll like completely lose his paycheck in 8 months. Not completely, obviously, like he'll get retirement, but, um, I have—

how long has he been in the military?

22 years.

Okay. So he's getting 20-year retirement, which is pretty strong.

Yes. What's the debt?

Um, $92,262.85 from 2 cars, a credit card, and a personal expense. And then I found a Forth account, like, um, F-O-R-T-H, where it looks like he submitted to get them to negotiate the debts, and there was $28,532 in there. And then I have $33 $30,000 in credit card debt as well too. Um, I—

okay, so you guys were not handling your money together. He's handling his money over here and he wasn't hiding it, he just didn't tell you. I mean, you don't have car debt with cars sitting in the driveway and you're confused that we own cars. You knew you own cars.

Yeah, he— we've been married for 5 years and I tried to combine our finances and he fought it like an uphill battle up until last month when he pulled money from a joint account. And when I was asking why he needed that much money, I just kind of like really put my foot down. I was like, I really need access to all the accounts. And that's when everything kind of just unpacked because I realized that he had been pulling money from other accounts. Um, I— he was spending $800 on eating out, $300 on gaming, And there's just—

you guys really had substantially separate lives.

Yes, financially.

No, I mean lives. Your lives were separate. Yeah, he had a whole life over there to the side that you weren't even half watching.

I mean, I knew that he was eating out all the time and the gaming, it's just I didn't know that it was that severe. And even when I brought it up about him eating at home and all these things, he just It just wasn't, and it just, the car thing was something that caused a huge fight.

So now where is his head today? 'Cause he was bullheaded and didn't want to do anything smart back then. Is he now still defensive of this ridiculous position?

When I took over everything and I basically couldn't sleep and saw everything, I had to sit him down and say, for my mental capacity and my nervous system regulation, I need everything. So I took his car. He's only living on cash as of the last 2 weeks. If he needs something, he has to ask me for it. I removed every credit card off of Amazon, DoorDash, like I've deleted everything from his phone. Like I just, I needed to have complete control of everything. And so I now have complete control of the finances and he hasn't said anything. I don't know that he's on board, but he's just—

Well, this will last for a second.

Yes. It's not going to last. That's obviously not sustainable.

So think of it as, uh, the words we use around here is financial infidelity. Yes. You found out he was cheating on you and it's important to come up with a 7-day plan and then another 7-day plan on, I need to, I need to know that I can trust you for 7 days. And that's often like when somebody cheats on you, like, I want no more phone, no more of this, right? And, but, but you gotta do this money thing together.

I don't think he wants to.

But well, and you have to ask your— he— I mean, if behavior is a language, he's telling you, I don't want to be married to you. I'm not interested in sharing a life with you. I like you at home taking care of the stuff so I can go do whatever I want, buy cars I can't afford and go out to meals I can't afford, but I don't want to build a life with you.

Right?

And that's hard to metabolize, but that's what's— that's if behavior is a language, that's what he's telling you pretty loud and clear. Here. So when you said, hey, both of these cars, we're selling them tomorrow, what's the response?

He would ask, how is he getting to work? I'm—

I'm with the kids.

A bicycle, right? Because if you sell both these cars, that clears up a chunk of the debt, right?

A scooter.

Yeah, get him a moped.

No, I'm not kidding.

I'm not playing at all. Yeah, I mean, this is a big deal, but it— the, the fracture is— I mean, or you're not retiring. You go back, you re-enlist for 4 more years. Because we don't have the money to retire.

Yeah, he can't, he can't re-enlist. Like, he's at the rank where he can't— like, there's a possibility that he could advance in August, but he's not— that's not a guarantee, obviously. And so he's at— he's tapped out. He's, he's, he's, he's done as much time as he can.

Well, I mean, but then it's—

timeline is not moving.

Okay, but then it's he retires from the military and goes and gets a job the next day.

Yeah, right.

And takes a military retirement, and all those checks go in one pile to clean this up. Okay, so if we sell all the cars, we don't have $100,000 in debt, right?

No, we also have 3 houses, so that's— oh, okay, we'll sell 2 of them, which is not what I want to do because 2 of them are rented out.

I don't want you to do any of this. I didn't want you to discover that this separate life you were leading led to an absolute disaster because your husband was moronic with the handling of his side of the money. And you guys never bothered to be intertwined enough in your marriage to know what the other one was doing. I don't want any of that for you, but that is where we are. You have $100,000 in debt, and no, I would not take out a home equity loan and keep another property that's an investment property and run the debt up on my home, because right now all this debt is in his name, right? You didn't sign any of it. Have it?

No.

Okay, so I mean, if there's a divorce, it's his. So I'm not running up a home equity loan on our home, especially if his— in case this whole thing comes crashing down.

If he hasn't fallen on the floor in front of you and said, I'm gonna do whatever it takes, I want to keep this marriage, oh, instead he's just sitting over there sucking his thumb in the corner like a whipped pup. Yeah, so you're gonna take out a home equity loan, put your house on the block, and then he may go buy another car tomorrow.

I mean, when I started telling him how this is ridiculous, the amount of debt he was, he tried to say, throw it in my face that it was the house's fault, that we, it was my, I'm the investor in the family, I guess. And so he was like, the house's fault. And I was like, you can't say that this started when we started buying houses because you didn't have anything to your name before you got married to me.

How much equity do you have in those houses?

My property that I bought before we were married has has over $200,000 equity in it. The property that we bought together when we got married has over maybe $50,000. And then the last property, which is the one that is the one that we're not losing money on, it's just the one that we live in and the one that's the hardest because it was a multifamily because I thought I could scale up. Because again, you, like you said, we were living separate financial lives and I thought that that's where we were at, is the one that even if I tried to sell it, we would maybe break even we would clear our overhead as far as bills, but this house still needs work.

Okay, but you just told me two really easy things. You sell the, the joint house y'all bought together and it brings in $50 grand, and then you sell both the cars and you're debt-free. Okay, I mean, it— none of this you want to do, but again, I'm way more worried about your marriage than your financial situation, to be honest with you.

So am I. Yeah, yeah, you guys have got to grow past this and combine everything and, and become a team, not a, uh, a scolding mother.

And that means you don't buy rental houses without y'all both saying, this is what we want to do together, we want to be landlords. And he doesn't buy—

there's no more you and me, there's now we, or, or we, or there's not going to be a because you guys, this is exposed. The situation has exposed the weakness in the system that you were using. The system you were using doesn't work. We don't— we do not find in all the data and the research and the people that we study, people who become wealthy living extremely separate lives while married. They just don't. And this is the reason, is this kind of stuff happens. Only— we only find that there are hand in glove, working together, symbiotic, and aligned on our values and aligned on our goals and aligned on our targets and pointing and firing at the target and firing at the target together. And you guys got to get back to that. And then you've also got to get rid of the debt. And the way you get rid of the debt is sell the house and the cars.

Hey guys, Rachel Cruze here, and I love summer. There is more fun on the calendar, more time with your people, and way more chances to make memories. But you know what else there's more of? Spending. Oh, between the extra groceries and gas and camp fees and family trips, it all starts to add up so fast. And before you know it, money stress starts to steal the fun out of everything. And that is why I love the EveryDollar budget app, because it helps you plan your money, track your spending, and find more margin in your budget so that you can put extra cash towards the goals that matter most. Enjoy your summer without the money stress. Download the EveryDollar app in the App Store or Google Play and start for free today.

Buying or selling a home is a big decision. With so much conflicting housing market news, hard to know what's really going on. We keep up with the market and all the trends and do all the research. And if you want to know what's going on, go to RamseySolutions.com/market or click the link in the show notes if you're listening on the podcast or YouTube, and you'll be— like up to date on what's really going on, that kind of thing. So that's the whole idea. Now, if you're going to get an agent, you want to get a Ramsey Trusted Agent because that's someone, if you're going to buy or sell, that does a whole bunch of transactions and that we have spent time with. We trust them because they're excellent at what they do. Proven professionals. Mark's in Omaha, Nebraska. Mark, what's up?

Hey Dave, so I just graduated college. I lived on campus all 4 years and I'm officially, you know, moving out now and gonna tackle the world. But my question is, while researching places, I have discovered that rent isn't just the number listed, and obviously there's a bunch more expenses— gas, electric, Wi-Fi. So with this being my official move out, my first official move out into my own place and not in a college dorm, how much should I be willing to spend and still be confident in place I live?

25% of your take-home pay or less.

Is that for rent and all the—

No, just the rent.

Just the rent, yeah.

On just the rent.

Or less.

Okay.

That's the most. Less is good because rent— what are you doing when you're renting? We're sitting there planning to buy, and we're planning to buy by saving money to buy someday. 3 years, 2 years, whatever, right? And the more rent we pay, the less money we can save. So, or less is a good number. Okay, the least possible rent that you can get by is the best number, but 25% is your max.

Okay, what's the new job?

What are you making?

Uh, $89,000.

Doing what?

Uh, electrical engineer.

Congrats, man, way to go!

First job out of college making 70. What a world we live in. Look at you, way to go.

Do you have any student loan debt coming out?

I do not, bro.

How'd you do that?

I was very blessed, um, my parents.

Yeah, you were blessed. Where'd you go to college?

Uh, I went to a small school in, uh, Pella, Iowa.

Okay, good for you. And you're going to be living in Omaha, or where are you going living?

Uh, I'm moving down to Lincoln.

Okay, good for you.

All right. Hey, if you can sit— if you can— if you can live dorm life for 2 years, 3 years, and just stack cash— meaning don't rent something fancy, rent something that your mom, when she comes to visit you, goes, I thought— I thought you were doing well.

Oh, I'm worried about you.

Do I need to pray for Yeah, and if you can, God help you, don't buy a new car. Just keep the same car, even though all your colleagues will be like, what are you doing, man? Just park at the back of the lot or park in the front.

Just 3 years of doing that straight out of college, making $90,000, you're gonna stack cash. Let me tell you how I know this is gonna work. We did the largest survey of millionaires ever done, Mark. 10,167 of them. One of the things we researched was what occupations showed up the most often among millionaires. Number one occupation among millionaires: engineer. You, you, I'm excited for you, brother. It's gonna be an awesome life ahead of you.

But listen, you're not prepared for all of the people who are gonna be barking at you when they know that you're doing well about what you should be doing. Doing. You should be buying a new car. You should be buying all new suits. You should be getting a fancy apartment. If you can weather that noise for a couple of 3 years, you will set future you up so, so well.

Yeah, write this down and put it on your mirror: dogs don't bark at parked cars.

What does that mean?

Well, if, if you're, if you're moving and you're doing stuff, somebody's going to be barking.

Oh, there you go.

100% of the time. So everybody's got an opinion about your money. Just get ready.

But by the way, this is a great example. Parents were able to support him and take care of him, uh, take care of his college. But also, it's clear they taught him well because he's asking good questions at 21. You— 21-year-old me with no college debt, making 90 grand—

if—

I mean, that's way more than I was making, But I would have been— I would have ended that year at $100,000 in debt, man.

Oh yeah, for sure. Got to buy a house, got to buy a car, got to buy, got to buy, got to buy, got to buy, got to buy, got to buy.

I would have had a credit card.

Yeah, you do. And this young man is just like, he's asking, okay, how can I— what's— how— what should I spend on rent? And he actually called like a national show to ask that.

And I bet Lincoln, Nebraska, I I don't know the market, but I bet the Midwest is a good place to fairly, fairly affordable get a, get a nice 3-bedroom, 2-bath house in a few years.

Man, he could pay cash for it if he watches what he's doing. Yep, it could happen. It happens in America right now among 21-year-olds. Turns out socialism does suck and capitalism is amazing. All right, Ashley's with us in Raleigh, North Carolina. Hey Ashley, how can we help?

Hi, how are you?

Better than I deserve.

Thank you for taking my call. I'm wondering if financially my husband can retire early due to health concerns.

Okay.

I think he can, but he doesn't want to quit because he doesn't want to put that burden on me to work longer and be the sole provider.

What do you make?

I make $130,000.

And if he retires, is there any money coming from his retirement? How old is he?

How old is he?

He's 57. So no, it would be retiring without any retirement right now.

And what does he make today?

$100,000.

So your income is going to go in half from $230,000 to $130,000, right?

Correct.

And can you do that?

I think we can.

No, it's not a think, it's a math problem.

That's how I did math in elementary school. I think it's 4 times 5.

For us. Yes, math-wise we can.

Okay, so you did a budget on your income and you can exist on that budget?

I, I have done a budget, yes, on your income.

Yes, he looked at it and he looked at it. And so how old are you?

I'm 55.

And how much is in your old nest eggs?

Uh, about a million.

Good for you, well done. House paid for yet?

Um, we owe $75,000 on it.

You broke up.

Do it How much do you have in savings that's not retirement? Um, $130,000.

Pay off the house today.

Okay.

That was easy. And now it's a lot easier to live on $130,000 than it was 10 minutes ago. Yes, for sure. Good. I like it so far. What's his health condition at 57?

Um, he has heart disease.

Okay. And has had heart surgery or is going to, or he—

yes, he has.

He had— he had heart surgery?

Yes.

Okay. And it, uh, and it didn't repair. He's not going to come back or what?

Um, well, well, physically he can still do some stuff, um, but it's, you know, it's a— it's a genetic and it's— it's not going to get better. I mean, he He can still work. It just— we're trying to— mentally, the stress is also there.

Okay, so, all right, so it's possible that he could do something that didn't create stress and did not stress his heart either physically or mentally. Okay, and probably not what he's doing today.

Correct.

Yeah, sitting on the couch is probably not a good prognosis though.

Um, no, he would not be able to sit on the couch.

Yeah, I didn't think so. Yeah, so, but, but he may need to get away from the track he was on prior to the heart attack or, or the heart surgery or whatever we had here. I don't— I'm not a medical doctor, but it sounds like he needs to get away from the stress of this job and find something that he can physically easily do and without the stress. Stress, and he might only be making $50,000, right?

Correct.

Yes. Yeah, let's go that route and pay off the house today. And for sure, for sure, he needs to check out of that other job. I'm with you.

But well done setting yourselves up for when life happened. Y'all were financially ready. Both of y'all are doing great.

Yeah, you got paid for a house.

Yeah, you got $1 million in the bank, about to have a paid-off house before the day is over. That gives y'all a ton of options.

Yeah, at 55 and 57, ding ding, millionaires. I just talked to another one. There they go. Hey Mark, that I talked to a minute ago, that's your future right there, except you're going to get there at 35.

Hey, George Campbell here. We often talk about how being normal sucks when it comes to your money, but guess what? Normal isn't so great when it comes to your job either. Normal is staying in a job you hate, dreading Mondays, and working for people you don't even like. Sound familiar? Well, the good news is you can break free from normal because Ramsey Solutions is hiring, and we refuse to settle for the ordinary. In fact, we are anything but normal, and we are proud of it. And right now we're hiring for technology, sales, marketing, editing, writing, copy editing, and creative roles. So head over to ramseysolutions.com/careers and apply today.

Our scripture of the day, Luke 6:38: Give and it will be given to you. A good measure, pressed down, shaken together, and running over, it will be poured into your lap. J. Paul Getty said, money Money is like manure. You have to spread it around or it smells. This is true. Brian is in Arkansas. Hey Brian, what's up?

Hey, how's it going, Dave?

Better than I deserve. How can we help?

So I was looking for some advice on making a highly irresponsible financial decision.

Yes, I love those.

Well, at least we've analyzed this properly.

What in the Earl. So, uh, my wife and I retired 4 years ago. I'm 48 years old as a lieutenant paramedic in the fire department due to a medical condition. And so we have pretty consistent income. We have about $7,500 a month in income, and I'm about to gain another $2,500 potentially. That was completely unexpected.

Um, so $10,000 a month income, you're 48 years old and you're not working.

And our house is completely paid off. We have no vehicle. We have no debt other than a loan I gave to my brother a little while ago, which I'm not concerned about. It's not a ton of money, but really no credit card debt and nothing whatsoever. We are pretty flexible.

You borrowed money to give to your brother?

I took a portion of a little $15,000 home equity line. He's my family. I know that's also irresponsible, but he's my blood and—

Do you have any cash?

Do I? Yeah. Um, so everything, um, I dumped all of our savings into land and our home after I was diagnosed with something the doctor said could potentially take my life. And so I went, I decided to safeguard my wife's future because she gets my pension if I pass away. And so I ultimately made a decision, which we followed. We went to FPU 20 years ago and we got, we did everything you said to do and it's been awesome. I'm so thankful to you for that. But when I was diagnosed, diagnose with my epilepsy. The doctor pretty much told me that, um, at any point in time, the next one could be your last one. And so that's hard words to swallow. So I just made a decision and said, you know what, I'm going to buy a home cash. We're going to buy vehicles cash. And I know she gets my pension. So just doing the basic math, if anything happens to me, my wife is good for the rest of her life. And that was, that was the decision I made, whether or not that was wise or not.

And you have no cash.

We don't have a ton of cash. We have, we have land though, and stuff that's very liquid if necessary.

How much cash do you have?

Uh, maybe $15,000.

Okay. That's not much of an emergency fund in this situation.

Okay.

It's not. And, um, what is the land worth?

Uh, the land's about $150,000 and the home is about $425,000.

Why is the land liquid? I don't think it is.

The market here is just, it's hot. And so if I listed the land for sale, I say lick 'em here, it's the wrong term, but I listed the land for sale, I'm confident that each parcel would sell for within a week or two.

It's very, very popular out here. Does your wife work outside the home?

No, she's my boss. I have a home inspection business and a handyman business that she runs. And so she does that.

Is that part of the $10,000 income?

No, that's completely separate. That, that is upwards of about, uh, I don't add that because it's not the, I say guaranteed, but it's not part of pension or—

What are you making on that?

About $60,000 a year.

Okay. So, so you have a $15,000 a month income and you have no cash. Where's all your money going?

This, this just started. And so, uh, this is all relatively new. All this income literally has been generated and established in the last the last, uh, say about 2 years, and I'd say about half of it in the last—

I think I got the picture, sort of, mostly. Um, now what's the irresponsible decision we're gonna make, right?

So here's the irresponsible decision. If we were to get this additional $2,500 a month, um, we— I don't know the answer to the question, or I know why I'm calling, but we are really wanting to do the Great Loop, if you're familiar with it, where you buy a, a large, you know, 2-bedroom, 2-bath boat and you pretty much travel on the water full-time. And, um, and I, I'm pretty confident that I could do that with about 50% of that additional $2,500 a month, uh, as far as the debt we would incur. So purchasing the boat is the, uh, is the highly irresponsible decision.

What's the boat cost?

I'm pretty confident I could get the boat at about $150,000.

Why don't you rent the boat?

Impossible. I, I assure you, I've tried and tried. Nobody, uh, will do that. There's no organization on the planet that would just rent a boat, and, and it would probably cost triple or quadruple if it existed.

Okay, uh, well, I mean, yeah, you're right. You know the answer to the question. I'm not going to finance a boat. Um, I love the idea. It kind of sounds cool I'm not a sailor, I'm a Mastercraft water ski guy, but either way, I think it's a cool idea. I would save up and buy a boat and do that. And then maybe it's not, maybe it doesn't require a $150,000 boat to do it.

Right. The only other option I was gonna suggest was—

Or you could sell the land.

We were debating selling everything, home, land, and everything, and buying a smaller home, paying for the boat in cash. Yeah, you could do that. That direction as well.

You could do that if you want to go that bad.

Yeah.

Yeah. Or you could, or you could wait a couple years and save up.

You know, everyone I hear that waits gets sick and then they never do it. And so I think we're ready to go.

You're 48. Please don't be drama queen.

No. Um, well, well spoken. Yeah.

No, I mean, I, if you want to save, if you want to sell everything and go do it, then you can sell the boat at the end and come back home and reestablish your life. You know, if the two of you want to do this thing. I mean, what's it take, about a year to do it, doesn't it?

For a year? I'm sorry, we would do it for one year.

Yeah, yeah. I mean, I've known a few people that did it, and they're, they're, say, you know, they're sailboat fanatics, and they're— it's like the favorite thing they ever did in their life, that kind of stuff. But yeah, I— you've, you've set yourself up in a life that allows you to go do this. But I would only do it if I paid cash. And, and if you're— if you— if your wife and you both. You have kids at home?

So our, our daughter is leaving to the Navy in a month and a half, and our son, our son just got back from the Air Force, and he is very well established for himself already.

Good.

All right, so there's nobody— so, you know, I don't think— I wouldn't call it financially irresponsible if you pay cash for it by selling off stuff or save up the cash. I would absolutely yell at you if you take out payments to do this when you have— especially you got other options to to do it.

Yeah, it— yeah, that's— I mean, that's all— that's good.

Yeah, I mean, but would you do that? Would you? I, I don't want to go that far back for, you know, I don't want to take that many mother may I steps backward to do something that I think is a dream, because every time I've done something that, that I thought was going to be the coolest thing ever, it never has quite lived up to the way it was in my head, right?

And I, to me, that feels like a, you're, you're scratching a lottery ticket on, cuz you're basically pausing real life for a year to go literally on a fantasy ride. And then you're gonna come back to real life. And I would wanna be honest with myself about what I thought that was gonna do for me. I have found being gone for many nights in a row, I start to really want my own bed and I want my own light, but everybody's different. Everybody's got their own adventures. I would struggle, and this does not make it right, and I'd probably have to check myself. I would struggle at, at my thinking of my kids at my funeral and them evaluating how much that land is worth that dad sold for his boat ride. Right? Like, um, and that's a stupid way to live your life, but right now I, yeah, I'd have to ask myself, do I wanna sell everything, scorch earth and take a year off of life? And I'm, when I get back, I'm gonna have to jump right back into real, the real the world. That'd be tough for me. But, um, also, I also know when you're, when you're like him and you have an opportunity— the people I've spoken to, to peer over the edge of this thing called you may not be here tomorrow— it tends to spark some fire in your eyes to like, I'm gonna go live life right now.

And the balance is, do you have to pause life for a year and go, let's go sailing, you know? Or can you live life now in your own seat? I don't know.

Yeah. That's a big live life now move.

It's a huge all-in live life now move.

Yeah. But yeah, if you— you probably could sell the boat for almost as much as you bought it for a year later after you make the run and then come back home and buy a house.

Could you buy somebody's boat who just made the run for—

I don't know.

Yeah.

I don't know.

I'm thinking if you're walking around with cash, you might make a different boat decision. I know you would, than you would if you, uh, otherwise. That puts this hour of the Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.