Transcript of Get Out of the Cycle of Debt and Choose Peace Instead

Hey, you guys. Cyber Monday deals are here. So shop meaningful Christmas gifts that won't bust your budget right now at ramseysolutions.com/store.

Live Doctor John Deloney, PhD in counseling, number 1 best selling author and host of the doctor John Deloney Show on the Ramsey Networks. He's my co host today. Open phones here at 888-825-5225. Well, it's official. Now we get to start saying Merry Christmas.

Right? I I mean, some people start just before Halloween, and then others start right after Labor Day. But we're I think we're close enough now we can officially say Merry Christmas.

It was the day after Thanksgiving. My son and I were going hunting. It was 4 AM, and every channel had Christmas music on it. And I was half asleep, and I said, I can't take this. And he said, Ted, in his half asleepness, it's the happiest time of year, isn't it?

Man, it's too early for Christmas music. Too early.

The sun not even up. Todd's in Boston, Mass. Hey, Todd. Welcome to the Ramsey Show.

Hey, Dave. Thanks for having me. I really appreciate it.

Sure. How can we help?

So, I just learned of you a few days ago. My sister listened to you religiously and told me I should call you regarding my, situation.

Okay.

So earlier this year, I went with a debt settlement company to handle much of my debt, which is primarily student loans and credit cards. Unfortunately, just recently, I went into default with, 1 of my student loans, and that is through Navient, which is now Muhala. And what they, offered me was something that's outside of my budget. And my father is a cosigner on the loan as well, and I'm just trying to find out of ways of how I can negotiate something with Navient to help me make the payments that I can afford, or what are the avenues I can take.

Wow. So this is a federally insured student loan. Right?

This is, this is a signature student loan.

They all have signatures. Private. They all have signatures. Is it private? No.

It is private.

Oh, okay. Alright. Good news. Okay. Alright.

Well, lucky for you, we have actually a sponsor that refinances private defaulted privately held student loans. So they'll buy it from Navient and, refinance it and set it up where you

can make the payments. You got a pencil?

Yeah. 1 moment.

Yeah. Go ahead. Alright. Yrefy.com. And so I'll

I'll go ahead

and give you the mechanics because they've been advertising with us for a while, and we send people over there. The mechanics are they buy the loan because it's defaulted at a discount. And then they so they don't have full face in it. They pay less than that because it you know, because you're not paying it. You're not credit worthy.

Right? So that's not a loan anybody would wanna buy That the guy's deadbeat that the guy's deadbeaten on it. Right? So they're gonna buy it at a discount, and then that enables them to restructure it and, put an interest rate on it that's low. And they still end up making good money on it.

But you get the deal of the century. So it's a win win. It's a win win for everybody. Even Navient, and I really don't care about Navient. Never would I help try to help them win with anything.

But, but it turns out they get money on a loan that they thought was bad, so they're happy. Yrefi buys it at a discount, and then you are paying them a a reasonable interest rate, so they're happy. And you get a payment you can afford, so you're happy. So that part's taken care of. Now the rest of this, basically, what these debt settlement companies have done and do and they did to you is they quit paying all any of your payments.

So all of your credit cards are in default. Right?

Most of them. Yeah.

No? They should all be.

How long

and did you pay payments to the debt settlement company?

I did make payments. Correct.

Yeah. How many?

I'd since May. So I'd say probably close to 6 or 7 payments.

They haven't paid any of your credit cards since you signed up with them until they work a deal with each credit card company. And again, they're in default, so they're working a bargain with them. They put you if you weren't in default, they put you there.

Correct.

That's why we tell people not to use these companies because it's actually does more harm to your credit than even filing chapter 13 bankruptcy. So how many credit cards do you have?

Right now, I have 4.

And what is what is the total balance of credit card debt?

With all those, just shy of $35.

Okay. And what do you make, sir?

I make per month net pay. I make, just over $6 a month.

Okay. Are you married?

I am.

Okay. Does she work outside the home?

She does.

What does she make?

She probably makes less than what I do. I'd say about $3.

Okay. So you got, like, $10 coming in a month. So we ought to be able to clear up 35 pretty quick once we get our crap together. Agreed?

Correct.

Yes. So, yeah. This is awesome. So what what you do, quit paying the debt settlement company. Just just opt out.

No more money. I'm going to take the Naviance. I'm going to take them to WiReFi. And I'm going to take these 4 credit cards and work them myself. Now, here's what you're going to have to do, because they're all in default.

You have to lump sum, no payments, lump sum, settle each 1 of them. So what I want you to do is I'm going to put you a budget, you and your wife working together. You're married. And we have to clean up this freaking mess that we have. We're gonna get the student loans on a payment.

We're gonna quit making payments to the debt settlement company. We're gonna live on beans and rice, rice and beans, because the stress of this is overwhelming, and it needs to be out of my life. I can't build wealth in the middle of this. And I make $10 a month. We ought to be able to win, you know?

Yeah. Okay. So it sounds like you're with me on this. Good. Now we're gonna get you on a budget.

We're gonna sign you up for a finance for Financial Peace University and show you how to handle money. I'm a put you in every dollar. Now here's the way you work the debt the debt off on the credit cards. Take the smallest 1. What is it?

Do you know?

Yeah. Smallest 1 is, just shy of $4.

Okay. So, you need to put together in your budget $1,000, $1500, and call the smallest 1. Understand that credit card collectors are the dumbest humans on the planet, and you can tell they're lying if their mouth is moving. They would have a good job if they weren't. That's a horrible job.

It's a high turnover job. So you're gonna be talking to people whose parents are cousins. Alright? Okay. You got it?

I mean, you gotta understand this because it's warfare. No.

I do.

It's warfare.

No. No.

And so you're gonna try to talk to them and they're gonna they're gonna blah blah blah blah. And you're just gonna have to hang up. And then you gotta go talk to them again. So I'm offering you $1500 as settlement in full. And you keep beating that drum until you get them to take it and say, if you don't take it, I've got other cards.

I'm gonna take this money and go to 1 of the other cards. So you got about 5 seconds right now. 4, 3, 2. Are you gonna take it? Because I'm hanging up.

And you just gotta have some fun with this. Okay? It's gonna it's gonna take, like, 10, 15 phone calls per card. And you'll settle them for a quarter on the dollar. Lump sum.

Here's the 2 rules, remember these 2 rules. Do not give them any money unless you have the agreed amount in writing. An email is fine. It's got to be in writing from the credit card company, or from the collections agency, whichever it is, that they are accepting $1500 as settlement in full on this $4,000 debt. And then, that's rule number 1, no money.

Not in writing, no money. They lie. The second thing is, no electronic access to your checking account. We'll just take it from your account. They'll take 4,000 out of your account.

No. No. You send them a prepaid debit card that has just that amount only on it. And you go get a different prepaid debit card for the next 1. And you keep them out of your account, and you don't deal with them except in writing, and you treat them all like they're crooks because they are.

Hope that helps. This is the Ramsey Show. You want to leave happy memories for your loved ones when you pass away? Not a mess. Your family will be grieving, so don't make them spend days trying to access your computer or sift through drawers full of junk.

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And you can get organized in time for the holidays by visiting knockbox.com/ramsay. That's nokbox.com/ramsay. Doctor John Deloney, Ramsey Personality is my cohost today, number 1 best selling author, PhD in counseling. Lucy's with us. Lucy's in Richmond, Virginia.

Hi, Lucy. How are you?

Good. How are you?

Better than I deserve. What's up?

I got a real head scratcher for you. I was wondering if you could give me advice on a financial decision that I'm trying to make. I'm a single mom of 4 children, and I wonder if I can purchase a home with going through a divorce.

Okay. So you're in the process of becoming a single mom with 4 kids. Yeah. What do you make, hon?

I'm a registered nurse.

Mhmm. Good.

I make, like, 50 plus dollars an hour.

Mhmm.

But I'm working PRN now since I'm going through marital issues and so forth. Yeah. I gotcha. Anyways

So, obviously, you all are separated.

Yes.

Has the divorce been filed?

No.

Why?

Because I have an appointment next week with the other lawyer because the old lawyer said it was a conflict of interest to hear my case. So I'm presuming that he has got that lawyer, and so I'm going through another lawyer and start all over again.

Yep. Okay. Good. Yeah. So, no.

You should rent until you get this final. Because if you buy something in the middle of the divorce, it's gonna throw that property into the middle of the divorce discussion because you're still married.

Yes.

And so you you need you need to wait until the divorce is final.

Okay. Alright. So the divorce is final within whatever. And I have another issue. I own 2 other properties.

Because I have read your book, and I paid off my mortgage in 5 years. And what do I do with this property that I live at now? I paid over a $150,000. I paid it off in 8 years.

Well, is is is your is your husband gonna have claim to it? Your ex? You're gonna split the split the estate?

I'm going to try because it was my money that went into the estate. And I know that you say marriage, you equally 5050, but he didn't contribute anything to my family.

That that that will depend on Virginia law, and I don't know the law in Virginia. Okay? They may force you to split it with him anyway. I don't know. But, obviously, you're gonna ask for, and have receipts improve that he didn't pay on it.

You paid on it. And so you didn't own it before you were married, did you?

We bought it, like, 3 months after we got married.

Yeah. Okay. So it's it's marital property, and you'll have to talk to your divorce attorney about that. So what I want you to do is get get clear of the divorce, and then you'll know what you own. And you know you'll know how much money you've got as a result to put into the next deal.

So you could take that house and the other property, sell them, put that big put the pile of money you get from that out of the divorce in a pile, put some other money with it, and buy you a house. But you need to be clear of this so that, the same problem you're getting ready to have with this house, you don't have with the new 1, which is arguing over it.

We're not well, it's that's the head scratcher. I live right beside of his parents.

I don't care. Yeah.

And I'm ready to get out of it, but I want my money that I put into it. But I'll probably never see it.

You need to see a lawyer, honey. That's right.

And I'll tell you, 1 of the things that always trips people up when they enter into a divorce is they have an imaginary number that they think they're gonna get. And it's almost never that number. It's almost never even close to that number. And so then people think they're getting screwed. And really they made up a number.

So in your head, like, you're you're talking to me and Dave, you bought a house as a married couple. And you might have married a deadbeat who did nothing and he was a a joke and a crook and all. But the court will say, y'all bought that house together. And so in your head, you might be thinking, I get a $150,000 in the sales, and I'm just gonna go buy a house. You may get 65.

You may get 75. And if you I'm I'm just telling you. If you don't if if you think that

that other person cares, you don't know until this is done.

So you're gonna cause yourself more angst by imagining what comes next is what I'm saying.

You just don't know until this is done. So the answer to your question is, you can either sit right there until the divorce is final, and the divorce decree will tell you the judge will tell you what's happening with the house you're living in and the other property. And then based on that, I'm selling that house. If you if you've gained control over it, you obviously don't wanna be next door to his parents. We wanna leave.

And we wanna take our cash and go start a life. Chapter 2. That's right. Encore.

Yeah. And I I think the man, if I could tell people 1 thing when they're going through something hard, whether it's a divorce, somebody just passed away, is slow down. Don't do anything for 6 months. Don't do anything for for 9 months. If now, if you gotta get away from mom and dad's

house Yeah.

Go rent a place, but don't do anything permanent for 6 to 9 months.

After. After. But in the middle of it right now, you need to do something. You need to go get an attorney, and you need to get this filed, and you need to start learning about what law is in your state. And your attorney can tell you, there's a 0 chance you're getting this.

Or he or he or she can advise you. I think we got a real shot at that. Mhmm. They'll tell you what what's going on. But you're gonna get new information that you don't have yet today, and you do not need to buy a house in the middle of this.

Yeah. If you need to move out of that house because of relationship problems, now, then just go rent the cheapest thing you can rent until you get the other side of the divorce. Because here's what happens. We get our in divorce situations, a normal human being will get their emotions woven into and create this false sense of justice in the math. That's what John's talking about.

And it doesn't work that way. A friend of mine that does divorce recovery work and counseling says a divorce turns a marriage into a business transaction. It's all about pluses and minuses. Plus for this asset, minus for this debt. And it's about pluses and minuses and 401ks and where in what ends up on which side of the balance sheet, the ledger, and then the judge signs off, and then the money is dispersed.

And the you know, all the emotions and all the what's right or what's wrong and the justice and all, it doesn't really come up usually. It's kind of frustrating. Yeah. So that's that's the deal. So you gotta walk through it.

So please get the other side of this before you buy something. If you've got to move if you don't have to move, sit there. But if you've got to move, then go rent something. Rent the cheapest thing you can rent until you get the other side of this. But go get an attorney like yesterday.

I've seen this several times, Dave, where somebody has an imaginary number about what they think they're gonna get, and then they do what she's talking about. They go buy a house based on

In a couple

of months, I'm gonna get $200,000.

And then they get You get

a check for 60. Yeah. Or 40. Yeah. And you're you're up a creek.

Right? Yep. So just, get after it. And the other thing, Dave, I love that you mentioned this. It seems to be a new trend.

This is new coming up over the last 3 or 4 years. It's people getting divorced, but not trying to do it just handshaky. Like we're just separating in we're just moving on. And if you've made a legal binding agreement, you have to unbind that agreement.

Now there's state law. That's right. You're screwed.

So call an attorney. And if you're moving out, call an attorney and go through the process and get all the all the the t's crossed and the die the i's dotted and and move on.

Shut all code shut all, accounts down immediately that have both names on them.

Yes. Absolutely. So he

can't run up debt right now that you end up being responsible for because it got your name on it.

I put a freeze on my credit so that somebody couldn't get in there with my with my social security number and open up some credit cards

and Yep. And all of that. Yeah. So, you know, we'll just take that just the last second here and remind you guys. Okay.

So here's the deal. When you sign up for a car loan or credit card loan, that is a contract. You and your husband, folks, if you're out there. You and your wife are on that together. If both of you sign up for us in both names.

It's a contract that both of you have signed. The judge comes in the divorce decree in probate court and says, I'm going to give this visa bill to the husband. Okay? That means that judge has told the husband he has to pay it or he has to face that judge. He does not that judge does not have the power to undo the contract.

So just because he handed the Visa bill to the husband and said, I want you to pay it. The wife is still on that bill. So when he doesn't pay it, they sue both of you. And you can't go, but the but the judge said, the judge does not have the power in divorce court to undo contract law. They don't have that power.

Only bankruptcy court has that power. And so no, you you know, well the judge said to give him the house. I gave him the house and he didn't pay it. Now they're suing me. Right.

Because you believe that crap. You're still on the contract. So you've gotta be completely released from everything by getting it paid off and moved and that kind of stuff in the process. That's why this is a business transaction now. This is The Ramsey Show.

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That's xander.com or 800356 4282. Doctor John Galoney, Ramsay personality is my cohost. Elliot is in, Canada. Hi, Elliot. Welcome to the Ramsay Show.

Merry Christmas.

Merry Christmas. So I'm hoping you can help. So earlier this year, my wife left me. I've got a daughter who's about, 18 months. We are separated.

We're not legally divorced. She used to handle all of the money in the house. So I'm just kinda figuring things out for myself now. Make a decent wage. I make about 73,000 a year.

Mhmm.

But I just I find, I don't really have pennies to rub together by the end of the month. Like, I'm not really saving anything. So I'm just wondering if can we find maybe ways to to optimize that?

Good question. Yeah. That would be a normal thing. Left to itself, the savings never occurs naturally. Unless somebody's just like a savings freak.

But most people, if you just don't pay attention at the end of the month or really even before the end of the month, the money's gone.

Mhmm.

And so the only way to make the money behave is before the month starts, write every dollar down and where it's gonna go. And then make it go where you wrote it down to be going. You're in charge of it, but you need to tell it what to do because what's happening is in your emotional state, because your heart is broken, and you're the daddy of a little baby, and you're dealing with all this. In the middle of all of that, you're you're not even paying attention to the money. It just leaves, which would be I mean, that that's what most people do in your situation, but the answer is you gotta pay attention.

When you when when you're struggling to make payments at the end of the month, is this you having sat down and done the math and realized I don't make enough money to live where I live and do what I do now that I'm a single dad, or are you still sending money to your ex? I mean, what what kind of situation

are you in?

My ex. So, I mean, I'm currently paying about 40% of day care based on how much she makes, how much I make. My well, like, I've I've put a budget out for myself and, you know, it it says I have $300 left over the end of the month, but that never seems to happen. I do have I have, like, a recurring investment. I was like, I might as well start putting something away if I can.

So I was just like, I'll do $10 a week. It's gonna be something, like, just won't really notice. I just have that going into, you know, investment in stocks and dividend reinvestment and all of that. So that's

like Okay. So what happened was you you wrote down a budget, and you never looked at it again till the end of the month.

Yeah. You're probably right.

Yeah. And then you went, wow. That didn't work.

Yeah.

So, yeah. You you I'm gonna give you the, I'm gonna tell you to do a written game plan every dollar on paper, on purpose before the month begins. And then before you spend anything out of a certain category, you'd go back and check that category and make sure you still got money left in it. And make sure if you're spending time, eating out because you're lonely, or you're spending time doing whatever that costs money because you're lonely, make sure you recognize that and you're writing it down. Right.

Because, I mean, you're going through a heartbreak right now. This is a hard time emotionally. And that hard time will show up in the money if you don't get on the other side of it and crack the whip on it. So what what you're facing is a very normal reaction in a situation like you're in. But that doesn't make it okay.

That doesn't make it it doesn't make it, like because it doesn't feel right. That's why you called.

Yeah. And, David, I don't think you can overstate that. When when your world blows up, it's easy to feel like the rules don't apply anymore. Right. But they do.

Right. Math does. Right? Math keeps going and the kids still needs to eat. I remember a close friend of ours.

Her husband left her pregnant with number 3 and Oh, God. And I remember asking a couple of years later, how'd you make it? And that her answer was so instructive. She just said I had to. Right?

And that meant I have to get up and do the next thing, the next the next right thing every day. And so the next right thing for him is to begin to put some sort of structure to this chaos. His world blew up. His wife left him and this little 1 and no 1 has that in their head even. Right?

It happened. Let's get a hold of our money. Let's get a hold of our calendar. Let's start there. And if you can prove yourself over 30 days that I can stick to this thing and say no, then you can do it again 60 days.

You can do it again 90 days. And then you start asking yourself, is this the job? Is this the apartment? Is this the house? Is is this the daycare center?

And go from there.

But I guess, I I don't know. You you you know a lot more about this than I do that it feels like grieving a broken heart or grieving a loss of some kind, somehow gives us permission to let our body go. Mhmm. To let our mind get on junk food, binge watch stupid stuff on Netflix instead of actually feeding our mind something that tightens it up, And just let our money

go. Yeah. I I I and I think the difference is and I I don't think grief is doing nothing. I think grief is active. And if you're actively grieving something, if you're writing letters, if you are choosing your thoughts, if you're doing the next right thing, then that's an action.

I think what most people mistake grief for is I'm just gonna turn draw the shades and do nothing.

Yeah. What I'm saying is when something bad comes at me, it's like you said, gives you permission. And so I so I don't need to exercise.

That's right.

I I don't need to go to church. Right. I don't I don't I I don't need to watch my money. Right. Because something bad happened to me.

So now I have permission to to sit on my butt.

1 of my friends who works in, in the fitness industry said, we often treat diets like you blow your diet. And he goes, you get a flat tire. And then you just, you're like, whatever. And he said, it's like pulling out a knife and going and slashing the other 3 tires. He goes, instead of just having 1 tire off, right?

So your world blows up. This is the time to actually stop and really down

on that. Double down on everything

Yes. This is a unique But you've got

to control the things you can control.

That's it.

And that marriage blowing up is not 1 of them.

No. It's it's that's happened. So let's do these other things so that we can deal with the hard, hard truth.

And what that means is like hardcore, like you were completely energetic and hopped up on caffeine, hardcore budgeting. I'm gonna write this down, and I'm gonna pinch it, and I'm gonna pinch it some more, and I'm gonna and and $300? No. How about $1,000 at the end of every month. And I'm gonna start putting that towards something, and then I'm gonna work some extra, and then I'm gonna lean into these things.

And that's the way I'm gonna process while I'm going through this rather than using this as a reason. I was gonna say an excuse, but even a reason for taking our foot off the gas and just letting the car go in circles.

It's it's your choose your heart. Right? Yep. You can choose to double down on your budget. I will force myself to exercise even though I don't feel like getting out of bed, And even though it's 44 below in Canada where he is, or I'm gonna choose the heart of just getting to the end of every month and getting further and further underwater.

Yeah. It's just it's human nature is just so interesting when we think it through because I can't I mean, doing this for 35 years, I can tell you that the number of times I talk to someone they go, well, you know, everything was going good, and I went through a divorce, and I went $40,000 in debt, and I gained £40. And it's like, well now you gotta go clean that up. Yes. So, you know what you said is before you do that, go ahead and not do that.

Exactly. Yeah. Yes. Yes. Exactly.

Or find a find an activity. Find a Xanax, if you will. Find a distraction that's not going to be catastrophic. Right? So often I tell folks, you get 1.

So I hear from husbands who come home. They're like, dude, I just wanna veg out. A lot of guys will go sit in the bathroom for an hour and a half, and they'll just scroll the phone. It'll disappear. And they're they're the pushback is you need to be present in this house.

You need to be around. Okay. I need I need a break. And I always tell them, okay. You get 1.

You want 30 minutes? She's gonna keep the kids away for 30 minutes. You get 30 minutes. After that, you gotta put that thing down to be present. And so, yes, when your world blows up, it is hard to get out of bed.

It is. Okay. So you get 10 minutes. You get 30 minutes to lay here and be sad. And then you gotta get up.

You get 1. And then you gotta go do your thing. Like, whatever that thing is, you gotta go do the next right move that you know is good for you.

So a buddy of mine came to an event that John and I did with, Micro. We're doing it for business guys and John 1 of the things John did was a talk during that event and choose your heart. Okay. You're either going to be overweight, or you're going to exercise and manage your caloric intake. Both of those are your You're either going to be broke, or you're going to manage your budget, and work some extra, and sell some stuff, and get your butt under control.

Right? Choose your heart. 1 of them's they're both hard. You might as well choose which 1 on purpose rather than let it happens to you. A friend of mine sitting there, he's lost a £150.

It's so amazing. I was

with him I was with him Monday night.

That's like 2 George Camels. Yeah. Well, more. 2a half. Yeah.

More now. Yeah. Yeah. That's that's so amazing. Do do do choose your heart.

Right?

Choose your heart. And and I said, what do you do? And he goes, stinking Deloney talk, man. Choose my heart. He goes, I've been choosing to be fat, and I decided I wasn't gonna be.

Like, that's what he told me. Wow. This is the Ramsay show.

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Merry Christmas, folks. So I don't understand how on Thursday, it's still Cyber Monday. I'm confused about all of this.

I saw a great, Internet thing from Lecrae. He was it was like a it was like a confession video. And I thought, oh, no, man. Did he cheat on his wife or something? It's like, I'm so sorry, but I said it was I said it was good.

The the cyber Monday sailing. It's just gonna keep going for a while. It's like this big confession.

Well, apparently, we're doing the same thing.

So I

don't know if we need to turn it into a confession

or not.

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store. It's just to keep it going, so

just keep it going. Just keep it going. Travis is in Grand Rapids. Hey, Travis. What's up?

Hey. Yeah. How's it going, Dave?

Better than I deserve. How can I help?

So this is my question. Right now, I'm driving to work, and it's costing me quite a bit of money because I drive a 3 quarter ton pickup truck. I'm planning on buying a cheap little gas zipper 4 cylinder car. My question is, when I do buy that car, I had this truck is totally mechanically sound, nothing wrong with it, has high miles. Do I park it in my garage, keep it for a spare, or do I sell it and, invest the money?

Are you do you have debt?

No. I have no debt.

Okay. And how much money do you have in savings?

10,000.

Okay. How much in your investments?

Well, I just started investing

Good.

And, only, like, only, like, 3,000 right now. I'm only 20 years old.

You're only how old?

I'm 24 years old.

Okay.

Alright. I make $30 an hour, by the way.

Yeah. Good for you. Okay. So you're gonna buy a cheap little car because the the the 3 quarter's killing you on gas. Pretty simple.

Right?

Yes.

Okay. You know, it it I love having a truck. I've had a truck most of my life. I drove a truck to work today. Okay?

So I'm a truck guy. Let's just put that in in the parentheses in the answer here. Alright? However, if I were 23 in your situation, I would not keep a spare car as an investment of any kind. Now later on, you know, when you're a millionaire and you're 33 because you keep following our stuff, and you want to have a spare truck sitting around, I'll be your guy.

Because it'll be a small percentage of your world. But right now, I mean, that truck will bring how much money?

Probably 5,000.

Okay. If I put $5,000 in the middle of the table and you didn't own the truck, would you go buy a truck for a spare? No. Only reason you're keeping it is because you like it.

Right. And, well, if I'm buying a cheap car and if that does go down on me, I will have a backup.

You don't have a backup now? You have a $5,000 truck.

Right. Right. Yeah. Yep. That does make sense.

I know.

If I were you, I'd sell the truck promising myself that I'm gonna become wealthy and drive whatever the flip I wanna drive later. Because I'm not worried about the gas myself. I mean, I just drove a Raptor r over here. The thing drinks gas like I mean, you have to stop at every gas station on the way. It gets

4 miles to the gallon.

It gets 4 gallons. Yeah. It gets 4 gallons to the mile. But yeah. But I don't give a rip.

You know? That's the difference.

Yeah.

So but I'm in a position but when I was broke, I don't remember being broke in 23. It wasn't 20 minutes ago, it feels like. And and so, yeah, you don't need that. You don't need that extra weight on you. And but you just like having you just like the truck.

I don't blame you for that.

I tried this when I was broke to have a a spare little I I inverted it. I had an old truck that I like driving around, but I had a little zippy card to get around. And it was when it came up for registration.

Oh, yeah. And and and I got insurance.

I did the math in insurance, and it was costing me about $75 a month that I didn't have. And so this paid for car that I had in in the driveway was costing me money that was my light bill, and that's when I was like, I just gotta I gotta sell it.

Yeah. Yeah. So that's what I would do. But again, it's not a permanent decision for the rest of your life. It's what you're doing right now at your stage at 23.

Later on, get you whatever you wanna get when you got some money, dude. Live like no 1 else. Later, you can live and give like no 1 else. Allen's in Seattle. Hi, Allen.

How are you?

I'm doing much better than I deserve, Dave.

Good. How can I help?

Well, I have done so well. I've I started doing Dave Ramsey about 5 years before Dave Ramsey started doing Dave Ramsey. When I discovered you on the radio in the nineties, I said, I'm already doing that. I'm already doing that. This is great.

It was confirmation from what I was already doing.

Well, it's good when a couple of geniuses can meet up. Old, old,

old geniuses.

Hey. Eee. Careful. That's where that genius stuff comes from.

So now I'm 68 years old. I, survived the body of cancer this year, so I'm a little tighter than I used to be. Mhmm. But I'm doing fine. I'm doing great.

My net worth is $5,500,000. I've got about $2,900,000 of that in stock in the stock market in mutuals. I got about $200,000 in cash. And, I'm living in a house that's worth $1,500,000 in Seattle with the Lakeview. I mean, it's just I'm doing so much better than I ever dreamed.

I couldn't I can't believe it. And I just couldn't believe it because I didn't I never spent more money than I made.

Oh, you know?

It was just it was just obvious to me. You make so much, it's been less than you say. So so that's where I am now. So now that I'm 68 and getting a little tighter, I've been retired for a long, long time, and I've spent most of my time doing volunteer work when I do anything. Anyway, I've got a duplex, it's about an hour and 15 minute drive from here and it's worth between $800,000 and $1,000,000 and it's bringing in about $50,000 a year, it's increasing in value by about $50,000 a year.

So it's net worth in value is about $100,000 a year. And I'm just getting tired of managing it because as you know, real estate isn't passive. Every year something happens, 1 of the tenants moves out, we got to turn it around or we get a water leak or something happens. And I told my wife, I said, I'm tired of managing this thing.

Got it. So what's your question, Alan?

Well, do I sell the place and get a REIT to just be done with it? Or do I get a professional management company to A

professional management company is not going to make vacancy and repairs go away. No, I know that. Both of those things are still going to be there. Financial. Yeah.

If the vacancy and the repairs are what are driving you nuts, those are aren't gonna leave. A professional management company will just handle the grief associated with those 2 things, but not the money. And so you're gonna give up a little money in order to have someone else deal with the tenant, deal with the repairman, and those kinds of and deal with the vacancy. But there it you know, no 1 cares when it's empty as much as you do. So that's up to you.

If you wanna go that route, that's fine. But just get you know, look for the right thing out of it. It sounds like you're tired of being landlords, is what it sounds like to me. And so I I think I am probably getting out of it, and I might get into a different kind of a property that doesn't require as much, active management, something that's a little newer, that kind of a thing. Or like you said, just buy a REIT.

Put drop drop that $1,000,000 that you're talking about there into a REIT, and that's fine. What's a REIT, Dave? A real estate investment trust. It's basically a mutual fund for real estate, is how it functions. And so many, many, many Allens out there put money in, and they buy a bunch of different properties.

And the cash flow from those properties, and the increase in value of those properties give you your rate of return. And most of the REITs are paying about like a good growth stock mutual fund, about 10 or 12%, a good 1 is. In the old days, when they first started, they were fee heavy, and they didn't do well. Net. Nowadays, they're valid.

So you just own a whole bunch

of pieces, a small pieces of a whole bunch of houses? Just like

you do when you buy a mutual fund, you own a whole bunch of pieces of

a little Bunch of stocks.

Bunch of stocks. Yeah. Same thing. That puts us out with the Ramsey Show in the books. Live from the head headquarters of Ramsey Deloney, PhD in counseling, Ramsey Personality, host of the doctor John Deloney Show and the number 1 best selling author.

He's my cohost today. Jared is with us in Phoenix. Hi, Jared. How are you?

Oh, I'm doing better than I deserve.

Good. What's up?

Well, my, my dad passed away a few years ago, and he left us a very, sizable estate to my brother and I.

What what is a what is a sizable estate? How much money?

My brother and I probably ended up with 3 to 4,000,000 each.

That's sizable. Okay. I agree with you on that.

And and he he taught me to to be, debt free at a young age. So I've, you know, I've built up my own, my own retirement up to about $750,000 anyway. So it wasn't that I needed the inheritance, but

You you were already a millionaire.

I was working on it.

Yeah. Well, you I mean, you had other savings on top of the 7.50, so you were there. You had a house, probably.

I had a very blessed life. Yeah.

Good for you.

So the, the conundrum that I have is that he was married a second time. So I have stepsiblings, and 1 of the steps had had mentioned that I should share because he left it to my brother and I and not the other steps.

Now the steps are not his kids?

Correct.

They were his wife's from a previous marriage, and it was his second marriage. And so he he became the stepdad. I'm just making sure I got the exact connection. So they have absolutely no blood connection to him whatsoever?

Correct. And they're adults.

How long were they married?

16 years.

Okay.

Oh, so they were adults. They were he didn't raise these kids.

No. He waited till he he said that that he didn't wanna get married until everybody was out of the house. They dated for a considerable amount of time

before. In no way even looked at him as a father figure. Bye, Felicia.

Well, this this step doesn't have a good relationship with her father.

Mhmm.

And she did kinda look at him for advice and so forth. Yeah.

Well, that's nice.

And he was he was good to their kids too.

Mhmm. I bet he was.

To the to the steps.

Okay. So she calls you up and says, I want some money?

No. She it was, I'm having problem. My brother has passed away since then, and he was in the middle of a divorce. So I'm having problems with his wife that was divorcing my brother, and I mentioned that to her. And during that conversation, she got upset because of the numbers involved.

And she started crying and saying, I can't talk with you about this, and I just really I just don't understand why we can't all just share.

And Because we're not communists?

But what do you say to that?

Nothing.

Nothing. It's not your fault. You don't say anything. Yeah. You say, you know what?

I'm so sorry. Yeah. I'm sorry. You know? I I listen.

I I care about you, and I'll be here to emotionally be your step, whatever I am, and that kind of stuff. But, I I and I understand that this is hurtful to you, but gosh. I'm so sorry. And I'll just leave it at that.

Because it's not about you.

Feel bad about this?

No. You didn't do anything. What'd you do? Why would you feel bad? What'd you do?

Well, not not that I did do something, but that, you know, that that I'm in a better situation than she is. And, it just you you know, she's making You

didn't harm her in that process. Your father had money, and your father decided to leave his money to his 2 sons. That is a very normal act. Had he left some to the stepchildren, that would have been unusual. Mhmm.

Step adult kids. Yeah. That he never were never in the house that he lived in. He didn't adopt them, did he? No.

They were adults.

Uh-uh. Yeah.

No. They their father's still alive.

Yeah. Yeah. So no. I I mean, that that's this poor girl's just got emotional issues on her own. I mean, I can't talk to you.

You got too much money that I thought I needed some of. I mean, come on. That that's her.

Okay. Well,

no. No. I don't feel guilty at all. And I'm not gonna be mean about it. I'll be kind to her.

And your dad loved her. He'd be gentle with her, and you're gonna be gentle with her. But your dad didn't leave her any money. And he was closer to her than you are.

No. We're pretty close.

Your dad was closer to her than you are. He married her mother.

Alright. Well, I appreciate the the the vote of confidence and that I was doing the right thing.

So are are the are were the assets of you and your brothers intermingled?

Some of them were. There were just a a couple of things, but my brother and I got that worked out.

So how are you involved in the divorce then, and this and his death and so forth?

Because I'm his trustee.

Oh, jeez. You're the executor of his will.

Well, she sidestepped that and got the I forget what it's called, when you're the she became, in lack of terms, the executor because the will hadn't been put in place. So she's kind of in charge of the estate, but I'm in charge of the trust

Oh.

Because I was the trustee. So, yeah, that's a whole another mess.

I bet Thanksgiving dinner is amazing at your house.

Yeah. No. Not anymore. This trick's on the out. She was on the out before he died.

She was on

the out. Wow. Yeah. Oh my goodness gracious.

I get to make the rules,

but I've got the money.

But I get to make the rules. No. But I have to make the rules. Not really. You're like, you were almost the ex wife.

You keep that in mind.

Yeah. It's what

I figured out. We were gonna put an

x in front of your name, kiddo. How the fed uses the road money. Like, we're states. We can do what we want. That's cool.

You want roads? Okay. We'll do what you say. We won't do

what you say. Oh, man. So hey, guys. Wow. Jared, you do whatever you wanna do, honey.

But bottom line is, back to the stepsister thing or whatever she is. If you were to give her some money, it's not gonna make her okay. She was not okay before. She will be not okay after. Because this is not about the money and it's not about you.

So you can't fix her with a check. Right. It's a waste of money.

And even I mean, y'all call each other what you wanna call each other. That's that's your family's business. I I don't even know this qualifies as a stepsister.

It's not. I mean

It's it's it's Well,

I guess it is.

It's the child of it's an adult child of someone your dad married. Right? But that's a separate life. It's a separate world. And maybe all are close now, and that's wonderful and great and good.

But, I always like to think back on these situations as if my dad was here and I've got a decision to make, what would bring him joy, right, with this money he left me?

Well and he already decided what he wanna do with this money. He made that choice. Sitting there when he wrote the will. Right. I mean, she she was on the planet at that point.

Yeah. This

is not this is not like something that just, oh, I didn't know. Right. You know, he already cleared dad already clearly said what he wanted to have happen.

Yes. Behavior's the language. He he see he was loud and clear.

Yeah. Yeah.

And he didn't say he was mad at her. Nope. He just said she wasn't his.

And you don't know what she's already left them. Who knows? She paid for her college or her her kid's college. You don't know any of that stuff. Mhmm.

She just saw some huge numbers and says, I want some of that.

Yeah. That's what happened. Yeah.

There you go. This is the Ramsay show.

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Hey, guys. George Campbell here, and it's that time of year again. The store shelves are packed with Little Debbie's Christmas trees, matching pajamas for you and your dog. You know who you are. And giant inflatable Santas for the yard.

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Doctor John Deloney, Ramsay Personality is my co host today. So I ran out of time, and we ran into the break on the, dysfunctional stepsister dad left money to his own boy's discussion. And I was actually having a talk with 1 of our team members, before the show. Christian and her were talking about a dysfunctional succession plan that's blown up in the public eye that he's aware of. And he was asking me, how do you avoid that?

So let's go back to that particular thing and say, how do you avoid this? Okay. So there's 2 broken things in that call. 1 is the step kids had no knowledge. And so once they got once the daughter got knowledge of how much money, then her feelings were hurt.

And her reaction was, I can't even talk right now. You you need to give me some of this money. Right? Yeah. The other broken thing was his brother who had received $3,000,000.

He and his brother had some of that intertwined. They were able to untangle that so his brother was stand alone. But and then his brother starts going through a divorce. And instead of making sure he had a completed will, his will was incomplete. So now his soon to be ex wife has stuck her nose into it and is screwing that up.

Both of these are poorly handled estate planning. Okay? So every 1 of you need a detailed will, but here's the important part that is left out of the first 1 of these things with the step kids. Have a reading of the will or a discussion with the parties that think they might be involved. Either in 1 room or a series of rooms.

I don't care. Have the courage to tell people what it says while you're alive. So if dad, who loved this girl's mom and was married to her for 16 years, had sat down with this girl and the others and said, hey. I care deeply about you guys, but but when we got married, we decided that I'm that my money was gonna go to my kids. And so I I want you to know ahead of time.

It has nothing to do with that whether I like you or whether I care about you, but I'm leaving my money to my sons. And it's substantial, but that's none of your business.

Would that be his conversation or that be their mother's conversation?

I think it's his.

K.

I think it's his. Because she's right now, who's she angry at? Him. Yeah. Because she felt connected to him and this this cut her.

Yeah. It makes me wonder if he gave her $50,000 and then 4,000,000, and that's the that's the gap.

She didn't say.

She didn't say.

I mean, he said he he said he left everything to my brother and I.

That's true.

So, which I don't even know what happened to the mom. Right. Did she not the second wife not get taken care of? I don't know. We didn't get that in the story.

But the bottom line is tell people Yeah. This is what's going on. And so I've got a friend whose kid is doing drugs, and he's in his twenties. And he sat down with everybody, and he said, honey, I can't leave you money. Not because I'm punishing you, but because I'd be buying you drugs.

I'll kill

you. I'll

kill you.

You'll you'll use that your your your addiction will be ramped up, and you'll have an overdose and die. And I love you, and I'm not going to fund something that brings harm to you. And so you're not going to get any money in the current version of the will. And it's not because I don't love you. It's because I do love you, and you're out of the will.

And he knows that now. And your brother's the executor, and don't you say a word to him. Mhmm. So dad threw his shoulders back, had a backbone, and had the discussion with a grown child drug addict Mhmm. While he's alive.

Yes. So this is not a movie. This is life. Yeah. It's not like we have the paneled room with the trophy wife and the dysfunctional 4 children who come in, and they are entitled and trust fund babies and the reading of the will, and they're all shocked that the 1 kid who's somewhat normal gets it all.

This is that's a movie. That doesn't happen in the real world. Okay? Whatever you're doing in the real world, tell the people. That way, they don't have to deal with the other people who are pissed off after you die because you were a coward and didn't tell people what was going on.

Yeah. You're cowardice.

Act of cowardice.

Your cowardice will blow up the lives of of the remaining

young ladies. What this is. Yeah. If dad had had a 10 minute conversation with his grown step kids and explained to him that he loves them, he loved their mother, but this was my money before I came into this marriage, and it's so it's going to my children. You're not my children even though I care about you.

Then that would have probably handled this whole thing. And if brother had kept up with his own dad gum will and gotten it gotten it done and changed everything over. So you get divorced, change the beneficiary 3 weeks before on your 401 k and your life insurance policies. Don't expect your ex wife who hates your guts to leave to take a a half a $1,000,000 insurance proceeds and just give it to somebody because you forgot to change the beneficiary because you didn't do your job. So you've got to do these documents, people.

Yes.

It drives me nuts.

And here's the other

side of it.

Here's the other side of it. I just yesterday sent my dad a text message. My dad's in his seventies and I'm gonna see him over Christmas and I said, I wanna go out to lunch with you. And I just wanna listen. I wanna hear what your what your picture is for the next 10 years.

Where your mom wanna live? Because I think he's retiring, in the next couple years from his professor job. Where you gonna live? What do you want this to look like? And as a part of that conversation, he my and my dad's was a homicide guy.

He's been I've known where that wheel was since I was 6 years old. Right? Yeah. But talking through what kind of support y'all gonna need, what kind of health challenges are y'all facing. But there are millions of of of senior adults that won't have that conversation you're having.

But there's also millions of people my age, thirties, forties, and fifties. If you don't know, don't just say, well, it wouldn't have the conversation. Then you need to go have the conversation. Somebody has to be an adult in this transaction.

Right? Yeah. 78% of Americans die without a will. Which is insane. That's stupid.

It's asinine. If you're 18 years old, you need a will. It's cruel. I don't care if you own anything or not. You want the you want the state to decide what happens to your children?

Have you seen what some of these states are doing with children? You don't want these states in charge of nothing. They're morons. And so you need to be in charge of your kids. It is a will.

And there's 0 0 correlation between making a will and a likelihood you die soon. Right? It's not a thing. Talking about death doesn't

Might be the opposite.

Doesn't occur. Probably.

The more we discuss my death, the better I feel.

Good and healthy.

We call it the Monty Python meeting where we sit and talk about Dave when Dave dies I'm not dead yet. I'm really not dead yet. It's just a flesh wound. I'm not dead yet. I'm feeling better.

Really? Just a flesh worm.

I I've I've Dave, over the last year on my show, I think the 1 of the most common questions I get is how do I do x without somebody getting mad? How do I do how do I talk about y without them getting blowing up our? You can't control that. So I think we all, as a country, we just gotta have some more conversations. And we gotta do it in our at our kitchen table.

You don't have to be mean about it. No. My buddy that he's not mad. He is upset. He's hurt, but his kid's doing drugs.

But he'd probably pay for rehab. Right?

He he would help him any way he can, but he's not going to give him money A blank check. In order the same amount of money everybody else. He gives him 0. Yeah. So because, you know, and he said when you clean up, I'll change the will if I'm still here.

If you don't clean up before then, you're just out. Yeah. So, you know, and it's a good it's a good incentive, but it's not we're not trying to buy something with that. We're just trying to say this is what's going on, so don't be hurt later. Yeah.

There we go. Hey, folks. We love talking about money and life and everything else. 1 of our brands where we help people is a small business brand called EntreLeadership, and we coach about 10,000 small businesses around America, showing them how to run a small business, all the aspects of running a small business. And I do a podcast, that we've had we've done a podcast for about gosh.

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Still no.

We both went to college for mechanical engineering. My parents covered my tuition, but my boyfriend has over a $125,000 in college loans. We both work good jobs and bring home a combined income of $200,000, but his loan payments are killing him. He didn't wanna burden me with them, and he wants to put our life on hold, marriage, house, and children until they're paid off. He has about 15 k in savings, and so this is gonna be a long process.

I have 80,000 in savings and roughly 300,000 in stocks that my grandpa set up for me when I was a kid. Should I help pay off my boyfriend's loans by adding an amount to his payment every month, pay them outright, or do you think I shouldn't help him at all?

Should you cave to his blackmail?

That's exact I was gonna say, he is this is a it's a red herring. It's a it's a proxy.

It's a ploy. Yes. So listen, kiddo. We tell folks when they get married, everything becomes shared. So you will have a $125,000 student loan when you're married because your husband does.

He will have $300,000 in stocks that his wife's grandfather left her. He will have $80,000 in savings that his wife had before they got married. And so when you get home from the honeymoon, pay off the pay off the student loan. But this is bullcrap.

Bullcrap. On a stick. So frustrating.

Yeah. Tell boy child time to get you know, part of the problem is is we're all playing house over here, so he's got no incentive to get married other than blackmail you into it. So now if you wanna have a healthy relationship, y'all get married yesterday since you're playing house anyway. We have a combined income. You don't have a combined income.

You're not married. That's

bullcrap. You're shacking up. And we would not have a show if people like you didn't withdraw, $125,000 from the money that their grandparents sent to pay off a boyfriend's loans, and then y'all break up.

Oh, yeah. That's like We would standard.

We wouldn't have this show if that didn't happen all the time. And I know you can say, no. Not us. Not us. No.

He would never do that. Yes, y'all.

The guy that won't marry

me would never do that.

You know how you sound? So seriously.

No. Don't. Please don't. Please don't. Please don't.

Please don't.

Time to get married, boys and girls. Look. I think this is a I think it's a good I think it's a good, like, an altar call right here. It's come to Jesus. Are we are we gonna do this or not?

Yeah. Because if you're gonna get married, y'all get y'all come home for the honeymoon. We would tell you to take the $380,000 that you have in assets and pay off the 125,000 debt that he has, and then we take off with our life with our fabulous combined income and 0 debt. And whatever's left of that money, which would still be $200,000. So Yeah.

And by the way, when you get married, what you're agreeing to do is to help carry burdens together.

For richer, for poorer.

And so if he sickness. If he already says, well, I've got this thing going on, so I'm gonna hide it from you. I don't wanna be with you. I don't wanna be part of you. This will be the rest of your life.

This will happen with kids. This will happen with tuition. This will happen with which church to go to. This will happen again and again and again. This is the big glaring neon sign.

Put our wife on our life on hold.

He doesn't wanna burden me with them.

He put our life on hold.

Then he does he's not ready to marry you then.

Oh, brother.

We're gonna work together. Work together. Work together.

I'm gonna give this guy about 20 minutes. Get me to the church on time, baby. I'm serious. I'm I'm done with this guy. This is bothering me.

So there's something about this that's running all over me, and I I'm usually a little bit I'm pretty pretty mean, but I'm usually a little bit more gentle than this. Yeah. But this is this there's something wrong, Jenna.

Here here's what I here's what is is getting under my skin.

Oh, I know what it is. You have worded all of this. It's all the dad gum language. That's what's killing me. You have worded all this because you have bought this freaking sales line.

That's it. That's the thing. She thinks she's the problem. She thinks she is the problem here.

This guy has complete he's a I'm afraid he's a con artist.

He's a leech.

Yeah. So either way, if you're listen. You you either need to leave or you need to get married.

Please don't. Don't pay off his loan. And

don't pay off his loans unless you get married. And if you get married, then it's our loans and our money, and we'll do that. But you got you got about 20 minutes, buddy. About 20 minutes. Stop the sales job.

Don't like don't like con artists who are sleeping with the person they're conning. It's a problem, dadgum salesman. Sorry. I think I've had too much coffee, John. Merry Christmas.

Ho ho ho. Oh my gosh. I need to calm down. But, yeah, I just I think about my girls, and they did not thank God. We, you know, thank God that we taught them how to pick, and they picked studs.

So I've got 2 sons in all. They're absolutely incredible, man.

I I yeah. I've got a young daughter and You would kill him. But here's what here's what.

Yeah. I'm sorry. You just got it.

I know. I do. Here's why. This young woman, Jenna, is is astounding. Yeah.

She's a

dead guy.

She's a mechanical engineer. My god. She makes a $100. She's got half a $1,000,000 already put together because her grandpa hooked her up. And she's got this guy that she loves, and the guy is making her acting easy.

Yeah. And so she's asking herself every day, what am I doing wrong? Oh, I have another way I can save this thing.

I I wanna help. I know what you're gonna say, but I'm different. No. You're not.

It's not

you. It's him. It's him. You're worth more than this. That's what I'll say.

You're you're more valuable than this.

He's the dad of a daughter. You're worth

more than this. For you, Kevin. Yeah. So

Brought to you by Yrefi and Preparation h because I got hemorrhoids now. God, it makes me so mad when guys are idiots.

Patrick's in Orlando. Hey, Patrick. What's up?

Hey, guys. So the situation is we're, my wife and I are 67, and we've got 2,800,000 in 4 different mutual funds

Where did it go?

Debt free. Thank you. Thank you. We're debt free and we got

an offer we couldn't refuse on

our business. We closed December 11th. We get 5.75 cash and we hold a note for 5 years for 300. So that brings me to the question because I've got a daughter that lives in Austin, Texas and she and her husband have been married for 20 years and we have a beautiful grandchild and they're saving for a house. They're also debt free.

They're doing everything right. They're both teachers and they want to get a house. And they're saving like crazy, 2 rounds of IVF to get Juliet here, pretty much wiped out their savings. And, they're trying to come back for that, and I'm thinking, you know, December 11th, I collect 5.75. I could probably, you know, give them the money for a pretty nice house in Austin with that 5.75.

Mhmm. And, so that's 1 option.

Do it.

Option 2 would be to get

a really strong just do it.

Yeah. Yeah. I like it. I like it. Can I can I add 1 thing to it?

Yeah.

Okay. I I do want this to be a gift, and I'll teach you a technical thing you need to do. But aside from that, I do want it to be a gift without strings, sort of.

Right.

But I I would sit down in person with them, you and your wife, go to dinner, and make this a big deal. This is not just a drive by breakfast 1 morning coffee. Okay? We're going to a nice restaurant. We're gonna make a production out of this and say, this has nothing to do with the grandkid.

Although, you said it 6 times that it does, but it doesn't. Okay? It shouldn't. It shouldn't. Because you shouldn't give it to them because the grandkids.

You should give it to them because they have been responsible, and you're not bringing harm to them, and you're not enabling bad behavior. Instead, you're accentuating and lifting the positive thing that they have been doing with their life, and it's going to it's gonna change your family tree the rest of the way. So yes, you should do it. And I would say, I'm gonna give this to you with no strings attached. I will tell you I have a favor to ask that you promise to never borrow money again.

Love it. Love it.

And I wouldn't I wouldn't make that it's not a contract, but I would just say, I'm doing this to change my family tree, but if you go screw that up by borrowing money, it's gonna break my heart. And I would do it. Yeah. Now oh, unified estate tax credit. Talk to your tax guy.

You need to use up some of your estate tax exemptions so you don't have gift tax. Don't do this without tax advice. Go get some tax advice, please. This is the Ramsey Show.

Hey. George Campbell here. So you're thinking about buying or selling your home. It's exciting, but there's a lot to think about, and all those decisions can feel overwhelming. Well, here's the good news.

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Cyber forever.

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This is The Ramsey Show. Madeline's in Atlanta. Hi, Madeline. Welcome to The Ramsey Show.

Thank you for having me.

Sure. What's up?

So me and my fiance are just really stressed. Our debt to income ratio is horrible. So we just wanted to know what steps we need to take to go in the right direction to get out of debt.

When are

you getting married?

We haven't planned a date yet.

Then there's not a we.

Right. Okay.

K. There's not legally, morally, ethically, monetarily, we aren't in existence until we are married. And I'm not just making a statement. You you literally have absolutely no rights to the other person's income, legally speaking. Okay?

So, you you can act like you're playing house. You can act like you're married, and it doesn't change the law. The law says that your debt is your debt. Okay? Now, when you're married, that's different.

So I would suggest if you're gonna be a we that you make it a we, and you run down the courthouse this weekend and get married.

Yes, sir.

Okay. How long you all been engaged or dating?

About 3 years engaged.

Time to paint or get off the ladder, kid.

What what do you mean?

I mean, get married.

Oh, okay. Sorry.

We've been almosting a long time.

Yes, sir.

So y'all just how old are you?

I'm 24.

Okay. Cool. So what do you make, and what does he make?

So I make annually 38 k's.

Mhmm. What's he make?

And him annually. Okay. I don't have it totaled, but 26.40 monthly.

Okay. He makes about the same year due then. Okay.

Yeah. Right.

And, and how much debt do you have?

So my debt, about so, really, I only have, the home loan and the

You bought a house together? House?

Yes, sir.

Is it your house, or do you buy it together?

I'm the only 1 that's on a lease.

Oh, it's a lease?

Yeah. So I'm financing mortgage loan.

Honey, that's not a lease.

Oh, man.

Did you buy a house, or are you a tenant?

I I bought a home.

It's a

mortgage in your name. You have a mortgage. There's no lease does not enter into it.

3. Yeah. 243,000.

Okay. And, and so you have a mortgage.

You bought a $240,000 house, and you make $35,000 a year.

And you're 24 years old.

Oh, jeez.

On the promise that he was gonna help her pay, but they're not married. And he's not on the loan.

Correct.

Yeah. This is what I've been talking about before I started talking. Okay. Now the, alright. So let let me what what debt does he have?

He has, in total, including his auto loan, $28,330.

Okay. So here's what I would tell you guys to do. And you're I don't know if you're gonna do it. I can't tell from talking to you.

Will you actually

do it?

You sound terrified.

I kinda don't think I don't know if you're nervous on the radio or if you're just gonna go do whatever you wanna do. Anyway, the, I I if you were my daughter, I would take you 2 knuckleheads to breakfast and bump your heads together and say, you knuckleheads go get married this week because because you're very do you understand how vulnerable you are? This guy walks off. You're screwed, girl. You understand?

You can't pay this house payment.

Okay.

Can you? They qualified you for it, but you can't you can't afford this house if he gets up and leaves. Right?

Right.

Okay. Now I'm assuming your is your relationship good?

It is.

Okay. Then I would say, let's quit acting like we're married and go and get married because it's very, very important that you all do combine everything. And then what we've got is we've got a home mortgage with an $80,000 household income approximately, and he's got some consumer debt that we need to get paid off as quick as we can, and we'll walk you right through the baby steps at that point. You cut up your credit cards. We get his car loan paid off, and, we take all the overtime we can, we quit eating out, we don't go on vacation, and we clean up this mess.

And where you have $20,000 cash in the bank for an emergency fund and no payments but a house payment and a combined income of 80,000, you'd be in pretty good shape. Right?

Yes, sir.

I can

get you there in about a year if you're married. I can't get you there while y'all keep sorta doing this, because it won't work. Because this the the the doing things in the wrong order has left our precious Madeleine here unbelievably vulnerable. You you will be the victim if this thing goes sideways, not him. You'll be the 1 that's in a mess if this thing goes sideways, not him.

And you're you're worth more than this. And so somehow, you talked yourself into or you got talked into or you guys together sat down and had a com a combined lack of brains and decided this was the right way to go and it wasn't. Because it's left you, my daughter, in a real mess, potentially.

Let's say he's not gonna, like, break up with her, but they cut his hours. They he quits his job, or he decides I wanna go to the NBA, and he just quit. Like, it's so exposed.

And what I mean, she doesn't have it's all on her.

Yeah. That's better than me. Like, he's got a free ride now. He got someone else to buy a house that he lives in, and he gets to pay rent.

Yeah. Maybe. Maybe. Yeah. Yeah.

So this is why these numbers don't work. Okay? Alright, guys. There there's a couple of issues. I we gotta stop for a second because we've got just a moment here.

Number 1 will remind you that if you wanna catch the next segment of the show, the 3rd segment of the podcast is always on the Ramsey Network app, and it's completely free. Go download that for free. So the numbers, if you do just a couple of things in the right order, there's less than a 3% chance you'll be at the poverty level. And the right order is before you do anything with your with building a family, you graduate from school, high school. K?

You do not live together before married. If you don't live together before married and don't have children before married, so you do it in the it's called the it's called the order, The poverty poverty order. Okay? So you graduate from high school, get married before living together and before having children, you have less than a 5% chance of being at the poverty level. That's the national statistics.

Almost all of our poverty occurs when you do those things in the wrong order. And you're a 17 year old with a baby and he takes off because we got pregnant before marriage, and so on and so on and so on. And I'm not picking on anybody. I'm just saying, if I could sit down with a 14 year old and say, hey, you have less than a 5% chance of poverty level if you'll just do these 3 or 4 things in the right order. You set yourself up for prosperity.

You want to add to this and get it down to almost 0 chance? Graduate from a 4 year degree than in a usable degree field. You want to add further to that? Do all of that with no debt. If you just do a couple of little things like that, you're down to less than a 1% chance you're gonna be at the poverty level.

These are controllable variables in your life. But instead, you just buy a house with somebody you're not married to. This is The Ramsey Show.

Hey, you're still here? What are you doing? You do know that the rest of today's show is playing right now over on the Ramsey Network app. Right? All you gotta do to finish the episode is search Ramsey Network in the App Store, Google Play Store, or just click the link in the show notes to download the app for free.

Yep. You heard me right, for free. Then right there on the home screen you can watch the rest of today's show. Bada bing, bada boom. Alright.

I'm getting out of here. Enjoy. We'll see you on the app.