Transcript of Get Your Finances In Order Now So You Can Enjoy Your Life Later

Brought to you by the Every Dollar 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 studios, this is The Ramsey Show. I'm Dave Ramsey. Rachel Cruz, number one best-selling author, host The Rachel Cruz Show. Ramsey personality, my daughter is my co-host today. Phone number is 888-825-5225. Tracy's in Chicago. Hi, Tracy. How are you?

Hi, good.

Good. What's up?

So my husband and I had a few opportunities pop up that we never thought would line up and happen, that we were able to move closer to our family. It was something we were really excited about, the The hardest thing with it was we have a small business that we are in the process of selling. We have never lived by credit card debt. With this business, it involved purchasing inventory with a credit card, and Now with the selling of this business, we know we're going to be left with that credit card bill, but not the income from the business. We're at a really nerve-wracking stuck point.

Are you getting money for the business when you sell the business?

We are getting a small amount. Because of the distance we were moving, we had to sell it quicker. Then we probably could have got a better price if the sale could have went longer. That money is absolutely being put towards this. Then we are financing some of it for that person as well.

What are the numbers? How much are you getting for the business, and then how much do you end up in credit card debt?

We have currently got 15 grand from it, and then we'll continue to get another 20 grand over the next three years. So it'll be small payments coming in.

How much credit card debt is it?

We have 49 $9,000 that we will have a credit card debt.

Wow. So this business was a real failure.

Yeah, we had just taken it over, so we really didn't have time to start recouping the funds of the initial investment all. Wow.

All right.

So you got 35,000 left in credit card debt that you're going to have to clean up.

Yeah, exactly. What are you going to be making at the new location? What's your new careers?

We will still have income coming in for a few more months that we're hoping to really pour towards that because there is a truck loan with the business as well. We're trying to figure out if it's best to sell the truck or or keep it within it since it's LLC.

No, it's not an LLC. You signed personally for the truck. You signed personally for the credit card debt. I don't care if it's running through an LLC. That's only in your mind. The bank ain't going to sue the LLC. They're going to sue you. You are liable. No, you sell the truck today.

How much underwater are you guys on that, Tracy? Do you know?

From what I've looked at, the loan is around 38k, and then the cash offer estimate would be about 30.

Oh, you're killing me. Okay, it's eight grand in the hole. All right, we got eight grand.

This is the worst business deal I've heard in a while.

Well, it's not like 380,000. It's like 38,000.

Okay, one more time. Then what are you guys going to be doing for a living at the new location?

We both have different careers. We will be bringing in about eight grand a month. We do have everything budgeted, so we would have about 2-3 grand a month to play with out of our budget.

Okay. It's irrelevant- We will take you 10 months to pay this off. It's irrelevant how we got here? You have an $8,000 hole that you're going to have to finance on the truck because you're selling the truck, and you have $35,000 in credit card debt, and you make $8,000 a month and $2,000 a month to go towards debt your debt snowball. How much other debt do you all have?

Only our house.

Oh, good. Are you selling it when you move?

We already sold and bought a new house. Right now, it's just the one house.

Okay. All right, good. We have $43,000 in debt, and we make $100,000 a year, and let's pay it off. Just run the debt snowball on it. Is there something wrong with that?

Are there any good tactics for negotiating with the credit cards to get a lump sum payoff? Because we will most likely still have another 52,000 coming in from the operation of the business before we sell it.

That'll be nice if it does come in to recoup the fact that you had to take this money out of your cash flow in the meantime because you're not going to wait around on that money to come. You're going to go ahead and clear this debt now. No, there's not a tactic. The only way people accept deduct less on the debt that is owed is if they don't think it's going to be paid. The reason they don't think it's going to be paid is if you're not paying it on time. If you want to not pay your payments for six months, yeah, you probably could negotiate with them. But I don't to amend that. You have the money to pay your bill, you should just pay your bill.

Okay.

Okay. Thanks for the call. Open phones at 888. No, this is just So if I see the first call of the show, Dave. Well, it's okay.

People make... Listen, that is life. Everybody is like, Yeah, Dave. Yeah. Listen, that's life, though. That is a situation that happens.

Okay, let me recoup then. For a lot of people. Come back through it for everybody else.

It could have been $38,000 in a car that we get. We get that call.

We get that call all the time. All the time, yes. Here's the thing. When you operate a business, it's supposed to make money. Otherwise, it's what's called a hobby. You don't buy a business that small and borrow $38,000 for a pickup. You used your business purchase as an excuse to buy a truck you wanted. That's what happened, and now it bit you in the butt. You ran up a bunch of credit card debt because you weren't running the business well and it was losing money. You don't get to just go, Oh, it's inconvenient for me to pay that now when I have the money, you pay your bill.

Yes. No, I totally agree with that.

Sorry if I'm chipping on it, but that's just it.

But they had the opportunity to move close to family, and so that decision is what caused them to sell the business.

They had Let me just say what happened. They went way too fast on the whole thing.

I agree. That's a great lesson, yes.

On both things, the purchase of the business and the move to family. If they'd have slowed down, sold the business for more money, they could have limited the damage they did when they didn't slow down and buy the your business carefully. But now it's just like, We did this and we just go do stuff. That's the stuff that will bite your freaking wallet in half, is you just start jumping around on stuff. It's slow down.

Well, and it's the urgency. It's what we talk about even with this analogy, but people that invest in real estate, for instance, and they have so much. What happened to you? You have so much, and then you get in trouble, and then you end up selling for less. The urgency You can see on anything, right? You could do real estate business.

I've often said this about me, and I'll say it about others as well, is right after I get desperate, I get stupid. That's what you're talking about. Once you paint yourself in the corner and you realize you're going to get pain on your feet, then you get silly and you start ice-skating in the paint. I mean, it's nuts. Yeah.

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There's a lot of negative, hopeless messages out there, but you have more control than you think you do. And this year, it's time to take back your money, starting with our free Every Dollar Live stream tomorrow night, Thursday night. It's going to be hosted by me and Jade, and we're going to give you the clarity you need to finally get ahead with money in the middle of the noise and the chaos. And we're going to give away $20,000 cash that night. All you have to do is to enter the giveaway or to enter the Sign up for the free live stream. It's free, and you're automatically signed up for the giveaway. Register right now by going to everydollar. Com/livestream. Of course, we'll be announcing the winners of the There's $10,000, $2,000 winners. I'll go ahead and spoil our alert during the live stream. So again, everydollar. Com/livestream tomorrow night, Thursday night. For those of you out there, depending on when you're picking this up, right? And we'd love to have you. It's completely free, everydollar. Com/livestream. And, Rachel, we got about 2,500 people going to be on campus in the Ramsey Events Center. It is completely sold out.

You guys, the rest of you, John and you and George and Ken and whoever, are all going to be answering questions for the live audience before we go to the livestream.

That's right. We will not be on the livestream, but we will be hanging out with everybody that's here in person, which will be so fun. These events are always great. It's always a great way to kick off the new year, especially with people with their money goals and everything they have that they're looking forward to. So, yeah, that'll be fine.

You get about 45 minutes of Q&A if you're on campus for that with Deloney and Rachel, and Ken, and George, and then Jade and I will be doing the actual live stream in the second portion of it. So wherever you are, make sure you join us. It's going to be an incredible event, and I promise you will leave with some actionable, doable things and some real hope in the middle of all the hopeless messages that are out there. John is in Chicago. Hi, John. How are you? Good, guys. How are you? I know. Better than I deserve. What's up?

I'm just wondering if you guys be able to give me some clarity here. Another parent plus loan question for you. Back when I was 18, both my parents took out a parent plus loan for me to go to school. And during this whole time, my dad just kept on saying, Hey, don't worry about this loan. Don't worry about this loan. He even brought up staying home, but he wanted me to get the full college experience at the dorms. And fast forward to now, my mom, my dad's no longer with us. My mom is now expecting me to pay everything back in full when I've organized my life to where I would not have to do that. I have been paying this loan for a while now. Why? Because I felt obligated. Why? Kind of guilty. Why? Kind of guilty.

I thought you weren't obligated.

That's the thing. They needed some help. They came into some financial issues. My dad got sick and couldn't work anymore. Eventually, that illness took his life.

I'm sorry. Okay, so what do you make, John?

My household income, because I'm married, is 221.

And what is the parent plus one? What's the balance on?

Right now, it's at 104,000.

Oh, wow. Wow. It's no mine or puppy.

No.

Does your mom have the money?

That's the thing, Dave. My dad had a really big life insurance thing. I think it was 200 or 250. I brought this up how both of them promised to take care of this. My mom has got amnesia about it now, but she decided to spend all that, paid for my sister's wedding, redid her entire house, paid off her car, did all these things, and still expecting me to do all this. So I don't actually know.

So how does she... If she used all that money, how is she surviving?

Well, she has her own job. She's working.

What does she make? She does work.

Last time, I knew it was about 120, and that was probably five or so years ago. I know last year, at the beginning of last year, she She got really sick. We did almost lose her to acute kidney failure.

But- John, how old are you?

I'm 34. How old is she?

She is almost 60.

It sounds like you all are disconnected.

In 12 years, right? Did you graduate '22?

Yeah. Yeah. Or '20.

Yeah. 21.

Yes. This has been long enough.

That's what I was going to say. This has been over a decade, right? Yeah, exactly. Of you paying it. And how often do you guys talk? When's the last time you brought this up to her?

The last time I brought this up, it was actually a three-way call because it turns out she consolidated this whole thing, and I was actually paying my sister's student loans as well.

Oh my gosh.

And I didn't even dive into that until my wife, bless her heart, she kept pushing me like, No, look at this, look at this. And I was paying that, and I was like, Hey, you guys need to pay this. I ended up paying almost two grand worth of her student loans, and all this has been combined together now.

Is the $104 include your sister's?

No, that's just mine.

Yeah, it's like 138. And so is she asking your sister to pay hers?

She did, but my sister just isn't paying it. She's also living there at my mom with her husband, my sister's husband, that is, my brother-in-law.

Yeah, you have a lot of feelings about it. You're You're not real happy with your mom in general, aside from this. I mean, you made several derogatory statements, aside from this issue.

Yeah. I've talked about these things with her to try to get through it, but it always is just like, Well, you're the one who's the man. You have to be responsible. She even at one point said, Well, she's your sister and your only sister. You should just take care of that. I don't know. I've been a dormant, I'll be honest with it, because I just.

I think you're over there. Well, I guess you got two choices, don't you? Yeah. Let's just talk through what happens with either one. One is you don't pay it. Say, Mom, you and dad promise to pay it, and you make enough money to pay this. Sister's not paying hers. I'm not paying mine, and you guys promise to pay it. I know you forgot about it, but you did. I'm sorry, but that's what we're going to do, and I'm not paying it anymore. That's one option, right? Yeah. The other option is, Shut up and pay it.

Then that's not really an option for me because my wife, we just went through the financial piece. We've paid off over 120 grand worth of our own debt.

Then you know what's going to happen when you cut this off, right?

Yeah. I feel like I have a choice between my mom and my wife, and I got to choose my wife. That's how it feels.

Well, no, that's not true. That's not fair of your wife. Your wife should be participating in this decision. She's made her voice clear that she doesn't think this is right. I agree with her. It's not right. You agree with her. It's not right. But now you've got to decide because 100% chance, when you do this, it ends your relationship with your mother and your sister.

Yeah, exactly. I don't want my four kids to not have their grandma.

That's That's up to their grandma. That's not up to you.

Okay.

Mom, you're more than welcome here. I'm not angry with you. We'd love to have you for Thanksgiving. Love to have you see the kids. Love to have a relationship with you. But I'm not going to be paying this. My wife and I are not okay with the fact that the money was wasted on one side. You paid everybody's stuff except this after you and dad promised to pay this, and you make enough money to pay it. Now, I got to tell you, if she was a starving widow or something, but that's not what you've outlined here, okay? Then I might change my tune if I were you, and I might talk to your wife about that.

I don't like the unhealthy unbalance of putting everything on him, especially his sister. That's not fair.

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Tiffany is in St. Louis. Hi, Tiffany. How are you? Good. How are you? Better than I deserve. What's up?

My husband and I recently split, and I filed for divorce. I'm sorry. He was having an affair. We have a bunch of debt, and he's currently not helping me. He was fired from his job. I live on a very small income, and I need to know how to navigate that debt.

What was he making at his old job?

Sixty.

Why was he fired?

He won't tell me the truth, but I think he was on his phone and driving a truck.

Oh, okay. All right. Because he That doesn't tell the truth a lot. That's a pattern.

He's that's accurate.

Okay. What do you make?

$24. Okay.

How much debt do you all have?

$20,000.

On what?

Car, credit cards.

That's about it. How much on the car?

Ten thousand.

What's the car worth?

Probably close to $10,000. Okay.

You're driving it or is he- His car, yeah.

His car is it.

He took the car. Good. Okay.

Is it solely in his name, Tiffany? No. Okay. Yeah. No. Both are on it. Okay.

All right. There's 10 grand in credit card debt, really, because… Okay, so You filed for divorce. That means you've actually seen an attorney, correct?

Yes. Okay.

First and foremost, let's step back from the $20,000 in debt and say, Okay, Tiffany is probably going to get a whole different career to have a whole different life.

Okay.

Because Tiffany can't do well in Saint Louis, Missouri on $24,000. Agreed?

Agreed.

Okay. What do you do?

Right now, I work at a retail store.

How old are you? I'm 51. Okay. What are you planning to do? What's your new life going to be, your new career? Because I'm so excited for this new life for you.

I don't know. I've always wanted to be a nurse, but I'm 51, and going back to school would be crazy.

No, it wouldn't be crazy at all. A matter of fact, nurse is a great, great idea. I want you to begin to think about those things. Then what that does is it says, Okay, let's pretend we're five years from today and you're making $85,000 a year as a nurse.

Right.

I like that plan. Yes. Now, then how much does this $10,000 car or this $10,000 credit card matter? It doesn't matter much. Right. Okay. What I'm trying to do is to take away the stress of it, because right now on all the other things, including your broken heart, heaped on top of that is the immediacy of this that's causing the stress. Is that fair?

Yes.

Okay.

How much is the bill each month for the credit card?

On the credit cards?

Okay, so let's redo the credit cards. The credit cards are 20. I'm sorry. The car is 10.

Oh, I misunderstood. Okay.

No, I did it wrong. I misspoke.

Oh, okay.

And he's supposed to give me half, which he's not because he Currently, whatever money he gets is giving to somebody else. So a total of, I believe I pay 600 a month for everything. Yeah. Okay.

All right. So here's the first thing. The first thing you do is you call your lawyer and you have him her or him get in touch with the other lawyer and say, We're going to smack this guy. He needs to start paying his half. If not, we're going to drag his butt before the judge, and the judge is going to start immediately. Because when this settles at most, you get half of the debt.

Right.

Okay. What I would recommend is you take the car and sell it.

Right.

Then that gets rid of a bunch of your half of the debt. Then you would He only have $5,000 in credit card debt, and he would be responsible for $10,000.

Right.

If you split this down the middle and he took $15,000 of credit card and you took five of credit card in the car and sold the car, that's what would happen. I like that plan.

Will there be anything in the divorce, Tiffany? No, there's no money in there. Assets or anything?

He has 401k. Oh, he does? How much is in his 401k?

He has 60.

60? Oh, good. Yes. Well, 30 of that's yours, okay.

That's true, but I believe at this point, he is trying to cash it out.

Well, I mean, let's have the judge stop this young man. This is illegal.

I did. I called my attorney and I said, I think he's trying to cash it out, and so I'm waiting to hear back from him.

Yeah, and he's not paying these bills. Here's the thing. Your husband thinks he can just walk around and do these things, but the judge is going to teach him how this really works.

Right.

Okay. Long term, I mean, long term being six months from now, the wrinkles will be ironed out of this as a part of the divorce. Now, you're going to end up with some debt, but you're going to need more money to live now and in the future to become a nurse. You really got to start working on your career. I would say 60% of my answer to your question is, let's get you making more money now and in the future.

Do you have kids, Tiffany, at home?

No, they're grown. They are here, though, living with me, but they help.

Okay. They're not a problem. They're an addition. No. Okay, good. All right. You guys don't own a home? No. Okay. All right, good. I think you get on your attorney and you start figuring out what Tiffany is going to be in this next chapter. In the short term, what can I do to increase my income substantially while I pursue the idea of what it's going to take for me to become a nurse long term.

Right.

Okay. But you can't just keep working at 24k, and this will work out okay. If you had no debt, you'd still be in a problem.

Right.

Okay. That's what my point is. This is not a pile of debt. You can actually get through this. But I would just not pay any of it right Now, if he's not paying it, don't pay it. It's not the end of the world. They're not going to do anything. What are they going to do? Yell? We got plenty of yelling going on this story already.

They repo the car. He has it.

Yeah. Let them pick up the car. I mean, let Junior figure out how he's going to walk to nothing, walk to see his girlfriend or whatever, right? I wouldn't pay a dime on any of this until you get the attorney straightened out and as a part of the mediation process.

I would take- Or keep the receipts of what you have and let that go against what you owe, too.

Yeah, but I don't think it... It doesn't serve any purpose. Right now, you don't have enough money to pay all these bills or a good portion of these bills, even, and live. I want you to live first, food, shelter, clothing, transportation, and If you have some money left over, we can talk about you paying some of it after you clear that with your attorney. But just trying to carry it because he won't? No, don't think so. I'm going to let this come down on his head, too. Just let the weight build up on the whole thing. I think it'll be good for both of you. I'm sorry. Sorry you're going through this. What a nasty situation. Frank's in Houston. Hey, Frank, what's up?

Hey, Dave. Thank you for taking my call today.

Sure. What's up?

Well, my wife and I had a question for you because we've been working off on paying off our debt. And currently, our mortgage is I get a little over $32,000. I do have the little credit card debt. I have a personal debt of 6,000, and from my business, it's about 1,400. So I try to keep it as low as I can. I had a really amazing year last year, and I'm so grateful that we've gotten to this point, whether we can ask this question, whether I should just pay everything off.

Why wouldn't you?

With my emergency fund and everything, I have about $87,000 in liquid cash. Okay.

If you wrote a check today, you'd have $40,000, right? Yes. Why wouldn't you do that?

And I'd be done. Of course you'd do that. I was going to wait till my birthday. I thought that would be a good time to do it.

Well, it's called an early birthday present.

Happy birthday, Frank.

You are too old to wait till your birthday. You need to do it now and say, Happy birthday. Just wrap up all the receipts and open them again at your birthday and go, Whoopie. That is so funny. Let's walk out in the backyard.

Go buy a nice dinner on your birthday, Frank.

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Dave, we hear a lot of We get success stories. We get a lot of problem calls on the show. That's why we're here to help if people have a problem. But we'll also get success stories. And I feel like in the lobby, we always get fun tidbits of people who are like, Hey, we're on Baby Step 7, or, We just paid off our house in October. You get these little tidbits of success.

We go out at the commercial breaks and take pictures and talk to people. That's what she's talking about.

Yes. And we just had one. A sweet, kind young lady was talking about that she was going to go to film school and take out all these loans and then I binged some of our stuff.

Her teacher said, Don't do it. The teacher is a hero in the story.

Yes, and said, Hey, there's a different way. She said, Oh my gosh. Don't do that.

She said, Oh, my gosh. Watch these Dave Ramsey things.

She said, You know, three weeks before, I decided not to go, and I wanted to be a financial advisor, and I totally changed the course. We were just talking in the break after we met her. It's one of those decisions in life that everyone gets to make. Whether you're on the car- She was minutes away. Yeah, from doing something different.

From a decade-long problem. Yeah. Her teacher, way to go teacher, hello. Don't you know teachers change people's lives? That's right. Said, Don't do that. Go watch these videos. Then she went down the rabbit hole on the Ramsey videos because there's like 80 million of them out there. If you go down that hole, you may never get out, Alice. I'm just saying the Chesa cat is in there. It's there.

Yeah, but when you're standing on a car lot about to sign up for a loan, whatever it is, you get a moment in your life. You're like, Which road am I going to take? I love hearing those stories.

It's beautiful. One more time, we get to say, Salute to teachers.

Yes.

Amen. Teachers, one little conversation like that, took a decade off that girl's life. It's pretty incredible. Yeah. Awesome. Good stuff. All right. Derek is in Tampa. Hi, Derek. How are you?

Living and giving like no one else.

Love it, brother. I'm going to call, guys. Love it. How can we help?

My wife and I are baby steps millionaires. We are invested in the four mutual funds, growth, growth and income, aggressive growth, and international. Every year on December 29th, I rebalance those investments so that they're even to start the new It's a loss.

Okay.

Am I doing that right?

There's nothing wrong with that.

Do I do it more often?

No. I think once a year is more than enough. You're a detailed dude for sure. But it doesn't harm anything. I don't rebalance mine unless I look up and they're way out of balance. If I looked up and saw 70 20% was in one thing or something, then I was going, Whoa, that's a little heavy over there. I need to reset that. But 27% down to 25%, no, I don't do that. I don't fool with that. I just don't want to fool. But I'm not as detailed a person as you are. I'm more big picture person.

I'm a data engineer, so yes, I am.

It gives you peace to do that. It would cause me an ulcer to have to do that.

I can see the numbers move the next year, and it's more exciting for me.

That's fun. That part from a math nerd, I like that part. I like saying, Oh, look at that. Now it's out of balance again.

Do you see a consistent trend, Eric? Because you're deep in it. The fact that you've been looking at it every year, do you see Do you see certain ones in balance over different ones each year?

Let me give a guess for your answer. International. The international has come up short for the last eight years.

It just started taking off in the small cup. Yes, what you're saying is correct. Yeah, I see them have been tied together.

Yeah.

Okay.

So interesting.

Very good. We almost redid our suggestion after Five years, about five or six years ago, I went down the rabbit hole with our smart investor pro, who's a friend of mine, and he and I are math riddle nuts. We pulled up a whole bunch of hypotheticals of what if you went 20 years? Because the International has underperformed the other four categories substantially over a long period of time. It's the worst of the four. You've experienced that. That's why it was easy to guess. I was thinking about just pulling it out. But what we figured What we got was that it's offsetting because it runs at the inverse of some of the others. When we ran the hypotheticals without it, we didn't make as much money, which was weird because of stupid things underperforming. But it was almost like a math riddle, like I said. But anyway, we ended up leaving it in because the hypotheticals that we ran out, ran it out two or three different ways over two or three different age groups and so forth. It just didn't make... It made more sense to leave it. But you rebalance it does help offset the fact that the stupid Good thing has had a really lousy decade.

Yeah.

Yeah. I agree. Very cool, man. How old are you?

53, and my wife, 52.

Yeah, and what's your net worth? 1.

3 I'm going to give you a second, 1. 3 in our retirement. I got a tricky answer for you. Our house is worth about six, but we're almost done with an addition that 150 grand we're paying for in cash.

Okay. All right. You got You had about $2 million net worth of 52. Did you inherit any money?

No. All us.

All right. Way to go, guy. Way to go, man. Thank you. What do you tell people? How did you do that? What was the trick? Did you make a pile of money, or are you just smart? How did you do it?

We don't go into debt. People think we're crazy, but we do not go into debt. We moved from a three bedroom house to a two bedroom house and been here eight years saving to do this, and people think we're crazy. But we don't go into debt, and we see the benefits from it tremendously.

Yeah. And what's your household income?

My wife retired, 130. Okay. She was a special needs teacher.

And she retired at 50.

She retired at 48. She's doing some side jobs just to- Because you don't have to work if you got $2 million.

Yeah, I got it. Okay. Proud of you all, man.

Well done, Derek.

Way to go, Derek. Thank you, guys. Thanks for letting us interview you, too. Wow. Very cool. So if you don't know what rebalancing is, guys, we I teach people to put a fourth of your income in growth, a fourth in growth and income, a fourth in international, which we were talking about was being the one that was sucking wind, and a fourth in aggressive growth when you're doing your 401k. If one of them grows substantially more than another during the year, in his case, he does it once a year, sometimes people reset it to a fourth at the end of the year. You might get to the end of the year and one of them has 32% and one of them has 18%, because one of them didn't grow much and the other one took off. What he's doing is he's smoothing it out each year and going back to 25%, moving them around inside the 401k. It doesn't cost anything to do it. Then it restarts, and Then his contributions are still at a fourth. Then he gets to look at it again at the end of the year because he's a data guy and he likes watching it happen and so forth.

That's a cool thing. That's what rebalancing is, resetting it to a fourth each, 25% each, because that's our portfolio mix that Rachel and I use both. Rachel and Winston, Dave and Sharon, it's what we've suggested here for 30 years. It's what all of my retirement is set up on. But mine is not sitting at 25, 25, 25 because I don't rebalance as often as he does. Again, because I'm just not that into the details. I don't care. It's just a big old pile of money. That's all I'm worried about, right? I'm that guy. But it's cool that he's doing that. Especially if you like all the nerdy math stuff, which I actually do. I probably would enjoy doing it because I enjoy that part of it.

I like to see the trends and the patterns we're talking about over time, over a decade, and seeing, okay, which ones are continuing to not perform as much or as well as others.

Yeah. That's what we teach folks to do. What that does is each mutual fund has 90 to 200 stocks in it. If you've got a growth fund that has 90 to 200, a growth and income that has 90 to 200, an international that has 90 to 200, and an aggressive growth that has 90 to 200. So you've then got somewhere between 4 and 800 stocks, roughly, except for the overlap, that you're invested across. And that's a lot of safety because the chances of all of those as a group going down over an extended period of time is really close to zero. That's called diversification. When you spread it around, it's diversification. It's a big financial word. Sounds like Charlie Brown's teacher. But all that means is spread your money around. Money is like manure. It's better if it's spread, it grows things. Spread it around. Don't put it all in one thing. When you put it all in one thing, you increase your risk. If you buy Apple stock with a million dollars, or you put it in 800 different stocks with a million dollars, the safety factor is way different, even though Apple is pretty stinking cool and incredible and stable.

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Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. Rachel Cruz, Ramsey personality, and my daughter is my co-host today. Stacey's with us in Baton Rouge. Hi, Stacey. How are you?

Hi, Dave. I'm doing great. First-time caller, but I'm a second-generation Ramsey family, and I'm so thankful that you took my call.

Well, thank you. A financial peace, baby. All right. How can we help?

I'll never forget cutting my parents' credit cards at eight years old. There you go.

What a memory. That's awesome.

How can we help?

Well, we are doing pretty well. We're at our 30s, and we made the decision whenever I got pregnant with my third baby to put my career on hold and be a full-time mom and take care of our little side and do that whole thing, which has been really incredible. We've done that for about a year. Neat. But before I did that, I was volunteering and providing services for our local parish. And since I've done that, that has picked up significantly. I'm just curious, and I can go into more detail, but should I be tiving less because I'm giving more in other ways?

The overall answer is it doesn't matter because giving is giving. And there's not an angry God standing up there with a calculator that's saying, I can't bless you because you missed this by $4. Okay? The whole point of the tithe is to create a giving heart and a rhythm of giving in your life, not to create a burdensome rule. Okay? That's the whole point. Okay. So once we've said that, then the answer could be whatever you want to do, right? The technical mathematical answer is no, because the tithe is based on a scripture in Deuteronomy and a scripture in Malachi and a scripture in two or three other places. And then it's reinforced by Jesus in the New Testament. For those of us that are evangelical Christians, and you said perish, so you're probably Catholic, right?

Yes, sir. Okay.

You're reading through the scriptures and saying, Okay, what's God's love letter to me, my dad's love letter, saying that it's a good way for me to live. My heavenly Father is crazy about me. He wants me to win. He wants to turn me into a generous person. Okay. That's the overarching thing we want to do. Now, having said that, then the technical nitsy thing that I would go on, because I'm a math nerd, not a pharisee, is just that the tithe says to tithe on your net increase, which would be the money that you make. If you run a business, your profits, not your gross. If you're a wage earner, it would be your wages. You can argue about whether net increases before or after taxes. There's lots of good teachings on either side of that. I tithe before taxes, just so when I get to heaven, if I'm wrong, I'm on the good side. But it's just funny to me. I always give more than a tithe anyway, financially. I don't reduce it by the amount of volunteer hours. I'm going to charge God $20 an hour for this volunteer out of my tithe.

I don't do that. It's okay if you do, but instead, what I would do is just say, Hey, I'm putting a lot over here, and so I'm going to put a little less over here. God's not mad about this. He's just trying to teach us to be generous children.

Originally, whenever I started… First of all, I love your take because I do think that by doing what I've been doing, the service I'm providing, I'm attending church more because it's an in-masse service. I'm closer, literally, integratively to God than I've ever been.

You're getting more out of it than you're giving, Certainly.

They originally offered to pay me. They pay the other people who do this. I just said no because I had a job. Well, so do I offer to now get paid?

It's up to you. It doesn't matter. Okay? Whatever you want to do. You can't out give God. So if you want to give more money or you want to give more time or both, it's okay.

And don't feel guilty if you decide, Hey, this is turning into a part-time job. And so if everyone around me in the same position gets paid and they've offered it and I take a paycheck from them, that's great.

Or if you're like- Or if I don't take a paycheck and I reduce my tithe by that much since I've been offered a paycheck. That's a whole other wrinkle in the discussion. You can add that. But you can tell there's no guilt trip on our end.

Yeah, I would just trust the spirit, Stacey, honestly. I know that's such a fickle answer sometimes, but what does your gut say? Inside feels right. I think that there's a level of that that's okay.

That's the Holy spirit talking to you. If you think God's telling you to do it, for sure, do it. Don't do what Dave said.

If you feel convicted one way or the other, you may have a different story than someone else in your exact situation over here because they are leaning somewhere else of how they're feeling. I don't know. It's not a legalistic thing by any means, but I think whatever feels right to you. Again, I think it's the selflessness versus the selfishness is one of the gifts in giving. There is something about that selflessness that's beautiful. However, that is- That happens when you're giving your time or your money. Yes, all of it. The giving and the serving, you're creating that in you already.

Yeah, I think you're a neat lady. Very cool. Proud of you.

Very good stuff.

I think you're pretty neat, too. Well, very good stuff. There's just no way you can mess up generosity, okay? No. We use tithing as a baseline, and then certainly for many many years have gone way beyond the tithing.

Well, and that's Baby Step Seven, live and give like no one else. Give outrageous. And so once you're there- And as you're already finding the most fun you're ever going to have with money is giving.

Yeah, absolutely. My husband is an engineer, and he's fickle. I think maybe that's why I like to get the- He wanted a rule.

He wants a formula.

He wants a formula.

His rule was that we do the math, of course, and take what they would be paying us, withdraw that, carry the one, and that's how much we're going to give because we're giving less regardless, because we're making less. I'm not working.

You're only giving on your income. Yeah, you only give on your income. Then he could just multiply his flow formula He comes two and he'd be okay. It's all right. It doesn't matter. That's the point. But the technical answer is the tithe. Evangelicals particularly teach Stacey And depending on which parish I land in, which priest I'm talking to, I don't know which- Well, type is 10th.

You can't- I know, but Catholic- 5% the 10th.

Our friend Pat Lincione is a raving Catholic. He's one of my favorites. And he says, I'm an evangelical Catholic, which what he means is he believes the Bible. That's what he means. And so we love Pat. It's a wonderful... We've had great discussions around these kinds of things in those settings.

Yeah, and the whole The main of it is taking care of your local church, and hopefully, they are the ones taking care of the city, the town you are. It's an extension.

The widows and the orphans.

It is. It's an extension.

And the priests, which is the pastors or literally the priests. Yeah. But make sure your pastors are being taken care of and the widows and the orphans, the single moms are being taken care of in your church, and you got to be tithing in your local church. That's an evangelical teaching that's been around way longer than I have.

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Well, buying or selling a home is a big deal, but it's starting to happen. Man, these interest rates are down. They're getting down next to 5% on the 15-year fixed, and the market's starting to move. The grass is going to get green in your neighborhood, and here we go, baby. Game on. Going to happen. Ramsey Trusted program is the only way to find a top agent you can trust that we have gone through. We've checked them out. They're high octane, high protein, and we do not put Ramsey Trusted on an agent unless they are a big-time real estate agent. So find a local Ramsey Trusted real estate for free at ramsey Trust at ramsey solutions. Com/agent, or click the link in the show notes. Jolene is with us in Toronto. Hi, Jolene. How are you?

Hi, Dave. Thank you so much for taking my call.

Sure. What's up?

Okay. I am single. I have no dependents, no heirs. I'm completely debt-free. And by October, 2028, I will have owned my home outright. I've spent my entire adult life intentionally saving and working to be 100 % debt free. I am a planner, so I think about when I want to downsize, and I'm pretty much stuck between two options. I could buy a condo with cash and I'm struggling with HOA fees, which could equate to 18 to $30,000 a year and likely rising, or I could rent and knowingly deplete my savings over time. So since I don't have anyone to leave money to and I plan to spend my money during my lifetime, how do I think about the choice between owning a condo with a really high HOA fee versus renting and spending down my assets?

Very interesting. Okay.

It's a high HOA fee.

Why is it mandatory that the condo have a high HOA fee? Why are we stuck with that as the only option?

It's That's not the only option.

Why don't we get a condo that doesn't have a high HOA fee? I think about when preservation- I'm sorry?

I think about when preservation no longer matters, how do I optimize?

Yeah, I understand. But I'm just saying, anytime I have two options and neither one of them are fun, it means I don't have enough options is what I mean. That's why I asked about why don't we find a condo with a low HOA fee? Because HOA fees, let's I'll assume for a second, it's not always true, it's not true often enough, that the HO is managed accurately, then the HOA fee should be covering actual costs of operating the condo, which would be roof replacement, parking lot management, maintenance issues, taxes, insurance on the exterior shelves. You carry your own insurance on the interior shelves, I assume in Canada, like we in the States and so on.

Taxes would be additional. Yeah. Taxes are additional. An additional.

Okay. The only way an HOA fee would skyrocket is mismanagement or maintenance skyrocketed, or one of the costs associated with operating the condo skyrocketed, right? Right. Or a luxury condo that has- Here's the thing. If you rented a condo in that exact same thing and the HOA fee was accurate, your rent would cover the HOA fee. So you're paying the HOA fee either way.

Correct. I guess the question comes down to philosophically, would I own outright if I could pay for it outright, or do I revert back to renting?

Yes, I would own outright. And the reason is this, you're stabilizing the largest line item in your budget into old age? Because rent- But then my largest asset is trapped into a home. Yeah, so what? You're living in it.

I die with all my assets trapped into a home instead of depleting my savings.

You want to rent and travel and spend it all?

Yeah.

Okay. I have no errors. It's not evil to do that. The problem is you don't sound that old. How old are you? 49. Yeah, I didn't think you were that old. Okay. We're talking about a 40-year plan. We're talking about a 40-year plan here. You know how much rent is going to go up in 40 years? Yeah. That scares the crap out of me.

It's the unknown. I think that is a little nerve-wracking for your home, right? Yeah. I think you're- unknown for your shelter, for your place of protection and where you're going to be. You know what I mean? There's something about having no risk in that that gives peace that if you want to go travel and do other things, it may not be as big and luxurious because to your point, a lot of your money is tied up in the home. But at least there's this stability of knowing that if you get hurt, something happens to you that your place is paid for. Do you know what I mean? Your home.

What would the condo cost?

If I were to downsize, I would pay it for a cash. So it would basically be the cost of my home or less.

What would it be equal to? How much money would the condo cost?

600 to 800, maybe.

How much do you have in your nest egg total?

I have 815 investments locked. I have my home, which is about 800, and I have A liquid of about 400. So my total net is around 2 million. Okay.

What I would do is buy the condo for cash and ride that for 20 years and then remake this decision.

That's a good idea. If you run out of your money and you're like, I still want to travel, what do I want to do?

You're not going to run out of money in 20 years. Because you're not even going to spend your income that this is creating. Just talking to you, you're not going to spend $200,000 a year on travel. She might. Are you?

Jolene sounds fun.

I haven't traveled. No.

I haven't- What are you going to spend $200,000-Jolene wants to go to travel. What are you going to do to consume $200,000 a year? Because you've never done that in your life.

I think that's the philosophical question of at what point do I stop saving and start living.

Now, How much do you make now, Jolene?

I make between $200,000 and 300 a year.

Are you going to retire anytime soon or are you just going to- I'm so concerned about not having revenue that I don't want to retire. I'm trying to calculate what my house.

I would buy a $600,000 condo. I would pay cash for it, and you'll be sitting on a million to a million and a half dollars making 300K. You can do anything you want for the next 20 years, and you can work as much of that or as little of that as you want. You can slow down a little bit and go travel or go whatever it is. But philosophically, let's say a million and a half is going to create somewhere around $150,000 a year income without touching the nest egg, without consuming it. The goose is going to lay without touching the goose. The goose is going to lay $150,000 nest eggs. Okay? And so- So I should stop saving when my eight If the investment becomes 1.

2 or something?

Whatever. You just run your number out, whatever you want to be. But the point is that you're going to have a hard time consuming all of this money, even if you pay cash for a condo. Because the money is going to be making money almost as fast as you're spending it.

So that said, do we care if it's 30,000 a year in HOA fees or rent then?

Do I need to own? Yes, I would own because it stabilizes because rent goes up every year and it destabilizes this whole freaking plan. You're 49. Think about what rent was when you were nine. I know. I know. That's what you're talking about here. When you're 90, that's what we're talking about. You don't want to be paying rent at 90. This plan sucks. Renting long term is not a good idea because it destabilizes it, because it goes up every year more than the cost of operating the condo does. The condo goes up in value, too. You can always liquidate it and decide to consume the whole deal in your last 25 years if you have the luxury knowing when that is.

I think that's a great plan. I don't think you need to make a decision right now for the next 40 years of your life. Cut that in half. It's so funny because I'm like, She's In one way, I'm like, Oh, she's a little scarcity-minded because she's like, Oh, I don't want any revenue to stop, so I'm going to just work, work, work, work, work. But then in a way, it's a little bit of this like, Oh, yeah, I'll just pay for rent, and it doesn't matter on the other end of the equation. I don't know. I don't know.

I was trying to like- Roll place to splurge.

Yes, that's it. I think that I would agree with that. Have the home, have the peace, that nothing can be taken away from you. It is there. The stability. It is there. When you turn 60, if you hate and you're going on cruises once a month, then you're like, You know what?

I predict you will sell the condo before 60 for one or two or three reasons.

A downside, is what you were saying.

About the time I think I'm going to live in a house till I die, I live too long. So there you go.

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Today's question comes from Aiden in Alabama. My fiancée and I have been practicing budgeting as we prepare for marriage. We're both debt-free except for my house, and once we combine finances, we'll have extra money left each month. She likes shopping, while I like to spend money on golf trips and don't buy many clothes. Would it make sense to set up a separate fund money or separate fund money accounts from our joint account with a set amount deposited each month for us to spend however we want? I worry that when I take a solo trip, I might feel guilty about spending money on things that I enjoy that she doesn't really care about. Yes. Welcome to marriage, Aiden.

Yeah, absolutely.

That's going to happen. Yes, you're going to spend things that she doesn't care about. She's going to spend money on things that you don't care about. But that's why together you decide, Hey, here's how much money a month we're going to spend that we each get to spend. And you get to do it guilt-free. There's There's no worry because it's a set amount. Now, if you go over that amount, then yeah, there's going to be some frustration of, Hey, we said this amount and you're going over it. But that's a whole other discussion.

He's saying, Set up a separate account for fund money only to deposit the money from the budget, the joint budget and the joint account into a fund money account. You could do that, or you could just open up a sinking fund. Just do a sinking fund in every dollar.

But it's separate fund money accounts. She has a fund money account.

She does. It's Fine.

Nothing wrong. Separate checking. It feels like different checking accounts.

Do it all in one account. No, no, no.

It's in the budget. In the budget-Okay, if you get $200 for your fund money, and Winston gets $200 for his fund money, where do you put that money? It's all in her checking.

Okay. But how do you keep up with it's his- Every dollar. Okay, your sinking fund.

No, not a sinking fund. Just when the transaction comes in and I get my nails done, I drag it into the Rachel line item.

Yeah, but what if you don't spend the whole $200 in a month?

Well, that's a bigger discussion of what would you do in any He's saving up for a golf trip. In any category. Well, in that case, yeah, then you do a sinking fund. Okay. Yeah, and just put money aside.

That's what I'm saying. That's the same thing. The only question is whether you just... How do you do the accounting to separate it and keep it separate so that he doesn't feel like he's spending her money or she doesn't feel like he's spending her? You do it with a sinking fund if it goes over the portion of a month, or you could have a separate account just for the trip.

Just for the fund money.

Yeah, that's okay.

I don't know why it feels legalistic. I I feel legal. That feels like separate accounts to me. Okay, all right.

I don't care. I don't do it.

I don't do it. You don't do it. As long as everybody has access to it and you can see in all of that. 100%, yeah. But different line items, because even in different savings, high yield savings, you can have different line items within it, within the actual account. I wonder if you could do it that way, too.

I think a sinking fund in every dollar is a better plan, actually, because you don't get into the spirit of it that's bothering you.

This is my money over here. This is my money.

It has been allocated, too.

It's been allocated, but it starts to feel-Well, let me give you an example that fixes it.

When we first started doing this, you were a little kid, and your mother would play the Southern Bell martyr and spend all of the clothing money on the kids. Of course, I'm buying clothing money for work, right? Period. She ends up with no clothing. I ended up to get her to stop doing that. We were using envelopes for the cash flow. We had a kid's clothing envelope and a Sharon's clothing envelope, and she had to spend the Sharon money on Sharon. No excuse. Because she would spit it all on you all, and I'll just wear the drapes. I'll make something out of the drapes. Scarlett O'Hara, right?

Limited to.

I'll take the drapes down and it'll be okay. There's no reason to be a martyr. We have the money. Sound of Music.

That's Maria on Sound of Music. She took the drapes down from the captain.

They did. They did. They did it in both places. That's where Sound of Music got it. But anyway, still, man. I hear you. The important thing in this whole discussion, Aiden, is that you're not even married and you're already both concentrating on this. That means you're going to win.

Yeah, and there's a little bit of me. I like the exposure. I think it's good practice for yourself to spend money on yourself and let your spouse see it. Because one of the things I might feel guilty spending money on things that you shouldn't join. I'm like, you have to learn about that in marriage. There's a part when you just hide that over here so I don't have to feel guilty. That's where I'm like, run into that. Go straight into that emotion. Let her see what you're spending. Let her be like, I think that was probably stupid and silly or whatever she's going to say to you. Hopefully she won't say that.

I don't understand you spend that much money to put a very small white ball in a very small hole. I don't understand.

Golf. I don't understand that.

I don't understand purses that cost more than a car. These are great discussions to have in there.

I think it's good to face it head-on. You need another gun?

Yes, I do.

Oh, my gosh. As a newly wed couple, I think there's a level of exposure there that's good to live in. She may feel silly about buying something that you don't think, but I think that's good discussion to have. Talk about those things versus avoiding it and putting it in separate account, so you don't have to feel it.

Okay, that's what was tickling your spirit. I see it now. I don't know. He was hiding it over there. He was ducking the emotion.

Yes, I like everything in the lights.

Bring it in the light. Yes, that's good. But the great news in the overall thing is, Aiden, You guys are going to win because the number of people that are smart enough to do what you guys are doing right now and actually have these discussions before marriage, boom, boom, boom. You're going to be huge. You all are going to be amazing. You're going to have a great marriage. You're going to be very wealthy. These are indicators that are just incredible for Way to go. Gillian's in Charlotte. Hey, Gillian, what's up?

Hi, Dave and Rachel.

Hi.

I have a question about paying for college. Cool. I have the answers to all your questions, so do you want to ask me or do you want to start?

What are you asking? Tell me what… First, I need to know the question about how to pay for college now or in the future.

How to navigate the next four years of my life.

Got you. How old are your kiddos and how many?

We have three children. Our daughter graduated from UT in '23, so one down, two to go. She is married, so she's off of our payroll.

Good. Okay, so we got two to deal with.

And they are 17 and 18.

Okay. How did you pay for college for the first one?

Out my nose and around my elbow.

Yeah.

Well, and out of state, Gillian, right? Out of state. Yeah.

You don't have the money for these other two. Is that what you're saying?

Right. But I have seven grand in a 529, but we didn't have that or use any for her college. Got it. She came out. Her degree cost about 208. She had 18,000 in debt, which she's almost got that not done.

What's her degree in?

She went to UT. She went out of state.

That's not 118,000. Just four-year tuition Mission?

Yeah, be 20 something thousand dollars a year.

It's 52 a year. For what? It's 52 per year at UT out of state.

University of Tennessee is 52,000 dollars a year out of state. They don't want you people, apparently. Or they do. They want her money. Because it's $12,000 a year for in-state.

Did she do- They are really good to their in-state.

Tennessee is very good to the Tennessee.

Yeah. Okay. All right, let's move on. We're going to run out of time. Let's move on. We got a 17 and an 18-year-old. They're going in state because you don't have the money. And they're going to a community college for the first two years because you don't have the money.

No. One of them is finishing his first year at the community college, and he's going to Appalachian State.

The other one is- How much is Appalachian State?

This year? Appalachian? I mean, all in. Housing, Room, board, tuition, fees, and books is about 28.

Okay, so here's the thing. The thing that causes people to not be able to pay for college is not college. It's college choice. You choose a college that fits your budget. The The kid works, you take scholarships, you stay in state, and you choose a college that fits your budget, and that's how you pay for college. After the holidays, a lot of people start feeling budget pressure, and it's a wake-up call to get intentional. So listen, don't fall for buy now, pay later, cell phone plans that drag you back into debt. Boost Mobile keeps it simple with no contracts and no nonsense. Keep the phone you already own and pay just 25 bucks a month forever for unlimited data, talk, and text. That's Real long-term value and real peace of mind. So budget like you mean it and go to boostmobile. Com/ramsey today to make the switch. That's boostmobil. Com/ramsey.

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Okay, time to circle back. We have a best, not best selling, that's not right. No, no, no.

I just said it during the break. I said, let's don't.

No, no, no, I'm not talking about that. Okay. You all are right in a family discussion here. But no, we have a documentary, Rachel, that the public knows about, okay? That I can talk about since I own it. It's called Boreowed Future, and it's award-winning, and you can watch it for free. It's talking about the student loan debacle and what's going on. As we did in-depth, detailed research on this ridiculous student loan crisis, and it is ridiculous. There's $1. 8 trillion in student loan debt now. Congress talks about it being bad, and everybody talks about it being bad, but they keep doing it. If it's so bad, you have to forgive it, but you keep making the loans. That's intellectually dishonest. Anyway, all of that is in that documentary, and you can watch it. But the core thing comes down to our last collar. How do you pay for college? If you list out five things that impact whether you can pay for college, the thing that takes up 75% of the space, and the other four take up the 25% of the space, is college choice. Because nothing in our society has a wider spectrum of cost than colleges.

An example being that in-state tuition for the University of Tennessee, I said 12,000. We looked it up during the break, it's 13,000. I missed it. Out-of-state tuition is not 52,000. Out-of-state The tuition is 32,000. But with room and board. But with room and board all in, it was about 50,000. The girl went to school four years, and she had 200,000 out of pocket. That's what the mom said. The mom's numbers were right, but it was all in with room and board and everything else. That's pretty hefty on those numbers. But anyway. You have to ask yourself, what am I getting for what I'm spending? What do you get when you go to a college? You get the college experience, whoop-de-doup-de. You get to say you went to that school, which there's no correlation between what school you go to and what success you have. No piece of research ever has ever said A certain school is more successful than another. None. A lot of people believe it, but it's not true. There's no data to back it up. If you want to go to a super expensive, fancy-pancy school that has a big name on it, and you have the money, it's fine.

I'm not mad at you, but don't tell me that you have a higher probability being successful because there's no data to back up your statement. What are you getting if you get basically the same knowledge base? I've been to the University of North Carolina. I graduated from the University of Tennessee. Both are fine academic institutions. If you graduate from either one of them, we will hire you at Ramsey. Okay?

You When you went to Alabama, you'll have to squeeze through.

Yeah, there you go. That's funny. There's an Alabama lady sitting out here. Bobby's back there. That's questionable about that stuff. But Florida, for sure. But anyway, you see what I'm saying? The point is, if you could pay 13,000 or you can pay 32,000 for the same thing, why would you do that? They're literally 300 miles, 200 miles apart. The only thing that... She's closer to the University of Tennessee than we are in Nashville, where she's calling from. But she had to go across the state line and ding, ding, ding, ding, ding Why would you do that? If you're short on money. Now, if you have the money, that's fine. I've got a friend who sent his kid to Alabama, but he went to Alabama, and he's got plenty of money. And by the way, Alabama has actually really good out-of-state tuition. They like out-of-state people. I can make a real funny comment about that, but I'm not. But anyway, the Just keep moving. But the point is, where you go to school, you only do that if you have the freaking money. In most states now, you can go to a community college free or almost free for the first two years.

So don't spend $76,000 in student loan debt a year to go to Vanderbilt. That's stupid. Now, again, if your mama's rich and she's going to write you a check, I'm okay if you want to go to Vanderbilt.

Or you get a scholarship grant, whatever. Yes.

I'm okay if you want to go to Vanderbilt. If you want to go, I don't care. But don't go in debt to that and tell me you got a bargain. You did not get a bargain. How in the world can children go to school? They go to a school in a place they can afford. You make wise choices based on the value that you're getting for what you're spending. That is huge. Folks, Rachel, you said this in the documentary, and I'll never forget it because I thought it was really wise. You said it's more of a parenting problem than it is a student loan problem.

Yeah, well, because the 18-year-olds, their frontal cortex of their brain isn't even fully formed. I'm like, they're still kids. I mean, yes, they're 18, but they're not.

Somebody's got to look at them and say, No, this is stupid.

They don't know. I do think the repercussions of what happens in your life, because we sit in these chairs every day taking calls from people that have 38,000, 100,000 student loan debt, and they're working their way out.

A hundred and four thousand in a parent plus loan because mom and dad borrowed the money to facilitate the stupidity.

That was in the first hour. Yeah. The 18-year-old doesn't know, doesn't understand the full consequences and repercussions of this decision that they're making at 18. And that's what's so frustrating about it. I'm like, if you're 30- They can't buy fear, but they can borrow 100 grand.

Yes. Seriously.

And if they go and try to get a mortgage or something, I'm like, no, no one would give them that much money, ever.

The banks wouldn't give them that much money. The government wasn't so stupid that it guaranteed it.

Yeah.

That's the thing. So it is. I mean, this is That's the deal. Moms and dad-I think people are waiting. Listen, here's the deal. You go $12,000 a year, you live at home for the first two years, and you go to community college, and then you need $12,000 a year. That's $24,000. You got a degree from an in-state tuition like the University of Tennessee, University of North Carolina. Two years in a community college transfer. Plan your curriculum out to where all the credits transfer and all of it meshes up and works in the syllabus. It's not rocket surgery. If you can't do that, you probably can't graduate from college anyway. You need to do this. Lay out the plan, execute the freaking plan. If you lived at home the entire time, you could do it for $24,000. You can make that driving Uber while you're in school. You can make that delivering pizza, mowing grass while you're in school. Go to Home Depot and buy a leafblower. Rich people are afraid of leaves. They will hire you to blow their leaves, okay? You can do this. You can go to school working if you keep your stinking cost down.

Retail. Work retail, yeah.

You can keep your cost down and get through. You can't work while you're in school. Everybody listening to me right now worked while they were in school, except the three people that said that just now. Seriously, everybody worked. I worked while I was in school like an animal because I had I have money. I didn't even need money. We were so broke, we couldn't pay attention. I went out on the first date with my wife. I had a dollar 17 in my checking account. I mean, come on, people. This is college. What What do you think this is? The Taj Mahal?

Yeah, but what's happened is the debt has been so normalized that you live off of it. You don't have to work because it's all paid for. It's all right there. So it is a- Stinking colleges have a lazy river. No, they don't.

Yes, they do. One does. You can float down the river. No. Yes, it does. With an innertube, just like you're at the park, like you're in Six Flags. I don't think so.

We have been to some campuses and some stuff, and you're like, wow.

You guys have It's lost your minds. It's all financed by state-funded. Guys, choose a school you can afford and get your kid knowledge. The degree is worthless.

If you're a parent-The currency is knowledge.

The currency is knowledge.

In high school. Just replay.

Yeah, knowledge is what matters.

Replay this clip if they're a senior in high school because school choice, it's coming around the corner for these seniors if they haven't already done early acceptance.

Well, you don't have to go just because you got accepted. That's true. I know somebody like that. Welcome back to The Ramsey Show in the Fairwinds Credit Union Studio. Tom is in Seattle. Hey, Tom, welcome to The Ramsey Show.

Hey, Dave. Thanks for taking my call.

Sure. What's up?

Dave, I just need your opinion, if you two would be so kind give it on an upcoming rather sizable purchase I have planned. My 11-month-old pup needs an operation that's going to run about 7,000 bucks. And so my wife and I have mutually decided to cancel our vacation this year, and we're going to get her taken care of. All my friends and neighbors that I've told about this, just look at me and shake their heads as if they don't agree. What do you think? Am I missing something? I cannot see not doing this.

Okay.

I'd say a couple of things, Tom. Do you guys have the 7,000? Yes. Okay. And is the surgery, is there a guarantee at the end of this? No.

There's no guarantee, but the guarantee without it, she will go lame fairly quickly.

Is it a Bulldog?

No.

Okay. No.

She's a Chihuahua mix.

Okay. I was going to say, our George Camel just spent a sizable amount more than, I think, what you're about to spend on his, and his ended up in a wheelchair. His dog really did. Yeah, he's in a wheelchair right now.

We've been picking on George about it. But good-naturedly, we love George, in down. He's fun it. Okay, first thing is, the Ramsey's are unbelievable dog lovers. So my The opinion is skewed. I mean, laughingly, I could say if it was a cat, no way. I'm kidding. But no. That's a joke. But I love my little dog. I walk three miles with her in the morning. The thing I run into with people on this question, and I've had this question over 30 years, several times or something like it, is the first thing is, are we doing this for the animal, and is it going to be in pain? Is this selfish on the human's part? For instance, I know a lady that put her dog through four years of chemo. That was unfair to the dog, in my opinion. Okay? She was doing that because she didn't want to lose the dog. But the poor dog suffered. Okay? That's harsh, as far as I'm concerned. I wouldn't do that to a dog. But I cry every single time like a 10-year-old girl when we put a dog down.

When we put ours down, you cried.

I did. I came over and visited yours the day before Nala went to heaven. Yeah. And all dogs do go to heaven. There's no question. So it's a theological fact. But That's not the question. The thing is, number one is the dog... Are you doing this for you or for the dog? Because I could fall into the category. If I'm not real careful, I don't want to lose my dog. I mean, I love them, and so I'll do anything. But that's not fair to the dog because these are dogs, they're not humans. And so it's a different measure. As far as I'm concerned, you ask our opinion. Anyway, but is $7,000 completely on a one-year-old dog if it fixes it mostly and the dog is not going to be in pain because you are selfish as a human to keep it around. If a dog walks with a limp and hurts the rest of its life because you did this and you didn't have the courage to make a call, that's not fair to the dog. But if the dog is healthy after this and you get 10 good years with the pup or whatever after this because of this, the pup has a great life after that, and you got the $7,000, no, I don't think you're crazy then.

If you got the $7,000, you can on a credit card. Nope, sorry. You couldn't afford the dog.

No, I've got the money, and we're going to do it.

You see what I'm saying, though? But I understand that because it depends on where your neighbor grew up. My wife grew up on the farm, and let me tell you, 100% chance, that dog ain't going to make it. She does not have this. She does not dog crazy like I am, right? So this $7,000, noop, noop, not happening.

I can just tell you. Hey, you all spent a crazy amount on Maggie's hips, your golden retriever.

I did, but I did it in spite of your mother. Okay, did you? Yeah. That dog had 10, 12 good years. She did. She was a great dog. We did spend some money on that dog. Golden Retriever had bad hips. As a pup, we had to do the hips. It was expensive. It was a pain in the butt. But the dog was great. It was one of the best dogs I ever had. Anyway, all that to say, yeah, but- You're not crazy.

Just don't make sure the dog isn't suffering.

As long as you're not being a selfish, immature person and you're doing this and herming the animal. You know what I'm saying? No. This is for all the people that are going to hate me after this. So just get in line. All you cat people get in line right behind the dog people that get in line, behind the credit card people that get in line. It's a long line around the block.

There's a spectrum of what people's threshold is for an animal, a pet, financially. Yeah.

And your mother's is much lower because animals come and go on the farm.

And George, I think, is even past you, Dave. I think our George Campbell is.

George is over our line. Yeah, he's over my line.

George will do anything for those dogs.

Yeah.

So it's where you fall of personal value, where you want to put your money, just make sure you have the money.

And be a kind person that doesn't cause an animal to hurt for your selfish because selfishly weak and can't go through the pain of doing the right thing. That's a lack of courage on the human's part, and that's unfair to the animal. That's inhumane as far as I'm concerned. I see people do that because they're just like, Well, you can't get rid of, whatever. Because we all get so attached to them. Oh, my gosh. I like my dog more than I like a lot of people. I mean, it's really I do. We do get attached to them.

Dave, big dog, small dog.

I like them all. I really do. I like dogs. Jade lost hers a few weeks ago.

I know.

She had him for 12 years or something. Big old Rockweiler. They had to put him down.

They were part of the family.

He couldn't get up one morning. It's awful.

Dad's dog now is a little...

What is Bella? She's a bear dog.

No, she's not a bear dog.

It's legendary. This breed keeps away bears. I think the legend is true because I've not seen a bear since I got her.

I'm pretty Yeah, she's 12 pounds. Just know we all hear, Bella, Bella, Bella, where's Bella? We're like, Dad, she's in the other room. Just go get her. Go get her.

They gave me a hard time. The whole family. The whole family on vacation. This was on vacation.

All vacation, just Bella, Bella.

No, that's not true. It's not true, but yeah, it's funny.

We love our dogs, though.

We are dog people.

But you're not crazy.

You're not crazy. All three Ramsey kids have a dog, and we have a dog, and we love our dogs, and all three of us cry when we put them down. That's the way it is. Unless something really bad happens to you, you're going to outlive them regardless. You better get that as part of the program.

Listen up, guys, because I've got a big question for you.

Where will you be with your money at the end of 2026? Will you be better off, worse, or exactly the same? Believe it or not, you get to choose. Look, I know there's a lot going on that can make you feel powerless over your money, but I want you to hear me. You're more in control than you think. You can turn your finances around.

So let me help you out.

Start your year off with me and Dave Ramsey at our free Every Dollar Livestream event on January eighth. We're cutting through all the lies and all the chaos out there that's keeping you stuck. So you have the clarity you need to finally get ahead. And you could even win $2,000 just for signing up. Listen, another year is going to pass anyway. So decide that this is the year you're going to take that control of your life and your money. Go sign up for the free livestream at everydollars. Com Noelle is in San Antonio.

Hi, Noelle. How are you? Hello, I'm doing good. How are you? Better than I deserve. What's up?

Yes. I currently have a car note that's $1,200. And I'm looking to... At first, I wanted to get a single family home, but now that I've been doing research and Looking into getting wealth, I was thinking on a multifamily home. Okay. I'm just wondering if I'm at a good point in my life to get it right now, or should I wait on it?

You should wait. I should wait? You should get your debts paid off, either get rid of the car or pay the car off. That car payment is out of control.

Is it $1,200 a month, Noel, or the whole note is $1,200?

No, it's $1,200 a month. A month?

How old are you?

I'm 24.

Oh my gosh. How much do you make a year?

Sixty, but I just got a job offering, and they said I could be up in there in the '80s.

What do you owe on this car, sir?

I owe 80.

Eighty?

Yeah.

Trust me, I didn't owe it. Let me, as kindly as I possibly can, say that's insanity.

Yes, it is. Trust me, I did not want to get I got this vehicle.

I got- Yes, you did. You got the vehicle, and you were 24, and you were sober, and you signed the note. So yes, you did want to get it, but yes, you do need to get rid of it.

Yes.

Now.

I tried calling them, trying to see if I could trade it in maybe for something older because my parents basically forced me to get it because they said I should get something reliable since I have two kids. Before this vehicle, I was having a lot of car problems.

Okay. You have a lot of excuses is what you have. You're a 24-year-old man. Your parents don't force you to do anything.

Yeah, there's some struggling. There's definitely putting the blame of the car on other people, Noelle. Just so you hear us, my parents forced me. I had to... These are pretty extreme statements that you didn't have to do any of this, and you could get a reliable car for $10,000.

Yeah. For your two kids. So you need to sell this car. Yeah. You don't need to trade it in on something slightly older. You need a $10,000 car.

How did you get the financing for this, though? If you make 60, how did they finance you an $80,000 car?

Well, first I had traded in an Equinox I had.

Was it negative value rolled over? Yes. Yes, exactly.

And then my grandma helped me cosign it also.

They loaned her the money. Yeah. Your poor grandmother.

Yeah.

Oh, my gosh.

You got to get out of this car.

Oh, man, I'm so scared for her right now. No, I really am. This is not going to go well, sir. What do you think this car is actually worth?

I called today seeing what it's worth, and they said it's about 40.

And you were how far upside down on the Equinox?

I think it was 30, I believe.

Okay. And so this has already lost 10,000, and you bought it how long ago?

I'd say eight months ago.

Oh, my gosh, honey. No, you don't need to be talking about buying any house. You have an extreme car crisis on your hands, and your grandmother is at risk. I'm very afraid for her right now, and I really, really, really want you guys to take six jobs and start paying extra on this car. Pretend like you have $40,000 in credit card debt and you have a $40,000 car debt. Yeah. Yeah, the finance manager at this dealership should be put in jail.

Horrible.

So horrible. They took an old lady and put her on as a cosigner. Yeah, they did.

With a guy making 60 grand, with negative equity.

Along with this guy making 60 grand.

So stupid.

It's not illegal, but it's legalized fraud. This is ridiculous.

At who knows what interest rate.

Yeah, it was 1,200 bucks. Oh, my God. And he makes 60 grand.

So, honey. Yeah. So, Noel, I would be acting like I make 40. And if you get this extra 80, which is amazing, get this car paid off in a year. You have some upside on this, but this needs to be your number one focus.

Yeah, clear the car.

Do not act like you make 80 if you get this job. Clear the car.

For God's sakes, honey, take care of your grandmother by clearing the car. Because it's going to land back in her lap, because it's going to go sideways if you don't straighten it up. So far, your track record on cars is pretty lousy. Don't go back over to that dealership for anything, ever. Just drive by and wave at them.

And go on Kelly Blue Book and just see a private sale. I'm just curious if it's a little bit more. If there's any more relief in it, even a couple of thousand dollars.

There's any way you could sell it for 50 and get a hoop Maybe tell your parents to jump in a creek and start paying off the other 40 or 30 so your grandmother doesn't get screwed over here. Because this thing's going down in value every stinking day you own it, and it's adding to the problem, so you need to get rid of it. But you're going to have to cover the difference somewhere, and I don't know how. Your poor grandmother. Oh, I'm so pissed right now at the dealer, at the mom and dad. I'm sad for the grandmother, and I'm sad for Noelle, and yet they all were adults and all made decisions. Wow. See, grandmothers, attention grandmothers. 100% of the time you cosign, you're stupid. 100. Oh, he's a good little boy. He'll pay it. Honey, he's dumber than a rock. He can't pay the bill. Not you, Noel.

No, I'm serious. You're just talking in general.

You cannot pay the freaking bill. I don't care how sweet he is. I don't care if he's out of your DNA. He cannot pay the bill. That's why they called you, old lady. Don't cosign for your grandkids. You're not a blessing. You're a curse. You helped him get trapped. Don't do that, grandparents. Parents, quit telling people to buy crap they can't afford because your grand babies are riding in it. Unless you're riding a freaking check, shut up. Oh, my gosh. You people. This is ridiculous. You're killing These poor people, man. Then you go in there in this car finance guy smoking crack. Who makes this loan? Who makes this loan but a crackhead? Nobody. Oh, my God. You loaned $80,000 to an old lady and a kid that don't make enough to pay the bill. You crackhead. You ought to be put in jail. This is ridiculous. Oh, my gosh. See, this is what happens. This is the problem. You guys get victimized by these stinking car companies, by these student loans. You get victimized by City Bank because Samuel Jackson, who has a little red wagon carrying his money around because he made it all trying to sell you City Bank.

What's in your wallet? It ain't Samuel Jackson's money, I can tell you that. You guys got to quit doing this stuff, man. You got to quit lining up like sheep to the slaughter. You just walk in and go- Picking on Samuel Jackson. I'll take $150,000 student loan, and, Yeah, I got to get my cash back, Samuel. Thank you. That guy that lives in the City Bank lobby, he don't live in the city bank lobby, people. That's an actor. Hello. He lives in a mansion that he paid for by being an actor on city bank commercials. With your money. Hello. Quit believing this crap, you all. You're getting screwed by all these people. The borrower is slave to the lender. Quit lining up and tell me I was forced to buy. You weren't forced to do squat. You're like a grown person and stuff. Act like it. Quit this, people. Noelle, I'm not just yelling at you, honey. I'm yelling at you. I'm yelling at everybody that's like you that's out there listening, and they're all going, Good God. I want you to be free, honey. I'm glad you called here, and we'll help you. We'll put you on hold.

I'm going to put you in one of our coaches for free since I picked on you so hard. But, honey, my God, do some math. Jeez, this is just... How in the world Somebody find that finance manager and put him in jail, please, before he acts again.

I'm just glad you haven't picked on Jennifer Garner.

Oh, I need to. I can do hair extensions, but then I'd have to get you.

No, sweet, sweet, sweet, Jennifer Garner.

All right, let's cut to the chase. It's easy to get discouraged about crazy house prices and interest rates. But when you have the right real estate agent to help you buy and sell right way, you'll have confidence to make smart decisions. Ramsey trusted agents aren't just experts who guide you through buying or selling. They're people you can trust to have your back from the first call to closing day. Find a Ramsey trusted agent near you at ramseysolutions. Com/agent. That's ramseysolutions. Com/agent. Are you staying on track with the baby steps? You can take a quick quiz to check your progress and receive a personalized plan just for you. Click the show notes and hit the link, says, Are you on track with the Baby Steps. Free quiz, get you on track, show you what you're doing. We'll help you, help you develop a personalized plan right quick. Ashley is with us in Columbus, Ohio, on the other end of the spectrum, one of our Baby Steps millionaires. Congratulations, Ashley. What's your net worth? 1.

16 million, Dave. 1.

16. Okay, cool. Break that down for me a little bit. What's the categories? Like 401k and so forth and how much?

Yes, In our house equity, we have 420,000. In investments, which include retirement, our 529 plan, we have 570,000. Personal asset/collectibles, we have 120,000. Then we have about 50,000 cash.

Good. Well done. How old are you?

I'm 30 and my husband's 29.

Wow, you're young millionaires. How much of this did you inherit?

We were blessed that my husband's parents had a 529 plan for him that was not used up. We inherited $100,000. That's now a school fund for our daughter, and we got that this past wintertime. We were just over the millionaire mark before we inherited that, but we are We were blessed that we were able to have that from his parents.

Absolutely. That's great. But the point being, mathematically, you did not become a millionaire because of inherited money. Correct. We were blessed- How did you do it? By 30.

We're very boring. I, thankfully, found you relatively young. I was graduating college- Wait a minute.

That's not boring.

I like that. I found you when I was graduating. I realized I had a bunch of student loan debt, and I was trying to find a plan of how to pay that off. I found you all and I've just followed your plan ever since. We're very boring. We invest. Our big savers, actually, both of us, we break the norm.

Do you have any fun? Yes, we do. What do you do that's fun?

We travel a lot. We buy things that we want when we want them.

What's the coolest place you've traveled to?

The coolest place we've traveled to? I would say we did a joint trip both to Paris and then to Ireland. Paris and- That doesn't sound like boring.

Yeah, that's fun. No.

We got to do Paris when I was pregnant with our first, and then we got to go to Ireland to pick up a great gift for one of my husband's employees, which was such a blessing and a really fun time.

Wow. That's awesome. Very cool. Very cool. So, man, so you have had fun. You've had a life. But by boring, I think you just mean you're intentional.

Correct. Well, nothing flashy. You're just investing. I don't know. Paris is pretty flashy. No, I'm saying from a wealth building perspective, they're not like, Oh, we're going to go do all this crypto, all this. It's just like, We just invest, and that's the main thing, which is great.

Yeah, we live below our means. That's something that we've always done. I'd never used credit cards growing up, neither did my husband.

What's been your income through this period of time?

Our lowest or worst income, I was making about $37,000, and my husband was making about We weren't married at the time, so we were separate. Then our best income year was probably this past year before I become a stay-at-home mom at $325,000.

Oh, nice. You became millionaires on that by age 30? Yeah. Wow. Correct. Very, very cool. That's great. What are your careers?

My husband's in Aviation Management, and I'm a geologist who's working to become a stay-at-home mom in the next couple of months.

Got it. That's cool. What do you do as a geologist?

I play in the dirt, that's what I like to say.

Yeah, that's Cool. How many kids do you have?

We have one baby girl and a baby boy on the way.

Hey, good for you.

So great, Ashley.

That's awesome. Congratulations. So proud for you all. Very, very, very well done. If we got a 20-something out there listening, what would you How do you deal with it? Tell them.

I would say my husband's advice, and he's very adamant about this, is to live below your means, and don't try to be fancy or clever, be boring, do the slow things. Invest. Save for your future. Don't try to outsmart the them. There is no outsmarting it. Do the boring things, as I said before. And then my advice would be, I was very thankful that I found you young. I worked seven days a week to pay off my loans and save money. I always thought of it when I was in debt as that I had negative money, and that really motivated me to be responsible and work as hard as I could when I was young. Now that I have babies, I want to be at home with them, and there's more excuses to not work hard. And thankfully, we're in a position where I don't have to work seven days a week, but I worked hard young so that I can now reap the reward a little bit older and spend time with my family.

You lived like no one else, and now you can live and give like no one else. Exactly. It's almost like a plan. I like it.

It's awesome, Ashley.

Well done. Well done. Very well done, Ashley. Excellent. What car do you drive?

I drive a Lexus SUV, and my husband drives a BMW SUV.

What year?

My husband's, I believe, is a 2021. Mine's a 2005.

Oh, you drive a junker. Okay.

We're working on upgrading. That will be when baby number two comes. Yeah, you need to.

That car sucks. I don't mind what I drive, though. I know. I can tell. It doesn't bother you a bit.

It's a great car. Lexus will run forever.

Yeah, apparently. This one has.

Almost.

It almost has 300,000 miles on it.

It's a 21-year-old vehicle. It's a fine vehicle. Good for you, Ashley. Good for you. So proud of you. It's excellent. The number of times that somebody's driving a Toyota when they're millionaires, the first one to two million is just scary to me. I don't know what it is about Toyotas, but they're everywhere. Of course, Lexus is a Toyota in case you didn't know, folks. But okay, very cool. Congratulations, Ashley. You're the great American hero, man. Baby Steps Millionaire. Started doing our stuff when they're baby children. I mean, 20 years old, right? And just like, game on and clean up the student loan mess that they had and work like a crazy person. And make great income. Now she doesn't have to ask the question, Can I afford to stay at home? The question doesn't come up.

Such a gift.

Yeah. They can easily live on his income. They've already got a $1 million net worth by age 30, which, by the way, you can do just a quick predictions. It's fairly easy to say. If they stay just generally on track, it's probably 20 or 25 million when they're 65. That's about where that will land. Not too shabbat. Well done. It's called Changing the Old Family Tree right there. Mom and dad left 100 grand. Well, and they both grew up. Not Ashley. Nope.

Ashley's grew up. They both grew up with... They both said, We both never had credit cards. You know what I mean? The household environment that you're raising your family in, that matters.

More is caught than taught, Rachel Cruz says.

Yes. They're watching.

Yeah, they're going to do what you do. Financial peace babies do matter. Yeah, it's a big deal. She grew up learning this stuff, obviously. It's a benefit For me, of having been doing this now for 35 plus years, is that I am getting to see second and even third generation of people that have been following this stuff. The results are astronomical with compound interest and with wisdom parlayed over that many decades, how would you start to see happen. When you think about, Rachel was born in April. We filed bankruptcy in September, and she's sitting here. That's the same thing in a way. It's the principles. This is what the principles that we're teaching God's ways of handling money do, because scripture is God's love letter to you. It's your dad that loves you. He's saying, Do it this way. And 100% of the time, by the way, he's right. And if you disagree with him, 100% of the time, you're well known as what's wrong. So you're just off. This is not going to work. Right? And so even if you're not a person of faith, it doesn't matter. This stuff is just the freaking truth.

It works every stinking time. And then when you parlay it out over an extended period of time, you get Ashley.

And those things are working hard and being diligent, staying away from debt. Every time debt is mentioned in scripture, it's in a negative fashion. Exactly. Saving. Yep. Being generous. Always. Looking at what you're spending, knowing what you have and managing it well. It's all of I mean, it's common sense, right? That's why the gods and Grandma's tagline is so true. Yeah, it is. But in a world that, again, she kept saying, boring, boring, boring. And I understand what she's saying, because when you go and scroll, where a lot of people are finding their financial advice on social and YouTube and all of it, there's exciting things over here that you can do this and Airbnb, and you can do... I mean, it's just it is like, it's a lot of distraction. And so to just invest and pay off your house in today's terms, that is considered boring. But that's the thing that is tried and It's the turtle. It is just it always... It works. It works decade after decade.

When you're stuck in a cycle with your money, try, feel, try again, it can I feel like you're losing your mind. But you're not alone, and you're not crazy. That's why I wrote my brand new book, What No One Tells You About Money. It turns out money is emotional, and no one's been talking about feelings like fear, shame, or guilt keeping you stuck. Until now, I'm going to tell you about the real fight and show you how to win. Get your copy today at ramsey solutions. Com/store. That's ramsey solutions. Com/store.

Our scripture of the day, Psalm 111: 10, The fear of the Lord is the beginning of wisdom. All who follow his precepts have good understanding. To him belongs eternal praise. El David Mar Kat said, One of the things that limits our learning is our belief that we already know something. That's fun. Jennifer is in Hartford, Connecticut. Hi, Jennifer. How are you?

Hi. Thank you for taking my call.

Sure. What's up?

I'm married and I have two children, and our family has started the Baby Step. And we just finished Baby Step, too. The reason I'm calling is because we He lost a family member, unfortunately, and that person left us $500,000. The person told us verbally that they wanted it to go to our children, and so we are going to honor that. My question is, should I take- They should have left it to your children. Well, didn't, and we're going to honor that, so they'll get it anyway. They'll get it anyway. My question is, do I use some of that money to move us through the baby steps because the kids will end up getting everything we own anyway, or do I just keep that separate and say, No, I don't touch that?

I would. I would walk it right through the baby steps because that's the way your kids end up getting the most bang for their buck out of the 500K, assuming you leave it all to them anyway.

Because your past baby Baby Step Two, Jennifer, right? So it would be Baby Step Three. What would be a fully-funded emergency fund for you guys? How much out of the 500 would that be?

I would say 20,000 out of the 500.

What do you owe on your home?

240. Okay.

You still got 250,000 bucks, roughly, 240,000 bucks left, give or take. That's to be invested. Of course, then the home is going to go up in value, which is an investment, and kids are going to be just fine with that. I absolutely would do that. Now, it is incumbent upon you then, because you took a leap forward, regardless of how you took the leap forward, where the money came from. Okay, let's just say you got a bonus check for that. I'll still tell you exactly the same thing is my point. To make sure you guys permanently stay out of debt and that you permanently invest for the rest of your lives what would have been a house payment plus more money so that this It becomes millions and millions of millions of dollars in the future.

Okay, so you would apply it to the baby steps?

Yes, because that's going to be the best deal for your kids.

As long as with the asterisk that you guys continue to be responsible and continue to invest for all of this to move forward, right?

Oh, absolutely. We're following the baby steps, and I just didn't know. Morally is what I'm saying.

If I Because I should do that.

I hear what you're saying.

Morally, if the kids are going to get it anyway, how can we maximize the money for the kids? Correct. The baby steps.

How old are your kids, Jennifer?

Nine and 13. Okay.

The other thing is this, okay? I'll just sidebar for a second. I mean, you're fresh in the middle of all this, and you've got all the emotion around and everything. Who passed away?

Our grandparent. Okay, all right.

Let me tell you what the grandparent did not mean.

Okay.

They did not mean that one of your children has all kinds of problems later, and they're addicted to heroin, and so you hand them a million dollars, which would cause them to overdose and die. That is not what the grandmother meant. You're not morally obligated to violate common sense with this inheritance process. I'm just going to extrapolate this way out into the future somewhere.

You're talking about in 40 years.

I'm saying if your nine-year-old is 49 and they're misbehaving, and you're going to fund that with his grandmother's money because granny said 50 years ago that that was a good idea. No, that's not what she meant. She wanted to be a blessing is what she meant. Being a blessing is not giving money to someone that's misbehaving. I'm not going to become a control freak over it. I'm not I'm saying that, but I don't want this verbal obligation to go crazy and turn you into some codependent thing 40 years from now either. I've seen that happen. I don't think that's going to happen, but you're being very careful to do what granny said, and that's a good thing. But let's just understand, granny's heart was to be a blessing. It wasn't to the thing. Good question. We appreciate you calling. Very good. Rachel, that goes back to the thing that we've taught for years, and it's good to remind everybody that money doesn't fix things. It magnifies things. It magnifies the good and it magnifies things. So it magnifies the good and it magnifies the bad. So today, that money is a lot of money, and it magnifies good because they're working a good plan.

She's got a good heart. She's trying to be honorable to her grandmother and so on. And all of that's good. So that good is being magnified by this. And my point is, is that Sometimes you get out there a few years, there's some bad things going on.

Decades later is what you're saying.

Decades later. If you throw money at bad situations, it magnifies that, too. Yes. Whatever you do, money is not good, money is not bad. It magnifies what's already there. In every one of us. The bad things in every one of us, the good things in every one of us. If you're a giver and you're generous, you get money, you become a philanthropist. If you've got a temper problem and you get money, you become a complete rageaholic and a bully. If you've got And so money magnifies. It makes you more of what you already are. It makes you more of what you already are. That's right. And that's going to be true of granny's money 40 years from today. And it's true of granny's money today. It's a good question by Jennifer.

I would almost put the word dangerous tool in the world. You have to be very, very careful with it. We were just talking about scripture. There's as many warnings about wealth. You know what I mean? You got to be careful with this stuff because it'll mess with you. So the working on the character of who you are is as big of a deal as the money that you're making in your investments.

It's interesting that the things that can bring you the greatest blessings also have the power.

That's right. It's a double-edged sword You put anything in there.

Money, sex, power.

Fame, anything. Fame, all that. It's a double-edged sword.

You got to be careful. It's going to make you more of what you already are, and you're going to have a problem with it and a blessing from it. You just got to decide how you're going to walk from that point Jennifer, that's a beautiful question, and you're really wise to ask it. You ask it in a very good way, and it's very, very dialed in. In the book, The Legacy Journey, which is probably my worst selling book or one of them, but it's more of my favorite. That was more than enough. It's one of my favorite. More than enough, by far the worst. It wasn't even close to enough. But The Legacy Journey, we talk a lot about wealth and through the lens of scripture, it's the The book I did that's uniquely Christian. If you're not a Christian and you read it, you're going, Who is this guy? But yeah, because it's all scripture and it's all laid out exactly the warnings on wealth. They're all in there. We talk about, Is it okay to be wealthy from a spiritual standpoint. And part of that is that those of us that are people of faith or that are believers, we understand we don't own it.

We're just managing it. I just manage more than somebody else manages. That's all wealth is. But if you actually feel, if you take the heart position of I own it, then that's where wealth really can start to screw with you from a spiritual perspective, start to mess you up. But certainly we know that rich people are all not going to hell. That is not a scriptural thing. That's a toxic version. It's people trying to teach theology on TikTok. Never get your theology from TikTok. That's a bad idea. Matter of fact, you probably shouldn't get anything from TikTok, including us, but we're there. But if you want to learn more about that stuff and look at the lens of that, is it okay? Because sometimes people are worried about becoming wealthy like they did something wrong because there's a portion of our culture that wants to yell at you, the socialists and so forth, that you did something wrong. You didn't do anything wrong. You just helped a lot of people. That's the only way you get money. That's the only way it works. Good show, Rachel. Well done. That puts this hour of the Ramsey show in the books.

Well done, Booth people. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.