Transcript of Live Life With Less Financial Stress

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Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network in the Fairwinds Credit Union studio, this is The Ramsey Show. And I'm Rachel Cruze hosting this hour with Dr. John Delony. And we're answering your questions about life and money. So give us a call at 888-825-5225. All right, starting us off this hour, we have Lynn in Jersey City, New Jersey. Hi, Lynn, welcome to the show.

Hi, Rachel.

Hi, how are you doing?

Good, so you guys are kind of the tiebreaker between me and my husband.

Yes.

Just to give you some background, we are on Baby Step 3, $5,600,000 and $6,000,000, and we have a house that we're aggressively working to pay off, but we have a lot of equity. So, um, we're almost at the cap of hitting, you know, above $500,000 for capital gains taxes. So my husband doesn't want to pay it off, but I want to pay it off because it gives me peace. And we don't know what to do. He's saying, you know, if we paid off, we're going to pay taxes on the gain since we are planning to upgrade soon.

How soon?

I don't know what to do. Um, maybe like in 2 years.

Okay, but there's going to be an element of paying taxes on the equity regardless of whether you pay it off or not.

So we are under the $500,000 threshold right now, but if we continue paying it off the way we have intended to, the equity goes—

hits that $500,000.

Correct. So it'll be above that. Yep, in 2 years.

In 2 years. When, and when are you guys going to move? I know Joseph just asked that, but we're looking around, um, 2 years.

Yeah, our family keeps growing. We, um, owe about $250,000 on it and it's worth $750,000, around $750,000 or $700,000.

Yep.

So how quickly could you pay it off?

Um, when I work this Excel, it looks about 3 years and a half realistically.

But you're going to hit that mark in 2 years, correct?

Or a little bit less, actually, if I continue paying it the way we're doing it now.

That you're doing it now?

Yeah.

I mean, it's just my husband's like, save the money, you know, we have a 2.5% interest, let's put it into a business idea. I, I really don't know what to do.

That, that to me sounds like what the real issue is, is he wants to use that money for something else.

Yeah. And I feel guilty sometimes not supporting him, but it gives me peace of mind, you know, just paying off my house.

What's his business idea? What is he wanting to use the money for?

He has an idea of creating, um, like video games essentially.

Okay.

Has he done any work on this prior? It's still just in the idea phase?

He has—

no, he has— he's doing protocols essentially, um, and we're waiting to kind of start marketing it, and he wants some money for marketing.

Okay.

But you know, I'm, I'm, I'm a woman and I love the security of having my house paid off.

I, I'm a, I'm a man and I like the security of having my house paid off. I mean, it's, it's not a gendered thing. I, I think the real conversation is not about the tax advantages or we're gonna have to pay tax on that. To me isn't the issue. The issue is, um, cuz here, here's the thing. We, I won't go down that road. I, I could make you a math case, but this isn't a math question. It's a, you want peace in the middle of your chest. You want peace in your household. And so, and you also have a husband who wants to be a video game designer. And so having a paid off house lets you, lets him go down that rabbit hole risk-free or with less risk. Lemme say it that way. And he doesn't want to pay the house off. He wants to invest in his video game design. That's the real issue here. Making it about instead of sending, paying taxes on $250,000, you want to give that $250,000 to the, to the bank or what, like you, you want to shell it around. That's fine. And even if there was a tax advantage in my house, we call it the soul tax.

I'll pay the, the difference so that no one can take my house from me. Right.

So mm-hmm.

You can make those kind of cases all day long, but it sounds like that's the, that's a proxy war for what's really going on. And That is, your husband wants to take that money and do something else with it.

And it's like, am I selfish? He's been on board with Dave Ramsey since we got married, and it's helped us tremendously, right? And it's, am I selfish for not giving him the opportunity, even though we have financial standing to do that, at the cost of delaying the house paid off maybe a year longer? And I don't know.

No, because I feel like this is a value system at which you guys have been operating under for over a decade, is what you just said. And so to go off course, to me, would be like we're deviating from the thing that we're so used to doing, which we're, you know, going down these steps. And the moment that that step starts to deviate, and again, when we talk about paying off the house, we do say it is being intentional, right? Like we are not like, oh gosh, the house is on fire, we have to pay it off in a second. You know, we don't want the house on fire, but it's probably a bad analogy for this situation, but— No, I get it. And some people are naturally more urgent, like John, I feel like you were urgent to—

Yeah, I got maniacal about it.

You want it, yes. It's like, this is what I desire and want. And so, my thing to him would be his, what he wants to do in the business, that can happen, but when it happens under an umbrella of, no risk, and knowing that we can cash flow it at any time, and nothing is gonna happen to us financially, to me, that feels like a safer bet if he wants to slow-step himself into this new career path. Or, and even, you know, even Lynn, if you did wanna slow it down maybe 6 months and him try something over here, I would, I could see that being more of a case than let's, not pay it off for something that may or may not happen 2 years from now.

Yeah.

You know, at the beginning of this call.

Yeah.

There's a lot of might happens in a few years.

Right.

Mm-hmm.

And so if we come to what we're dealing with, right, this right, right today, um, what, what I call you selfish, that's probably, that sounds like dramatic Deloney language. Right. And I have a penchant for the dramatic, so I wouldn't call you selfish, but if, if he's saying, hey, instead of paying the house off, hyper aggressively in 2.5 years? Can we pay it off in 3.5 years? And instead of tripling the payment or quadrupling the payment every month, can we just double it for a year while I try to get this business off the ground? And he provides both of you with an ironclad plan for how we're gonna spend these marketing dollars, because marketing dollars can get sideways real quick, right? And you say, okay, cool. That's different than him saying, I want to go back to paying the minimum payment and we're going to pay this off in 20 years. Cause I got a dream. And so to me, coming up with a compromise, we're still aggressively paying our house off, just not Deloney level, maniacal paying it off. We're still getting it done in 3 years. And who knows if we'll move in 3 years, we'd like to, it sounds like it would be great, but who knows what the world will look like in 3 years.

But as of right now, We still have a 3-year plan to pay the house off. That's pretty awesome. And you're gonna cash flow whatever dreams he has. If y'all agree on that together, I don't see a problem with that. It sounds reasonable to me that you, like Rachel said, 6 months or a year. Okay, I'll, I'll give and we'll push this, this aggressive timeline.

I will say though, Lynn, my, my pause too is, and we, because we've gotten this call too many times on this show, is people starting a business and it doesn't make money and it doesn't make money. And they look up and they call like, well, my husband's trying to start this business for the past 5 years.

There's a fine— there's a dollar amount.

Yeah, yeah.

Like you guys need like a—

yes, there is a marketing budget for John Deloney.

Yes. And that's it.

And that's it.

And so we are moving at the speed of cash and all of it. So that's my only word of caution with starting something. I think it's great. Amazing. I came from an entrepreneur household. Like, it's wonderful, but you have to be smart about it and not get so emotional. And sometimes people are so emotional about their business idea that they forget the numbers. So just y'all need a plan that you both agree on together that makes you feel good about paying the house off and him getting to start something.

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All right, next up we have Tracy in Dallas, Texas. Hi Tracy, welcome to the show.

Hi, thank you for having me.

Absolutely.

Hi, I'm in Baby Step 2 right now.

We have one credit card of a little over $8,000 left to pay on, and then we have our solar panels, which are about $47,000 left to pay on. And my husband, who has a brain injury from the military, gets really, really anxious about the credit cards, so he wants those to be paid off as soon as possible. But as soon as we get to the solar panels, he wants to put pause on that, slow down, and start building our emergency fund, which would be Baby Step 3. And, um, he wants to do it in like a $1,500 to the solar panel and like $500 to the emergency fund.

Um, And I just wanted to get your thoughts on that.

Okay.

Um, how much do you guys make a year?

Um, we make a taxable income.

I make about $54,000 a year and he makes— he's part-time at $18,000 a year because of his brain injury. Does he get any, um, yes, he has $6,300 a month with pension and disability.

And does that include the, in the $18,000?

No, that's a separate— that's because that's non-taxable.

On top of— okay, on top of that is what he brings home.

Yeah.

Okay, I gotcha. Uh, how much is left on the house?

Um, $460,000.

Okay, so you guys won't be moving anytime soon because usually those loans, they'll lump in with the sale of the home, but you got— you guys are probably there for a while.

The loan is separate from the home. We, we didn't do a HELOC or anything.

It's just—

it's like a private loan, right?

Okay.

You have a, this is not why you called, but that's a lot of house on your income, isn't it?

It is a lot of house on our income, but the payments that we make are 25% of what we bring in, so.

Okay, okay.

I mean, yeah, Tracy, I mean, there's, I mean, I was thinking if there was an element of moving this to Baby Step 6, which is what we talk about sometimes with HELOCs, if it's more than half of your annual income, And so, I mean, you guys are kind of at that line if you did want to push it, but it is a completely separate loan versus it being a HELOC, right? So it doesn't really fall necessarily in that category. And it's, I hate these things because you're stuck with it. It's not like a $47,000 car that you can sell off.

Right.

So is there a dollar amount that, 'cause I want to honor the fact that he's, experienced the worst and he's living with challenges, right? And so, mm-hmm. Um, it, it's not even like me being worried about something. I worry about everything. This is a different thing.

Yeah.

Is there a number that he has in his head that would give him a little more room to breathe?

Um, he wants the 3-month, uh, uh, uh, Baby Step 3, 3 months of savings.

And, and what, what, what is that for y'all?

Um, that is going to be about $25,000.

So could you take 3 months and take 100% of his disability check and put that in an account and call it?

No, because we need, uh, our margin every month after all of the bills. We have, uh, only about $2,300 a month to place towards the, um, our debt.

Okay, yeah, I mean, I would be okay if y'all bump it up a little bit, but I would get— because I mean, how much is your— how much is the payment every month on the solar panels?

Uh, right now the solar panel payment is only $275.

Okay, it's not terrible. Um, I was thinking of what that would free up to quickly throw at the emergency fund to get it built up more.

Uh, his—

he would like to do—

of our available—

I'm just gonna say $2,000.

It's easier to figure.

Of our available $2,000 excess, he wants to do 3/4 of that to the solar panel and a quarter of that to building the emergency fund when we get to the solar panels.

Yeah, and I get that impulse too. The challenge with that is you end up doing— you're going two different directions at the same time, so you just get both places way slower and people get frustrated and they quit, right? And so you'll look up and you'll have barely dented you'll still have a 4 in front, right? You'll have $40,000 on those loans and you'll have, I'm making up a number, $5,000 and neither of y'all will be happy.

That's right, yeah. I mean, honestly, if you wanted to bump it up a little, Tracy, just to give him some peace of mind from what he's been through, but I would knock it out. I'd act like it's a student loan and it's like, you just gotta get it out.

Or maybe say, hey, look, we're gonna, let's do 1 month. Let's do 1 month emergency fund and then we're gonna go back to Baby Step 2.

All right, next up we have John in San Francisco. Hi John, welcome to the show.

Hi there, thanks for giving me time.

Oh, Jason.

How you doing?

Jason, my bad. I'm so sorry.

No worries, how you guys doing?

We're doing great, how can we help?

So I had a question regarding how much I can spend on a car. I've been getting some conflicted advice.

Okay, what's going on?

Uh, so just to give you guys some background, I'm 24. I just moved out. I have $20,000 in a high-yield savings account serving as my emergency fund, and I have $100,000 in a brokerage account.

Okay.

And I'm kind of concerned with buying an expensive car. I've been pretty cheap up until this point. And I do want to buy a car. Um, some people are telling me that because of what I've saved up, that would allow me to afford maybe more car than I would be comfortable with. Um, so I kind of wanted your guys' opinion on how much I can spend on it.

Yeah.

How much do you make a year, Jason?

I make after bonuses a little under $90,000.

Under $90,000. Okay. What would be comfortable for you? Just Jason, not us two, our opinions or any friend or family's opinion. What could you spend on a car and feel like, okay, that feels good?

Well, I don't know.

I haven't really given it too much thought. I've been kind of trying to ask around because I don't know what that is for me. I don't really want to deplete my emergency fund or sell any assets to afford it. So it'd be something that I kind of start saving up for now and maybe pause some investing.

So you wouldn't take it out of your brokerage account?

Well, I don't know.

That's kind of—

yeah, I don't know if that's something I should do.

Do you need a new car right now?

Uh, I don't. My car is over 20 years old.

Who cares? Do you need a new car right now?

No.

Okay, so, so, I mean, do you want a new car? I'm not hearing you want one. It sounds like you're doing pretty well and everyone's barking at you trying to tell you what you should be doing with your life because you haven't even thought about it for yourself.

Yeah, that is like the one purchase that I was in the past when I was saving up and investing. That would be like, I kind of in the back of my mind, like, oh, I'd be able to, if I stayed at home for a couple more months, put something more to a car. And then I kind of got into saving more money and investing more.

Jason, do you have any debt?

No debt.

No debt.

Okay.

Well, our rule of thumb is that your car or anything with motors and wheels combined in a household should be no more than half of your annual take-home pay paid in with cash. Okay. So for you, that would be around the $45,000 mark, but I don't think you need, or nor do you want, or nor do you care. I know John doesn't want you to get a new car. So just, he doesn't, he doesn't like new cars. He's like, I just know.

I feel like you've won, Jason. You've won.

You're winning. But you could go upgrade your car.

You could, you could do a lot of things, but you don't, You don't, A, want to, that's the most important thing here. B, you don't need to. And I, any, so many young people who are, find themselves successful.

Yes.

People start, all their broke friends start telling them what they should be doing. And what they're saying is, if we had money, we'd make even more irresponsible choices.

Yes. And Jason, a step up in car is not like a step in adulthood.

No.

So it doesn't, it's not a marker for anything. It's just if, the AC goes out, it keeps breaking down, you're like, I need a new car. That's one thing.

You sound like a guy that a used, like, I'll go up, a used Lexus for $20 grand with some high miles on it would change your life. But you don't need a new car, brother.

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Hey, nice to be on.

Thanks so much for calling. How can we help?

Um, so I'm in the process, or maybe in the process of taking a loan out against my home. My home's currently paid for, but I have high-interest debt on a vehicle, uh, some credit cards, and an investment property. I was wondering if you would recommend, or should I consider getting a refi? Do you pay down the high interest debt?

No, I would not go— never, ever, ever, ever, ever borrow on my home to pay off something that's going down in value. And then you've put, yeah, a level of, of risk on your home. You just created, um, a whole issue there, Adam. Okay, so what, what's the deal with the car? How much do you owe on the car?

So I owe $35,000 on the car. I have another $25,000 in credit, and, uh, I owe $95,000 on a mobile home park.

How much equity you have in the mobile home park?

The mobile home park appraised for $270,000 2 years ago. I owe $95,000 on it.

Why don't you sell that and clear yourself and be free? Then you have a paid-for house, you have no debt, you have a paid-for car, and you're a free man.

Okay, what up?

But I would be losing my monthly income on the mobile home part.

You would rather have debt-free than monthly income on renters right now because you're broke? I mean, you're thinking about putting your house on the block, a paid-for house you want to, you want to put on the block in exchange for depreciating asset that's your car and your credit card debt, right?

Adam, how much do you make a year?

Uh, $4,000 a month, so about $60,000 a year. Uh, I'm married as well. My wife makes about $2,300 a month, so combined we're bringing in about $6,300 a month. And then the mobile home park cash flows $1,800 a month.

Okay.

Yeah.

So here's the deal, Adam. First and foremost, if you went and did this and just wiped everything clean, the problem with your money isn't the high interest. The problem with your money isn't the credit card companies. The problem with your money is you guys. You guys have a car that's almost half of your annual take-home pay. You probably have too much car. You probably can't afford that $35,000 car with what you bring in. You guys have $25,000 in credit card debt. And then this mobile home park that you, yeah, for $95,000. That the habits around your, the consumer side of your money, Adam, is not great. Would you agree?

Yeah.

So, wiping it clean doesn't change you. And so, that's why part of the process of getting out of debt is selling stuff, working extra, cutting back lifestyle, because what that does is that changes you, Adam. That, it's a reminder every single day of the sacrifice because of decisions, of digging yourself in a hole. And I say that not to shame you, but there's a, there's a part of behavior change that has to occur with your money, or you're going to go right back into this whole mess.

Now tell me if I'm wrong here, uh, my mindset was right now we're paying, uh, $2,700 a month for all the credit, all the, the car loan and the mobile home park. If I refinance the house, my payment's gonna be $1,500 versus $2,700. And the mobile home park will cash flow $3,000 a month instead of the $1,800. But listen, but I, I'll still be going backwards to what y'all are saying.

Yeah.

And, and not only are you going backwards, I just wanna paint you a different picture, brother. And cuz you've, you've thought this out and you've written it down a thousand times on the back of napkins, on Excel spreadsheets. I just wanna give you an alternative vision of your life, dude. Complete and total peace in your house. You and your wife walking through the front door. Y'all don't owe anybody anything. Y'all don't have the fanciest cars in the world and that's super okay. You don't owe anybody anything. Y'all can do whatever you want whenever you want within the limited means y'all have. And if she wants to work more, if she wants to work less, if y'all wanna have kids, you can kind of do whatever you want. And you don't have to always be hoping that this deal hits and that this one guy pays his rent because he didn't pay last month, and this other guy, you know what I mean? Like, you could Uber and make $1,800 on the side for the headache you have with this mobile home park, right?

I've got good tenants in it, but I know that doesn't last. Um, okay.

Uh, the thing here, here's what I'm going to promise you. You have to decide in your house. As for me and my home, we're not going to borrow money And then we're going to figure out life with that principle in mind. If it's always on the table and it's always, well, this is going to cash flow this, we're going to move over here and we're going to slap it up, flip it, reverse it over here. That's, that's a chaos that happens every day. And you need every card to land on your poker hand or the whole domino, like the whole set of dominoes falls over. It's just a wild way to live, man.

And after doing this, Adam, for so long and being able to see the result of so many people who have built wealth, that have actually stayed wealthy, they did it, I'd say, not the get-rich-quick way. It was the slow and methodical. Yes. And one of the number one things is you get out of debt. Because when you don't have debt, your income is your most powerful wealth-building tool. You're able to take your income, and instead of it going to car payments and credit cards or paying on the house and all of this, you guys get to keep that and start investing. You guys get to start making— money for you all and not for everybody else. But if you keep playing the debt game and moving debt around, which is what this would be, you put your house at risk for a $35,000, you know, truck or whatever it is, and all this other stuff. And it's not a smart move to take equity out of an asset to be paying for all this stuff.

So, okay, what I would do is, in other words, the $70,000 in debt, if I paid this, I sold the trailer park, the mobile home park, I would have $170,000 cash. You recommend putting the $70,000 towards the debt and then having $100,000 in the bank and then everything paid for?

The only other thing I would add is, I— this is just me talking to my, my brother Adam here— I, I would sell that car too. It's too much car for y'all.

Yeah, I agree. Uh, the one thing that complicated this, we just got married and we have a newborn at the house. Uh, I've, I've pinched pennies my whole life and I've got a 2005 Honda Civic with 200,000 miles on it.

That's just—

that sucker's—

you have a family car, but maybe we bought too much car.

Yeah.

What kind of car is it? What's the $35,000?

It's a '24 Nissan Rogue.

Yeah. So yeah, well, just from the income perspective, it doesn't, right? You're right on that borderline, Adam. So again, if you sold the mobile home park and wiped everything clean, I would put $100,000 in, I'd probably put it in a brokerage account and I'd leave it in there and I'd let it grow. And then maybe if you do enjoy the rental business, if you will, of having other properties, You could probably take some of that money and in Greensboro, yeah, here in a few years, cash flow a home, fix it up and rent it. And you guys have, you know, two paid-for properties at that point that's taking some rental income if you want to. But that's what I would do. And you guys have a newborn. Your wife may even want to stay home full-time. She may not even want to work part-time.

I don't know.

Just think about coming home to a house with a newborn that's your house. In your car.

And you got $100,000.

You have $100,000 in the bank.

Yes. Making interest, like, all day.

Like, that's peace that you can't even imagine, dude.

And you guys are young, Adam. And if you guys want to get back into some of this stuff, you can. Just take your time and walk your way in it slowly and not use debt as the mechanism at which you buy all this stuff with.

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All right, today's question comes from A-A-Ron, from Aaron in Wisconsin. Here's the question: my wife and I recently married and we are working on our budget. She has a $10,000 car loan. Uh-oh, I smell trouble already. $70,000 in student loans and only $500 in her bank, in her bank account.

Oh no.

I was expecting her debt to be half the actual number. The only debt I have is my house. I have $85,000 in a brokerage account and $125,000 in savings that I had earmarked to put toward our house. Oh, brother Aaron. Together we earn about $9,000 a month. How should we approach the debt? Should I have my wife use her income to pay off the debt and not contribute to our monthly living expenses? Or should I offer to pay a lump sum of cash to her debt? I actually think you should find, go walk watch, um, Back to the Future 1, get your hands on a DeLorean, go back in time and unmarry yourselves. Because this is— you're going to be calling my show in a couple of years saying our marriage is falling apart, and I'm gonna be like, yep, we talked earlier, A-Aron, and that's the truth, dude.

Dude, you kind of suck.

Yeah, kind of. You're the worst. The only—

oh my gosh.

And I get it.

I get people are getting married later. I get people have built up their thing, but you're getting married and you're like, do I choose to put part of my savings? You married her. You're sharing a bed. Like, oh my, oh my gosh.

I have cash earmarked for our next house.

You're gonna make her pay for some of the house too, Aaron?

Gosh.

Yeah, I think—

You knew what you were walking into, Aaron.

If it made you that mad, you shouldn't have married her.

Yeah, he says, I was expecting her debt to be half.

The only way I'll have some grace and compassion for you, brother, is if she lied. She lied to your face.

That's fair. That's fair.

And then y'all gotta deal with that. 'Cause that is, that's a big deal. If she promised you it's 35 grand, and then when you got, y'all got married, you started looking at each other's bills, but y'all have an income and this is gonna make people uncomfortable. Y'all have $125,000 in savings earmarked for what y'all decide is your next big move as a new couple, as a family unit, as two people who created this secret world called marriage, right? Y'all have $85,000 in a brokerage account. And until you get that through your head, brother, y'all are gonna be, y'all gonna be roommates. Y'all gonna be running parallel lives and you're gonna go one way and she's gonna go another.

And it will always be tit for tat at that point.

Always scorekeeping.

I made this, she made that. Well, she spent, I mean, it will be that.

I need you to Venmo me for Taco Bell because I paid last time.

Yes.

Oh, man. Now, I will say, if she sucks with money and she doesn't care and she spends it like, right, it's so much more. It's not the numbers that bother me. It's the attitudes behind it. So if she is terrible and you feel like I can't trust her in that, that's one thing.

That's not what I'm hearing.

No, but it feels like you're sitting on top of this mountain, Aaron, A-Aaron, and you're staring, you're casting down, like looking down your nose at this. I cannot believe.

But me over here, this lesser person who got a student loan. No, actually, I actually think your other— your plan is actually pretty good. I think, um, she should have to just work the debt off and you can just pay her part of the light bill for a couple. Come on, man, you're married.

What if you like— play out, play out. If we— if we— because we have strong opinions on this side and people get mad at us all the time, but it is what it is. What if our opinions were that strong on the other side and we're like, you're right, Aaron, you make her— you, you— yeah, she, she still has to pay her end of the deal, though. Like, she still has to pay half the bills. And she's going to be— she's going to— she may not make it. She may have to borrow money from you, Aaron. Like, if you go down that road, play it out how ridiculous it is.

It's crazy.

Play it out.

And you're married people.

Like, you're about to share.

Yeah. What are you going to do?

You're going to evict her? She doesn't pay her light bill?

What if she has to pay interest?

You're going to turn her lamp off? Like on her, like you're gonna like, she's not allowed to use her nightstand, put little plastic plates over her plug so she can't charge her phone. Like, what are you gonna actually do, dude? Like when y'all go out to eat, like I'm going on a date tonight. Oh, you can't afford your plate?

Sorry. Good luck. Have fun with the free bread.

Yeah.

We'll go to Olive Garden so you can have the breadsticks.

And I'm gonna get a glass of wine and you can't afford it.

You're gonna Venmo me $9 for the tip. Come on, man. Like if, play it out, play it out. It doesn't, y'all need to have one checking account. Y'all get in, sit at a table. And by the way, I, I'm, I'm now I'm being ugly. Y'all aren't working on y'all's budget. You handed her a budget and said, this is how we're gonna live. And I get to have a right to say that because you're shameful with money. Don't be that guy. Sit down and ask, what kind of world do we want to co-create together? What do we want to build together? Where do we want to end up in 5 years, 10 years, 20 years? And have that discussion and then live in reality and y'all both get there. And by the way, here's what really It pisses me off about this, dude. You could clear your household. Y'all could clear your household debt right this second. And you'd still have $85,000 in one account and what, $45,000 in another account. You know what? That would make you way ahead of the game still. And your wife would have her education. Her car would be, would be y'all's and we'd be good to go.

And you start from there. Yep.

Like if this was, we don't have any money and we're broke, what do we do? I get that. You have a lot of money, man. So anyway.

No, and I think part of what we see with conflict and money in marriage, 'cause we do that, the Money and Marriage Weekend Getaway.

We have a few tickets left, October 22nd through 24th. Come, it's the best marriage event on planet Earth. And it sells out every time. It'll sell out. But if you, I think there's still a few tickets left, get online. —kind of get them.

Yeah, go to ramseysolutions.com and check out those tickets and come spend the weekend. But one of the attitudes that we kind of see that can start to really, I mean, I think create a lot of resentment and erodes intimacy in a marriage is that superiority complex with money that someone, "Well, I make more, and because I make more, I get to make, I have more voting rights," if you will. Or, "I didn't take out, it's her debt." "and so, she needs to deal with it over here. I didn't do that." Or he, right, whatever it is, there's this feeling of, "I'm better with money." And automatically, it puts the other spouse in a position of, "I guess, I'm not great at it. I'm gonna let them just do it, and I'll just take the crumbs off the table of what's left." Not even from a financial perspective, but an emotional, like, "Okay, I'll just sit here and let you," "Tell me what to do," right? And over time, you guys, that's a bad deal. Like, when you get married, there is a level of sacrifice, a level of humility and selflessness and serving each other, and you're on the same team.

But when that starts to imbalance, especially with money, it gets weird. There gets to be a weird power dynamic. The wife either is taking care of the husband, and he ends up being like— Like some weird mom. Yeah, like he ends up being like the 5th kid or the 3rd kid, or he is he is so dominant over her and she has no voice because she hasn't made an income. And you know what I mean? Like it gets weird really fast. I mean, I feel like we, that comes up.

Yeah, it comes up every, from almost everybody universally in some shape, form or fashion. 'Cause sometimes it's not money. Sometimes it's the kitchen's not exactly the way I wanted it and that makes me better. And, or the garage is, not— the cars aren't parked perfectly in the garage. And so because I would park them perfectly, that makes me better. Anytime you feel like I am better than, right, you're— that's a recipe for disaster for your marriage, right? Both of you are going to have things you're better at than the other, like skills. And that's like, you make it— that's a team, right? Yes, it's a good thing. And it's a, it's a, it's a great thing. But yeah, Aaron, dude, like, just cutting you straight, man, today, before the day is over, Her— y'all, the debts she accrued that are now y'all's debts are paid in full. And I want you to take her out to dinner and celebrate the fact that y'all are debt-free. And y'all dream about what you want your life to look like. Because by the way, what people think, the freedom they think they're getting from being controlling like this, it's a prison with a lock on the inside, as C.S. Lewis calls it.

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Welcome back to The Ramsey Show in the Fairwinds Credit Union studio. I am Rachel Cruze hosting this hour with Dr. John Delony. So give us a call at 888-825-5225, and we'll talk about your life and your money. Uh, my oldest is 11. And she saw John the other day in the office. She was like, "Mom, can I call him John Baloney?" And I was like, "Sure.

I think he can take it." That would be the least offensive thing I was called growing up. So, yes, I accept.

I almost was like, "I'm with Dr. John Baloney.

I mean, Deloney." I ask my kids if people call them baloney. Was that like a go-to?

It's not really like a— it's not like a lunch meat that we eat as much anymore than we did in like the '80s and '90s.

Yeah, it was a staple in my home growing up. But also, I got the impression they didn't have the language for this, either my 16-year-old or my 10-year-old. They didn't have the language for this, but I don't think kids are mean to each other like they used to be.

No, there's not like a Disney Channel bullying. Yeah, yeah, yeah, yeah, yeah.

They post mean stuff about each other. Yeah. It's not gonna be like, your name rhymes with— Like, we were brutal to each other. Totally. Bring it back, bring it back.

Bring back the '90s. All right, let's go to Jennifer. In Dallas, Texas. Hi Jennifer, welcome to the show.

Hi, thank you so much for taking my call. I really appreciate it.

Absolutely, how can we help?

Okay, so my mom was served with papers. She's being sued. She's 82.

She's being sued by a creditor.

Um, it's only $1,500. Oh my gosh. Um, and now that she doesn't have the money, she lives on Social Security. Um, and yesterday she told me that she had $30,000 in debt my dad died in 2020, so she didn't pay any of that. So, oh wow, okay. I guess my first question is, what do we do about this? I think I heard your dad, um, I was listening to some old episodes, um, say that someone could call the actual creditor even after the lawsuit was filed and try to negotiate a lower payment, uh, with something like an agreed order.

Um, just tell them, hey, my mom's 82, she's a widow, she has nothing. I'll send you $300 in a money order. And God help you, don't, don't give them, uh, your— because they're going to want— they're going to say we're going to withdraw from your account. Um, and make sure you get the offer in writing. They're not expecting to get a penny of this. And so, okay, you giving them money on a 5 or 10-year-old debt of an 82-year-old widow, they're going to be happy to get what they get.

Do you know what the $30,000 is, the additional debt that you just found out about? What kind of debt it is? I don't know. I just heard about that yesterday.

I'm assuming it's credit cards.

Okay. Has she been getting any notice from any creditors for that type of debt or just the $1,500? No. Right. And I would just let us—

the first thing that has happened and—

okay. Um, yeah, yeah.

No, don't stress, Jennifer. You're fine. It's fine. Um, tell me this. The $30,000, how long has she not been paying on it? Since—

did you say 2020? Since 2020. I don't—

I don't know about it.

Yeah, no, I didn't know about that part. Yes.

Let me ask you another, a wilder question. Is there a chance that she's off on her numbers?

Probably not.

Okay, okay.

So you think they're— that that's legit? Probably. Is there a chance those credit cards were solely in your dad's name?

I have no idea.

Okay.

I, I don't— I didn't know anything about $30,000 until yesterday. Um, she just said I've been served with papers for this one credit card and I don't have the $1,500. And also I don't know what's gonna happen with this other debt, so.

Yeah, so I, if I were you, Jennifer, I would just let it sit. I mean, honestly, you don't know where the paperwork is. She doesn't know. This $1,500, I would call the creditor and say, hey, you know, she's got $300 to give you. What will you settle? Because they'll usually settle pennies on the dollar, especially if it's very old debt, because it's been, what's happened is that creditors have bought bad debt from credit card company, right? And it just gets getting passed and passed and passed. And so to even find the company is a miracle, honestly. Honestly, so I would call them. Yep, I would get it in writing, have them email you or by letter, but they could email a proof of settlement. And then you guys send them, send them a check. And then probably what I would assume will happen is that $30,000 in some world is gonna start possibly bubbling up. And I would just do what you've done with that. She can't pay it, so let it go bad. And the longer they don't get paid, honestly, probably the more likely they are to settle. So I would not stress about this, Jennifer.

It's, they're just, it's someone in a cubicle that has a script that's calling with a headphone and they're gonna be leaving the company. The turnover in those companies is like every 6 weeks. I mean, like, it's just, it's not as scary as what it feels like. So, okay. So get a dollar.

I heard Dave say that like, they take a box full of files like this and just—

Yes. And they just go through them and just call. Yes. Yes. Okay.

And so get, get a dollar amount. Okay. Get a dollar amount, get it in writing, and don't give them your account.

Right. That's it.

So her main concern was that she felt that since, um, this is all, um, already in a legal process, that she could not call the creditor But I'm assuming that she can call the creditor.

Yes, 100%. And she has it with them.

Probably not the original creditor, probably not Visa or MasterCard or whoever.

Not— no, it's not the original creditor.

It is— it was originally, uh, Credit One, and now it's with some sort of—

sure, yeah, you know, whatever.

It probably wouldn't hurt for you to call them.

I'll call them.

Okay, yeah, so I can call them even though a lawsuit has already been filed.

Is that correct? I don't— I— yes. I don't even know if that lawsuit's for real. Sometimes these— they have these scary letters that they just will send out and they're blanket.

Did she get a court date? She— well, they—

she did not get a court date, but it does say that the law firm, um, requested a remote hearing. It looks like court papers.

She even said, this is something very professional.

Okay, here's the thing you need.

Citation. You just need real information.

So get on the phone, okay, and just say, my 82-year-old widowed mother just got this thing. Okay, what do we need to do? And you say, I don't have $1,500. She didn't have— she surely didn't have $1,500. I'll send you $300 right now and we'll call this thing.

Okay.

Yeah, Jennifer, how are you financially?

I'm just curious.

Um, well, I got a letter like this 2 years ago and I ended up filing bankruptcy because because I got so scared. Oh no. And it was before I found you guys.

Oh yeah.

So I'm—

I'm— you're climbing out of a hole. This is like bringing you back to your days.

Like, just pay it, go away.

Sure, sure, sure.

Well, um, yeah. Can I give you an exercise I want you to do?

I would love that.

Okay. I want you to write Jennifer from 2 and a half years ago a letter, and I want you to imagine her being scared and terrified. You remember, it's still, it's still in you right now. And I want you to write her a letter and say, in a couple of years, this same situation is going to show up for mom, and I'm going to do what I should have done then. This time I get to run it back, and this time I'm going to fight. Okay. And set old Jennifer free and give new Jennifer new power for moving through the day. And get this piddly $1,500 nonsense off your mom's back.

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Next up, we have Tara in Richmond, Virginia. Hi Tara, welcome to the show.

Thanks for having me.

Absolutely, how can we help?

Well, um, my hubby and I are in our early 50s and we have two special needs sons. Well, we have six boys, but we have two special needs sons, 29 and 17, and we've been pretty smart with our money over the past almost 35 years we've been married. So we want to set up a trust, uh, for the two of them to make it so that our house becomes like their house and they don't have to change— we don't have to change things, we don't have to move them, we don't have to do anything like that if, if my husband and I— if anything happens to us. Uh, we're not looking forward to that, but we're sure we're trying to make—

no, you need to do that for them. Yes. Have you guys looked into special, special needs trusts?

No, we haven't.

That's kind of why I called to kind of get a, well, you know, how do we start this? What should we look out for? Yes. My dad just got a trust for his investments. Mm-hmm. And it cost him $12,000 in legal fees. So that was like, did he pay too much? You know, I, I have probably every question that you can imagine. Yes. But I will take whatever you can give me.

So I'll say this, trusts in general, it kind of depends on the situation and your estate. But when you have a special needs child, that is the one time that I see it as a requirement. You need to do this because it will make the transition of taking care of them so smooth. Now, I don't know how much specifically it's gonna cost in legal fees. You will have to hire an attorney. I would ask around if there's anybody in your community, um, that you know of, that you trust to sit down and kind of build this out. And you guys will get to pick make all the decisions of what you want going forward, if, you know, when you all pass away. And it will have to kind of reconcile with the other children, right? Oh, definitely.

Yeah, and what's your— I was hoping that the older kids would manage that for me.

And actually be the exec— yes, that's right. Yeah, so they could be the ones. Be the caregivers, I guess. Totally.

Do they know that? Yes. Okay.

Yes, they do. Okay. Yes. So that—

so this is— they are, um, 2 years older than the— uh, we have a 30-year-old who is in Japan and, um, is pretty financially in great shape. And then we have a 28-year— uh, 29-year-old who is, um, special needs, is autistic. And then we have 3 more, and then we have the youngest who is 17 that we adopted from the foster care system, and he is Um, he's a lot of work. He has a very rare genetic abnormality, so we're gonna have— he's gonna need care for sure for the rest of his life. The 29-year-old is, um, is functional. He does many things for himself, and he's very sweet and well-loved by people, but we— there is no way he could manage his future.

Yes. Yeah, so, so in that process, Tara, you guys will look at assets, you'll see what names need to be placed on which assets, the executor of the trust, different people making different medical decisions. I mean, you kind of paint everything out there. And yeah, the good thing about a lot of this is it skips a lot of, you know, the legal side when you have, especially for a special needs child in place. That is one time that we say it is worth every penny to sit down with a good attorney and map this out because they don't need to be making any decisions decisions or, you know, making any calls at that point. And, you know, and then I think probably even your 17-year-old's case wouldn't be able to. So all of that played out and protected in that trust is so, so important. So yeah, but I would sit down with a good attorney and state by state has different laws and how you, how you would structure it too. And so, yep, I'd sit down and take care of that for sure.

And $12,000 might be, be pennies depending on the size of your dad's estate. So that, I wouldn't be scared of that number, or it might be a ton of money and he overspent by a lot. So every situation's different. So, and this, the trust that he had drawn up for his situation is different than the one y'all gonna be doing. So just, just like Rachel said, find somebody you trust and no pun intended. And, um, yeah, get that taken care of. Get it going.

Yeah, for sure. And I would do that as soon as possible too, Tara, for them. All right, next let's go to John in Little Rock. Hi John, welcome to the Hey, how are y'all? Hi, we're doing great. How can we help?

Yes, so me and my wife, we bought an older home. It was built in the '60s, and underneath in the crawl space, there is a lot of water damage and mold, and everything underneath the house is going to have to be replaced and redone. The estimate is about $100,000 to fix all the flooring and the ductwork for the HVAC system. And we only owe $89,000 on the house. And so that's kind of devastating news. Mm-hmm. We also just found out we're about to have a baby. So that's also kind of put a little stressor on the situation. Um, so we're just wondering, basically, do we need to just try to sell the house as is and go rent somewhere or because we don't think it makes sense to go get a loan for that much on a house that is going to be less than the price to repair it.

Well, the house wouldn't be— what you owe on it is. But how much is the house worth?

The value, um, with land and everything would be about $170-something thousand, I would say.

I, I don't—

I personally, and I could be wrong, you need to check with professional in your area, but I don't think you could sell the house for more than you owe on it. 'Cause an inspector's gonna find all the stuff that, or you're gonna have to disclose it 'cause you know it now. So you have to disclose it when you list it for sale. And if you sell it as is and the whole property in and of itself is worth $175 grand, you're not gonna get, you know what I mean? You're not gonna get $89,000 after the sale of that.

Got you.

Okay, you get what I'm saying, right? I— what— have you had another, uh, person come out and give you a second estimate?

We have. It's still— it's still going to be pretty expensive, and they quoted it like $70,000.

Okay. How much do you guys make a year, John?

Uh, we make after taxes, uh, like $100,000, $105,000 a year.

Okay. I wonder if you could pull this apart in stages.

Mhm, that's what I was thinking. What could you do right now? Um, a little bit of work, take a few months, do, do some more. Um, how, how long have you guys lived in the house?

It's been, uh, about, uh, I'd say 4 years now.

Okay, so yeah, is there a possibility you can— and dude, I, I don't know what I'm talking about, I'm way over my skis here, but is there a possibility you could get the mold remediated and then do the flooring, but not put fancy floors down on top of the new subfloors and then come in 6 months later and redo all the HVAC stuff. Is there a way you can do this in stages where you can cash flow this thing?

But it takes you a year and a half. Yeah.

Versus doing it all at once. Yeah. I know it's a pain in the butt. It'd be awesome to write a check and go away for a month and have it all done. But, um, it may be cost prohibitive to do that.

That's, that's true.

The only thing is he said that they would have to fix the ductwork because the ductwork is also very old. And he said to get to the other part of the house, they would have to have that repaired too. So it's just, it just seems like every way we look at this, it's going to be a huge expense. Yeah. And yeah, but if it's a tough—

but it's basically what you're saying is in a way it's kind of, it's like it's worth $70,000, right? If it's worth $170,000 and it needs $100,000, they're not gonna, you know, when you just do quick math, that's $70,000, you owe $85,000. So I think about it even in the sense of a car, right? When people are like, I have to put more into my car than what it's worth, but then you do want it fixed to get a higher value. But you know what I mean? It's kind of like sunk cost perspective. And it's the home. I mean, honestly, John, I probably would slowly, probably cash flow this. Do you guys have consumer debt?

The only debt we have is the home, and then we do have a truck.

Okay. Shoot. This is the part of homeownership that is so hard 'cause it costs, I mean, it's the stuff that comes up, you guys, all the time. I mean, if I were you, John, I probably wouldn't, just wipe my hand. I think I would slowly start doing some repairs.

I'd sit down with the GC and say, I've only got to go in steps.

Yes, go in steps. And what steps could I make to maybe break even so that if we wanted out, we could eject at a certain point to give yourself an out if you wanted to. But— I hate this for you, brother.

Sorry, John. I hate it, man.

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Well, the 2027 Ramsey Goal Planner is here, and it is more practical than ever before. We heard some feedback and we said, you know what, we're gonna give the people what they want. So you're gonna get brand new content from Jade, Jon, and myself, and it's gonna give you clear action steps, some guidance to get you the momentum that you've been wanting this year. But here's the thing, we sell out every single year. So don't wait to grab your planner. So it is $49.97. You can get yours at ramsaysolutions.com/store. Or if you're watching on YouTube or podcast, click the link in the description. All right, so we're going to—

Well, it's for sale right now though, right?

Just says grab your copy for $49.97. I think it's—

I think if you order it now, it's the cheapest it will ever be.

Okay, there was a deal of that. I don't know if that's it. Is it over? Okay, two different graphics. I don't know, I'm just, I'm reading my ad. I'm giving, I've just given you I'm like Ron Burgundy. You give me a script and I read it. I don't know.

But sometimes do what? We got a lot.

We got a live tournament. It is on sale. You're trying to— here's the deal.

Rachel Cruz is a part owner of Ramsey Solutions. She's trying to get more money out of you guys. This thing is on sale right now. And last year it sold out. John Baloney. When it was on sale. Yeah, man. Listen, listen.

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All right, let's go to South Bend, Indiana. We got Sam on the line. Hi Sam, welcome to the show. Hi, thanks for having me. Absolutely, uh, thanks for calling in. How can we help?

Um, so I just kind of want some help trying to get kind of a roadmap for how to get out of debt because I'm about $65,000 in debt and I only make, uh, $60,000 a year. I have a 1.5-year-old at home and my wife is 6 months pregnant, so I'm I'm just trying to clean this up so that, you know, my kids don't have to suffer, you know, through any of that. I love it, man.

I love your heart, brother.

Yep. The kids turned everything around. I feel like once you have kids, you're like, oh crap, we gotta, we gotta get our stuff together.

We gotta be different now.

Oh man. What's the debt, man? So, um, about $18,000 of it is credit cards. They're split up into two different accounts. Um, they've already been sold off to third parties and it's been a while. So, uh, I actually went into a debt consolidation program originally, and then the law firm that I was working with, uh, just liquidated and was done with it. So they kind of handed it back to me and I want to try to get the ball rolling because I really am, you know, starting to look around and realize that things start to fall apart around me and I need to, you know, okay.

So what else, what else besides, so you have $18,000 that's already gone to collections in two different credit cards. What else you got?

Um, then I owe about $17,500 on a car. Uh, I just financed, um, a few months back. Uh, I just bought a second car for my wife and I., just actually over the weekend, uh, that was about $3,500. I paid cash. Oh good. Um, I owe about $10,000 on an AC unit for my house. So it blew up first year that I moved in. And then, um, I got my wife's car that we originally had as our only vehicle repossessed, and they still want about $15,000 for that.

And they took it? That's all right, that's done? That's already done.

They already auctioned it off, and that's what they want afterwards.

That's the difference, dude. What has happened up until now? Because this This isn't just a matter of you being in debt. This is a matter of you, you just didn't pay bills.

Yeah, I— so what, what truly happened was, uh, around the time that everything started to slow down with COVID I was working at a factory job and I started to get into some credit card debt when they cut my hours. And eventually I kind of just, you know, got tired of it and went and started doing my own thing. So I'm self-employed now. I have been for about 3 years, but I clean houses for a living and it was rough trying to get everything on track at first. And then I, I guess I just kept knocking my wife up and now I don't have any help and I have to have the, you know, ability to get out and really even get more clientele. Cause I just don't have the time in the day as one person. So how much money do you make? Uh, 65 grand a month on average. And it just fluctuates in the wintertime because I have some clients that go away.

Mm-hmm. Okay. Um, and you've been in that business 3 years, you said?

3 years now. Yep. So yeah, 3 years now.

Okay. And do you have predictable downtimes, you said, with certain clients? Yeah, yeah.

I, um, from about January to April, uh, I lose probably about between $1,000 and $1,500 a month. Okay. And just clients come and go.

So what do you do in that gap to earn money?

Um, honestly, I've just been trying my best to kind of stack up money aside so that when that time comes around, and, you know, stack up things around the house so that I don't run out of things. I have, you know, kind of stockpiles. And I also have been very fortunate enough to, when Christmas rolls around, and especially with the birth of my child, that people have been extremely generous giving me bonuses. I don't like to bank on that for the holidays, but it's been extremely helpful.

How much cash do you have set aside?

Uh, I have $1,000 set aside. I'm done with Baby Step 1, but, uh, that's, that's about all I have after the car.

What's the, the car, the $17,000 car, if you sold it today, do you know what you would get from Uh, I want to say probably about $13,000, $14,000, something like that. Okay, so you're a little underwater in that.

A little bit, yeah, just from the depreciation.

But yeah, because I'm just trying to think through some math here, because for me, my goal for you, Sam, would be to get out of debt as quickly as possible. Okay, so that's going to mean working nights and weekends. Your wife is is gonna probably feel like a single mom for a hot second because you are working so much. You guys, I mean, I'm sure you don't have a ton of expenses to cut, but where you can cut, we're not eating out, we're not going on Amazon, like we're doing nothing. We're not spending money except for keeping the lights on, keeping the roof over our head, like the absolute needs, the necessities. And then the other thing is selling stuff, right? And so you're doing all of this at once. Wants to get out of debt as quickly as possible. So, I'm just looking at your numbers and I'm thinking, okay, $18,000 in bad debt, you know, I mean, you possibly could settle, maybe let's just say generously, you know, half. You know, what if that went down to $9,000, okay? You can't do much about the repoed car. You can't do much about the HVAC.

And then the car, let's just say you have took a $3,000 hit, and if you could get a small loan from a credit union for $6,000, go get you a $3,000 car, and then have that, right? That loan goes from $17,000 to $6,000. You start to kind of play with the numbers of what the ideal situation would be to get out of debt as fast as possible. And there's a chance that your debt's looking more like, like $3,839 versus $6,500 at that point.

I, I was hoping, especially since it's, it's been to third parties, some of the, some of the debt, and they seem willing to kind of work with you to just get anything.

They will, but you're gonna have to, you're gonna have to save up a lump sum to settle with them.

Yeah, yeah, yeah. Right now, um, I, like I said, I bought the car in cash and it took me about 5 months to do it, but I saved about $800 a month so that I could buy that. So I saved up $4,000 within that 5 months. I think that, you know, that's the pace that I'm at right now.

This is gonna sound nutty 'cause I know I'm talking to a guy who's so tired 'cause he's got a newborn and a pregnant wife and you're hustling your own, you're a one-man shop on your business, but you can't afford, you simply cannot afford to, when a big chunk of your clientele goes on vacation during the cold winter, for you just to hang out at home. You got to go find other work, and you've got to grind and grind and grind. And after you get done cleaning all day, you come home and have dinner with your family, and then you go stock shelves at Walmart until midnight. And this is going to be the next 18-24 months, and you're going to feel like you're going to collapse. But on behalf of your family, you can do it. I believe in you. But it's going to take that level of negotiating with, with certain folks folks selling stuff, cutting expenses to the bone for 24 months. And bro, you're gonna, you've dug yourself a big hole. So to fill this hole up, you're gonna be tired shoveling. And there's just, there's, you can scroll all day. You can Google hacks all day.

There's not any hacks around. You've gotta cut expenses and make more money. That's just the, that's the only things you can do right here.

And the, and the wild thing is too, Sam, if you can get this credit card debt where they can metal and you do this car and you find $3,000 extra a month, right? I mean, a lot of this is gone. It goes away quick. In a year, year and a half. I mean, it's pretty wild what the, what the math starts to do, but it's gonna take some drastic changes. It's gonna be a drastic year and a half for you guys to get this to play out the way that you're wanting it to. But a year and a half of it and it's behind you. And then you have learned, gosh, such a way of life of what you're not you're gonna go back to. Like, that's the legacy changer there for your kids that you're looking for. Having healthy money habits where you actually control your money and your money's not controlling you.

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If you're enjoying the show, one of the best things that you can do to help us spread the word is to share it with a friend. Maybe post one of the clips on social media, but just spreading the word about the show is one of the best ways we can get the word out to help people do what we want, is to, you know, get control of their money and create a life that they love and finally find some peace with the subject in life that can be so, so complicated. So, yep, we're thankful for you guys for listening and watching. So leave a comment. We love hearing from you and share the show you can. All right, let's head to Kansas City, and we have Andrew on the line. Hi, Andrew, welcome to the show. Hey, hey, how are y'all? Hi, we're doing great. How can we help? Good.

I have to start off by saying, since you, Rachel, started it, I think that bologna is way better than the name that John's high school football coach called him back in the day.

Listen, Andrew, Andrew is deep. I don't even know what the— I don't know what the—

it's, it's far more socially acceptable to say John Baloney out loud, but I'm going to start calling her Rachel Bruise or Rachel Snooze. Oh, I like that one. Rachel Snooze.

I like that. What a snoozer.

Oh my gosh. What's up, brother?

We are in, we are in Baby Step 3, my wife and I, and my wife is certainly the free spirit and I am definitely the outspoken cheap and every time we talk about money, the tension is pretty high and we overall just tend to avoid the conversation altogether. How can we tell if we're actually pretty close on our goals and I just need to loosen up, or if our household spending genuinely needs to be reined in? I want money to be a conversation we can approach without fighting or dreading the finance talk.

Okay. Before we get to that, because Rachel Michelle's wrote a book on this. She's the expert here, but I wanna ask you a question. Okay. Ask that last question again.

I want money to be a conversation we can approach without fighting or dreading the talk. Okay.

Let's take the, the actual topic of money off the table and let me ask you a question. Are you a person your wife can sit down and have a conversation with and you don't try to fix her? You hear her. You say thanks for sharing that, even if you think it was dumb or boring or whatever? Are you a safe person that she can just talk with?

The answer to the question before yesterday would have been no. Okay. Uh, we, we go in seasons of that, but just yesterday we kind of had to sit down, redefine the marriage relationship conversation. Love it. Where both of us share our hearts, and that was one of the things that she really wanted to talk out. And I totally understand, and I admit that, yes, I'm a problem solver along with many other, many other men. Yeah, yeah. And that's something that I need to work on. And so even yesterday, after that conversation, it went really well. And then even this morning, I was able to practice that. But we're getting there. So historically, no, but starting last night, the answer is yes. Perfect.

So what I want you to work on in your home, and it sounds like y'all are on it, and you use the magic word— this is just practice, this. And for the, the wives out there listening, often a husband tries to fix a problem, not because they think you're stupid, but because their whole life they've been told the only value you have in the world is utility, is the solution to a problem. It took me being married forever before I realized, yes, my wife likes that I can change oil in the car, and yes, that she likes things I can do around the house, house, but she likes me. And that was hard for me to metabolize cuz I thought I was only worth my answers. And so y'all practicing just talking, listening, remembering she's your friend, that you're her friend, right? You get what I'm saying? So y'all are on the right path there. That will make not only money conversations, but any conversations you have one of curiosity and not judgment. Instead of, that's a stupid thing, dude, tell me more about that. That's different than how I I see it. And one of those is an invitation, and one of those is a slam door, right?

All right, so, we'll talk about the money thing here. Go for it, Rachel.

Well, I was gonna just, I mean, when you said, "We continue to fight about money," and then you're like, "But we're on Baby Step 3." So, I'm like, this is, the problem isn't the system that you guys have put in place, it's the attitude and the posture around the subject that's caused the strife, right? Or something's come up and gets triggered in her or you, and it's like, you guys just can't, can't come eye to eye. But I think it's probably more what John's saying is the approach at which you take those conversations. And a helpful thing that I feel like has been good that Winston and I, and we do this with more than just money, but we see the thing that we're talking about or the tension points where we're so different. We're coming at it in such different perspectives, different backgrounds, how we grew up with money, I mean, all of it, right? That all plays in. And we see that subject matter as kind of the third party in the triangle, and it's out "out there," and Winston and I are on the same team. Like, it's us locking arms against that thing out there.

That the spouse is— your wife isn't the enemy. You're not the enemy to her. It's this thing out there. And what is this thing out there creating in me or creating in her or him, you know, in my case, this strife that we just seem to have this conflict all the time? And when you can start to pinpoint that, that's huge. And I think we have found, too, we were talking about money and marriage, but we talk about the subject a lot over that weekend. But having empathy with your spouse, actually seeing your differences, and her massive free spirit as a strength, Andrew. Like, she gives you a gift in your life. You would be probably a semi-boring person that doesn't leave the house much, if it probably weren't for your wife, right? Who brings the fun and the levity. And the enjoyment, right? And then you are a godsend to her because if she's like me, details are not my ideal. I don't really enjoy looking at every single little thing and every interest rate. And if we put it in this thing and we change here and we do that, I mean, I'm like, "It's great.

I trust you. Like, it's fine. Go, go and do." Like, I don't enjoy that. But because of that, it actually gives me a subconscious safety net of knowing I have a husband who's taking very good care of our family in that way. Does that make sense? There's a beauty in the differences. And I think that's, you know, so yeah, we can dive into the numbers if you want. But I do think there's a level of respect and care to give each other in these conversations that's gonna help tremendously, where she'll have the freedom and probably maybe even say, "Hey, okay, because this has been going so well and I feel this freedom that I don't get I'm going to get slapped on the wrist or feel like I'm getting, you know, judged. Yes, that, okay, maybe I don't need to, I may not need to spend so much. Sure, do we want to cut back? Like, there's more of a willingness on both parties' end to do some level of change when you know that the other person is for you and there's a beautiful love and respect, you know, situation happening. Does that make sense?

100%. It does. Absolutely.

What's the number you're worried is too extreme?

Dream?

I would say there's a few examples, but things like birthdays, birthday gifts. She has a large family, and so when it comes time for celebrating a few birthdays, maybe sometimes there's a month where there may be 3 or 4 birthdays and we want to spend or she wants to spend $25 or $30 or $40 per person. Or going out to eat. A big one for her would be clothes.. And so, I'm not necessarily opposed to spending money because I kind of trained myself, hey, let loose every once in a while. Go get your— I like coffee, so go get yourself a coffee or specialty coffee or something like that. But where the line is, because I realize that we're still in Baby Step 3, we had an emergency fund, then we had a baby in April, so we depleted about half of it to pay off the medical bills. And so, now we're kind of building that back up. And so, because we're in our mid to late 20s, or I guess I'm 26, so mid 20s. I'm just kind of worried, like, I just want to get into a house. Like, I just wanted— yeah, I just want to complete Baby Step 3B and I want to get into a house.

And her maybe goals are like, well, I want to get a— I want to get a different car, and I really don't care about a house right now. Maybe, you know, maybe 5 years, absolutely, but, you know, in 2026 or 2027, no.

So let's have that conversation. Where do we want to be in 5 years? Yes. Who do we want to be in 10 10 years. And those dreaming conversations where they're like the, the old corporate whiteboard, there's no bad ideas. Like, what's your picture of 5 years from now? We have 1 or 2 or 3 little kids running around here. Where do you want to be?

What do you want that to look like?

And then you begin to reverse engineer action steps based out of this shared vision of what y'all want to be. And there's gonna be, there's always gonna be pinch points. Oh, actually want a new car before I want a house. I want a house before I want a new car. Well, one of those is a depreciating asset. And one of those is like this, but getting beneath the house is, I want the security for my family. I want a home. Sure. Right? And so getting to those real issues underneath the fight points. Yes. Man, it changes everything.

And her to have a level of freedom with income that you guys are out of debt, you're building that emergency fund, but I do also want to enjoy my life. Yeah. So there has to be a both/and. Welcome back to The Ramsey Show in the Fairwinds Credit Union studio. I am Rachel Cruze hosting it this hour with Dr. John Delony, and we're answering your calls. So give us a call, 888-825-5225. Looks like the phone lines are all taken at this moment, But just keep trying and hopefully we can get you in this hour. All right, let's go to Casey in Lexington, Kentucky. Hi Casey, welcome to the show.

Hi, thanks for taking my call. Absolutely, how can we help?

Um, little backstory, me and my wife, we are in our early 40s, baby's 6. Um, question is, she is planning on going back to school and we do have the money saved up for her to go back to school.

But her work is willing to reimburse her, but only if she takes out student loans. What? Yes. So she takes out— what kind of industry is she in?

She is in healthcare.

I, I've heard of all sorts of reimbursement plans of all types, but I've never heard of somebody that it has to go— has to be a student loan. That is— I don't understand that.

Has she asked more details of, of why the process is that way?

Um, not necessarily, no, but, um, but we for sure do have to take out student loans. That is the answer.

What will the degree be getting her? Um, like payment-wise? Yes, and advancement in, I'm assuming, her career track. Correct. Yes. Uh, approximately $30,000 jump.

Okay, per year.

Good for her. And how much is the schooling? Uh, $25,000.

Okay. And it is 2 and a half years.

And it's 2 and a half years doing that.

Okay, good for y'all. She must be awesome. That's really cool. Um, and let me throw one other wrench in there before Rachel answers. I I would want to know if I go in and put my tuition on a payment plan and tell the university, because they'll put you on a 3 or 6 month plan instead of writing a check on day 1. I, I've just never, I've been around higher ed for mo, for almost all of my adult life. I've never heard of this. I've, I've heard of blanket reimbursements. Mm-hmm. And unless there's some tax advantage that the business has by paying down their employees' student loans or so, I don't know. I've just never ever heard of this. This, which, and anytime I've never ever ever heard of something, A, I could be totally wrong, but B, I would want to dig in a little bit further and see if, if I'm not hearing stuff right. Okay.

Because if there's paperwork that has to be done of, okay, I, I, I, um, and not from a loan perspective, but I'm wondering, yeah, like a payment plan here and then the school writes her the check and reimburses, like it's all, yeah. And we'll, but I, I don't, and sometimes sometimes if it's attached to a loan, they sometimes have a weird repayment plan and/or you have to stay with that company for X amount of time, right? Like there's, there's some strings attached always. What is it?

What are the strings on this one?

It is 3 years. She has to be on for 3 years. Does that include— is that after she finishes her schooling? Yes. Okay, so 5 and a half years. And she currently works there now? Yes. Sure, sure. Oh bro, I wouldn't do—

there's no chance. And not— I know. And And you know my feelings on debt. I'm on the Ramsey Show, for God's sakes. But I would gladly pay $25,000 that I have for a degree that will reimburse itself, that will pay for itself in less than 1 year for 4.5 years of freedom for me and my wife. Mm-hmm. Gotcha. 'Cause she's one bad boss, she's one bad transfer, she's one bad, the hospital sells to another hospital. I mean, any number of things.

Has a baby that she wants to, you know, be home. I mean, I don't know. I don't know what it is, but it's like, yeah, dude, the freedom for my family.

Again, you hear me say this all the time. I saw it for peace and I saw it for freedom. I'll pay that $25 grand all day long, especially in a healthcare position that's gonna ROI in one year or less. Shoot, I wouldn't even think twice about that.

Gotcha. Well, I thought I knew the answer, but she want me to call.

Well, I'll tell you, Norm, I mean, I could give you the, I could preach to you about student loans or something. You would actually have me kind of bound up, to be honest be with you. I would have to, I, I'd have to, I'd have principle versus principle in my own spirit. If, if she has the ability, a company's gonna, uh, pay for her to go to grad school and maybe they're, they're gonna ask her for 2 years or for 1 year and, but they have to take student loans. That would be principle versus principle for me. But this one is a no-brainer. Y'all have worked your butts off for just this moment where she can get the advancement. It's awesome. And she doesn't have to sign a check with no, I mean, she doesn't have to sign a commitment to anybody. Be like that.

Yes, true. Yeah. Yep, yep. I would have options. That's the beauty in life. When you have autonomy over your decision-making, like it is, that's a game changer. We're not stuck in just a crappy situation if it ever turned that way, right? So yeah, and you don't have to pay it all up front. I mean, you probably pay $5,000 per semester, you know what I mean? As you go through. So easy. You know, it's the same conversation I feel like that we have to talk people off the ledge of of student loan forgiveness, right? If they're on the front end of it and they're like, well, I could wait 10 years and this could be for, you know what I mean? And it's this long time. And that's why we're even like, no, you never know what's gonna change in 10, 10 years is a long time, you know? And, and to work and to pay off what you've had, where it feels like a free situation 10 years from now, or in her case, kind of a free situation, but that's 5 years, right?

It's so— and your fingers are crossed that that's 1, 2, 3, potentially 3 presidents away. Yeah, that's right. God knows what they'll—

you know what I mean? What's gonna happen?

Don't get our concern. ChatGPT will be all our president in 3 presidents from now. Like, who knows what the plan will be?

The world is gonna be, right? So it's when you can make decisions for your home in a vacuum, you guys, that is worth it every time. All right, let's go to Doug in Tampa, Florida. Hi, Doug. Welcome to the show.

Hi, how are you guys? Hi, we're doing great.

How can we help?

Uh, so got a question. Um, we have some stocks that were given to us here recently, and I guess over time they've done pretty good. There are 3 energy stocks, but we're looking to make the most out of it, uh, for the next 15 years until we get closer to our retirement age here. What should we do? Should we sell these stocks and put them in the mutual funds that we found that are getting close to 10%, or should we just let them ride?

Are they 3 individual stocks? 3 individual energy stocks. Okay, so yeah, I'm not a fan.

I'd sell those before the day's over, dude, of individuals.

Yeah, I mean, because, because all your eggs are in one basket versus a mutual fund, you're going to have 90 to 200 stocks. Or if you even, if you just did an index fund for the S&P 500, right, it's across all 500 companies. There's just something about that diversification that gives you such safety. And you're right, and the market's done well. I mean, when you look over, I think we did the math with Dave on the show last week. It was like up 100% over the last 4 years, 5 years. When you look at all of it combined, like it's just, it's wild what the market's doing. And to put all that risk on just 3 companies doing well, I wouldn't take that bet, Doug. So yeah, I would sell them, move them to either great mutual funds, Um, or even, I mean, you could just do an index fund too. Open up a brokerage account with, you know, Vanguard or Fidelity. Or, um, how much are they worth?

Uh, I'd say right now, probably take out, um, out of our total stocks, take out the kids' college stuff, we have about $350,000.

Okay, so you know what, that's enough that I pro— I would sit down with a SmartVestor Pro. If you go to ramsaysolutions.com, you can find one in your area and actually look for a long-term game plan for that amount, right? If it was like $10,000, $15,000, which I knew it probably wasn't going to be, you could do something simple. But, but I, I probably would sit down because they're going to be able to look at different funds, the best ones to put you into, and even, you know, things like, you know, tax loss harvesting. Like there's some, there's some elements at that amount of money that I would want on my side, and a financial advisor can can help you with that. So check out a SmartVestor Pro, Doug. Yep, and I would get those moved.

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

Com. Up next, we have Kelly in Denver, Colorado. Hi Kelly, welcome to the show.

Hi there, thank you so much for taking my call.

Yes, absolutely. How can we help?

So I am going through a divorce. Um, sorry. And it's okay. Thank you. Um, so I, so right now I'm keeping the house. Um, but I'm also, uh, paying, will be paying, uh, $4,400 a month in spousal maintenance. And what is that? What is that? Yeah. Uh, alimony. Okay. Oh, oh, oh.

Okay, so to my, uh, in order to keep the house because you decided to keep it, so you— it's the equity, the split. Okay, okay.

Um, yeah, that was part of the, the negotiations. Um, and the reason, main reason I wanted to keep the house is my daughter. I have a 10-year-old daughter. It's her neighborhood. She has a best friend across the street, a great school system. And just really trying to keep that stability for her during this whole process. Unfortunately, I feel very underwater every— maybe not very, but $500 to $1,000 underwater every month. And so I'm wondering if I should try to keep hanging on in order to give my daughter that stability I do have a pretty good emergency fund. Um, or if I'm just, you know, if this is just a pipe dream and I'm sacrificing—

Let's get some numbers real quick. Cause I think there's a deeper probably element to this that I want John to speak on. But, um, okay. Besides the $4,400 that you're paying a month, how much is the mortgage?

The mortgage with taxes and insurance is $3,800.

$3,800. Okay. And how much do you make a month?

Month?

Um, well, so my, my gross is $175,000 a year, but I'm only, I'm only taking home around $5,700 after the spousal maintenance. And then after, um, is that taken—

that's not taken directly out of your check though, right?

Um, I, I put it into a fund.

Okay, but how much, how much income hits your bank account, just income without anything being I mean, like, after taxes, what hits Kelly's checking account?

I hit $5,600 a month.

But you make $175,000 plus the $4,400.

So you make about $9,000 or $10,000 a month?

Correct, yeah. Okay.

Yeah. Okay, are you counting that in the $175,000?

She makes $175,000 and she gets $4,600 $1,500 plus the $5,000, whatever, $5,500 she just said. Okay. So she gets about $10,000 a month. Yeah. Um, yeah.

So yeah, so that would leave you, because I would want you bringing in about $12,000. Right. Um, do you see your income going up at all?

Um, I work for the federal government, so we're not expected to get raises, um, this year. But in the next couple years, I would expect to get get some raises. Um, and the other thing is right now she's in, uh, an after-school program, you know, daycare. Um, so in another year or two, uh, she wouldn't need that when she hits 12. Yeah, which relieves some— so like, yeah, so in my head I think, oh, I can do—

I can hang on, I can do this.

I know.

And the numbers— I know.

So I know, Kelly, this—

I'll put this in the top 3 or 4 worst conversations I have with people, okay? And because we only have a few minutes, I'm gonna be pretty direct, but I know what I'm saying carries a lot of weight, okay? One of the most— not one of— the most common thing I hear amidst a divorce when there's kids involved, one kid, five kids, whatever, is this statement, some sort of this statement: I want them to have stability, whatever stability they can possibly have, right? And I get that sentiment, and I, I, I, I would be the exact same way in the situation with my two kids. But the reality is everything they know— she knows, your daughter is, is gone. It's not stable. And trading moms— what she needs more than anything on the planet right now is a sturdy mom who has peace in her chest and not the after-school program. She's 10. She's got a best friend. Like, I can't tell you the name of my best friend when I was 10, right? Like, so all— and by the way, I've got a 10-year-old right now. I got a 10-year-old daughter, and she's got best friends.

I get it, right? Um, but the most important thing she needs right now is a mom who's anchored after the world y'all knew doesn't exist anymore. And so instead of saying, what do I have to sacrifice, including financially, emotionally, psychologically, spiritually, so that she can have some illusion of things are just going on as they used to to be. I wanna— I want you to first ask yourself, what do I need as the adult in this house to be well and whole? And that everything in her life is going to be a derivative of, of you solving for that. And so it sounds like if there's a condo or an apartment in that area that you can live in for 2 years and make that sacrifice, that maybe that's the deal. But man, it seems pretty untenable sustainable to just have that much of your income out the door every month before you can even go to the grocery store, right?

Yeah, yeah, I know, it's, it's been, um, I mean, it's, it's weighs on my mind pretty much all the time.

I know, it's terrible. Yeah. And I— here's what I want. I want a 10-year-old daughter who's really mad at her mom who's upset, throws 10-year-old tantrums like they're supposed to, who accuse, who says all the things right now. And then I want that same 10-year-old girl snuggled up next to her mom over Christmas break on a couch that is yours, in a place that is yours, at a place where you can breathe.

Yeah, you know what I mean? Yeah, no, the whole thing is you know, I know what you picture in life.

No, I hate it. I hate it. I hate it. I hate it for you. It breaks my heart for you. It breaks my heart for that little girl. I hate it.

I know, Kelly, and you're, you're such a great mom. Yeah, I mean, honestly, doing what you can in such an out-of-control situation to try to create what you believe is the best. And I think when we do that, sometimes you— the unintended consequences are these other things that to drag and weigh on us. And yeah, and you know, and I'll say it from the math side, $1,000 a month underwater, like that's a lot, you know? And your emergency fund, if it starts to have a small leak and there's nothing replenishing it, that's eventually gonna run out, you know? And so you kind of get to this point where the reality's gonna hit at some point. And I would rather you do, if there is a decision to be made, which I think there is, do it at a place of strength where it's your decision to make and you're not being forced out by a bank or, you know what I mean? Like down the road if something dramatic does happen. Do you, do you have, how much is in your emergency fund? I have $50,000. $50,000. Okay.

And how much equity is in this house? If you sell it, what would you walk away with?

So that's, that's part of the problem. It's underwater right now with the market. Market. Um, so it's— I don't have equity in the house. Um, I would just be walking away.

I mean, I would. How did they appraise the house at being underwater and you still have to pay him $4,400 a month?

Well, the $4,400 is, is because of your income, correct?

The income.

And it's, it's—

there's a whole, uh, He was not working, so, you know, I guess it's roles reversed. Um, not quite a stay-at-home dad, but yeah, but not working either. So if you sell the house, does this alimony go down? Um, it wouldn't go down for at least the next 2 years, um, because that's It's kind of a locked-in rate for—

Okay, well, you might be in the—

if that's the case, you're not— I don't know if you're gonna find rent in Denver for—

You may not. Yeah, you may not have a choice but to stay in it. But to stay in the house. Until the equity is built, which will be probably another 4 years, Kelly. So I would find a way to cut expenses and hold on and try not to dip into that emergency fund too much until the market semi-recovers and you have some equity in the home.

You spend hours researching before making a major purchase like a home or car, but it's also a good idea to put in the work searching for the right insurance coverage. To protect your biggest assets, I recommend using Ramsey Trusted Pros. Whether you're looking for car, home, or any other type of insurance, Ramsey Trusted Providers have been coached and vetted to serve you like we would. Find what you need at RamseySolutions.com/insurance.

One of the biggest mistakes that people make is thinking that think that they can skip having a will because they're too young, they're too healthy, they just don't need one. Maybe they don't own a lot of stuff, so they're like, "Ah, it's not a big deal." But a will helps protect your family. It gives clear instructions and can keep your loved ones from having to guess what you wanted during a difficult time. Like, if you could imagine someone passing away and then trying to figure out what to do with all their stuff. And a will gives guided instructions, you guys. It gives a clear path.

I talked about this yesterday with Jade, but I want to say it again on this hour. Are today. Imagine you're 21, you live in an apartment, and you're, you're thinking like I would have thought at 21. I don't need a will. I don't have anything. I have a guitar and like an old couch, right? But imagine something happens to you and you pass away, and your mom can't go in your apartment and help pack up your clothes. Your dad can't come in with one of his friends and help move your couch out because they're not allowed in the apartment because the apartment has to turn it over because they're just different adults now. Give your family the benefit of just being able to grieve you and not also having to fight for you after you pass. Oh, every single body who's an adult needs a will, period, end of story.

So go create one, you guys, and go to mamabearlegalforms.com. And if you're not sure where to start, you can text quiz to 33789 and we'll help you figure out what option is best for your situation. But mamabearlegalforms.com, they're amazing. That's where I went. That's where I went. State-specific wills, like, they are awesome. So make sure to check them out. All right, let's go to Teresa in Tulsa. Hi, welcome to the show.

Thank you guys so much. Thank you for your time and your wisdom sharing with everybody.

Absolutely. Thank you. How can we help today?

Um, well, um, kind of starting late in life here to understand all this stuff. My husband is in his mid-70s and I'm in my late 60s, but I've been trying— I got all your dad's books and I've been reading them, but I have a question about the emergency fund. It says best place to put it in a simple money market. I don't understand where to go or what to do, if that's at the bank or if I have to go to a planner. I have it right now in a— nope, well, I did have it in a no-penalty CD, but I just have to change change it until December because it was better percent interest at the moment, but it's not liquid, so I got to get back to liquid. Yeah, I understand that. So I'm just trying to understand. I'm new to this game. I don't understand all of this stuff. Yeah, I was gonna see if you guys can help us out. Dude, you're awesome, Teresa.

I for—

obviously, I first applaud you for— not, not many people in their, in their 60s want to change the way they've been doing stuff. There's That's awesome. Yeah, that's amazing.

Well, I'm very scared. I do believe it's all God's, and I want to be a good steward and, you know, leave it where it needs to be, you know, do with what I'm supposed to.

So you called the right place.

We're gonna, we're gonna help you get unscared. Is that cool? We're gonna make it real simple for you. Yep.

So I think one thing to remember, and for everyone listening, this is kind of a good teaching point for everyone, is that your emergency fund is not an investment. You wanna see it more like insurance, right? So the percentage of what you make, yes, on it, it doesn't really matter as much. 'Cause if we were going for high interest, we'd be putting it, you know, in the market, right? And so, so that's one thing to remember. Also for CDs, yeah, they're not ideal for an investment or an emergency fund because you usually have to let them mature before you take some money out. You said that it's a no penalty one, but easy access to the emergency fund is huge. This is a big point. You don't want it too accessible where it's sitting in your checking account and you might spend it, right, accidentally. And so keeping it in its own separate account. So that is where in the book, yes, he probably did write about a money market account. And the funny thing is the things that have become more popular in the last couple of years, it's very similar to a money market account, it's called a high yield savings account.

And so you're parking money in this and And again, I know it's not an investment, so I'm kind of like speaking out of, you know, both sides here, but it's better to have your money in something that's just growing a little versus a traditional savings account. So with a money market account or a high-yield savings, you can put your money somewhere. I mean, you may earn 3%, probably around what you're making in your CD, honestly, but you're able to transfer money account to account within that. It's very easy to get to. Even some money market accounts, you can write checks out of out of it, and a debit card comes with it. You have a limit usually on your transactions, so you don't wanna use it as a checking account, but if you needed to get to it quickly, you could. So Teresa, if you hang on the line, Christian's gonna pick up and he's gonna help you get to Fairwinds Credit Union. They're an amazing partner of ours. I have, I've opened up accounts with them because you can have up to 10 high-yield savings accounts with them. And so that is where I would put your emergency fund, Teresa, is with Fairwinds.

And it's very easy to set up. If you go to their website, Christian can to help you get to that. It's fairwinds.org and go to /ramsey and set that up. But I would take money, yeah, out of that CD and I would put it just in a high-yield savings account. And again, your fully funded emergency fund is 3 to 6 months of expenses. And so that's the number you're shooting for there.

And so I'll say this, Teresa and Rachel, you can tell me, John, this is dumb. Is my home's emergency fund, like the, if something happens and I need money today, um, I, I have no idea what the interest rate is. Mm-hmm. Because I know me and that if it had, I've got money in a high yield savings account, right? And I've got college savings. I got that stuff. But as for that account, I know if it had an interest rate attached to it that I knew and watched and is it 2.9%?

It'd be a thing. Yeah. Oh yeah.

I spend waking hours going, well, is it in the— and I have to remind myself, that's not the point of that money. Mm-hmm. That point of that money is right. Every day of my life, we're having a good time. So in, in, in my house, I have my checking account in a bank and we opened another account under that same heading, under me and my wife's heading. And it's there. And I, I can't, I can't use my debit card out of it. I've gotta stop and open my laptop and move it from one account to another. Mother, which takes like 5 seconds to do. But for me, I don't even— for that, especially that initial $1,000, but for my 3 to 6 month emergency, dude, I'm— I just can't get my head in that stuff. It gets too complicated for me. I don't want to mess with it. I just want that safety.

You get what I'm saying? Teresa, do you guys— do you guys have consumer debt, you and your husband?

No, our house is paid for. Oh wow. Everything's paid for. Things in savings and in checking right now. I did check with a high-yield savings at my bank and they said you have to— you can only start it with $60,000. Oh, good grief. That's $60,000 CD.

But I— no, no, no, no, Teresa. Yeah, no, that's wild. That's crazy. No. Yeah, yeah. No, no, no, no, no. I think, I think Fairwinds is like $500 or something. Yeah. No, no, you're— that's, that's wild. That sounds like they're trying to take advantage.

I don't like that. That makes me feel confused.

Everybody tells me something different. And I don't have the internet, so I— we're computer illiterate.

Even better. That's why I was like, you know, that's why you're so awesome, Teresa.

She has no—

well, I'm trying, and I do depend on my kids once in a while, but I try to do it. I still try to do it. Oh, that's the best.

Okay, well, I'll say this then for you, Teresa. I love Ferens, but they are an online— yes, bank. They have partners around, um, different credit unions in your area that you can go and get cash from. But I would say this, if that, if that's not your cup of tea, then I would find a brick-and-mortar. That's not a— that's insane.

What that bank quoted you, I would go down the street in there in Tulsa and find a credit union.

Yes. If there's a credit union in Tulsa that has a high-yield savings or a money market, that's great too. If you just want to do it in person, I totally, totally understand.

And I want you to walk in there and say, I just want a high-yield savings account and I want to put $25,000 in it, which is 3 to 6 months for me and my husband or whatever that number is. And if they start trying to sell you other stuff, just say, I just, I just want this. And if they try to sell you more stuff again, say, thank you for your time, and walk out. You're in the driver's seat, sister. You have a paid-for house. You've got cash. You're, you are the boss here. Okay? Okay. And I, you are in a position of major strength here.

What, how much do you guys have saved, Teresa, overall for retirement?

Well, actually none. Well, I mean, we do now. I mean, just in the last few years that we inherited some money, and, and, um, but most of it is in savings and of course the CDs. Okay.

Yeah, well, getting, getting that— I'm sorry. No, go ahead.

Overall, well, in the CDs there's roughly $77,000. That's including That's including the emergency fund.

Okay, that's great. Well, and I would say any type of investing too, check out our— check out SmartVestor Pros. You can go to Ramsey's—

well, you don't have the internet.

Ask your kids to look up ramseysolutions.com and find someone in your area for investing for the future, Teresa. That's your next step.

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Our scripture of the day comes from Philippians 1:9: And this is my prayer, that your love may overflow more and more with knowledge and full insight. Maya Angelou said, do the best you can until you know better. Then when you know better, do better. Oh, I like that. All right, let's go to Gina in Los Angeles. Los Angeles. Hi, Gina. Welcome to the show.

Well, hi. Thanks so much for taking my call today.

Yes, absolutely. How can we help?

Well, I am getting very close to retirement age. My husband's already retired. And we're looking at our savings and investments and wondering whether we should leave a certain amount of money in an annuity we already have.

No, I would— Or move it. Yeah, no, I wouldn't. You can get much better rates of return less fees, everything. I mean, the only annuity that I would, I would never, I wouldn't personally do one, but some people are so freaked out by the market, they kind of want that guarantee, would be a variable annuity. That would be the only one if you were to do it, but I wouldn't, Gina. So you guys have one currently, you said? Yes. Okay, how much is in that?

It's $190,000 with a protected income amount of about $258,000.

$250,000, okay. And what other money do you guys have saved?

Oh, we've got the rest of our money is in IRAs, 401s, and high-interest savings. So that's about another, I don't know, about $1.2 million.

Okay. And what, what the annuity, I'm just curious, your thought process when you guys opened it, was it just to diversify and have just another element, or were you nervous about the market, or what caused you guys to get it in the first place?

Yeah, it was kind of to do something else. The market was a little bit nutty a couple of years ago when we did this. Mm-hmm. And we are working with a financial advisor in a private company who suggested it would be a safe place, and then we could start drawing against it as soon as next year. Mm-hmm. So that would be an additional safe guarantee monthly income.

Okay, yeah, I mean, you guys are fine everywhere else. I just wouldn't— I mean, I would— I'm just gonna tell you what, again, what I would do, and I wouldn't— I would, I would probably just open up an index fund, take that money out of the annuity and put it in. And just know that there's some great commissions. I'm not saying your financial advisor's wrong in this, but there's a lot of high fees. There's commission, a lot of commissions on annuities. And again, it kind of taps into more of that fear mentality. You know, we had a lady call in. She was like in her early 90s, John. This was a few months ago, and she just was scared to death. And I was hosting with Dave, and I remember he was like, you know what? Just do your annuity. You're fine. You just need to sleep good at night. You know, you're fine. But in your 60s, that's 30, that's a good 30 years, you know, hopefully 20 years of great growth that the market market has been doing. I mean, you can look at it historically and yeah, there are some ups and downs, but overall, yeah, I wouldn't, I don't see a need for it.

If you'd had that money in the market the last 5 years. It would have gone 100%.

That's what we were saying earlier. It would have gone crazy in a great way. So I think you can just make more. I think your money can make more than it's in an annuity personally. All right, let's go to Elsa in Houston, Texas.

Hi Elsa, welcome to the show. Hi, um, my question is that I, um, I need to figure out if I need to sell my house or maybe get a cheaper car. Um, about a year and a half ago, my ex-husband had to lower child support, and then it took time for that to go through the court system. Finally, that happened. Um, I only found out about him lowering the child support after I signed the agreement for this house, after I sold my other house. Mm-hmm. That was cheaper and more reasonable. So I'm trying to figure out how to keep from going under, basically. Okay.

How much do you make a year?

$53,000 a year myself. Okay.

And how much is your mortgage payment a month?

$1,850. $1,850. Okay.

And how much is the child support?

Uh, I got a lump sum, so I kind of budgeted for about $1,000 a month, and that'll last for the next couple of years when basically my daughter graduates.

Yeah, that was gonna be my first question, is how much longer is this gonna be a part of your life? Because if you bought a house on a— even on a 15-year note and your kid's older than 3 this money runs out, right?

Yeah, exactly. I have a pretty good 401k, but I have credit card debt because of going back to— back to court, basically. Okay. On all the attorney fees. So yeah, so I'm kind of stuck. I'm not sure what to do.

Yeah, I mean, the house is— it's a lot for your income. Yeah, even with the child support, $1,000, it probably is is. Um, how much is the house worth?

Uh, probably $220,000. I—

it's a brand new house. Okay. And how much, um, equity would it go— yeah, would it go for? Is there anything? Or how long have you been in it?

I've only been in it for a little over a year. It's a brand new neighborhood and it's not finished yet, so I'm not sure it would sell right now. For any more than what I owe on it. Okay. Okay.

Um, are you underwater every month with your, with just your life?

Yes. And it's very stressful. And I do have also a car payment and I'm kind of trying to decide if I need to, you know, sell that and get a cheaper one and just pay the difference.

Um, how much, yeah. How much, uh, do you own the car?

Uh, around $34,000. Oh gosh. And it's like $500, yeah.

Okay. Yeah. Yes. Okay. So just as a point of reference, we recommend that your car or cars in a household, but for you, a single car with your single income is no more than half of your annual take-home pay. So that would sit you around a $25,000 car at the mo— at the high end. Okay. Okay, um, are you underwater on the car?

A little bit, yeah.

Okay, and what other debt do you have?

Um, just the credit cards, basically. How much is that? That's around $20,000. Some of that is mostly 0%.

Okay, um, so gosh, I mean, Elsa, honestly, I would probably talk to a real estate agent. We have some great trusted pros in your area, and I would go to ramseysolutions.com and find someone. You can look at different profiles and talk to a couple, one that you're comfortable with. Tell them your situation, and I'm just wondering if you can get out of this house just unscathed and try to find, you know, even renting.

Rent it. Like Elsa, I'm telling you this from the bottom of my heart. I don't think you're gonna do it, but I'm just telling you because I love you, you, you need a season of a 2-bedroom apartment. And because you, you owe so much money in depreciating asset in your car and credit cards, you know what I'm saying? Like, this is like— I'm just trying to imagine the stress you've been through with divorce, with being a single mom, with now suddenly, yeah, like underneath you they cut the child support. Like, you need peace more than anything else, more than a fancy car, more than a fancy house.

Yeah. Yep. Man. And then, Elsa, I would go down to a credit union and see if they can give you a loan for maybe $6,000. And whatever the difference is on the car, maybe $2,000 or $3,000, throw it at that. And then, go— and I would just get a crappy car and let that be done. Like, it's amazing when you start to kind of see, and these are big changes. I know I can just say this like in a sweeping 2-minute segment with you. But if you can find rent for $1,200, and you have close to $4,000 left over, and you have no car payment, 'cause you have that beater car, you start working to get this credit cards cleaned up, right? And you throw an extra, you know, $2,000 at that, it's done in 2 months. Like, you start to see the light at the end of the tunnel with a plan, but it's gonna be a pretty intense plan after a pretty intense life situation that you've walked through with this divorce. So it's, it's gonna be a lot. And I know I just probably like threw a bunch over the fence of what to do to get out.

But honestly, that I, that's, that's what I would do. Because what John's saying, you can't keep at this clip, you're going to continue to go deeper and deeper in the hole. So I'd find good people on your team, people that are going to root for you, find a great real estate agent to give you the real numbers, the real comps, and look at get a real situation of what you could do to get out of the house.

A real private sale.

Yes. A number for your car. Yes, all of it. I mean, um, yep. Oh, I'm so sorry, Elsa. We're cheering for you though. Call us back if you need us. Remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.