Transcript of Living Without Debt Leads to Financial Freedom

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Normal is broke and common sense is weird. So we're here to help you transform your life. Here from the Ramsey Network in the Fairwinds Credit Union studio, this is The Ramsey Show, and we are taking your calls at 888-825-5225. I'm Rachel Cruze, hosting this hour with Dr. John Delony on Kind of a special day. We have our Money and Marriage Getaway starting tonight. And so, we have probably about 100,000— There's a jillion people out there. Out there for the event. And so, we are so, so excited. But we're here to take your calls on this show. So again, give us a call. All right, first up, we have Adam in Oklahoma City. Hi, Adam. Welcome to the show.

Hey guys, thank you for taking my call. I've got what I think is a good problem to have. My wife, uh, just started her job. She just finished her medical journey and she's about to, uh, get her first paycheck tomorrow. Uh, she's a doctor.

Oh, wow.

So, uh, we have done a decent job. Uh, we've taken the medical school loans down from $200,000 to $138,000. Um, and her after-tax income monthly is going to be roughly $40,000 a month. Um, I've been pretty militant, uh, about, uh, we need to pay off this $138,000, but I also own business and my expected income is approximately $250,000. My question is, would it be okay to postpone paying off the loans by December, January into January, February, possibly March to— after talking to my tax guy, he says that I can defer potentially $60,000 of the income in 401 and whatnot from my business. And so I'm wondering if postponing that a couple months and getting the 401 stuff on the books for this year would be wise.

You know what's funny, Adam, about your situation? Because of what you guys are making, I don't think it's going to matter either way in 20, 30 years. So for me, it's not a dollars and cents answer because if you, yeah, if you paid off the loans in January versus 30 days later, is it going to make a big difference? Probably not. It really comes down to a, a values conversation. And there's something to, we see this on the show more and more recently of, are you going to do what you said you're going to do? And if you guys said, nope, we are people that are, we're going to pay off the debt. That's been our journey. And the moment you start getting a little bit side-eyed or a little bit distracted again, and I'm saying this with the umbrella of like, it's really not going to matter for you guys.

Yeah. You make 3 quarters of a million dollars.

You're going to be fine. But I think the practice and the discipline here is, are we going to be people who say and do what we say we're going to do. And so there's something to that discipline that I think is pretty noble. But again, this is not a make or break question for your life. So I don't think it really matters. But again, I like the disciplined answer to say, we're going to be people who do something that we said we're going to do. And that's a sticking point because that will lead into other parts of your life and your marriage down the road.

Sure.

Yeah.

I listen to the show quite a bit and I am just, I've been one-track mind, but then this tax guy threw a loophole.

And they always will. There'll always be something.

And he's, let's say this, he's right. He's right. You could invest, take the full, your full max out of your 401 and then move. You could do that. There's no question about that. And it would reduce your overall tax burden, especially this year. Next year, I don't, Maybe some, but anyway, he's right. But I think Rachel's point is so good that in 2 years, your wife is going to have a colleague who wants to start a small little med tech business, and all he needs is $50,000. And all y'all can just run down and buy it. It's a guarantee, right? There's always going to be a thing. And I like what Rachel said, man. The thing that, and I'm a sucker for these things, right? And for me, John's not ADD at all. No, I'm all over the place.

About anything in life.

He's like, wait, what?

Go there? Do that?

What?

The way I have achieved peace is not by trying to win on every single transaction. It is, do I keep my promises to myself and do I hold onto the values that I put out? I'm more concerned about you having this been laser focused. Y'all got outta med school with only $200 grand. You got down to $138. That in and of itself is impressive.

Yeah, right?

Absolutely.

You've been running this thing for a while. Are you going to be who you say you are?

That's it.

Right. I'm kind of, I never in my life did I think we would have this type of income and I'm just, it honestly sort of terrifies me to mess it up. And so I feel like every time I have a question, I run and seek advice.

Yeah. And also, man, I don't know, dude. How about this? Will you make me a promise?

Yeah.

If y'all choose to just hit the gas on this thing, y'all could, based on her income and your income, what, y'all could be debt-free by January, February?

Yes.

If y'all are just ridiculous about it?

Yes.

Okay. Will you call me back in January if you decide to pay it all off and say, I'm really mad that we don't owe anybody any money?

I will definitely call back, uh, call back early next year.

Tell me, I can't sleep because I didn't reduce my my taxable income by my contribution this one year on the front end of 2 incredible, like an adventure me and my wife are about to go on financially. Um, I'm really, really mad that I didn't reduce my, right? Like, and, and I will publicly say in front of America, well, I'm sorry, Adam. Like, I'll, I'll, I'll own it. Okay. My gut tells me—

Fair enough.

You are gonna have not only not owing anybody money, that's awesome. That's amazing.

Right?

And then just thinking we're gonna have 3 quarters of a million dollars to give, like wild. To save and to finally catch up on things like going out to eat and stuff like that.

Right.

And, but more than that, you'll have kept your promise to yourself, a promise you made years ago. And that to me, man, that's just worth its weight in gold.

Yes, absolutely.

Awesome, Adam. Well, thanks.

Yeah.

Thanks for the call.

I know. And well done because—

You married well, brother. Good for you.

Married a doctor.

Yeah, I married a teacher.

Well, and the—

I married well too. I married well too.

No, but I'm like, there's something to be said, and we're gonna talk about it some this weekend. But I'm like, at the end of all of this, you're not gonna probably be on your deathbed and be like, wow, I should have moved that growth stock mutual fund over to a brokerage account and done that.

You know what I mean?

Like, you're not gonna sit there and nitpick everything. At the end of the scope of your life, it's who you are. It's your character, right? And again, hear me say, you guys, like, this is a small decision in the grand scheme of things. Like, either way, he's gonna be fine. But it goes back to the bigger picture of what money represents in your life and what direction and what control it has over you. Because there's always gonna be an investing person over here, a tax person here, a real estate— there are always gonna just be these things on the outside. And there's something about having the peace of being resolute in something of like, hey, we said we were gonna do this, just do it.

And then—

And we're going to be fine either way. And it's in the bigger thing of just taking ownership.

And I'll say this. So here's a good example. I had a buddy who's in the media space reach out about 2 years ago coming out with a product and, hey, do you want to buy in? And I got the pitch deck and it was actually pretty awesome.

Yeah, sure.

And there was a couple other things going on with me and my wife financially that we were working through. And I went back to what was the commitment we made? not for financial return. The commitment we made to each other after all the chaos was we're gonna solve for peace. And I passed, and that product just got picked up by Walmart. And I was like, oh, that would have been really nice, right? Yeah. And we've had peace. Yeah, we continue to have peace.

You're okay.

And so I can smile and laugh and be really happy for my buddy that this thing's working out. And I continue to be who I said I was going to be.

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Up next, we have Amanda in Bloomington, Indiana. Hi, Amanda. Welcome to the show.

Hi there.

Thank you guys so much for having me.

Yes, thank you for calling in.

Um, I just wanted to ask, so how do my partner and I balance finances when his family needs assistance? Um, we're on Baby Step 2 and we just got started. We are currently living together and I'm currently in my master's program in my last year. So, uh, we're in a position where my job allows me to have Um, like a place to live and, um, pays for my school. But his family oftentimes has to ask for money, and it's, you know, he makes the majority of the money. Um, and so since we're not yet married, um, I usually don't think it's even my place to have an opinion.

Yeah, it's, it's not. I mean, if it's his money, his family, that's what he wants to do.

Um, but it is worth a conversation about the marriage you're about to enter into.

If y'all are, are you guys married? So you want— do you guys— are you guys engaged? Like, are you getting married?

Yeah, so we are trying to save up to get married. Um, if we could get married tomorrow, we would.

Oh, just go to the courthouse, Amanda. I married somebody in my yard. I married 2 people in my yard.

Just—

you can do it.

Not your marriage. You didn't get married.

No, I had— I've officiated 2 weddings in my yard.

In your yard. There you go. I was like, we'll be clear about that.

Yeah. Yeah. So we want to get married pretty soon. Yeah. But, um, then it's even the conversation of his parents and, um, we are a team and he's very, we're very open. Yeah. Uh, with each other. But it could just be difficult to kind of even think about that because, mm-hmm, I want like to support his family.

So y'all, you said you're open right now about that kind of stuff.

Mm-hmm.

What are you saying to him now?

Um, just basically kind of being like, okay, like, uh, maybe let's, uh, budget for it. Um, let's plan for it. it into this and this because I don't want to. Um, but even that, I, I just feel bad saying because it's his family. It's his—

And what does he— how does he respond to you when you say that?

Um, he's very good about it. He's like, yeah, um, maybe we can break it down. Um, maybe you can kind of tell me how much. But even that, I kind of feel bad about because we're not married.

Can I, um, can I say something that's gonna sound really harsh, but I only have a few minutes with you, so I'm just gonna like I'm gonna be overdramatic about it.

Yeah.

How much money do y'all owe? Like if you took all your debts and wrote 'em down, how much debt do y'all have?

So it's almost $60,000. It's mostly my student loans from undergrad.

And how much, like, I'll tell you, don't combine your income until you're married. And there's legal reasons for that. But like how much, if y'all looked at your combined incomes, what do y'all both bring in?

I don't bring in a lot and he brings in about $40,000.

Okay. So I'm saying this with all the love of my heart. Y'all are frighteningly broke. Yeah. Like you owe a significant, significantly more money than y'all even bring in the house. Y'all have a financial emergency. And so the greatest gift you could give to his family, long-term, maybe on the weekly, like, hey, we need some more money for this or more money for that or whatever. The greatest gift y'all could give them, even if y'all have a picture of helping them and being of some sort of support to them down the road, is to get y'all's house in a place of safety. And that would mean saying to mom and dad, hey, we don't have that money.

Yeah.

Because every dollar you put out of the house, y'all are having to borrow that dollar just to eat and keep the lights on.

Right?

Yeah.

My only hard thing is, I mean, it's her student loans.

Yeah, I guess for now. Yeah, for now.

And he's making the money.

I'm assuming they're—

yeah.

I mean, you know what I mean?

You have no vote right now, for sure.

Yeah.

I mean, this would be an after-marriage conversation. Because in my head, if you guys, and you guys have chosen, you know, the decisions that you've made up to this point, you're acting like you're married, but you're not from like a living situation. And the truth is, I mean, you don't, you don't, you're not making, I mean, you wouldn't, you couldn't, sustain a life on your own, Amanda, right now. You're not bringing in any money. And so you're dependent upon him, right, to do that. And then if I'm him, I'm like, well, if he doesn't have a lot of debt and he's making money and he has margin.

Yeah, that's fair.

It's tough. You know what I mean? It's tough. Yeah.

But—

Yeah.

Amanda, I—

The thing is that for me, I'm, because he, so the apartment I guess is under me, so I'm able to live by myself. And so he's come in and he doesn't like, pay rent or anything. And so, um, like, I have like a meal plan and everything, and, um, it does give me some monthly income so that I would be able to, just as a student, but, um—

To support yourself, you're saying? Yes. Yeah, I hear that. Yeah, yeah.

I don't, I don't think, Rachel, this is a conversation they can— that can wait until they're married in terms of, are we going to continually— anytime mom and dad call—

That's right.

We're just gonna, no matter what situation we're in, what our finances are, what's the state of our grocery budget or whatever. We're just gonna give and give and give and give and give.

I 100% agree.

And Amanda, you've gotta own signing up for that. If he says, yes, anytime my parents call, I will always give them money no matter what. You have to know, okay, if I marry this guy, that's what I'm signing up for.

Yeah, absolutely.

Yeah.

So, uh, I would be apprehensive about that.

I know. So that's, yeah, it's the boundary conversation that, are you guys in agreement going forward of how you're gonna handle money? in that sense. But yeah, I mean, if I'm him, he's like, I don't have debt. I make 40 grand. If I wanna give my parents some money, I can. You know what I mean? Like, that's— That's true. It's tough. But Amanda, that's when you need to feel chosen, I would think, in that relationship to say, if we're moving forward and getting married, and after we're married, we are one. And so that $60,000 becomes our debt.

Ours, right.

And we only make now $40,000, or if she gets a job, $80,000. And then at that point, then the choices in the household have to shift to, we now have to take care of this debt. And is he willing to do that? Do you know what I mean?

The questions I would ask are, the day we get married, are you going to expect me to go get a job and pay off my student loans even though we're married? Is that part of the arrangement? Are we going to split rent? You're going to Venmo me some money for rent and for the electric bill every month? Or are we going to have a single checking account that we do life out of? And if that's the case, And that's what we recommend. That's what I recommend is we have to be very honest and clear about what we can and can't do when it comes to financial assistance and support for our families.

Yeah.

Get on the same page. That's good. All right, let's go to Marcus in Greenville. Hi Marcus, welcome to the show.

Hi, thank you so much for having me.

Yes, how can we help?

So I own a small business in construction and I'm primarily a one-man operation. Between my business and personal finances, I have about $300K in debt, not including my mortgage.

Mm-hmm.

A lot of it is in equipment financing, uh, credit cards. My biggest struggle is that my business brings in revenue, but I never seem to have enough cash left over. I'm constantly trying to cover business expenses, equipment payments, and family living. I mean, it's like, Instead of paycheck to paycheck, it's like from job to job. I'm barely surviving.

Sure. And yeah, you've probably overleveraged yourself on the, on the business side. And do you, you do have everything separate on the books, right? Your, when you say credit card debt, is that for, is that kind of on the business? I know it's all under you, but is it from an accounting standpoint, is it on the business side or is that credit card debt the household that you're having to dip into credit card debt to survive it in your home?

No, it's a business credit card.

Okay, so most all the debt is related to the business?

Business.

And I did— I, I got married about 5 months ago. Um, we bought a house, uh, 6 months ago. I mean, and there's just so much that happened this much, and so much expenses that, yeah, picked up. And, um, okay, I'm just—

How much are you bringing in a year?

So for, uh, for my business?

No, for you. Like, what are you taking home?

Yeah, what's your draw from your household?

I, I need to take home at least $5,000.

Okay. How much does she bring home?

She's pregnant. Um, she's— she got 3 months left and she doesn't work.

Okay.

Does your business make enough money to pay all the bills, service all the debt, and to pay you $5,000 a month?

Well, how things are going, not, not really. And that's where I'm just trying to see where, where do I even start?

Yeah. The upside-downness of the business is what is gonna take you under. And so honestly, Marcus, it's probably gonna end up selling some assets that you have just to get some debt offloaded. And you don't have those payments every single month, which means you may have to take different jobs, right? In the construction business, you may not be able to do the certain things you can, but where you can offload some of that for now, just for breathing room, for margin. That's where I would focus and, and find a way that, you know, you may have to work a second job just to get your head above water for a season.

Statistics show that half of Americans don't have enough life insurance or they don't have any at all. I don't understand this, John. Why don't people want to take care of their family? They think they're going to die or something?

Well, I used to be one of those guys. I didn't even think about it. And one of my buddies said, hey, the only reason to not have life insurance is if you hate your wife and kids. And I immediately went and got term life insurance.

That's a gut punch.

And oh, you're telling me. And for decades, Dave, I've sat across people who've lost a spouse. They've lost somebody important to them.

Me too.

They don't know what to do next.

Me too. I mean, you're gonna have a crisis here, and you know, you got 2 options while you're sitting and talking to a young widow. She's concerned about how she's going to invest all this money properly and not mess this up, or she's concerned how she's going to eat tomorrow.

That's exactly—

these are the 2 options. And take care of your dadgum family, man.

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If you're working the Baby Steps, one of the One of the best things that you can do to stay on track and just to have that daily check-in is to download our EveryDollar app. You can do this for free in the App Store or Google Play because it tracks your progress. You get a personalized plan to really walk out this idea that, I mean, even if you have nothing, you guys, if you are paycheck to paycheck, or if you are funding retirement and you feel like everything's, yeah, we're feeling on top of things, regardless of where you are financially, knowing where your income's going from a budgeting aspect, but then also an overall financial plan is so, so important. So again, go start EveryDollar for free by downloading it in the App Store or Google Play. All right, let's head to Davenport, and we have Denise on the line. Hi, Denise. Welcome to the show.

Hello.

Thank you for taking my call.

Yes, absolutely. How can we help?

So I'm currently 42 years old, and I want to be debt-free by 45. I'm currently in $135,000 worth of debt. I'm pretty confident that I can pay that off in the next 3 years. However, I'm a firm believer in paying tithes, and though I don't necessarily pay it to the church, I do set 10% of my income aside every month to just help people in need. It just sits there until I come across someone that's in need. But I'm wondering, because I know that God calls us to be good stewards of our money, and I know that if I get out of debt faster, that I can then allocate more to giving. So I just, I don't know if while I'm in this journey, if I should continue that or if I should hold for now.

Yeah, it's a good question. Because from what looks like on the outside, a common sense response would be like, no, do everything you can and put as much money as you can towards getting out of debt, and then you can do other things later. But what we have found, Denise, over and over, and I'll just say even in my own life, there is something about even in the times that feel like you're stretched financially, you feel like there may not be tons of room. I mean, any feeling of, gosh, I could push this off till, fill in the blank. I have a higher income, till I get out of debt, till I, you know, it could be a different answer for anyone. And what we find over and over again is specifically with giving, for whatever reason, there is something tied to the posture of our heart, And when you live life with that open-hand mentality, even when it is tight, when it is hard, and it may be a different dollar amount, you know, I always hate to be legalistic about this part of money, but I am a firm believer in it being really, really important because it's more than just the idea of you're just giving money.

It starts to shape who you are, Denise, throughout all of this. And I find that people say it all the time, if I just had more money, I would give. If I just could do this, I would give. And And I do think there's a heart issue there of this consistency, of this being part of who you are regardless of your circumstances. And so, I'm a big believer in continuing to give even while you're getting out of debt. Even when you're on Baby Step 1 and you're trying to save $1,000, having a rhythm of outflow with your money, it, yeah, I think it's just an impactful thing on you, of course, but then also— what you're doing out in the world. And there's something about putting yourself out there that I think is, is a really important part of living.

Denise, how long has giving been a part of your life?

Um, for all of my adult life, really. I, it's really important to me. And, um, I, I love helping others. It, I feel great doing it. Um, and to think, when I think about stopping, it kind of makes me sad. Like, I'm like, that's not, I mean, if I can't live off 90%, right?

Right.

So like, Also though, again, the faster I get out of this, the more I can give.

Um, so I just didn't know, like, I mean, my heart truly wants to, I want to continue to give. Um, I just didn't know it while during doing this journey if I should continue.

To me, the question is, when you look in the mirror the day you pay your last debt off and you owe nobody anything, you're completely free. Will that be a person who cashed in a really important value, the value of generosity? Or will you be able to maybe go another 2 months paying your debts off or 3 months or however long? And the day you hit send on that last payment and you look yourself in the mirror, you will be the person, right? You'll have kept your promises to yourself when it comes to values. You'll be a person you're proud of for multiple reasons, not just because you crossed the finish line.

Right.

Get what I'm saying?

Yeah. I mean, if, yeah.

Yeah.

So if I, if I pay off my debt, but I stopped giving, yeah, I would probably feel awful.

Mm-hmm.

And, or, or then you'd feel this sense of, I gotta give out of a sense of guilt, right? I gotta give to make up. I've got to, mm-hmm. Right. And that changes the spirit of generosity. Right. Um, I, I, I, I, I didn't. I went full bore and I spent several years after not owing anybody anything, trying to reckon with who I was and what values am I willing to sacrifice for whatever goal I put on the table? And that will never happen again.

Yeah.

Right?

Yeah.

It's one of those core values for me and my wife.

Yeah.

And especially for you, Denise, because I feel like we're not trying to convince you to be a giver. It is who you are. So you're almost denying your identity of yourself in order to do this external great thing, getting outta debt. Obviously we're so pro that, but in the midst of that, don't sacrifice who you are. It's naturally all woven within you. And so no, I would tell you not to shut that part of your life down, that part of your heart down.

And let's pull this philosophically, cuz I know people could say like, okay, cool, I'm a super giver then, so I'm gonna give 90% away and try to— you're right. At some point you have to say, What am I willing to sacrifice? And so maybe in not being legalistic, but maybe for a season we go down to 5% because we have a math problem. I'm going to continue to give, or I'm going to make the other 5% up with my time. Instead of taking one more shift, I'm going to go work the food bank. I'm going to go put myself out there. I'm going to continue being a person of generosity, and I'm not going to lock myself into this specific percentage. But that's who I am. That's who she is.

Yeah, no, absolutely. Yeah. So there's, um, we had a question about this yesterday actually on the show too, Denise. So I think, thank you for calling in and asking, because I think it's an important one because of this. It always goes beyond just the dollars and cents. It hits on something that a lot of people don't touch on, but the character of who we are, the person that's getting out of debt, the person that's saving, the person that's funding retirement, the person that's trying to help their kids do, like the character of who we are is very, very crucial. that we have a good pulse check on that person. And so I would say, Denise, trust your gut in it. And if you have to pay off debt 4 months later because of it, at least you have stuck to who you are. All right, let's go to Emma in Baylor, Texas. Hi, Emma. Welcome to the show.

Hi, it's so great to talk to you and John.

Thanks so much for calling in. How can we help?

My question is, my husband and I just found out we're having another baby.

Congratulations!

Thank you. And we need a car that can fit another car seat. Um, so we know we're in stork mode, um, we're still paying off debt, um, but I guess my question is, how do we navigate doing both at the same time?

How many kids?

Uh, this is gonna be our 4th.

Your 4th?

Yikes.

Man, we had to go to the minivan with 3.

Can you strap one on the roof? No.

Well, wait, so Emma, what, what, what can you sell your current car for?

Um, our current car on Kelley Blue Book, the private sale is about $11,000.

Okay, great. A car that would fit your needs for your family, a used one, what would that range? What's the range of that, of that car?

I'm not sure. Um, I mean, if we went through a dealership, I'm sure it'd be pretty expensive. Yeah.

Um, I wonder if you did some research, you might be pleasantly surprised to see what a $15,000 car would be. Right. And then you guys would have to throw $4,000 of it out of your stork mode. How much do you have in stork mode or in that savings account?

Right now we, right now we have about $4,000, but our midwife is gonna cost $6,000.

Okay. And when are you due?

May of next year.

Okay. How much can you guys save a month?

We're at about $1,500, $1,600 a month.

Okay. That's great. Yeah. So, I mean, if I were you guys, I mean, yeah, you could probably, you could hit both goals, get a new car, save for the midwife, and even have some extra on top of that.

Okay.

Yeah.

So I would do both, but I would just, It's hard not to.

It's hard. Like once you break that seal and you're like, okay, we're in Baby Step 2, we're trying to get outta debt and we have a 4th kid. We have a true need. We gotta get another car. It's hard to say we cannot go over $15,000, right?

Yes.

Because then it becomes $20,000 and then it becomes $35,000. Then you end up with a new Suburban, right?

Yes. So be very diligent in what you guys can realistically have saved to put with that $11,000. But I think you'll be fine. And then you'll be able to save the $2,000. More for the midwife.

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Well, John, I am super excited about what's coming up here. The official launch is in a few weeks, but the presale launch of your new book—

Yeah, dude.

Is happening right now. And I have been waiting for you to write a marriage book for so long because all the material that you talk about, and even just on a conversational standpoint.

You're always texting me, come fix my marriage. And I'm like, gosh, I can't.

No, but what John has to say about the subject, it's amazing. It really is. The depth of knowledge, the research, the real-life experience of working with couples day in and day out. You have so much to say. And the fact that, and it was funny because I even heard through some of the edits, they made you edit some stuff down because it was going to be like a 600-page book.

Oh, it would've been a couple of dictionaries.

Yeah, exactly.

Exactly. But it finally came together. Look how pretty it is. And it's Building the Marriage You Want. So many people end up like roommates in marriage, something you didn't sign up for and something that you keep thinking, oh my gosh, how did we get here? This point of—

I think the prevailing wisdom is that marriage is this thing out there that happens to you. You find somebody, y'all like each other, you get married, and then this thing called marriage happens to you. And this whole book is about reclaiming ownership of, no, at the end of the day, y'all get to choose.

It's amazing.

And here's how you do it.

Yep. So you can preorder now for $24.99. And if you preorder, you get $100 of free bonus items. And this is always big for me. So you get the audiobook, which I'm an audiobook connoisseur. It's what I listen to now in the car all the time. Connoisseur.

I'm a connoisseur.

Of audiobooks. I do. I love 'em. The ebook, and then an exclusive video. And it's, yeah, well, the whole package of the presale is so important. But honestly, this book in general, if you are married, if you know someone that's married, you need to order this book. Preorder today at ramseysolutions.com/store. And I know you're pumped about it.

Yeah, I'm excited. Here was my aim. I want this to be the last marriage book you ever have to buy. That's it. Put a period at the end of that sentence. All the tools, everything you need, it's going to be right here.

That's it.

So good. Love it. Again, ramseysolutions.com/store. Preorder today. All right, let's go to Matt in Denver, Colorado. Hi, Matt. Welcome to the show.

Hey guys, thanks for taking my call.

Yes, absolutely. How can we help?

Well, so this is my first year doing the Baby Steps here.

Welcome to the cult, brother.

Baby Step 1, Step 2. Thank you. Thank you. I am excited about the future. But have a tough question today. So, I own my own landscaping company. I am the sole income earner in my house. Right now, business and personal debt, we're about $365,000 in debt. My big thing is, like, it's hard to be optimistic saying that first part, but my big part is I do feel optimistic about the future. The business is doing pretty well, things like that. But here in Colorado, business gets slow in the winter. So I was just curious how you guys think I should attack this debt without hurting myself in those winter months when things do slow down.

I think you have to first out of the gate, before anything else, you have to not concede the winter months.

Yeah.

If I'm a football coach and you're the wide receiver and you come out and you're like, well, sorry coach, I can't run those passes when they've moved this guy to cover me. He's just too good. I'm not going to put you on the field. I want you to come and say, that guy's really good. We're going to have to do this and this and this and this, and we're going to have to try this play and I'm going to have to run this route this way, which is different than I normally do it. I will not concede the winter months. And so ask yourself, what could you do, especially for a few years, just to get the debt knocked way, way down or get it paid off? What could you do?

Yeah. So, that's been the problem. So, the last few years, because I've been in business for 7 years now.

Okay.

But I'd say the last 3 years, I've taken out loans to get through the winter. And it just ended up that way where, you know, I felt like I had to. It was like my last chance. Obviously, not, yeah, not the way to go about it. So, I'm still paying one back from last winter. But the optimistic side, what you're saying, This is my first season where I've gotten a good contract for snow removal in the winter. So hopefully it snows, not like last year. But yeah, I've got 15 properties. It could potentially be good money. So I'm hoping to not take a loan. So that would be huge, I think.

Let me tell you right now, I almost promise you, you're going to take a loan. And here's why, because you haven't taken it off the table.

Mm-hmm.

Because if it is, I've got this contract, but I'm not willing to just go, just start dropping me and my crew off at neighborhoods and knocking on doors. Or if there's no, if the contract doesn't come through, if it, if we have another winter like we had last year where there was zero snow, um, I'm gonna go throw boxes. I'm gonna go get 2 full-time jobs and just pause this thing. Because here's what's gonna happen. You're gonna come up with a contract and you're gonna figure out a way to squeak by. And then The axle's gonna fall off your wife's car. And you, since you haven't taken a loan off the table, you're just hoping that this year I'm not gonna use one. I can almost guarantee something's gonna happen and you're gonna take a loan out. You have to scorched earth it. You're $365,000 in the hole, man. You have to say, this ends now. I'll never do this again. So what must be true then?

So, and that's, uh, so, and I, I am trying to take steps that way. So I do have right now, like I've been trying to gear for this, right? So, I have $30,000 in my retained earnings account. And then I do have $81,000 in my operations account, $81,000. And then I have $246,000 in incoming projects coming up. Obviously not all that is coming to me, materials, labor, all that stuff.

What is your projected draw from that amount, from those contracts? What will you take home to you and your wife? Um, because that number sounds big and cool, but after expenses and paying everybody off, and it can be $5,000.

I was gonna say the, the goal, like if it was a perfect world, it'd be 20%. Um, but I think realistically, you know, some jobs take longer than, uh, you think.

And, you know, so you're bringing home what, 50?

No, you bring home 20.

Um, so if it was $246,000, 20% of that would be 40 or 50, right?

Yeah. So, and if you're being realistic, it's gonna be less than that, right?

Yeah. So that, so let's just say if I had $30,000, that would put me at probably, let's say $60,000 would be safe. You know what I mean? Like in the retained earnings account after that's done.

Yeah. Because of what you're gonna add. Okay. Well, my question is your household, how much you, you've been lumping the debt and I'm just curious with the $365,000, what, what, what is towards the business and what are you guys operating as a household?

Totally.

So business debt is $325,000 of that.

Okay.

And then yeah, personal debt.

What's the $40,000? Is it credit cards, cars? What is it?

So yeah, $34,000 is, I have one credit card left. So it started at $64,000 at the beginning of this year, just so you know.

Okay, you guys have been working it down. Yeah, that's great.

So yeah, $12,000 on a credit card, $3,000 on another credit card, $3,000 medical debt, and then $15,000 is my wife's car.

Okay.

Have you guys cut up the credit cards?

Yes. Yep. No credit cards left.

Yeah.

Amazing.

We've got all that done.

Are you guys doing a budget? Do you know pretty strictly of, okay, here's what we need to operate the household? And then anything extra that's coming in, we're going to get that paid off ASAP. Do you guys have a plan mapped out for that?

Yeah.

Yeah.

So I have been using EveryDollar, which has helped a ton.

Awesome.

What does your business make a year?

So this year we're going to do right around probably $1.3 million.

Okay.

And I guess, man, that's tough, man, because you've got a good business. How many guys you got working for you?

Uh, 6 right now.

Yeah, that's great.

Yeah, you got a good business.

And you just gotta, I think you just gotta tighten some things up, Matt. And I think part of it is a values thing of saying, this is how we're gonna operate this business going forward. And we don't have an option for debt. So either I have to lay people off cuz I can't make payroll or I like, you know what I mean? Like it is gonna be a pretty hard and fast rule. And then aggressively within the business where you can cut back, And where that revenue can really float to, to profit to, in order to be aggressive with this $325,000 of, of the business side of debt.

Yeah.

'Cause you, you keep taking out loans on depreciating assets. All those mowers and tractors and trucks go down in value every day. And you're gonna be in a cycle until you just say, never again.

Yeah.

I will not borrow a dollar ever again. That's true. So we gotta figure out how to make this thing work.

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Welcome back to The Ramsey Show in the Fairwinds Credit Union studio. Up next, we have Steve in Hi Steve, welcome to the show.

Hey, it's great to talk to you and John. How are you?

Thank you so much. Thanks for calling in. We're doing great. How can we help?

Thanks. Well, my wife and I met with a lawyer this morning for our will to update it. And here's my, my quick background. We have 15-year-old, 18, and 20-year-old. We have $2 million in life insurance and probably about $4.5 $400,000 in net worth between the house and the investments is all. And if we both died today, me and my wife, she's 51, I'm 48. If we died today, um, you know, that $2.4 million, we, we— I'm looking for your advice and guidance and suggestions and best practices of what people typically do and why regarding when to let the trustee Uh, or give over the money completely to the, to the young adults, uh, 21, phase it in 25, 31. Like, what, what can you teach me about that, or guidance? Because my lawyer, the estate planning lawyer, he's like, well, you have to decide. And I, I was a bit frustrated with him.

And you're like, no, tell me what to do.

Hey brother, can I shout you out just for you and your wife sitting down and doing what I think is the most the most important thing a couple can do for their children, which is to make a plan for the worst. Good for you, man. I know it's not easy. It's not fun, but I just want to shout you out. I'm proud of you, dude.

Thanks.

It's good. And you're wrestling with good questions.

Yeah, they are good. And I think it, I mean, this is one that's, it's not black and white. And I think it depends family dynamic by family dynamic, kid by kid, even for some people's situations and the way you view some of this. You know, the way we've set it up is, yeah, we had a certain age at which they are gonna be given a portion. Like if Winston and I die, I think there's a portion for college, like if they're 18, 'cause mine are younger than yours, Steven. We had a portion at 21, 25, and 30. And then we had some like, is it addendums? What's the, like inside of that, that if they were married, for instance, and they were wanting to buy a house, they could tap into more. Like we put in some situational kind of bullet points under some of the ages that we felt comfortable, you know, with the trustee and everyone making the decisions all together. And trusting everyone in that process is a really big deal too. Like the person we have that's going to be distributing—

Right.

The money, I very much trust and I don't think there's any weirdness. And they're really good with money. They're used to seeing big numbers. And I trust the value system of their parenting and all of that, that I would feel good if something came up and they're like, yep, that is a time that we would be okay giving more. So yeah, we, so all, so that's a long answer, Steven, but we have ours through blocks with specific life events that can alter and kind of open up some of these buckets earlier if they need to.

And mine's very, very similar. The one difference is probably I had some specific things. And what Rachel just said is really important. I'm fully, I mean, literally fully trusting this person who's my trustee.

Right?

So I have a 16-year-old and a 10-year-old, and the first rattle out of the bag, if something happened to me and my wife today, is they would go live with somebody. We've already designated who, where they'd go live. I want to make sure they get through, that family has the resources they need to take care of our kids. And since that family has their own kids, that they're going to have to deal with that. Then we're gonna cover tuition and that might include a small junky car. And this, this guy I went to college with, so he knows what I drove in, in school. So I, I'm not worried about him buying my kids a BMW or something. Right. And then it staggers by, by age with the same addendums that if my son comes home and he is 22 and he got married and they wanna buy a house, that I'm not gonna make you wait till 30. Right. If, if you, you got a job, you're doing, you're doing those things.

So, We were thinking we just changed it because we updated it. I've been listening to you since 2015. You guys have changed my life financially. My wife and I, unreal. I couldn't tell you. I've read a bunch of your books and Smart Money Smart Kids and everything else, your leadership.

All right.

Um, so if we died, my 15-year-old, who's a sophomore in high school, uh, we are making the guardian of him our daughter who's 20. And my 18-year-old is 18, you know, so they'd be living in the house as of like, say we died tomorrow, right? And then, you know, she turns 21.

Does she know that?

Oh, she's— she wouldn't have it any other way is what she told us.

Yeah.

So, and here's the challenge there. You are— and this isn't a bad thing, I just want you to own this— you are injecting conflict into their relationship.

Well, because like he doesn't want, he doesn't want to go live with anyone else. I mean, like they're at home.

Of course.

He's only 15. He's gotta be 16. And well, in the spring.

And my 16-year-old, almost there. I get it. But, and my 16-year-old asked me the other day if he could drive to Florida by himself to go fishing. Like 15 and 16-year-olds.

What would you recommend as an alternate? Like, cuz my brother who's the same as what you said, Rachel, you trust this person. He's looking at, he's used to seeing big numbers. He's the trustee and executor.

Mm-hmm.

Right.

So, okay. That, that, that, that makes me feel better then, because what I, what I, what I would be concerned about—

The 20-year-old was that—

Is your 15-year-old having to go to the 20-year-old and saying, can I have money for—

No, no, no, no.

This is just getting through 2 years of high school basically.

Right.

My daughter would be like signing off on parent-teacher conferences.

Right.

Okay. That sounds great. If she's in for that, then I'm okay with that. If you trust her and she's in for it, and that's, that's fantastic. I just, I just don't want to inject conflict immediately that suddenly the 21-year-old is now the bank who's holding $2 million. And this is through the eyes of a 15-year-old, and you won't let me go to the movies, you won't buy me a new car, you won't— and suddenly they go to war with each other. So yeah, if the 21-year-old has to go to your brother and you have— and I, I'm saying this loosely, but if you have adult supervision over this, that, that makes me feel all kind of, all kind of better.

You know, I'm with you, I'm with you. I was thinking maybe because let's say like my 21— should be 21 in May— like maybe she gets access to $100 grand, $200 grand. Maybe she wants— she was talking about she's gonna graduate actually this coming summer from college, and she'd go through debt-free. She paid her own way.

It's awesome.

Um, my second son too, he's going debt-free, paying his way.

Y'all get to decide all that stuff.

So like maybe, maybe she gets, uh, $100,000 something, $200,000, and then at— I was thinking at 25 or 31, they could have access to more because I don't want, like, if they, if they blow the $100,000, $200,000, then maybe after 10 years of growth in a mutual fund at 31, they're like, all right, I'm not gonna screw this up.

But yeah, you know what I'm saying?

Yeah, totally. 100%. Yes. And I think all that's, I think all that's fair.

And you're gonna not like this, but your, your attorney was right. Rachel and I aren't gonna take these choices from you. You and your wife have to look at each other and you'll have to come to an agreement and make this call on your own.

You guys are so cool. I love you. Thanks a lot.

Yeah.

Um, and, and again, thank you for, for thinking about the future like this. It's awesome.

It's such a big deal, you guys. And it's a, it's an important subject when it comes to wills. And if you've not done a will, then getting a state-specific will is so important. Now, if there's, if there's a bigger estate situation, getting, you know, an estate attorney involved is very smart, right? And if there's a family trust you need to set up, like, I mean, all of that. But if, if you need a basic will that gets your family covered, you guys go to Mama Bear Legal Forms. They have the ability and it's so quick. It's like 20 minutes.

I got a Mama Bear will when I moved from Texas to Tennessee because I needed one right away.

Oh my gosh.

Go to Mama Bear and get one.

Yes, it's state-specific, inexpensive. They walk you through the process. Everyone needs a will.

Everyone.

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Up next, we have Megan in Boise, Idaho. Hi Megan, welcome to the show.

Hello.

Hi, how are you?

Good, how are you?

Doing great. How can we help?

I am trying to see if I should keep or get rid of my whole life insurance.

Okay, what's going on?

So my husband passed away and I have 3 kids.

Oh, I'm so sorry, Megan.

I have— that's okay. I have health issues and I couldn't qualify for any term insurance, so I just accepted what I was given, basically.

Yeah.

Um, but I'm just wondering if it's worth it or if my money is better Um, how, how are you financially?

Did he have life insurance when he passed?

No, no. And things have been really, really, really hard. Yeah, like I just burned my emergency fund because we had an emergency, so I feel like I'm starting over.

When did he pass away?

3 years ago. Okay.

Gosh, Megan, I'm so sorry. Um, so in your situation, it's one of the rare instances that I would say, and we would tell you to, yeah, keep your whole life policy.

Okay.

Because you can't qualify for it. And that is like, ugh, bitter coming out of my mouth because it's such not a great product. But when it comes to life insurance, you need life insurance. And we find when people run into, and it's usually medical reasons, preexisting conditions, and they don't qualify for term, It is one of the only times we say regardless, you need life insurance. But what I would do is I would go to Zander Insurance and have them help you shop a policy because whole life is so gross, like that whole industry that they, I just feel like they take advantage of people. They have crappy products, all of it. Zander actually will be able to help navigate to find you the best bang for your buck, if that makes sense. It's still gonna be more expensive. and different things. But it is still well worth it because especially, I mean, yours is like one of the more extreme situations, right? You're a single mom. You do have health issues, all of this, and you want those 3 kids taken care of. And so having something in place is better than having nothing.

But will you visit our friends at Zander? Will you, you can at least go online or even call them because I trust them so much in the life insurance space that they really take care of people. And people that run into things like your situation too. Okay.

And my policy is only for $230,000. I couldn't even qualify for a lot.

Okay.

Oh man. Can I tell you this, Megan?

Yeah.

I know you feel like you burned your emergency fund and you had an emergency come up. And can I flip that around and say, I'm so proud of you that in the fog of the last 3 years, trying to pick up and figure out what is even up, And navigate 3 kids, navigate your own health challenges, navigate the loss of your ride or die, you still managed to squirrel some money away in an emergency fund for this exact moment.

Thank you.

I'm proud of you for that. That's, that's, it's incredible. That was 3 years ago, you in the darkness thinking about future you. Otherwise, what's, what's the, what's the deal? You're, you had to go take out a loan for 10 grand or 15 grand.

Mm-hmm.

And now you're underwater. You're not just, you're not just on dry land, you're underwater. And because you did that, so I know it feels scary. It feels like all that, that insecurity's back, right? And, and that's right and good. And you gotta go rebuild that emergency fund cuz that's a math problem, right? It's not a feelings problem, it's a math problem. But man, I'm proud of you for doing that.

Mm-hmm.

For just this moment. So good.

Thank you. Thank you.

So good. Sorry.

I know, man.

That's okay.

Thank you so much. I appreciate that.

Hey, real quick before you go, what was his name?

Josh.

Was he awesome?

He was the best. Yeah, he was the best. He really loved our kids.

Yeah.

Well, shout out to Josh, man, for being a good guy. Being one of the good ones.

You're incredible, Megan, though. I mean, all single moms in general, whether you're walking through a death, a divorce, whatever it is, and you're you're a single parent out there doing it and making the way. I think that is one of the most incredible things that any person on the planet can do. And you've stepped up exactly what Jon was saying. I'm like, that's what you do. And that's why it's there. That's why it's the gift. It's not the, oh crap, I have to use the emergency fund. It's thank God I have to use the emergency fund because there is one.

I have it to use.

Yep. That there is one. Oh man. Yeah. So that, you know, we talk about life insurance on the show. I feel like wills and life insurance, it's like the 2 like kind of womp womp topics, but they are very important to your overall picture, you guys. And, you know, you even hear Megan's story and it's like, man, the importance of getting insurance in place and even, you know, getting term life for obviously if something were to happen. But obviously to hers, and we've heard this story a lot, go ahead and get something locked in.

Yeah.

Before even something within you health-wise, right? That where you can't qualify.

Well, I hear that from young folks like, well, I don't, I don't need any life insurance because I don't like— now's the time to buy it.

Now's the time to do it. Get like a 15-year policy.

Yeah, get a long policy.

Yeah, and you got— and it's locked in and it's there. And so these are some really, really important things. But our friends at Zander, you can go to zander.com or 800-356-4282. Give them a call, you guys, to for sure, for term life, for those of you that, um, and hopefully majority of people, you know, you can qualify and get get something in place. But life insurance in general, it is a way to say I love you to my family. And so Megan, even you doing that, I think is a way to love your kids in it. And so—

And for whatever it's worth, that's not just a spiel. Like Xander's got, that's who I—

No, it's the—

Wrote my policy.

That's right.

So it's not us just trying to sell you something. That's who I trust in the event something happens to me and the boys.

And because they're an insurance broker, you guys, so they're shopping all different kinds of companies. They're not just giving you a quote for one. That's why I like them.

I like—

they're on my team.

I need options.

They're on my team.

Yes. And I get to pick, and it's one of the best resources out there. All right, let's go to Jacob in New York City. Hi, Jacob. Welcome to the show.

Hi guys. Thank you so much for taking my call.

You got it.

Um, so my question is, um, I am starting— well, first off, my wife and I are expecting a baby in the next Couple days.

Oh my gosh, congratulations.

Thank you very much. So my question is, is I'm starting PA school, that's physician assistant school, in about 2-ish months. And I have some money like saved away, like in a brokerage. And my wife also has a little bit of a smaller brokerage. We have some money saved away, but not enough to pay for the whole school. And initially, before I started listening to you guys, I thought like, oh, obviously keep everything in my brokerage. It's all in S&P stuff, 10% a year. So I was like, I'll just keep those and take out all the loans. But obviously after listening to you guys, like no loans is like definitely the way to go. So I wanted to ask you guys, like I have money but not enough to pay for all of it. And obviously, you know, with the baby coming and me not being able to work so much in PA school, kind of wanted to know like how to navigate. Like should I sell all of my stuff in my brokerage, pay as much as I can? Should I keep some? Should I not?

I would move my everything in that brokerage since you have a dedicated thing. Tell me if I'm wrong, Rachel. I'd move all of it now to a high-yield savings account because you're talking about a 2 or 3-year plan, right?

Right.

And you're not going to like this answer, but because I love you, I would tell you to reach out and defer your admission for 1 year and work real hard and save up the rest. And I know that answer is the worst, the worst answer.

Well, I was going to ask, how are you guys, what were you thinking about just paying bills and life if you were gonna be in school. Was it full-time?

Yeah, so the school is full-time.

While she's on maternity leave, what are y'all gonna do?

Right, so when she's on maternity leave, she'll obviously get paid her full salary, and then afterwards she's planning to work. She'll probably make about like $50,000 a year or so. And then, um, the job I'm doing now, I can kind of move into like a managerial role for like a couple hours a week of work and get $18,000. So it'd be like $68,000 Total for the year. So not terrible. It definitely would be tight. But my parents would also be helping us with $1,000 a month.

For tuition or for electric bills?

For life, electric bills.

And if you look at y'all's combined savings and then what the total tuition bill's going to be, how short are you?

I think If we use all of our savings, and that doesn't include retirement, I would say maybe like $40,000 short.

Okay.

Oh yeah. Yeah, you're kind of way off. I just don't think, Andrew, or Jacob, I just, I don't think you're in a place right now to afford it. Yeah.

It's a hard conversation. I'd defer it for a year.

Yeah, and I don't think I would drain everything down to zero either. With a baby, I would keep an emergency fund emergency fund in place, and then anything above that is what I would count towards tuition. But I think you guys probably have another year of saving up for it.

And they will defer your admission.

Yeah.

They will defer it.

Oh, and it's not the fun answer, and that's part of the annoyance of moving at the speed of cash, but it's ultimately gonna be way more peaceful to do it this way. Slow and steady and patience. But that's what we would do.

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Today's question comes from Tyrone in Ohio. Tyrone writes, I'm planning to pay off my mortgage early. Good, good, good. I have an aggressive savings goal, but now I'm wondering if it's better to pay an additional amount on the principal every month rather than put the money in CDs or a high-yield savings account until I reach the balance needed to pay it off. Which way would fit your advice about paying off a home?

Um, no, I would put it to the principal every month.

Yeah, so it sounds like— I, I used to do that where I would— I, I like the feeling of sending a big chunk, right? Um, and like being able to put an extra $1,000 every month doesn't feel like you're doing anything when it's a big number, but when you send $12,000 after a year, it feels like we did something bigger.

Right, right.

But that interest kept just cooking.

Going, yes. And got more and more. Yeah, from a mathematical perspective, as much as you can put on the principal as quickly as possible, that's gonna be your best route. I didn't think about that though. The excitement of being like, ooh, here's a big chunk. We're gonna see this number drop a lot in one time versus like—

I always looked, and I remember telling my wife like, hey, the first number's a 2 instead of a 3 now, or it's a 1 instead of— And that's the only way I could feel like I was making any progress.

Yes.

Yes.

Um, but yeah, just, just, just make it a regular habit to just kick that principle down.

Yep. That's a good question though.

Great question.

All right, let's go to Jeff in Savannah, Georgia. Hi Jeff, welcome to the show.

Hi, thanks for having me on. How are you guys?

Yeah, doing great. How can we help?

Awesome.

Uh, so my situation is I just sold a Pokémon card. For $90,000. Oh, and, uh, never had this amount of money before. Okay, so I'm a little bit—

You sold a what for what?

People, people, this is— go ahead. Sorry.

I sold a, I sold a Pokémon card, uh, that I collected, uh, in my youth for $90,000.

I love America.

Me too.

You have a cartoon character on a piece of cardboard worth $90,000.

Which one was it? Not that I would know.

So, uh, so it was, uh, the character was Meowth, uh, who's pretty popular too. And, uh, it was from a, a short-printed, uh, series called the Legendary Collection, in which there were these like reverse holo foils. Yeah, that, that are really popular.

Just so you know, Jeff, there's a couple of, uh, nerds— I mean, a couple of dudes in the booth, and they are just cheering you on, man.

They are. They're pulling up Google Images. They are so excited.

So excited. I'm gonna take a wild stab. You don't have a girlfriend, Do you? I'm just kidding. Totally kidding. Totally kidding. Um, are, are, are you by yourself? Are you married? You dating somebody? What's that look like?

Single.

Wait, what did you say?

You just cut out.

I'm currently single.

Oh no, wait, Jeff, say it one more time. Put your—

I'm, I'm currently single.

Okay.

So we made you say it 3 times. He's like, I am single. Um, okay, awesome. What do you make a year just in your job?

About $60,000 a year.

$50,000?

I'm in the food and beverage. Yeah, yeah, food and beverage industry.

Awesome. Okay, how old are you?

33.

Okay, how much debt do you have?

Debt, I think I have like maybe $2,000 or $3,000 in outstanding credit card debt, but I did use some of this money to pay off my car.

Oh, good for you.

Nice, good for you.

Yeah, okay, great. How much was that? How much did you pay off?

$7,500.

Good.

Awesome.

Yep.

Yep.

Um, any other, any other debt or is that it?

No, uh, no other debt.

That's it.

Okay. Okay. So are you down then to, to $83,000-ish?

Yes.

Okay, perfect.

Yes. And well, plus, you know, plus whatever savings I had, maybe about $10,000 in savings, uh, before that sale.

Great. Where are you living right now?

Um, I'm in South Carolina.

Coastal, coastal South Carolina.

Okay.

I mean, I'm sorry, like, um, are you renting? Are you living with friends?

Parents?

Oh, sorry.

Uh, yeah, no, I, I rent. I rent.

Okay.

Yeah.

Are you gonna be in that area for a while, do you think? Or, cuz I might, my next big step for you would be probably saving for a down payment on a home and going ahead and getting into the market and starting that process. Yeah. But I didn't know if you're, if you're still—

No, I, I, you know, that's a great question.

I don't know if I wanna stay in this area for like the length of time that, uh, you know, uh, buying a home would But real estate is like the first thing on my mind. Like, I would love to stop throwing money down the drain renting, but I just don't know if even now is a good time to be thinking about that. Like, I just, I, I was, you know, so far away from this thought process a month ago, and now I'm kind of like, I feel like I have a million options, but, you know, you don't know what you don't know.

For sure.

That's kind of why I'm calling in today.

How long have you been in South Carolina?

Um, so I just moved back to the area, uh, about this time last year.

Previously I was living up in Atlanta, Georgia.

What brought you back?

Uh, it actually was a girl that brought me back to, uh, the coast here, man.

I feel like I'm just kicking you while you're down. Sorry, man.

You are.

You are.

It's all good, man.

Uh, and here's why I'm asking. Um, sometimes people say like, I don't know if this is gonna be my forever place, and then you blink and you've been there 7 years.

Sure. Right? Yeah.

And so, um, there's something about, and it's, it's very countercultural, but there's something about saying, I'm gonna put down some roots and I'm gonna, not going to bounce around and bounce around and try to find home somewhere. I'm going to plant some roots and make this home. And then if a job calls me away, if, if, if another relationship calls me away, great. I'm gonna, I'm gonna, I'll follow that. But, um, there's something powerful about that. And I gotta say this, man, I'm so happy for you.

I appreciate it.

Everybody is into their own weird things. I don't care who you are. And good for you for collecting whatever— what'd you say?

Meow Pokémon?

Yeah, yeah, it's a Meowth.

Yeah.

And good for you for not being somebody who's like, no, no, no, this is going to be like my retirement. You saw a good deal, you took your chips off the table. I'm— the whole thing, I'm just proud of you. It's awesome. I'm really happy for you. That's cool.

So yeah, so Jeff, if I were you, honestly, I would I would open up an account probably with Fairwinds, because you can have 10 different high-yield savings accounts with them. I would open up one labeled emergency funds and put, I don't know how much you need for a 3-month emergency fund, $15,000.

I don't know. $15,000 or $20,000 in there.

Put it in there.

Sure.

And then have another account. And it's just kind of your, hey, this is probably going to be my down payment account. And you'll probably have, I don't know, $73,000 in there or so. And I would start, Start putting money away and, and, and building that up. And at the same time, Jeff, you need to be investing in retirement. Are you doing any of that?

Uh, not so far.

Okay.

So you need to open up— I'll get on that.

Yeah. So you need to open up a Roth IRA. And I don't know, okay, with where you're working, you said food and beverage. I don't know if you're with a restaurant. I don't know what, you know, benefits are and everything in your situation. But if you, if there is some type of 401 or anything, plug into that. But for sure, a Roth IRA, you can put up to $7,500 And we say to invest 15% of your income into retirement, which is where you're gonna be. And that's about $7,500 of your income, which is perfect. So I would fully fund my Roth IRA from here on out every single year. Okay? Make that a goal.

Okay.

And then any extra money beyond that, I would throw into that high-yield savings to bump up that 73. And I mean, honestly, getting into real estate, I think it's, It's definitely one of those things. It's better now than later, but only now if you're ready. And I don't know if you're ready from a destination standpoint to settle roots, like what Jon's talking about. And you probably aren't ready fully with a big down payment enough to find something. I don't know what the market is where you are, but—

There's also something to be said for, like, your life just changed, right? You basically got 2 years worth of income in a check. And so there's something about, Getting your debts cleared off, getting a Roth fully funded for the year, and then just putting that money in a high-yield savings account and leave it alone for 6 months and just exhale.

Become emotionally unattached to what it looks like.

Because you're going to feel like, I got it, I got it, I got it. And every friend, every coworker, every grandparent's going to have—

All my trader friends.

Yeah. Yeah. Is going to have an opinion on what you need to do with this. Man, I'd love to see you just let the smoke clear on the emotions. That's a big swing. It's awesome. It's cool. You scratched a lottery ticket. Cold Pikachu. What is it? Meow? Whatever it is. And dude, you won $90,000. That's amazing. Just exhale for a minute. Yeah. To use your clinical words, just detach from it over a season.

Yes.

And you'll have cash if an opportunity shows up and that's cool.

Yep, absolutely. And if you don't do that and you end up spending it, how quickly—

You'll burn through 80 grand.

70 grand.

Yeah.

Oh man.

Could be so fast.

So fast.

So you gotta, yeah. Yeah, be, be slow with it too, Jeff, which I think is important. But man, the baseball cards, the Pokémon cards.

I love it.

It's a real thing.

It is a real thing.

They are out there and—

Everybody's into their thing. I'm not gonna make fun of nobody.

Listen, my brother—

That's exciting.

My parents in their attic still have my brother from elementary school, which would've been '01, his old Pokémon cards. He needs to get 'em out.

You just said that like it was 1,000 years ago. There you go.

I was doing the math in my head. I'm like, how old have I been? I love a good sale. I also love the holidays. But if you're like me, sometimes those two don't mix well because 6 promo codes and a commercial later, it's so easy to convince yourself that you need just one more scented candle or a waffle maker shaped like a Christmas tree and some flannel pajamas. The temptation to spend more than you budgeted for is real. That's why I love having a bank that keeps my free spirit in check. And for me, that's Fairwinds Credit Union. With their Smart Bundle, you can choose a Ramsey-themed debit card that says, Live Like No One Else. It's a great reminder to stick to your goals and what you're working toward, Especially in a season that wants you to spend instead of save. You get a no-monthly-fee checking account and a high-yield savings account. You can even open up additional savings accounts, like a holiday fund for gifts, so you can finally pull the trigger on that waffle maker. Because staying on track for the holidays doesn't mean giving up your free spirit. It just means being smart about it.

So get your Live Like No One Else debit card by opening a Smart Bundle today at fairwinds.org/ramsey. That's fairwinds.org/ramsey. Ensure If you are new to The Ramsey Show, a lot of the ways that we answer money questions, especially when it comes to tactical issues and decisions that people have to make, we walk through the 7 Baby Steps. And if you are not really familiar with that plan, it takes a few minutes to learn because we talk about it every episode, but we'll drop a link down below in the show notes if you're watching on YouTube or listening on podcasts for you to get this plan and start implementing it in your life, because it is the thing that will take you from paycheck to paycheck and broke and stressed out all the way through Building wealth and living giving like no one else. All right, let's go to Amber in Salt Lake City. Hi Amber, welcome to the show.

Thank you.

Yes, you're welcome. How can we help?

Um, I've been kind of living in fear since 2014.

Um, Amber, do me a favor.

Do me a favor. Take a big deep breath and hold it for me and then let it out.

3, 2, 1.

We got you. Okay.

I just, I don't know where to start.

I know.

I'm glad you called. I'm glad you called. What's going on?

I, I've been a truck driver for 22 years and up until 2014, I had done everything right as far as making sure my taxes were taken care of.

Hmm.

Um, I got— I ended up getting 2014 taken care of. They said that I had gotten a letter. I was, I was supposed to receive like $1,400 back, but they said it was filed too late. Unfortunately, the 15th and 16th of that year, uh, for the, you know, the 3-year mark was, um, over the weekend. I get you there. But I— and for the most part, I've been a company driver up until these last 2 years, and I've been a lease operator for the last 2 years. I've been successful at doing it, but my fear starting back in 2014 has just kind of locked me in.

Mm-hmm.

And then I had a fire that took my apartment last year. And I can't seem to step out of it. And I went to call one of your, um, Ramsey professionals for, uh, help me get caught up on my taxes. And they wanted another $600 for every year that I was behind.

That's tax—

And I'm sitting here and I'm just like, I don't even, I can't even think about trying to budget for that.

Do you know what the total tax bill is?

I don't. Okay.

Have you seen—

I know for last year and this coming year, I'm probably just for, as a lease operator, I'm probably looking at about $20,000 for each year.

Okay.

And I'm assuming that fear is you've got nothing saved?

I don't.

Okay.

I finally got a place to live again back in May after the fire last September, but I'm just barely making everything work.

Yeah.

I think the thing that will help you the most right now, fear like this grows like a cloud, right? And then the cloud gets bigger and heavier and it lays on you. And sometimes when things get scary, just ducking and hiding out, that's actually the right thing to do. for a season, for a minute. The thing that I think you're longing for is on the other side of this. And that means the only way through this fear is through this fear.

All right.

And I would tell you, and this isn't a statement of your character or strength, you can't do this by yourself. And I think the thing you need right now, remember this line, facts are your friends now. You need to know what this number is because right now you're fighting this invisible dragon. You don't know how big this dragon is, how scary this dragon is. You might get that number and that dragon's real and is breathing down your neck and it's a big scary dragon, but at least you'll have a target now. But right now you just have a big cloud and you don't know where it's coming from. It just feels like it's everywhere. You get what I'm saying?

Yeah.

And so So standing up and owning and saying, okay, I don't know where to go next. I don't know what to do next, but I'm going to go find out this number and we'll give you some ideas on where to go. But I'm going to start walking through this thing and I'm going to find the right person to walk with me. I'm going to get some real numbers and then I'm going to know what does my career look like? What does my job look like? But you'll have a target to aim towards. And so when you've come—

I've even tried to get out of trucking because I don't want to be doing it anymore.

Yeah.

I'm sitting here, don't want to do it anymore, and I'm starting to learn AI, so maybe I can actually step out of it.

Yeah.

And that's a problem for tomorrow because that right now is a distraction from that. You trying to like, can I work around this cloud even further? We're just going to go right through it. I haven't paid my taxes in 12 years and I know I'm going to have a big bill that I owe. and I'm gonna have to sit down with somebody. I'm gonna have to face the music at some point. Um, I'm going to be in charge of walking through that, and I'm going to get the right professionals around me. I'm going to send you 3 months for free with our friends at BetterHelp. I want you to contact them, and they'll be in contact with you within 24-48 hours to have a licensed therapist talking to you. Okay?

Thanks.

And they're, they're going to take care of the cost on that. And tell me about this calling a tax pro. So you call a tax pro and you said your situation, and they said, we won't talk to you Unless you give us $600 per year you're behind?

Well, they were— they talked to me for a little bit as far as what my situation is, but they— to help me, they want $600 a year to be able to get each year straightened out and filed to see where I'm at.

Oh, so they can't even figure out where you're at until they file?

And you haven't filed?

You—

it's not like you filed your taxes and didn't pay them. You just— you never even filed?

No.

And I— and I want to learn how to do it all too, but Again, write that stuff down. The stuff that you want to do— I don't even live in anymore.

Sure.

But listen, the stuff that you don't— that like, I don't know if I even want to be in trucking anymore. I may want to learn AI. I want to learn how to do my own taxes. I want you to start writing that stuff down because those are distractions from I've got to get some real answers and find out how big this dragon is.

Right. I have all my transcripts for the last 14 years, but I don't Or 12 years, but I don't. After talking to them, it just is harder to think of how to come up with another $600.

Yeah. Amber, do you, do you have any money saved anywhere? Anything in retirement or anything?

No.

No. Okay. Um, so what I would do is you can either contact them again, contact someone else, and/or you can contact the IRS directly. And if you have your pay stubs and everything, I'm wondering if there's a filing application that you can walk through with them. It's probably going to be a headache getting them on the phone and doing it, but going directly to the source.

Honestly, right now, that's what I would do.

Probably going to the— it would be the right move and seeing what those next steps are with them when it comes to filing. And then what they're probably going to do, because you're past the 10-year mark, they're going to probably put you on a payment plan. And it will be, it will probably be a long road to get out of this.

Right.

But it may not be, to John's point though, I mean, depending on what you made, you know, every year and I don't even know if you can look back and do—

Your employers may have paid a big chunk of this tax on your behalf.

Who knows?

Yeah. So you need to get that number and that's going to help you navigate. And sometimes the IRS does things, if it's a 10-year-old, at that 10-year mark, if there's something there, yes. And then above, it's going to take some strength on your end, Amber, and it's going to take some energy. to fight this and to get what you need, but it's going to be worth it because some of this fighting could save you tens of thousands of dollars at the end of the day. And just knowing yourself that, and I don't want this to sound like it's beating you up by any means, but it's like, okay, I owed this and I didn't pay. And so now I'm having to pay. So now looking forward, it's going to be a lot of my paycheck is going to things that should have already been paid and are not paid. It's almost like this reconciliation of like, this is what it is.

The bill came due.

Yep.

And I'm going to do the next right thing.

That's right.

And that might involve a settlement. It might involve a payment plan. It might involve any number of— might involve you getting a second job or a third job. But all I want you to hear, me and Rachel, we believe in you.

Yes.

And we're empowering you in moments when you don't feel like you have any power left. We're telling you, pick up the phone and make that phone call. And if you have to write out a script for what you're going to say and just read it directly, I have not paid my taxes since 2012 and I'm ready to get right with Write that stuff down and just begin to take full ownership. But hang on the line, we'll hook you up with a professional therapist. I think they'll be really helpful to walk with you.

Welcome back to The Ramsey Show in the Fairwinds Credit Union studio. We are taking your calls. So, give us a call at 888-825-5225. We love hearing from you, and your questions is how the Ramsey Show is even possible. So, give us a call. And if you, yeah, if you end up having to leave a voicemail, do it, and we'll call you back maybe. You know, we'll figure out a way.

We are holler-back girls. We'll call you back.

We will figure out a way to get you on. So, make sure to give us a call. All right, let's go to Jacob in Dallas, Texas. Hi, Jacob. Welcome to the show.

Hi, how are you guys?

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

Awesome.

So, uh, just to get to it, um, our mortgage, uh, is over 50% of our household income. And when we first bought the house, it was only about 30% of our income. But, um, 4 months ago we had our first baby and my wife is now a stay-at-home mom. And so now we're just on my income. And so now that mortgage feels a lot less of a blessing. And I'm honestly just trying to weigh my options. I, my 2 options that I have in my head are either try to get my wife to do some kind of work to get our income up, or we try to sell the house.

Um, your framing of the first thing is not a good frame. It's not a good frame. I just gotta get her to make some more money. Like, uh, no, that's, that's a tough sell.

Here's the thing.

And Rachel, hop in here. Y'all made a values decision and the values decision was made before the math on that values decision said, is this possible or not? And so you made a values decision, which is your wife wants to be a stay-at-home mom. You want to support her being a stay-at-home mom, but y'all still have this math problem, right?

Yes, sir.

And so it may be that y'all traded that you traded her full-time job for her being a part-time, having a part-time job because you have a math problem. Or it may be that this value that you have of her being a stay-at-home mom is going to cost you this big fancy house y'all live in. And every value that anybody anchors into always has a cost to it, a consequence to it. And it's frustrating, it's annoying, but it's just reality. Right?

Sure.

And so I wouldn't over get over-existential about it. Like we made a call, this is important to us, this matters, and here's what it's gonna cost us. Now I'm oversimplifying it, right? And I'm under-dramatizing it for the first time ever. Selling your house is a huge deal, especially with a little kid and it's probably a place y'all love and all that. But I don't know, you have a math problem in front of you, right?

Sure.

How much?

Yes, sir.

How much do you guys make a month, Jacob, after taxes, but before, like if anything's getting out for retirement or health insurance or anything. Do you know what that number is?

Yeah, so we currently bring in about $5,000 a month.

Okay. And does that, again, does that number include, um, if you, you know, funding 401s and health insurance and all that?

Right now we're honestly not doing any investing.

Okay. Okay. Okay. So $5,000 is pretty much it after taxes?

Yes, ma'am.

Okay. And how much is the mortgage?

It's $2,686 per month.

Okay.

And what do you do for a living?

I work as an estimator for a construction company.

Okay. Do you see growth potential in your role?

There is, to be honest. It's a smaller company. There's only 4 employees and we're still young. So there's some difficulties with that that come with that being a smaller company. However, There's also a great opportunity to grow with the company as the company grows as well.

Yeah. But you—

but in the immediate, there's nothing.

Can you take your skillset to another company?

It's certainly possible. Yes, sir.

And do you see how we're beginning to bounce? Well, I have a value that I want to be a part of this small startup, and we have a value that we don't have a stay-at-home mom, and we have a value that we want to be homeowners. And y'all just have a math problem that says we can't do all of those things. So what priority are we going to put in front of what? You get what I'm saying?

Yes, sir. Yeah, I do.

Yeah. So either there's gonna— I mean, you can't do a side hustle for basic living expenses, right? Like, I would tell you to do a side hustle to get out of debt and all these other things, but I wouldn't tell you to go get a side hustle for you to be able to pay a mortgage. Now, if your wife does want to do something, um, on the side, you got— you guys need to have that conversation. But it's kind of what John's saying. It is that But something has to give in this situation. Either you're gonna have to make more money, Jacob, and ideally in your salary, like your normal life, right?

Your career.

She's gonna have to bring in some and/or you may not be able to afford this house anymore with one income. And that's a really hard reality. And I always, this is a big decision because moving is expensive.

Yeah.

You're going through closing costs, all of it. You're trying to, I mean, it's a long process. Even to sell a home right now is tough. I mean, houses are sitting on the market longer than they have in a while. So even if you got it sold, right? And that's an if right now. Like it may not sell very quickly. So yeah, tonight I think that's a conversation you guys are gonna have to have. There's a couple of options on the table and it's like, which one are we gonna pursue? And because I'll tell you, The hard thing with this is $2,500 a month, you know, for food and everything. Like it starts to, or I guess it's really like $2,300 a month. It starts to get tight. Do you guys have debt, consumer debt?

No, ma'am.

The only debt that we have is the house.

Okay, great.

Great.

How much do you still owe on it?

That's the problem is we owe about $351,000 on it. The house is only worth about $360,000. We only bought it a couple years ago.

Okay. Yep.

So it's been pretty flat.

Yeah.

So, um, here's how I'd have this. I'd have this conversation tonight is like lay out the values that y'all have both talked about and kind of just stumbled into.

Do you feel like y'all stumbled into it, Jacob? How did you guys talk about this when you, when she wanted to stay home? Did y'all look at your budget and talk through it or was it, Was there conversation around it? I'm just curious.

Honestly, we— yeah, we always wanted her to be a stay-at-home mom, so I'm fully on board and, uh, like, I support her in that. And, um, so honestly, it was kind of our dumb decision to just like— because we knew it was coming at some point, right? We just assumed with no debt that we would be able to like, well, it'll be tight, but it's worth it for her to stay at home. And I still stand behind that, but we are We're certainly realizing the reality of what it looks like to have over 50% of your income just immediately go out the door at the first of every month.

Yep, for sure.

Yeah.

It's not sustainable long-term.

And I've seen husbands, and I don't wanna overgender this, but I've seen husbands approach this numbers first. Right. And I think it would be cool for y'all to sit down and say, hey, it's really important that you're a stay-at-home mom. We've talked about that since we met. It's really important that we're homeowners. We've talked about that since we met. It's really important that, um, I'm a part of this startup with these guys. I trust them, they're good, and the growth potential here is really great. But right now there's, there's nothing. And we have, instead of future potential earnings, we have a math problem today. And then to say, here's a couple of options, I'd love to hear what your options are, but we have some hard choices to make.

Right.

And that, that is, I'm going, I'm going We're connected in this. It's you and me versus this problem. It's not, you gotta go get yourself a job. I gotta talk you into getting some more money, or she's gotta talk you into quitting your job. It's you. It's us two versus this problem. Um, I don't know. I don't see a world where you don't have to sell your house ultimately.

Yeah, that's probably what'll end up happening. 'Cause I think the value of, for you guys from a family standpoint is gonna be stronger than a house, which is great. And you get to make that call. Um, but being a stay-at-home mom and not having any money to do anything— That's not fun either. It's not fun either, right? So like, there's a give and take there.

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Everybody needs insurance, but it can be really hard finding pros who aren't just looking to make money and agents that really know their stuff. So Ramsey Trusted Insurance Pros, they are vetted and coached to make sure that they're market experts who have your best interest at heart. Go to ramseysolutions.com/coverage to find the type of insurance that you're looking for and connect with a Ramsey Trusted agent. All right, let's go to James in LA. Hey James, welcome to the show.

Hi.

So to jump right in, I am $22,240 in debt, and it is majorly because I have a mental disorder known as Bipolar I. It causes me to go into manic episodes where I'm very grandiose and impulsive, and I spend money, all of my money and credit on Stupid things. Um, the credit is being handled through a consolidation. I have a payment plan that's very low interest and that's fine. My major question is, and so my question is for the protocols that I have in place to try and keep myself from spending myself further into oblivion on my next episode. What happens, what I have now is when I feel that I'm going to be sick, I send almost all of my money cash. To my parents just for safekeeping. But my major question is, my parents aren't going to be around for forever, and are there any protocols or ideas that you guys have that I can protect myself from myself when I'm sick?

Yeah, that's a great, great question, man. So give me some context on what your psychopharmacology routine— ah, dude, I'm talking like a nerd. Give me some— what does your treatment program look like right now? Are you taking care of yourself? Are you taking your meds? Are you going to see somebody? Are you developing—

Yeah, I have a great doctor relationship for many years. I'm on a great medication plan.

Excellent. Can I stop right there? Can I just tell you I'm proud of you for that?

Thank you.

That's a big deal, especially when you're out of a low season. And the folks I've sat with over the years with bipolar 1, it's tough When you feel good, feel normal, right? Which I hate to use that word in this situation, but you know what I'm talking about.

Yeah.

Yep.

And then you're like, okay, cool. I don't need to take my meds anymore. I'm proud of you. That's awesome. The next layer beneath the pharmacology route, the medication is, do you have somebody that you're working with on a behavioral treatment plan? And what that looks like is not waiting until you find yourself running up to the edge, of either side of this teeter-totter, but coming up with a plan that you work day in and day out that becomes a part of your life so that you're not constantly in a state of reaction. You get what I'm saying?

Yeah. So I, I also work with therapists and I have like mood tracking and everything so that I can kind of like see things coming before they happen.

Dude, I'm proud of you, man. That's so good. So good. Um, so I, I, I like the idea of stepping all the way back and not waiting for an emergency. And what I mean by that is not waiting until, like, even on your tracking, you get to the very end here and then you take all of your money and you change all your passcodes and give 'em to your parents, right?

Yeah.

What would it look like to hire somebody that managed your money for you, that gave you a stipend every month and that just became the routine?

I would love that. I don't think I could afford that.

Okay. I think it may be, especially with online programs, I think it may be infinitely more inexpensive than you think.

Okay.

But what you're looking for is not a solution to an acute problem. You're looking at a new lifestyle. And so for instance—

This would be always—

This would just be a way you enter into the world, like the way you're going to navigate the world, because you've got a set of challenges that most of us don't have. And so because you have these challenges, you're going to have a different operating strategy. So like, for instance, for me, I have no access to credit cards because I don't trust myself.

Me either.

Right?

And so, and I don't have a clinical reason why I don't, but I start, I will just spend myself stupid. And I don't even have an ex— I don't have a reason like you do. I just have poor impulse control. And so I've taken that off the table. So now that means I've gotta go through other avenues. And because I share an account with my wife, I can't just go spin that into, into a black hole, right? Because I've got an accountability partner. What you're looking for is you're gonna need a professional accountability partner because you're smart enough to look down the road and say, my parents aren't gonna be here forever. And so I'm gonna begin to set, set up a life here. And if you can't afford something, do you have a, someone I would call a trustee, if you will, to, to borrow some, some legal language, but do you have a friend? Do you have a, mentor that you would trust to say, hey, I'm gonna have my check deposited into this account and you're gonna be on it with me, right? And begin to create a life management plan instead of a problem management plan.

That's a good way of putting it.

And that would be, I'm gonna put a freeze on my credit. And so I have to go through some hurdles to even click on a, you know, on a buy now, pay later program.

Right?

I'm going to put some, I'm going to take the internet out of my house. I'm going to do what I have to do to keep myself safe. And if you look at this not as a spending issue, but as a safety issue, it's easier to get a little bit more radical about your solutions.

James, I'm curious, how many, how many times a year would you say you kind of have a flip, like an episode?

Well, like this year was one, but it was one very long episode.

Okay.

Like months.

What does the underwater season look like for you?

It feels like I'm in a— if you ever get caught in a wave and you're like pinned against the bottom of the ocean and you can see what's happening but you can't do anything about it.

How long does that last? How long does a depressive episode last?

Depressive episodes can be a month to 6 months. Manic episodes can be 2 weeks to 3 months.

A 3-month manic episode?

Yeah, I have a subcondition known as rapid cycling where I bounce back and forth. So I kind of count it all as one because it's all just one.

Okay.

I was gonna say, I don't normally hear of an extended manic episode that lasts 30 days.

Yeah, it's like 6 weeks and then a 2-week break and then 6 more weeks and then a 2-week.

So yeah. Okay. So there's a significant amount of time.

This is a way of life for you.

Yeah.

Yeah.

Yeah.

It is unavoidable.

Yeah. And so when we're looking at any sort of disability, any sort of challenge, we're just going to own that challenge. And then we're going to make the necessary steps. And we're not going to look to our left, to our right and say, what are our friends doing? What's our neighbors doing? What's my Uncle Bill recommend? They don't get a vote. I'm going to do the things that I need to do now and forever that are going to keep myself safe. And for you, that's just going to be a really strict behavioral management plan where you bring somebody else in on the regular, right? Yeah. Whether you hire that out, whether you get an online assistant or Or you have an uncle that you trust or a mentor that you trust and say, here's how I'm inviting you into this. Would you be a part of this for me? And maybe we're going to look it up every year. We're going to change it, but we're going to make a plan long-term.

And kudos to you, James, because you've done that with your health already, right? You've reached out to people and said, I need a plan.

Yeah.

You're unbelievable, James. This is incredible.

All that. And this is just another part of life that you're using what you've already done in these other parts to set up something. For you to win, which is very self-aware.

It's noble, dude.

Yeah.

How old are you?

Uh, I'll be 29.

Okay.

Yeah.

Okay.

Um, what, tell me about this, uh, debt consolidation program.

Um, so I, after my last episode, I was, I was all of a sudden $25,000 in debt. It's through a company called Christian Credit Counselors that my parents helped find.

Uh, how much do you make a year?

About $55,000.

Okay.

And I'm paying $570 a month.

Yeah, you may wanna look into their terms and conditions. I don't know how much it would cost you to get out, 'cause usually these debt consolidation companies, they'll consolidate debt. Sometimes they'll run your credit down the drain where they go and then negotiate the bills. Like there's all different tactics.

According to them, they're not like a consolidation, 'cause I'm actually still paying my debtors directly. They just negotiated on my behalf.

Okay.

So they, they, they went the 28% down to 6% interest.

But what did that— but have you done the math on paying them $575 a month plus paying your payments? Or does that $575 include your payments?

That includes, that's everything. And there's a $74 a month fee.

Okay.

Everything else goes direct to the creditor.

Okay. And will you be able, do they have something in place that if you wanted to be more aggressive, you could pay more to the creditors every month?

Yeah.

There's no penalties.

Okay.

Okay, perfect. Well, it may be cheaper to stick in the plan, stay there than bailing, because sometimes there's gonna be penalties and fees to get out. I don't know, you may wanna just run some numbers there. Ideally you wouldn't, you could have done that, you know, yourself and not been in this, 'cause I'm not a huge fan of these companies. But if you're in it, I would still be as aggressive as possible to get out. But James, yeah, I commend you for—

So proud of you, dude.

Yep, doing all the great steps moving forward.

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

Next up, we have Nick in Phoenix, Arizona. Hi, Nick. Welcome to the show.

Hey, how are you guys?

Hi, we're doing great. How are you?

Doing well, thanks. First of all, I wanted to say thank you to you guys and also everyone that works behind the scenes. Uh, really appreciate what you guys do. I've been a listener for almost 6 years now, and, um, really everything that I've learned or, uh, think I know has come from this show. And John, another shout out to you, man. Thank you so much. You've helped me on the mental side of things, uh, more than you will ever know. So thank you for all that you guys do.

Thank you, brother. Appreciate it, man.

Thanks, Nick. You're so kind. Well, how can we help today?

Okay.

Uh, so I wanna know if I should be freaking out or not.

Um, the answer's probably yes.

Okay, well, great. That's exactly why I'm here. So, um, my wife and I are expecting our first child in, uh, the next 2 to 3 weeks.

Congratulations.

Thank you.

We are 32 and 33. And right now I just want to, I mean, I can provide all the numbers if that makes the most sense to, you know, directionally have this conversation. But just want to know if there's anything more I could be doing better with managing debt and bringing a new one into the world and more or less just what can I be doing more?

Oh, is your question about money or is your question about, oh my gosh, I'm about to be a first-time dad in 3 weeks?

Or both?

I think it's, I think it's more around the money aspect because yeah, that, that, that raises the flags with everything else.

Right.

Okay. So Nick, how much debt do you guys have?

Okay. So total debt that we have right now is roughly $350,000. Um, $329,000 of that is my mortgage debt. I was there I would say our house is probably worth, uh, probably about $520,000. Um, and then, man, I did a bonehead decision, and, uh, I'm so happy. I, I love Dave, but he would just spit me up and chew me out right now. Um, we did have to buy a new car just because our other ones wore down.

No, you didn't. No, you didn't.

We're gonna chew you up.

You do not have to say— take ownership. I chose to go buy a new car.

I chose to, uh, we, we actually had a total loss vehicle. Um, and, uh, it was not only time, but bringing a new one in the world, we needed something safer, reliable. No, no, no, no, no.

I had 2 kids in the back of a used Prius.

Nick, rewind, rewind, rewind. Say it again.

I made some choices.

I made choices.

I made some choices.

There you go. There you go.

So, um, out of the debt, that is all that we have currently. And we are being very aggressive on the new, uh, car payment. I expect to have it done in, I don't know, maybe less than a year and a half. But our income right now between the two of us is about $210,000 for the household. Our 401 is sitting about $210,000. I have a Roth IRA that has about $65,000 in it, a brokerage with just under $15,000, emergency fund of $15,000, a baby fund of $1,000, and an HSA currently of $1,200.

Okay. And how much is the car? How much is the car loan?

It's like $30,000.

No, you're not supposed to ask that.

How much is it?

The car loan that we have outstanding right now is about $25,000.

$25,000. Okay. I had $20,000 written down.

You make too much.

Why does it take you 18 months?

Yeah.

Why a year and a half?

Just, just with all the investing and, uh, Nick, you said you've been listening to the show for 6 years.

You know the baby steps.

I know, I know. And I stepped out of the line.

That's why I've been on the phone for so long.

And you keep stepping, like you, you didn't even have to call us. You already know. You know what to do.

I know.

Reach into that brokerage account and keep your emergency fund cuz you're having a baby in 3 weeks. I won't make you like go down to zero. Keep the emergency fund. I would, I'd get the brokerage out and Pay, pay off, pay off $15,000 of the $20,000. You'll have $10,000 left. And then when mom and baby come home, that car needs to be paid off by Christmas, Nick.

What are you doing?

Man, I'm sorry.

Okay.

Thank you.

Thank you.

There you go. You know, you can't start crying, Nick. You started it.

No, no, no.

I'm playing.

I'm playing.

All right.

So, hey, um, for, uh, for, is your wife gonna, is she gonna continue to work or is she gonna stay at home?

Um, I mean, the goal one day would be for her to stay at home, but as of right now, with the, the schedule, the flexibility, she's going to continue to work because I think she would go crazy if she did not.

Okay, you think a lot of things. What has she said?

That's, that's in line. The household's aligned.

Okay.

All right. So good. Well, Nick, you're in a great spot. Okay, you're doing great. You guys make a great income. You're investing, like you're doing it all right. You're just doing it a little out of order right now. So just pause Nick's plan, pay off the debt, and then get back on board. That's all you gotta do.

Okay.

And the last part of this was, I think there were some other callers that shared some very great experiences. And, you know, they're shining some light over here. As far as the last box that I don't think I have checked is, Life insurance for us today. I know it's always today. I know it's always term. Um, and I, I think that, you know, in general, we're relatively healthy individuals.

Doesn't matter. Doesn't matter. My whole career has been showing up to, to homes to let kids or their loved ones know that their healthy parent, friend, relative is no longer with us today. Term life insurance with Zander. Get on the phone today. Okay.

Thank you so much.

By the way, exactly what I Right now, as 2 healthy 30-year-olds, this is the great— this is a great time. Oh, I don't know if she's pregnant, actually.

Yeah, yeah, let her have the baby and all that, and then she needs to go get it.

Yeah, but like, as 2 31-year-olds who are healthy, this is a great time to buy term life insurance.

Yes, it's gonna be cheap, Nick. You guys can get a lot of money, seriously, in life insurance. A lot. For— it's very inexpensive. And if she's— and remember, it's 10 to 12 times your annual income for what you guys need, right? Okay, so, so be, be remembering to get the right amount too.

Um, okay, Nick, can I, can I challenge you on something?

Please.

Okay. Now I know calling into the show is nerve-wracking and you've been listening for a long time and getting on the air with us. I, I know all that, but there is an urgency to your voice and I want you to consider this. What if you solved not for brokerage accounts and not for, okay, I move this here and triple stamp and a double stamp. What if you and your wife solved for peace? You'll make almost a quarter million dollars. You'll have great equity in your home. You've got a great retirement already underway. What if the focus became, we've done a bunch of good hard work. We're going to go ahead and have no payments because we don't want one person on the planet telling me, us what we want to do with our life. And we're going to bring this baby home into peace.

Yeah.

Not into the, what about this? And I'm a kid. You get what I'm saying?

No, absolutely. And thank you for saying that. Like I said, we, we haven't had a ton of direction. We've learned everything through this specific show. I get it. I, I stepped out of line with the baby steps here.

Um, but it's not out of line like that. That's what, like, a, like, a dad who used to be in the military that has kids, he's like, you're out of line. Like, that's not— or a football coach.

Like, you're fine.

You're fine.

You're good. You're good. Take some of the pressure off yourself. Just follow the plan. It's worked for millions of people, man.

No, and that's, that's what I hope I'm getting across the phone. It's worked for us. So I really, really just appreciate you guys, what you guys do, and really what your guys' show brings to the audience because it's so critical and it's so important. And I just wanted to really just say thank you.

But Nick, but Nick, our show doesn't mean much if people listen to it and they don't go do the stuff. So go do the stuff, right?

Absolutely.

Nix, thanks for calling. And hey, congrats. You guys are gonna have a great new season of life. It's so fun. So fun. And I think some of your angst is like, you're like, we're out of balance. We're out of whack.

Everything's out of whack. You're 3 weeks out.

Just get back. Yeah. Get back in order. And you guys are gonna be fine. You've done some great things. Funding retirement. I mean, $210,000, you said, in their 401. It's great. You guys are on, you're doing a a fabulous job. You are fine. But yeah, it's the, it's the consistency of something. And, and if you get off track, how to get on, just get back on and just keep going. And I know it's boring and exciting, but I do know also I grew up on road trips in an Astro van without seatbelts on the floorboard playing with Barbies.

And we figured it out.

All I'm saying is you don't need a brand new car. To have safety for your children. You do want safety in car seats.

I get it.

But don't let that be an excuse to make a dumb financial move.

You've heard from me and the Ramsey Personalities for years, but nothing beats actually getting together in person. That's why we created the Live Like No One Else Cruise. For 7 days, we're vacationing with you. And 2,500 Ramsey people in the Western Caribbean with live shows, us, new content, us, and more. If you're on Baby Step 4 or beyond, come spend the week with us next March. Choose your cabin at ramseysolutions.com/events or click the link in the show notes.

Our scripture of the day comes from Thessalonians 5:16-18. Rejoice always, pray continually, give thanks in all circumstances, for this is God's will for you in Christ Jesus. Stephen Covey said, I'm not a product of my circumstances. I'm a product of my decisions. Oh, very good. All right, let's go to Jesse in Roswell. Hi Jesse, welcome to the show.

Thank you so much. Good afternoon. Um, I have a question for y'all, surprisingly, right? That's why I'm calling in. Um, let me explain the situation. All right, so I bought in, in 2021 or early 2022, my wife and I bought 1 acre of land and we put a single-wide on it. Now everything is paid for. House, land, everything. But my question was, would you, would you build a traditional home there even though 70 to 75% of the surrounding homes are, uh, trailers? Or would you look for land somewhere else to build on?

I'd probably look for land, yeah, that has residential housing around, just because of the value of the property is probably not going to rise at the rate it would That's what I was thinking.

That's what the holdup was. Awesome.

Yeah. How much is the land worth?

Uh, I know it— I'm not sure exactly what it's worth by itself. I know it was like $43,000 for the land itself, and then development, electricity, septic, well, all of that.

Yeah.

Are y'all thinking about— are y'all thinking about— are y'all in a place to go Build something?

In the next year or two. Yes, sir.

Okay.

That's exciting.

Yeah. Very cool, man.

Yeah. So yeah, you may want to, for cash flow purposes, a lot of people that end up building their current place, sometimes they'll sell it and go rent for a year while they build just to keep some cash flow going. But there's some options there for you guys of what you want to do during that process.

Yes.

How hard is it gonna be to sell this place?

I don't think it's gonna be hard.

Okay.

Um, pretty high demand.

Are y'all gonna stay in the same community or are you gonna leave community, leave state? Where y'all going?

I would say same community.

Yeah.

You know, 5, 10 minutes away.

Okay.

Just a nicer neighborhood.

Yeah.

That's what I would do.

Awesome.

Yeah. Good for you, man.

Great. Thanks, Jesse, for the call. Let's go to Kevin in Salt Lake City. Hi, Kevin. Welcome to the show.

Hi, how's it going?

Doing great, how can we help?

All right, so I, I don't have a lot of the info that you might need, but so I'm trying to help my girlfriend out.

She's got bad credit from her, from her, uh, ex-husband. She—

her ex-husband's brother somehow used her credit to get a car and then somehow—

Fraudulently stole your girlfriend's identity.

Or she gave it.

Yeah, well, with—

with—

no, she didn't know about, but her ex-husband did.

Okay.

He, he put her credit on her. Yeah, on to get a car.

Okay.

And then they weren't— she wasn't able to, um, they didn't— weren't able to pay it off, or I don't know exactly, like I said, what, what happened.

How long ago was this?

Now This was like, I think it was like, I'm not sure, but maybe 15 years ago. It's been a long time. It's been a long time. But, uh, but now pretty much she's— her credit's been so destroyed that now when she's wanting—

From that one instance?

That's not from that one instance. 15 years ago. That's 2 cycles ago.

I, I'm not sure exactly.

We're both telling you that, that you're not getting the full story.

Okay.

But yeah, I'm not sure if it was 15 years.

It was a long time ago though. And she literally has told me that she cannot get into an apartment or anything like that because her credit's really horrible. And so I'm just trying to figure out—

Okay. So what I would do, Kevin, if I was her, If you stop using debt altogether, how much debt does she have? How does she owe?

Honestly, I'm really not sure cuz she doesn't have a car cuz she owns her car. Um, she, there, she's renting.

Well, there's debt somewhere happening because in order to have a score and a bad score is meaning that she's not paying debt on time. She's not diversified enough within her debt to get the score. Cuz the score's all about debt, right? So something is happening.

Yeah.

Because if she pays off all of her debts and she's completely debt-free and she doesn't own a home, her credit score will go to non-determined, like undetermined within 6 to 9 months. And then she'll be able to get an apartment if she has first month's rent and last month's rent and a security deposit. Majority of places will still rent that to you. So her bad credit is, it's something is happening in the present that's keeping it bad. And that's what I'm trying to figure out.

My guess is she hasn't paid bills for a long, long time.

Yeah, she will.

I, I think probably a little bit that too. Probably, probably, uh, probably.

Kevin, I don't think you know a lot of information about it. Yeah, right. I mean, I really appreciate you wanting to help her.

No, no, no, no, no, no, no, no, no.

I'm just saying, like, um, I think there's a lot for you if you're wanting to help her and she's wanting the help. You're gonna have to uncover a lot of information to get to the bottom of it.

And that would start with you saying, hey, um, you asked for my help. Let's pull your credit reports. Pull your credit reports.

Yeah.

Let's take a look.

All 3 of them.

Yeah.

It's free to do that. And let's see how, what, what the situation is.

Yeah.

How long have y'all been together?

Uh, it'd be 2 years now.

Okay. And it's, and you, you're able to tell us with all honesty, this is a woman who pays all her bills. She's always on time. She takes care of everything. And we just can't figure out why her credit is so low.

As far as I know of, I know, I know, I know some of it.

I know, I think she has been late on some of her phone bill. It's just because after her ex and them split, she had to—

Yeah, but brother, that was 15 years ago.

Yeah, but like I said, I'm not sure it was 15 years ago.

I'm just guessing because—

Okay, so I would say, I think you're being very kind of wanting to help your girlfriend, right? I think that's a very fair— yeah. So what you need to do with her is you guys need to sit down tonight. You can go to TransUnion, Experian, you can go to these websites.

freecreditreport.com and get all 3 of them.

And there you go. Thanks, Jon. Simplifying. And print it off and you guys look through it line by line because it's going to show exactly what's going on. And my curiosity would be, would she be open to that?

I don't know. She might be, but I, because I have asked her.

Kevin, I think there's a lot going on. I'm not the psychologist.

No, I'm not a psychologist either.

I'm just a woman and I'm getting a little—

You sound like you're getting taken to the cleaners and I'm just a woman. Good grief, Rachel.

No, and I'm saying I'm getting my spidey senses. Us women, we feel and see and we know.

It feels like if she's coming to you and has over the last 2 years, Hey, I can't do this there. I got screwed on this, so I need $300. I got hosed on this, so I need you to co-sign for an apartment. This one thing happened to me 15 years ago, and so now I can't, so I need you to give me $1,000. If that's been the routine of the last 2 years, then something deeper is going on here. You, you're basically an ATM machine, and there's always—

Are you giving her money?

Uh, no.

Does she have kids?

I have, I have once, but it's only to help her out with food for her kids because she was out of work.

Okay, so what is she asking you to do? Is she asking you to co-sign an apartment?

No, no, she, she hasn't asked me to do anything.

I've offered, but I've also— I've offered if it's, it's needed, but she, she's like, no. I— she's like, thank you, but no.

Okay.

So she hasn't asked me for any of that.

Do you see her as, as your wife in the future?

I would like that.

Yes.

Okay.

Okay. Um, I just think as your relationship progresses, if it's a, and you may say no, you may be like, nope, we're just having fun and it is what it is. I'm not trying to pinpoint you into a relationship, but yeah.

Yeah.

I'm just saying these are good conversations to start to have if the relationship is progressing. Cuz money is a big part of this. Mm-hmm. And it doesn't sound like you, you know her on that level. At all, from like even from even a number standpoint.

Yeah, it's because I kind of don't, um, I don't like prying into her life.

Y'all been dating for 2 years. What do y'all talk about?

Yeah, I know.

So, well, we, we talked about this a little bit, like a little bit later before.

That's fair. That's fair. Well, Kevin, so I think, I think the most realistic step right now for you to help her is y'all need to pull the credit reports. I think that's gonna show you a lot of what's going on.

And start talking about alignment together.

Yep, for sure. But thanks, thanks for the call though. Thanks to everyone in the booth. Thanks to our great audience as we kick off a Money and Marriage Weekend here in Nashville, Tennessee. We are excited. And remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.