Transcript of My Mom Wrecked My Rental & I Have To Evict Her

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Normal is broke and common sense is weird. We're here to help you transform your life. From the Ramsey Network in the Fairwinds Credit Union studio, this is The Ramsey Show. I'm Jade Warshaw next to me today. George Campbell. You ready to get started, George?

I'm pumped. Let's do this.

Let's get into it. We've got Brandon who's here locally in Nashville, Tennessee. Hey, Brandon, how can we help today?

Hi, good afternoon.

I appreciate you taking my call.

Most definitely.

Well, I have a situation where I naively rented out my house to my mother about 13 years ago, and she's fallen on very hard times because of some very bad decisions. And after trying to move her out, we've identified maybe about $20,000 of damage as a very rough estimate that needs to be taken care of. And I'm trying to decide where I should take these funds from.

Okay. I'm assuming she has no money if she's fallen on hard times.

Yeah, that's correct. She actually owes more money than she has, so very hard times.

How long has this been going on?

Well, the past two years, she quit her job. She's been living off her retirement for the past two years, and she has exhausted all of those funds and has That's what I'm hearing.

When's the last time she paid rent?

So this was the last month. I talked to her because it was the first month she paid in cash, and I thought that was very suspicious. So I confronted her on it, and she told me she only has enough for one more month of rent. So we've been spending the past few weeks trying to get her moved out so we can get repairs done.

Where is she going?

That's still up in the air, either with myself or my younger brother, which isn't... I I don't believe either of those options are the best option, but those are the only options we have currently.

Is she well? How old is she?

She is 63.

Oh. So why isn't she working?

There's not a good answer for that. And the answers she's given me are just not very valid. So I can't give you a good excuse. It's either health problems or stress problems or mental problems. It's all those combined. But it doesn't legitimize her decision making.

So there's 20,000 of damages, and the question was, where do I take the money from? What are your options?

So I currently have about 19,600 liquid stretched across my banking accounts. I also have a paid off truck that I use as my daily driver, and I have a Mustang that I currently owe 9,000 on as something I'm a little more sentimentally attached to than the truck, but the truck is my daily driver.

The truck, what's it worth?

It's probably worth 30 to 35,000. Oh, wow.

So question long term. So let's say your mom moves out, you cover the 20,000 in damages. What happens next? You bring another renter in who has the propensity to do the same thing, and now, again, you're on the hook for however much the damages are. What's the long term play here to not be in this situation again?

Me and my wife are still debating that question, whether it's worth keeping and renting out a little more legitimate with a very detailed lease agreement or selling the property, which I would prefer not to do, but that option is there, too, just to make all these problems go away.

Here's what I'm thinking. Let's talk about the $20,000 first, and then let's talk about George and I can give you some ideas for the long-term play on this based on your finances. I don't think your mom has the money. I think continuing to hound her about this is just going to be like you bashing your head against the wall. Fair enough? Right. So, yeah. Yeah, I know.

I forgot the bruises to prove it.

You don't have a landlord insurance policy?

No, no. This was strictly just because I was trying to help my mom out.

And she wasn't a legal tenant then? No. There was no deposit, nothing signed. No. Okay, so this is... It's on you. And I think that stinks to realize. And we also need to take our part in owning that we made a whole lot of mistakes on our own that got us here. Number one was letting mom live there, knowing that she wasn't in a good financial spot, and probably this day would come, where she didn't take care of the place, she can't afford to rent, and we have to evict our own mother.

Right. Everything you said is accurate. I even let her know if she did move in with us, that I don't want to have her pay any rent. All I care about is her getting back on her feet. So I'm fully acknowledged that this is in my hands, and I'm going to have to be the one to solve this problem.

And she'll likely be your burden financially as well for the foreseeable future.

That's right as well. That's one of my concerns.

Yeah. So if I'm you, I am going to scrounge together this money, and I'm going to try to get this stuff done for the cheapest price possible. It's possible that you can do it for less $20,000. Maybe you put your own sweat equity in it. I don't know the nature of the repairs. But let's talk about further down the line, the way you mentioned the $20,000 scraping together from here and there. I want to know about your financial snapshot, and if it makes sense to even keep this rental house. So tell us about you.

I'm retired in the military, so I have a very stable pension that allows me enough to support two mortages. It's not going to hit me financially at Just a big hit is going to be this complete liquidation of all my savings because I only have 19,600 liquid. So it's going to put me back to square one, which I'm trying to avoid.

How much are you making a month?

8,700.

And then what are your total expenses, including everything, insurance, food, bills, all the mortgages? What's your outcome?

I pay 3,000. My total income for the month, 8,000. My total expenses is 3,000 after bills, not counting groceries, just the bills.

So counting everything, though, are you spending about five grand a month, you'd say? Yes. Okay, so you might have 3,000 left over each month. Yes. That's smart. So we can cash flow this over the next month, two month, three months, to where you're not fully liquidating it all at once. Maybe we spend 10 grand now, and then another five grand next month, five grand the following month, and then we're done. All the while, we're using as much of our income to cash flow it versus draining the savings.

Okay.

Now, tell me about your current residence. What do you owe on that?

We bought this property in 2021 for 300. I think we owe 280 still left on it. And what's it worth? 261, I'm sorry.

Okay.

What's it worth? Probably low 400 maybe.

And what about the rental? What do you owe on it and what's it worth?

The rental, we owe 88,000. It's probably worth 240.

Okay.

So after selling it and everything, I'd probably pocket 140.

What would you do with that 140 if you had that sitting around on an account?

I would like to invest it into the S&P and the DAO or whatever would be best, and just leave it there.

I love that. The thing about that plan versus being a landlord, it sounds like you don't love dealing with the physical issues, a tenant, the upkeep and maintenance And so if you could get a return by that money just being invested, and it might be even more than you would have gotten if you had a tenant.

I agree with that. Right. And I don't know if you- I know you said you have a pension, but do you have a nest egg anywhere invested?

I do. I have a small investment with the Roth, not the Roth, I'm sorry, the S&P and the Dow. Okay. Not very anything substantial worth talking about. It's 6,600, but I do have the TSP from my time in the military.

Then I got to say, based Based on how this is hitting you as an inconvenience, I could see down the road this rental continuing to be an inconvenience. I like the idea of you selling it and taking that money and investing it for your future or however you think it would be best spent.

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Nlmls ID-1591. Nlmls consumeraccess. Org, Equal Housing Lender.

All right, back to the phone lines we go, where we have Cordell, who's Pittsburgh, Pennsylvania. Hey, Cordell. How can we help today?

Hey, how are you?

Doing good. What's up?

I'm in a little bit of a pickle.

I have a I bought a car in 2023, and the car no longer runs. It needs a new engine, and it's been like that for a while. It's been just sitting outside. I quoted the dealership, they said $8,500 to get a new engine, but I don't want to put any money into the car at all. And I'm stuck with, I think, just around seven grand, I think. I just checked, it's like 70, 100 on the car.

Oh, wow. And what's it worth in its current state? Nothing?

Yeah, I called the dealership and they said 200, but The car is worth 200.

I think so. Like, that's what they would give you for it?

That's what they would trade in, yeah.

Did you buy this car from that dealership? I did. Okay. It feels like you keep going back to an abusive ex. Like, of course, they're going to screw you on every turn. And so I would not go to the dealership to get this thing fixed. I would go to an independent mechanic and maybe two to get some quotes on what it's going to take to get this thing up and running.

How much money do you have?

I don't have anything liquid, a lot liquid. About a thousand. That's about it.

What are you driving now? Accessible to. I have my mom's car.

She gifted me. So everything's in my name, title and everything. She gifted me her car.

It's paid for?

And it runs good.

It's paid for, her car that she gave you?

Yeah, it's paid off.

There's no payment or anything. So this is great news because it means you don't have to go buy a new car, and whatever we can get for this thing is what we get for it. Now, we need to pay off the loan. That's the problem. So we need to come up with a difference or scrape up the cash to get this thing fixed and then sell it.

You said you only had $1,000 liquid. What do you have non-liquid, and what's it And what's the nature of it?

In a 401k.

That's about it. Okay. Just making sure you didn't have stocks or some coins sitting around. Okay. Yeah, I'm with George.

We started doing that, but we're not at the point yet where it's like we can take out the money for liquid. You know what I mean?

Understood. We just started. So tell us about your work. Are you working?

I am working, yes. Okay.

What are you bringing in?

About 50, 55, a thousand a year.

Okay. And you have a spouse at home? Yes. Yes, I'm married. Are they working outside the home as well? Yes. Okay. What do they make?

Around the same.

Great.

$100,000 income. Great.

We make six figures. So this is a solvable problem. Within the next month or two, we could probably scrape up enough to cover this if we live on nothing. So can you keep up with the payment for now?

Yeah.

That's what I've been trying to do. What's the payment?

The carpet, it's like $322 a month.

Okay.

So you should be able to easily handle that.

On our screen, it says, Should I do a voluntary repo? Is that what you were thinking about doing?

I called the dealership back, and I asked them, What should I do? And they said, Your best bet is to do a voluntary repo with a credit hit.

Oh, my goodness. I said, My credit just went up 50 points last week, and we've been really trying to do that, and I don't want to do that.

I'm so glad you didn't listen to them. That is called set you up for failure. So I'm so glad that you called us instead. You're bringing home over $6,000 a month. You're You're handling the payment, but we want you to get out of this because obviously it's not running, and we don't want you in any debt anyway. I don't know if you have other debt to speak of that's sucking up more of your income, but I would put this as a top priority. My guess is if you listed your debt small to largest, this is probably towards the bottom of the heap.

Yes. Yeah, this is actually the last... This is my biggest bill.

Oh, this is your biggest bill?

Okay, great. So you could knock all your debts out pretty quickly, making 100 grand. If you guys... It sounds like you have not been on a budget. It's just been spending willy-nilly, not really paying attention.

Yeah.

Okay.

That's 100 % accurate.

Now, are you and your wife ready for some life change? Because we're about to be living differently for a little while.

Yeah, I've been trying to do that.

It was a lot of branding that. I don't know, Cordell.

I don't know about that.

Yeah. I would have a real vision casting convo tonight. Where you say, Hey, listen, the way I've been leading us in money, this is not an attack on her. It's start with I statements. The way I've been leading us when it comes to money has not been great, and I own up to that. And it's left us in a real pickle, where we have this huge repair that we can't afford, and we got all these payments around us. I'm ready to live differently. Are you on board to help us get out of this and stay out? See how that's not an alarming, attacking conversation? And then it becomes the byproduct is, Hey, let's get on a budget and just see what our income is going to be this month, see what our expenses are, and see where we can do better to cut anything that isn't necessary for the next few months. Yeah.

And that's what this is going to look like. But it's going to start with the two of you, and we'll make sure that you're set up to when we'll give you every dollar. It's the best budgeting app out there, but it's more than that. It's really going to help you stick to the plan. I'm glad you called us because we're going to tell you the fastest and best way to get out of debt and build wealth in every is going to do the same thing for you as well. Kelly will pick up and get that to you, but the key is you guys have got to get on this. You guys have got to work it together. It's totally up to you to do this. George, let's talk real quick about repo, because I feel like, First off, I feel like we're getting more and more calls about that. I don't know if that's just a reflection of the high cost of living right now and people are falling behind on payments that they got when auto prices were super high. I'm not really sure what the correlation is there. I could speculate on that a little bit.

But repossession, guys, is never the answer.

When you hear the word repossessed, what do you think of, Jade? It sounds like a demon.

A demon. It's a possession.

Just tie them together when you hear that word. And so here's the problem. Whether it's involuntary or It's not a voluntary. Involuntary is they show up at your driveway in the middle of the night.

And they take that bad boy. Yeah. But don't do voluntary. A lot of people think there's a difference between the two. Well, it's on me. I'm voluntarily giving it up. No, you're still going to have to go through the same negative process.

It It will destroy your credit. It leaves you liable for the difference after auction. So here's what they do. They go sell it for like pennies on the dollar to get what they can. They don't care. Then they come after you for the difference. And so you're in no better of a spot than if you just continued keeping up with the payments and tried to sell it yourself. That is the goal, to sell it on your own, to get way more so that you're at least less underwater.

That's right. Here's the thing. If you are underwater, maybe you have a vehicle that, like I said, you pay too much for your underwater on it. Guys, what we would suggest here always, less debt is better than high debt. Let's pretend you had a vehicle that you spent $30,000 on, and now it's only worth, I don't know, $15, half the amount. You're upside down. We're always going to tell you, go down to the credit union, see if you can get a loan for the difference. See if you can get that. I don't care. You could put it on a credit card for all I care. I just want that number down. I want you to be paying $15,000 of debt instead of $30,000 of debt, is my point. Then from there on, now we can actually work out of this. Now you have a lower monthly payment. So again, that's going to come and work for you on the debt snowball. You have more money to throw up your debts, smallest to largest. That's why we suggest that. But please, please, please, never go down to the dealership and ask them what they think, Because they don't have your best interest at heart.

Yeah. It's like making a deal with the devil and then going back to the devil for financial advice.

Yeah, and thinking he's on your side.

Exactly. And so this is not a knock on every dealership in the country, but generally, the dealership is the most expensive It's an expensive place to buy a car and get any repairs done.

Well, they're not your financial advisor. No. At this point, we're talking about a financial decision, and that's really where the conversation changes. They want to sell you a vehicle. They're in the vehicle business.

But you go back to the devil, you know. Yeah, that is true. A lot of devil references here, a lot of demons. I apologize to the kids watching out there.

What's wrong, George?

Is something going on? I'm just so angry. People are getting hosed. I talked with a guy in the street last week, 28% APR on his car loan.

Lordy.

Because their credit shot, and what do they do? They say, Well, hey, we can work with you. What payment you're looking for? If they say those words, run, you are about to fall for a borderline scam. And they'll extend the loan, hey, 72 months, 96 months, whatever you want. We can make it happen.

Guys, let me tell you, a cash car, that's where it's at.

Can't be underwater on that.

You can't be underwater. And I would rather drive a cash car that's 10 years old than have a payment that's going to keep me broke for the foreseeable future. I'm just saying.

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Doing well, thank you.

Yeah, no problem. How can we help today?

I just started talking to my lender. My wife and I bought our first home a little over a year ago, and he was reaching out because interest rates have gone down, and we talked about possible refinance in the future. And he did a soft credit pool and was running me through options. And I come to realize that my wife is in about $24,000 of credit card debt that I was naively unaware about. I knew she had some debt, but I didn't know it was that bad, where there's I have four cards, three of them that are about 99 % max, almost maxed out.

Wow. Well, you say naively. Why didn't she tell you?

I'm not 100 % sure.

How long have you guys been married?

It'll be 15 years this April.

And how long has this debt been laying around?

Some of it five years or so, and I just was not aware that it was that bad. I don't think it was that bad, but I think it's just one of these things where she just uses the card and doesn't really think of the repercussions. Again, I'm not 100 % sure, but I've been working on my credit a little while.

This is beyond like, I'm casually using a card. If you've maxed out three credit cards without telling your spouse, this is straight up financial infidelity.

There's no other way to say it. Do you combine your money or are you guys doing the separate deal?

We've been doing separate. It's just Obviously, what I thought would work best. I'm the majority income breadwinner, and I cover mortgage, I cover car, I cover most of the bills. I let her handle insurance or Well, I mean, you have set yourself up because unfortunately, what happens in an environment where you don't have full transparency, which is we don't have things combined.

Therefore, you have your world, I have my in the world. Like you said, maybe you do the insurance, I do the mortgage. It does set up this idea that I can do my own thing over here. In her mind, it's probably like, as long as it doesn't affect you, we're square. And then that sets you up to have the same thing. So that's the danger, George. Both of the George's I'm talking to right now. That's the danger.

When you silo your money like that.

Yeah, when you silo your money.

Have you confronted her about where all this money was spent and why she did this without telling you?

I just, we recently bid it, and it was, like I said, so we had, I guess she put my daughter's braces on one of them. She had some health issues a number of years ago where she had to get some stuff, and she put it for her to pay the medical expenses, and she was using one of those to do that instead of- So she's not buying Louie bags? She's not out here- No, no, no, no, no, What was going on here? I started going through them yesterday, and then she even did some cash advances. I'm like, That's the last thing you ever want to do on credit cards because one of her monthly payments is $242.

Have you guys had the conversation that we don't engage in debt? Has that been something that you guys have said to each other, that this is feeling not only that it's something that she kept from you, but it's also crossing a values line for you? Or have you never had that conversation?

Well, it's something where she knows that I've been working on because I had terrible credit maybe six, seven years ago in the low 500s. I couldn't even get a $500 credit card from my bank. And now, over the last years or a few years, I've learned how to play the credit game, learned what to do with it, not to buy things just because if I don't have the cash, I had to learn a hard way. But at that same bank, that wouldn't give me a $500 credit card. Now, I have a $46,000 credit card with them, and I maybe owe $1,000 on it for some car.

Here's the problem. Here's where the confusion is. There's a lot of confusion in this, and I hear what you're saying, and it now is It's still clear to me. There's two or three issues here. Number one, what we already said, the money is siloed. Because of that, there is just going to be a level of secrecy. That's thing one, and you both have created that environment. Thing two is there isn't a clear stance on debt in your relationship. It sounds like if it's this debt, it's okay.

If it helps our credit score, then maybe.

I think that's created. That's the second problem is there's just not a clear stance on what does that mean. Then the third thing is there is a lack of communication. There is something there that she didn't feel like she could tell you. Even something like, Brace is, Hey, I have to use this money for our children's braces. There's a communication there or some lack of trust that, I don't feel like I can come to you with this, or I don't feel like I can share this. These are three main issues. Hearing the call, George, what I would suggest is if you can take a level of ownership in this, too, and then you can come to her and say, You know what? We've gotten off on the wrong track, both of us. I see my part in this, and I want to change what I'm doing today. I hope that you're here with me because we can't keep going like this. I want you to know that I trust you. I want our finances to be together. What I'm finding right now is I was focused on debt, and I was a hypocrite because I was saying my debt was okay, but yours wasn't.

I think, honestly, going forward, we just need to say that debt has not been good for our relationship. Going forward, I don't want to engage on it. I don't know about you, but this is what I want to talk to you about. That's how I How do you approach this.

Yeah, no, I love that. And that's the conversation I had last night when I said, regardless of your debt is my debt, I have $4,000 in debt. But I told her, and I'm thinking, Oh, we just finally got a tax return for the first time in two years because I'm making more money than I've made in the past. So having to adjust for things like that, I had to owe the last two years. But having extra money taken out and being on top of the finances where we got like, $4,500. Okay, cool. Maybe we can use this to pay down our credit card debt, thinking ours was roughly around the same, not realizing ours was as much as it was.

Yeah. So what's your total consumer debt now?

It's about $30,000 between the both of us.

Okay. How much do you have in a cross-checking and savings liquid?

Like, leftover or just currently right now?

Currently.

I have about $2,300 right now in my debt, that's after mortgage and bills are paid.

Okay. I would likely pause in this refinance because it's going to cost you 2 to 5 % of the loan. And I don't know that you're going to break even anytime soon. So this might be a down the line thing. Right now, the focus is just attacking this debt with the debt snowball. That's the easy advice. It's just tackle it as if it was you all's debt and smallest credit card goes first, minimum payments on the rest. The hard part is going to be resetting your marriage and financial life and her rebuilding trust. The way to do that is a micro commitment every day to be a person who is trustworthy. That's going to involve transparency and accountability and having a joint account. We know the plan. Freezing both of your credit. Freeze all the accounts so that nobody could open debt in your name, including you. Make it really hard. Add the friction there so that we're not tempted. And if you do all of those things and get on a budget, there's definitely hope here. We can get out of pretty fast.

Okay. Well, a question with the snowball is, is it because, like I said, most of them, they're all around the same. They're all like 6,400, 6,300, 6,600. I'm looking at that.

Yeah. So what I would do then is I would do them in order. If it's 6,400, if the 6,300 one is the smallest one, do that one first, and then do the 6,400 one, and then do the 6,600 one. So when you do the debt snowball, everybody, what we're doing here is we're listing the debt smallest to largest, by balance, not by monthly payment, not by interest rate. It truly is by balance. When you do that, you get those small wins quickly. You feel that rush of dopamine. You feel like, Hey, I did something, and you want to go to the next one It really is proven to be the best method to pay off your debt quickly, and that's what's going to work for George, too. If you're looking for a more budget friendly way to save on medical costs and stay true to your values, Christian Health Care Ministries is a great option to think about.

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All righty, back to the phone lines. George, are you ready?

I hope so. All right.

We got Sarah, who's in Las Vegas, Nevada. What's up, Sarah? How can we help today?

Hi there. Good afternoon. My question is pretty much on garnishment, but also So, of course, your guys' awesome guidance.

Hit us.

My husband pretty much pays all of our bills and everything. Recently, his wages have started to be garnished for a car that we voluntarily let go a few years ago. So now we are… I downloaded the Every Dollar app, and I'm trying to do the budget, and it's in our face that now we're short on bills, so I'm scrambling, looking for a job. I have a side business, but I obviously need stable income to bridge that gap. So I'm scrambling, looking for work. We've been married for a while, but we just recently started joining our accounts because of this and working on the budget. I guess my question is, can we do anything about the garnishment?

How much is the garnishment?

I don't know the exact detail yet. He's working on getting that information, but I think- Oh, so you You haven't seen it actually happen yet.

It's just been ordered.

No, no, no. If these wages are being garnished already, I just don't have the physical paperwork. You don't have the numbers.

You don't have the numbers. Do you know the balance that's owed? Yeah, I don't have the numbers.

No, I don't.

Okay. I don't. Well, there's some homework there because once we know that, we can develop a game plan to pay it off aggressively using future income. I'm guessing you guys have nothing in savings.

We don't. He did, but he does not have anymore, so neither of us do.

What do you guys make?

Well, he makes, so before the garnishment, 43 a year, and then after it would be 31. So a month is basically 2,600 because they take it directly from his paycheck.

Yeah. It looks like they can take up to 25 % of your income on a garnishment. So this does have the ability to really mess with you guys.

There's nothing you can do about it. The lender sued you and they got a judgment that you owe the money and this is next steps because you're not paying.

Did you guys... When you were served, did you ignore this or how did you get to this point?

Yeah, I got ignored pretty much. Yeah.

Okay. So we're not doing that anymore going forward. What's the status on... I mean, obviously, you guys are married. The money is separate. It's like you know what's going on, but you don't know the amount of it. How are you... I think my question for you is what's the plan to come together to solve this? Because going forward, what I'm seeing, big picture, is we've got to get on the same page, and when life hits, we can't ignore it because it just snowballs and makes it worse, which you're finding to be true right now.

Absolutely. I mean, we're pretty much... Honestly, we're getting into taking the biblical approach of marriage and finances and everything, and joining our accounts and being one, and that's moving forward, but we do have, unfortunately, a lot of fight.

What other debt do you guys have?

We have a lot of debt in collections, but right now, It's just our monthly bills, like the mortgage, the phone, and cars, and everything.

So is there anything you can sell in this picture, where you could free up some payments and even walk away with some cash?

Yeah, because there's still a chance that they might settle this for you if you can get with the creditor and say, Hey- If I give you this much lump sum, can you call it paid in full? Yeah, that's not off the table.

That's what I was thinking about. He's like, hell-bent. I'm sorry for the reference. He's like, Ben, on, well, let's... We have equity, and I have no idea how that works. But he said, We'll just call a mortgage company and see about that.

So he wants to take out a heel of me.

He wants to take out a heel of me. I don't I don't know what type, but I just called to inquire, and they pretty much were like, Well, you have to run your credit anyways, and we don't even have the credit.

Good. I'm glad. We don't have the credit. Please do not use your house as a piggy bank and go into more debt thinking you solve the problem.

Yeah, debt doesn't solve for debt. The only way you can solve debt is to pay it off with actual earned money. So here's going forward. So how's the job search going for you?

Well, it's going. I haven't worked for a few years at a 9: 00 to 5: 00. It's my own business. I let that go because we need money. But I've been applying to pretty much everything within the past few days.

Today, I want you to know any job we'll do for the time being.

And you be a server at the nearest restaurant. We're not talking about a fancy salary job right now. We need any money in the door.

And then the first order of business is to try to stack up. You need to sit down with your husband tonight, find out what the full amount owed is, and then try to scrounge together as quickly as you can, 60 to 70% of what that is, or even 50%, start small and say, Hey, go to the creditor directly and say, Hey, I know we don't have the full 8,000, but we have 4,000 today. Take it or leave it. Because they're in a position at this point, they're not expecting to get much this garnishment of wages. They're going to get what they can, but I would at least try to settle it. There's no guarantee there, but I would try that. Then from here on, yes, the solution is income. There's not going to be a magic wand here. If you guys pull out a heelock or any other type of loan or personal loan, you are just kicking the can down the field and honestly making things worse for you in the future. For you guys today, the name of the game is income and drawing a line in the sand and saying, No more.

This behavior of you over here and me on this side, that cannot continue. This idea of not facing our financial issues head-on cannot continue. I love what you said earlier, Sarah, that you guys are trying to get onto this approach with your life and your money. Keep doing that. Matter of fact, I haven't offered this in a long time, George. But if you guys... I love Financial Peace University. I love every dollar, but I love something about I'm getting deep in this. So if you want to get into that, I would suggest it. Local church, I love that for you guys. We're also going to give you every dollar if you like the digital approach. But I think you guys could really use some people around you that are doing this and doing it the right way. Fpu, Financial Peace, always has some OGs in there that can guide you.

They've been there.

Yes. And that's what you guys need. This is a complete overhaul for you. And I think it's something to be excited about.

And on top of that, Total Money makeover. We're going to send you a copy that. So in between classes, you're going to be reading this book together, and it's going to fire you guys up. And if that doesn't light a fire under you, I don't know what will. Nothing will. But that's the game plan. It's no new debt whatsoever. Freeze your credit so that you can't do something as dumb as taking on a heelock. Then we're going to cut our expenses down to nothing, and every dollar will help you with that. Then we're going to try to increase our income as much as possible. And that gap, that beautiful gap, is called margin. And you're going to use all of that to attack these debts, to save up a lump sum, to try to get these other debts out of collections. Because those debts are next. They're going to come suing you for those. It's like Whac-a-mole right now trying to clean up these debts.

But the good thing, what we're teaching you, Sarah, is it feels like you don't have control over the situation, but you can gain control over it very quickly, and that's going to start by knowing those numbers. Something truly happens when you sit down at night, George, and you do your budget for the first time. And even if it's in the red, for you to just list out, this is the money coming in, and this is the money going out for a lot of people. It's the first time they've ever seen it that clearly.

Sarah mentioned that. She said, We did the budget and realized, oh, my gosh, we're in the red every month. We can't keep doing this.

Yes. And then so having that level of control and then saying, Okay, well, here's what we're going to do next. And they've got a plan, debt snowball. And That, for me, is the biggest piece. It's going to take time. It's going to take time to turn this around. But then to be able to say, Okay, now I'm reading the total money makeover. I'm going to my FPU class. All of those things combined is exactly what you need to stay motivated, light a fire under, but keep listening to The Ramsey show. That's the type of stuff that Sam and I did when we were paying off our debt. You have to just jump off the cliff wholeheartedly and really just submerge yourself in a new lifestyle.

Just have faith that this process works because 10 million people have gone before me and have done it. Yes. Not-ish. You got to go all in. You got to do it by the book. And there's a reason it works.

There's a reason it works. I'm excited for you guys, Sarah. This is the precipice of a brand new beginning. And be sure to call us back and Let us know how things are going or if you need any help whatsoever.

Dave, we got a lot of calls on this show where life happens. One day someone's healthy, they're working, providing for their family, and then a curveball hits. We hear it all the time. A car accident, a cancer diagnosis, a heart attack, and suddenly everything changes. Yeah, and that's why you've always said that having term life insurance from Xander is essential because it protects your family if the worst happens. Yeah, that's right. You need 10 to twelve times your income in coverage. No gimmicks, no whole life junk, just straightforward term life protection. But there's another piece that people often overlook, and that's long term disability insurance. Yeah, it's important to understand the difference between them. Life insurance steps in when you die. Disability insurance steps in while you're alive but can't work. So it replaces a large part of your income so the bills still get paid while you get back on your feet. Now, if your employer gives you free disability insurance, great, take it. If it's discounted there at a better price, take it. But if not, Xander can help you find the right plan. Whether you're single or married, it's not optional. If you're going to be out of work for a while, then you need to make sure the money is still showing up.

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Hey, welcome back to The Ramsey Show here in the Fairwinds Credit Union studio. It's myself, Jade Warshaw, next to George Campbell. Continuing to take your calls, and we have Austin, who's in Tulsa, Oklahoma. Hey, Austin, how are you?

Hey, guys. How are you? Can you hear me okay?

Absolutely. Fire away.

Excellent. Wonderful. Thank you for taking my call. I'll try to be brief here. We're a family of five with three kiddos, and we have just under $100,000 in debt, not including our mortgage. And while we can make minimum payments and are trying to tackle one of them, we feel so defeated. Our youngest has just been diagnosed with a life on medical condition, and our oldest is on the spectrum. And so a lot of our credit card debt went to helping get him resources that he needed. But you close our eyes, you wake up, and we just have all this debt. And so we're a little stuck.

Oh, man. Yeah, that's tough. That's tough to go through, especially with the medical challenges. How's your income in all of this?

Yeah, household income is 164,000 a year.

Good. That's a great income. You got a big pile, but you got a nice big shovel to help clean it up, which is nice. Can you tell me the breakdown of the debts?

Sure. So it's a little bit like death by a thousand cuts. So we've got roughly $40,000 in credit card debt between two credit cards. And again, those were some It was poor financial decisions on our part, eating out, et cetera. But a lot of that was the medical stuff. I have $20,000 in student loans, and we have two car payments. One of them is $28,000, and it's a relatively new car, and the other is $8,000. So it's close to being paid off.

Okay. Now, you guys's income, is that just you or do both you and your wife work?

We both work. So I bring home $80,000, and my wife brings home $84,000.

Okay, great. Okay, so What I'm looking at straight off the bat is maybe the first car that's worth 28,000. What's it worth?

Yeah, that's what's tough. So we did the Kelly Blue with the value. And if we got the perfect buyer, perfect money, it's probably at about 30,000 even. We'd make a little bit, but then we're like, What do we do for a decent, safe car for her? Because she is from a different country, and so she's learned to drive as an adult, and so she's a little anxious if the car doesn't have a lot of those safety features to help her Interesting.

That might be solved with some driving lessons, but I think that you could find a... If you took the 2000s, did you have any cash saved? Do you have any money saved?

We did, but we unfortunately depleted that. It's embarrassing to admit that, honestly, so we have to build that back up.

Don't be embarrassed. But what would be a goal coming away from this call is if you can sell that in pocket 2,000, obviously, you're going to need to put $1,000 aside for Baby Step One, which is just that emergency fund. But then I'd very quickly be trying to scrounge together, I don't know, $7,000 or $8,000, and just get a car that is safe, that is reliable, that gets her from point A to point B. And honestly, driving lessons.

Yeah. I mean, any modern car from the last decade is going to be safe to drive. It doesn't need all every single bell and whistle of the lights on the mirror to let you know there's a car next to you and all that.

A lot of that's just paying attention, too.

But you guys make sure you bring home 10K a month or so?

Yes. She might actually get a pretty healthy raise coming up, and I might too, actually. But we can't bank on that. Sure. And that's where the thing is Because we are really tackling. I think we're doing it backwards, and I was going to ask you about our high interest credit card, but we're doing the opposite of the snowball now that we realize what the snowball is, we may fix that. But we've been trying to throw money at the high interest credit card, and we're throwing almost two a month at that, and the minimum payment is everywhere else.

I'd swap this around. I think it's impatient. I'd swap this around. Your biggest opportunity here is with that car payment, because how much are you paying a month for the $28,000 car?

We do it twice monthly, but it's altogether about $500 a month.

Yes. If we said, Hey, $2,000 from the sale, and instead of throwing $2,000 at this credit card every month, since it's not even the smallest debt, what if we pocketed that for two months in a row? Now we have We can find a very reliable car. Surely there's someone in the community that you know, ask around your church, ask around at work. Surely somebody's selling something or know somebody who is. I like a used car like that because then I can get a more accurate picture of what the background of the vehicle is. That would be my first move because if you can reclaim $500 a month, plus to add that to now the margin of the $2,000 that you were already throwing at the debt, now you got $2,500 a month that you're pounding this debt with.

It knocks out over 25% of your debt right there. So now you're down to 72 making 164. Now it's a solvable problem. And you're not going to be driving that car forever. So I don't want you to think, Oh, my gosh, this is a death mobile. I can't ever drive in this car. This might be six months to a year until we can upgrade if we get intense about this.

Yeah, and your current car is worth $8,000, and you guys have been driving that one just fine. So that would be a full argument for that choice to be made. I love that for you. Second thing is, I think you did say that you're getting side up on doing the debt snowball the correct way, which again, by balance, is what I would do. So what's the smallest balance that you have laying around? And you can include student loans in that, too, by the way.

Yeah. I guess the other one would be that $8,000 my car, which we could probably take care of pretty quickly. So it's the 8,000. Then it would be the two credit cards. Our high interest one actually is at about 15,000. We're planning on using my life's bonus to knock that down $3,000 or 4,000, but maybe we'll rethink that now with this. Then we have another credit card at 21,000 and my student loans at 20,000.

And the student loans is just one big chunk. It's not divided into smaller loans?

It actually is divided into smaller loans. I don't know exactly what those breakdowns are right now, but they add up to just shy of $20,000.

Yeah, I'd look into that because, again, the whole method behind the madness of the debt snowball is small wins. If you can, say you look at that student loan, my guess is it's probably broken into $5,000 chunks. I don't know. I'm just going maybe by semester. But if you can feel that, Oh, we knocked out 5,000, and you can see it as four pieces instead of one giant chunk, it does feel like... It's almost the feeling of, I don't know if you're like this, but I love making a list and being able to check things off my list. It just feels great, and it's the same way with debt. If you can look into that tonight and you might find, Oh, this is broken into four or five smaller loans, that is going to do so much for your psyche while paying off this debt.

We talked about income. We talked about the debt. The last piece here is the expenses. I can tell you guys have just been in survival mode, which means we're just going to eat out because ain't nobody got time to go get groceries and cook. We are stressed, we're exhausted. That's exactly right. It's not because you're maniacal, you're just human beings.

No. Yes. I will say, since December, we've gotten really intentional about cooking at home, not eating out, doing all those things. We've seen a pretty good difference. But yeah, it's just the exhaustion at the end of the day. That's the temptation.

That's That's where the spending happens. It's scrolling in bed at 11: 00 PM and just adding to cart and going through the drive-through. And so that's really going to be a great opportunity for you guys to create even more margin because you have a great income. We can all agree. If you were 18-year-old Austin, you're going, you're going to make $10,000 a month take home one day. You'd be like, We are rich. That's right. And instead, you're looking around going, We don't have enough money to pay our bills. And so we've got to take some serious action because once we do clean this up, you guys are going to be in such great shape to build wealth for the rest of your life once we're done debt. And then you'll be able to keep up with the medical needs. That's an even better reason to become debt-free. When you got those little kiddos as your why, there is nothing that will stop you.

And that's one part that we didn't really talk about, knowing what their medical needs are going forward. And you may need to have a fund that's there to the side. If you know, Hey, we're spending a certain amount, a couple of hundred dollars on this a month, or maybe even a couple of thousands of this over the course of a quarter, I would certainly have that money set aside. Aside from your normal emergency fund, just knowing, Hey, this is part of our budget at this point. It's something that we have to create a sinking fund around to make sure that money is there when we need it. Owning a business can be a heavy load.

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All righty, then. Back to the phone lines we go, where we have Steve, who's in Chicago, Illinois. Steve, Happy to have you on the phone lines, my man.

Thank you for having me on.

You're welcome. How can we help?

So me and my wife, we got married in 2024. She's originally from the Philippines, and she still has her family there. One in particular is her mom. Her mom, as of recently, has come on some financial problems that we want to help support her. We're We're blessed we're in a good spot. We can do that. The problem is that she lives with her son.

You're breaking up a little bit.

We broke up on it, Steve.

Can you hear me okay? Yeah, just repeat what you said again.

So you said she lives with who?

She lived with her son, so my wife's brother.

Okay.

And he's, I think, 42, 43 and hasn't had a job in many, many years. And the problem is he's basically siphoned off everything she had for retirement. Where the problem is we want to support her, but we don't want to enable him at the same time. So we're not really sure what to do with that situation.

Well, at that point, you're just enabling his behavior.

Exactly. So all you'd have to do, theoretically, you could talk to her and say, Hey, here's what we see, Mom, and this is your wife talking. We see that you could use some help, and we'd like to help you. The only way we can do that is if you're separate from my brother because what we've observed is not good for you, and we cannot give you money knowing that it could enable him. But my second question to follow up that is, how is it not enabling your mom? Or the mother-in-law? Is she unable to work? Tell us more about that part.

Because this sounds like a forever problem that you're going to have to manage if you start giving her money forever.

Yeah. So she's retired. She had a good nest egg. They actually sold some land and something and stuff where she had a decent amount of money. And we've had that conversation with her of like, Hey, she actually had a condo in a different area, but she refuses to leave the brother behind because she's worried about him and his life and stuff. But it's hard to explain it to her where we want to support her. But at the same time, we see the enabling that's happening.

You may not be able to.

Whether she knows or not. That's where we're at.

Having stipulations or having something that you need to see in order to know that money is going to be spent responsibly, that's not mean or wrong or unfair. It's just honestly being a financially responsible adult. If you've observed that she has not been responsible with her money and that there is a person who is taking advantage of her, but she refuses to leave that situation where she's being taken advantage of, there's not a whole lot that you can do other than say, Hey, this offer is here if ever you want it, but these are the terms of it. We love you, but we can't let Billy Bob, who's 43, continue to take your money and therefore take our money and take it or leave it.

How much are you giving her right now?

Right now, we're giving her $1,000. A month? No, Right now, it's been one time. Okay. She actually, even though she's in dire straits, she reached out to some of her sisters for money, and then her sisters, my wife's aunts, reached out to us to let us know because she didn't want us to know about it.

Because of shame or what?

I think so. I think that's the biggest thing because she knows that her son is a problem.

But everyone's healthy. Is everybody healthy?

Yes, everybody's healthy.

And how old is she?

I think she's 70.

Okay.

So, yeah, going out and getting a job is not going to be the easiest thing here.

I think if you wanted to give and you knew the exact needs, you can try to give directly to those needs. So if it was, I don't know, covering her taxes and insurance for the year or covering groceries. You can make sure she gets a gift card that's in her control so that he's not just getting access to a bank account. Absolutely. So there's things you can do to try to separate this. But again, it's up to her to not enable him at that point and somehow turn this into him getting this money anyways. But if you can give directly to the need, and that way he can't get access, that's probably the best way to do an ongoing gift. It's also okay to say, Hey, we can do a one-time gift of $5,000. We can't give you any more money. And if you squander it, if he takes it, that's all we can do.

Is he getting money from somewhere? Is somebody else providing for him that he's able to do the other things he needs to do? He's just living there?

Yeah. So he got access to her money for a long time. He actually sold some family land. He lived off of that for a while. He's always going to another thing after another.

Is he an addict of some sort?

No, nothing like that.

Where is he blowing all this money?

We don't know. We don't know.

That's the part that scares me. I just want to make sure that your mom is in a safe environment as well, or your mother-in-law. And that might be a conversation between your wife and her to figure out what really is going on underneath the surface. How can we really help to give directly to the needs if we're going to continue giving it all? Because right now, I would pause until you have more information, because right now you might be throwing money into the abyss.

I would agree with that. Probably the most important thing out of this entire conversation is whatever you guys decide, you both have to feel good about it, you and your wife. It has to be something that you feel like, yes, this is money well spent, and that she feels like it's money well spent Because all of this is sheer generosity. For that reason, it's not something that must be done that is really yours to solve. But out of the goodness of your hearts, if you're doing this, that's a great thing. I just would not want it to cause any resentment between you two who are married.

It's good advice.

That is a tough one. All right. Thank you for the call. Let's go to Jack, who's in Kansas City, Missouri. Hey, Jack, how can we help?

Hi. How are you guys? Good.

What's up?

I am I'm looking to figure out what I should do with a decently large sum of money. I don't have any debt. I basically have $200,000 of liquid cash that I've saved. And then I just had a judgment in court that is awarding me about $530,000. Wow. Like I said, yeah. I mean, I've paid… I've always been really… I mean, I've been a long-time followers of the show, so I've always been very careful. I don't have any credit cards. I paid my student loans off. I don't have anything that's outstanding.

And you'll be sitting on three quarters of a million dollars?

Yeah, pretty much. Wow.

How old are you?

I'm 28.

Single? Yes. Are you renting?

I'm currently renting with my brother for the past couple of years, so that's where I'm at with that.

Cool.

Is there any health or anything going forward that we need to know about?

To manage? No. I mean, I'm a pretty healthy guy. The one thing that I did do just at the end of last year was because I wanted to get a good start on it. I did open a Roth IRA and contributed like 7,000 just for the past year just to get a good start. Yeah, great. But still, I have all this that I feel like I could do something with.

Yeah, I would split it across a few areas. Number one is giving. I think that's a wise thing to do with any amount of money that you get. And the other one would be saving and investing. And so that could be, Hey, I'm going to max out another Roth IRA for the year, and I'm going to put a chunk of this into an investment account, like a brokerage account, not a retirement, just to have it grow with compound interest or compound growth. And then the final thing is, you may want to buy a house with cash or upgrade your car with cash to a reasonable car and enjoy some of that money. Because locking in a house in cash at your age is one of the best wealth building moves you could make.

Yeah. So find something reasonable. I've been thinking about that because I bought my car with It was cash. I ordered it, brand new car, and I loved driving that away knowing that it was mine. And then I thought about the house thing. I didn't know if that would be a really wise move to just go for that.

Very wise. Don't go crazy. But I don't know what houses are in your area, but if there's a single family home that's, I don't know, $400,000, you'd still have plenty left over to invest and give and enjoy. I would do all three things with it. I would spend, save, invest, and give. If you do all of those things, you won't feel like you have a flat tire. But I love prioritizing a home. I mean, home ownership at 28, you'll be a unicorn, especially with a paid-for house. So that's the key, is try to do everything with cash for the rest of your life. You've already been doing that. That's going to be the best way to steward this money wisely.

I love that idea. And just because you can afford a $600,000 house doesn't mean you need that. Just get what you need for your life in this moment. You can always upgrade later.

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Hey, you know what? The truth is we wish that we could get to every call and every question here on the show, but that's just not possible. So if you have a money question and you want an answer for your specific situation, head over to our website and please use Ask Ramsey. Ask Ramsey is our free AI tool that's built and trained on proven Ramsey principles. You'll get an answer the same way we'd answer it right here on the show. Ask your today at ramseysolutions. Com or click the link in the description if you're listening on podcast or YouTube. All right, Manny is in Orlando, Florida. Hi, Manny.

Hi. Thank you for taking my call.

You're welcome. How can we help today?

My mother is 65 years old. Her house is paid off. She collects Social Security, and she's a house hack. She's got She has two studio apartments in her house, which she rents out, and that's what she uses for income. However, she has very low retirement savings, about $50,000. So My idea was to outright buy her house so she can retire in the house and have some money to enjoy her retirement. And so that was my question, whether this would be a good thing. My concern is that she would remain, continue to rent out the couple studio apartments within her house and whether That would be an advisable thing to do.

You'd buy the house, so she has the cash spending money. She'd continue to live in it, and you just would buy your time until the day comes where the property would roll Would be empty and roll back to you?

Correct.

How much is the house worth?

On realtor. Com, it's about $400,000.

Okay. Before I ask you if you have the ability to do this financially, how much is her social security and how much does she pull in from the rent?

She pulls in about $2,000 a month for the rent, so $1,000 per studio. And her social security is about She's $1,000 a month.

Okay.

And she's able to cover all of her bills?

She is.

Okay, so why do we need even more? If she's doing fine.

Well, just because she only has 50,000 No 401(k) is $50,000 in a savings account.

What's she going to use the extra money on? If she's living life- To increase her lifestyle?

Exactly. To be able to enjoy retirement and be able to travel. That's what she does. She likes to travel. Understood.

So that's- I feel like at this point, you feel responsible for her lack of retirement.

Well, it's a way for me to get back to her and not necessarily responsible, but I have a couple of rental property, and so I'm just in a position where I can- How much money do you have? In some way, I've got about 300 cash.

Okay. Okay, so you couldn't afford it in full right now, anyways.

Well, I could, but my idea would be to- Take on a mortgage? No, no. If it's, if it's worth $400, my proposal would be to do it like a 300 and be responsible for taxes, insurance, and all that.

That feels messy.

All this stuff throughout the years. That feels messy. So you want her to give you a 25 % discount?

Well, we haven't really discussed numbers. And honestly, I could pull the 400 if need be.

But that's all your money. When George asked you how much cash do you have, and you said 300, is that all your money, all your cash that you have?

No, no. No, it's just the liquid cash that I have.

I can pull from other- Give us a full snapshot. Give us a full snapshot. Tell us how much debt you have. Tell us about your... Give us a bigger piece of this so we can understand. How many properties do you have? How much cash do you have? What's in your retirement?

Yeah.

So my home is paid off, and then I have two rental properties that are also paid off. Okay. And then liquid cash in the bank is 300. Okay. And then I've got a couple liquid accounts that are 200,000. Okay. So all in all, liquid cash and couple of accounts that are pretty liquid is 500,000.

Wouldn't it be cheaper just to, if you want to bless her, cover the taxes and insurance on that house instead of you buying it?

That was not... Well, I mean, paying taxes, and that wouldn't really help her or afford her to be able to travel how she wants to.

But she can't afford it, is my fear. Right now, it's, you're artificially propping up her life Who knows how long. She could live another 30 years, right? She's in good health.

Or if the renters don't want to live there anymore, right?

Or if she blows through that money.

And then what? That's another concern I had, yeah.

And so these are all real- And she might be resentful. I would rather you give her 10 grand a year to go travel. That would be a cheaper option with less mess than you buying this house, but she gets the rental money, and it's in your name, but she's still living there. And then what if you need to sell it one day for whatever reason? Now, you go to evict your elderly mother. I just think it's just too messy to get involved at this stage. Too messy? Yeah. I just personally wouldn't do it. She doesn't need the money, and if she wants to travel, she might need to go make some, do a part-time job in order to come up with the money.

Or if She wanted to downsize and sell this home and buy a smaller apartment. There's options here that I think she has that she may not want to do, nor really need to do at this point. But I have a feeling that you stepping in and trying to do this is just going to lead to more problems down the line. And for that reason, I agree with George. I'd rather spot her some cash as a gift, maybe here or there for a trip, if you want to do that. But she's got options here. She's sitting on a nice piece of property that she's paid for over the course of years. So unless somebody did that for her, that lets me know she's got some wherewithal on being able to handle her money.

Right. Yeah. Those were my hesitations as well. It does sound pretty messy.

Would you inherit the property solely?

I have three sisters, and talking to them about this idea, they were At first, they were not so happy with it.

Because they were going to get a piece of that upon inheritance, and now they don't. They'll get a piece of whatever's left of mom's pile of money, which will likely be gone if she's traveling the world for the next several decades.

And the truth is here, the hard part with this is we all have a picture of what we want for our loved ones. All of us do. And sometimes that's just not the reality. And there may be, I mean, this sounds harsh, but I'm just being a realist right here. She may not get to travel as much as she wants to. Her life and her lifestyle does not afford that to her. And all of us face that every single day. There's things I would love to right now, but I can't afford to do it. I will either have to change something about my financial situation. I'll either have to wait, I'll either have to save up, I'll either have to write. And so there's part of that, rather than make something very messy because we want to have a picture so badly, there's part of it of just saying, Well, this is the reality of life for everyone to some extent, and it's maybe not here for me to try to clean up and make perfect.

Yeah. What if there was a compromise? Does she want to travel solo, or is she like to experience this with other people or family?

Both ways. Whenever we take a cruise, we bring her along. But she does also like to travel solo to South America and Central America. That's cool.

I'm wondering if there's a compromise here. I'm wondering if you go, Hey, Mom, once a year, I'd love to take a fun trip with you. You get to decide where we go. Here's the budget. So now she gets to live that dream without you being intermingled with the finances, and mom's a tenant now. I like that plan better because I can tell you're a noble guy, you're a great son, you want to bless your mom, you want her to have a great life. But I don't think artificially funding it by buying her house when she could sell it for more is the move. I just think there's going to be too much dysfunction in the family if you make this happen.

I agree with that. As long as you put really strong and clear boundaries and very clear expectations, if you do decide to do these trips, got to be so clear with that. Otherwise, next thing you know, it's like, But I want to go to the Bahamas. That wasn't part of the deal, mom. The Ramsey Show Question of the Day is brought to you by YreFi. When your private student loans are in default, your progress stalls out. Yrefi helps you restart the refinancing defaulted private student loans into a low fixed rate payment that fits your budget so you can stop spending your wheels. Visit yrefi. Com/ramsey. That's the letter Y-R-E-F-Y. Com/ramsey. Remember, it may not be available in all states.

Today's question comes from Shelby in Indiana. I have two children under five years old who are beginning to get invited to birthday parties for kids in their playgroups and daycare. This can get pretty expensive depending on how many parties are scheduled, and it's hard for me to justify spending a lot of money for children we're not especially close to. Do you recommend capping it out at a certain amount to spend per birthday, or should I look at this as an opportunity to be an example of having a giving heart to my kids?

Well, Well, let me know, George.

So much more information I want here. Yeah. Number one, I don't know her financial picture. Now, if she's in baby step two, drowning in debt, it looks like a lot of, Hey, wish we could make it, or a real simple gift that the kids make. It doesn't have to be a $15 gift because the truth is, under five years old, they're about as excited about a cardboard box as they are about the thing in the box.

Yeah. I mean, those little match box cars. Oh, I love those. Or even the ones from the movie cars, but those are $2, $2. They're not $6. They're not expensive. If you're in debt, if you're in baby step two, I would for sure cap the amount of birthday parties that we're going to, and I would cap the amount that we're spending. It's just, like you said, something small, a $5 gift. I think that you could do that. That way your five-year-old is not feeling like, I missed Isabella's birthday party.

Yes. I will say these birthdays have gotten out of hand. They It used to be simple. I remember it was just like, Come over, we're going to get a few pizzas. Now it's like, you got to get a white bounce house. It's going to be a progressive dinner. It's out of control. I'm going to one, Jade. For my two-year-old daughter, a kid in her little daycare, and there's a full-on petting zoo with exotic animals.

You want to know where I come from? I come from the roller rink, George.

That's what I'm talking about.

The sticky carpet, questionable individuals, bad pizza.

Ten bucks for unlimited skiing.

Okay, take me Back to that. But yeah, this business, don't get caught up is what we're saying.

I would cap it just out of principle. I don't think kids need expensive birthdays. I think they need stable parents. So unless it's a kid that they're really close to, and maybe the kid chips in. If they want to go to all these days where, all right, you're going to do these chores, get a little commission, and you can use your own money to buy whatever toy you deem fit. I love that. They'll feel the pain. They'll go, You know what? Maybe I don't need to get that $20 toy.

Can I tell you something else I've adopted?

What's that?

No. Hopefully this doesn't get...

This is going to go viral.

All right, here's what you do. However, whatever age they are, that's the money that you put in the card. Oh. And it's cute. So it's cutesy. If they're three years old, you put three crisp dollar bills in the card if they're four years old. And that way it's thoughtful because you're thinking about, I know how old you are. I went to the bank and I got four crisp bills. That's effort. So there's effort there. And it's very like, if you're an Auntie or an uncle or whatever, it's just a very cool way to send it in the mail or if it's a buddy's birthday, and it's like, this is what their family does. This is what the Warshaws do or this is what your family... I love that idea because it's thoughtful, but it's not breaking the bank. They're three years old. They don't need anything more.

Well, my favorite part is it doesn't add to the clutter. It doesn't add to the clutter. How many toys these kids have. Yeah.

And then on the way home, they'll stop and they'll get a fun drink or they'll get a stop through your drive, or whatever. You know what?

I really like that plan. And kids love money. They do. It's like magic to them. They do. They think it's a million dollars if you get a kid five dollar bill.

Oh, you got to do it when you do the magic trick, when you pull the quarter out from your ear. Yes. Listen, dropping like flies.

I like that. I would go for creativity. I would set a cap on a budget because that is teaching your kids a whole lot more. Absolutely. We don't just unlimited do whatever we want, no matter the cost. We make a plan and we stick to it.

Like that. All right, let's go to Savannah, who is in Milwaukee, Wisconsin. Savannah, you are on the line, my friend.

Hi, Jade and George.

How are you doing today?

Excellent. How can we help?

Thank you. All right, I'll make this really quick. So I have a son who is in high school, and he has a vehicle that I purchased for him, and he is responsible for some of the car expenses. And here's where my question comes in. He was in a car accident that was pretty pesky. The repairs was about $3,000. He did borrow $450 from me and did repay me back after about two months. And here's where my question comes in, because I'm really struggling with this every day. As soon as he handed me the money and it got to my hands, I felt so guilty. My first thought was this $450 meant more to him than me, and I'm really struggling with this feeling. Did I handle this correctly?

I understand why you did what you did. I understand your heart behind it. It sounded like you wanted him to have some skin in the game and to have some responsibility in what took place. The part where I think you may have gone wrong is you caused him to engage in his first debt. I owe my mom, and now what you guys experienced is the borrower slave to the lender.

It changes the relationship.

That's exactly what I felt. I thought it was a.

You also taught him a great lesson. Life costs money, and you got to be prepared, and you're not always going to get bailed out. It's not the first time. He's going to have a $450 bill. And so it's a good learning lesson. And you can even have the conversation, Hey, the way I approach I wish I would have done things differently. I wish I didn't say, You owe me this money. But we had to do what we had to do. And what I do want you to take away from this is emergencies are going to happen, and it's very wise to be prepared to have the savings in the bank. And maybe you put this money in a college fund for him, and it becomes a gift, and you surprise him.

Now, didn't you say it was 3,000 in repairs?

It was. So you covered the difference?

No, he didn't.

Oh.

I gave him some money for Christmas time toward it, I think about $300. But no, my hardworking son paid for it.

Wow. Way to go. So he was just short a few hundred bucks, and you said, Hey, I'll cover that. You can pay me back.

Correct.

. Yeah, maybe- And he didn't ask for the money?

He did. No, he did.

He said, Hey, I'm sure- He said, I don't have enough.

Got it. You can think about What I might do, because I tend to think that some of these lessons stick... When a parent makes what they feel to be a mistake and they go back to their children and make it right, that really sticks. I think it's something that is so good for parents to do for our own hearts, but also for our kids to learn that it's okay to make mistakes. I might go back to him and I might say, You know what? I didn't practice something that I believe in, which is I don't borrow money and I don't engage in debt. I'm sorry that I put you in that situation. The best time to give people money is if it's a gift. If I was going to give you this $450, it should have been a gift, and that's on me, and I might give him the money back.

Okay.

And he'll always remember that. And he'll remember that as a lesson. We don't borrow money, we give money.

Yeah, that's exactly what I thought after the whole thing happened. But I wanted to see another Another perspective of it, should I return it back? That's where I was thinking.

You're a great parent. The fact that you're even mulling over this is pure gold. Whatever you decide to do, you'll be a winner.

A bad Mom is not even having this conversation. Exactly. I release you of the mom guilt officially, Savannah, as if you needed that for me. Right. No, you're incredible. You're doing a great job raising this young man. And I think this is maturity building. I think so, too. Character building. It's not punishment. You're not doing anything cruel. No. Things happen. A kid's going to wreck a car. Yeah.

And by the way, don't you feel any guilt over it? I think just being a parent is making mistakes daily. That's the way I feel about it.

When you grow up and you're like, Oh, my parents were just figuring it out. Bro, I feel, yes. Because now I'm in that stage. Absolutely. And they look at you like you have all the answers, and you're like, I don't know, I goog it. Yeah. Oh, yeah. At least we have Google now. I don't know what our parents did.

They just followed their instincts. And I actually I think that that might be a little bit better because I feel actually bad saying, Yeah, I googled what to do. I overrode my instincts, and instead, I googled it.

Ai is now raising our kids. That's a frightening thought.

Oh, boy, oh, boy. But the point is, I think that as parents, when we make a mistake, it's okay to go back and correct it, specifically when it comes to money, because then they understand this is trial and error for everybody. If you make an error, you can always go back and make it right again. I tend to think that those lessons stick the most when you're a kid and as an adult.

Yeah, you don't want to always rescue them because that creates dependence. And so instead, you give them some responsibility. That's going to build some strength. So don't remove the consequences. Your job is to raise a capable adult, not a child who doesn't know any better.

Well, welcome back to the Ramsey show here in the Fairwinds Credit Union studio. Let's go back to the phone lines, George, shall we? I'm in. All right. Greg is in Texas. Greg, you are on the line, my friend.

Thank you all for having me.

You bet. How can we help today?

Well, I am recently engaged, and we are extremely I'm really excited about that. I've listened to you all for years, and I've talked with her about budget. I've talked with her about our finances. We've gone back and forth, and we agree on just about everything. However, there's one thing where I'm having a bit of a moral quandry. We both on our own homes, and the plan is to sell my house and move in to hers. Okay. Which I'm comfortable doing. She wants to do some repairs, but ultimately, she doesn't want me on the deed to her house.

That case?

Of this current home. She has witnessed her mom go through several divorces and struggle with homeownership. Worst case scenario, she wants to make sure that she has this paid-for home. She has a mortgage on it currently, but she agrees with me to get out of debt and snowball through everything and work the baby steps. And that's fantastic. But she doesn't want me on the deep.

Then if we do decide to- She trusts you, but only to a point?

Pretty much. Okay, and there is a mortgage you're saying, but she's wanting to pay it off?

Well, she wants us to move forward and pay it off. Now, I have a unique opportunity. I'm about to... The business that I work for is about, is possibly going to sell. And my proceeds from that will be about a half a million dollars in cash.

Amazing. That's great.

So, thank you. It's a boom for me. I've never had that cash before. And my question is, do we just work the baby steps and act like that money is set aside and it's investments and other things, or do I try to attack the debt and get out of debt as soon as possible?

I mean, there's two things here. I'm of the mind, yes, if you guys are married, your finances should be together. If you have the extra money to do things like payoff mortgages, I'm all for that. But before we even get to that, I do want to go back to your wife because on the bigger scale, you being on the deed, we can make the argument of, Hey, you're married after a certain point. If anything happens, the house is going to pass to you anyway, blah, blah, blah. But what we're really seeing is it is a trust issue, and it is due to something that she experienced, which is completely valid. I I want to say that to her and really anyone listening, of course, our past and our past relationships and what we saw growing up, all of that informs how we view money. When you get experts like George or I giving you a simple piece of advice, everybody She's going to filter that differently through what they've experienced. Some people are going to go, Yeah, that makes sense. No problem. Other people are going to go, Whoa, absolutely not. I can't. What she needs to understand is it's very easy for a good excuse or a good reason, even, to become a bad excuse.

If she allows that to persist and doesn't get the help that she needs to process through that, it's going to keep her from having the marriage that she ultimately wants. Before we get off the show, I'm going to give you a copy of my book, What No One Tells You About Money, because I think that's really going to help her process those emotions around what's going on so that you guys can have the best possible financial picture and best possible marriage in this whole thing. So that's thing one. Do you think she'd read the book if you gave to her?

I do.

Okay. Do you think it's something that she wants to work through?

I think through our continued conversations, she might be waning on it. I'm not sure.

Yeah. Well, you don't seem like a gold digger, Greg. You're about to acquire a half million on top of whatever else you currently have.

And you want to put it towards her house, which is awesome.

So is she not going to get a dime of anything you're bringing into the marriage? Because that's what it's turning into.

Well, no. I believe in joint finances. My parents, they operated that way their entire lives.

But you would agree it's unfair that you bring all this into the marriage, you help pay down the mortgage in the future once you're married, and you have no claim to the house on paper?

That's what I'm saying. Am I being a butt?

No. If you ask her, Hey, if you were in my situation, how would you feel about all this?

You're not being a butt at all, but I do think this is an opportunity for you to understand her a little bit I think you both have opportunities here. What George is saying is absolutely right. It's not fair. You're in a situation where you're thinking, Hey, hello. But again, back to the first point, you saw parents who managed money just fine, right? So of Of course, that informs the way you view this. You're like, Yeah, what's the big deal? Understanding her who is going to be your wife, that is going to set you free in so many areas if you approach this from that. Not I'm going to do whatever you say because what you're saying is broken, but But I do want to understand where that's coming from. And I want to be an active participant in us working through that and getting to a point where it's as healthy as it possibly can be. And I think if you approach it that way, her eyes are going to turn into hearts, and she's going to love you for that.

If you really dig into this, because she is operating out of fear. So the most loving thing you can do is get to the root of that and build the trust with her that her fear is valid, but the outcome is not something that is a possibility. Because I'm guessing there was a very specific reason her mom got divorced or multiple. I don't know the story, right? And do you know the reasons behind it? Have you asked her about that? Yes, we've talked about it. And was it financial? Was it infidelity? What was at the core of those?

Several different. Two of those already, yes. I would say infidelity and financial.

Okay. And so the sooner we can be aligned with our money values and our principles, and we say, Hey, this is how we're going to operate as a family. You guys are already light years beyond probably where her mom was, right? Relationally, financially. And so that's, I think, some good premarital counseling is necessary before you guys move forward on this. I don't know that this is going to be an ultimatum or deal breaker for you, But I think the spirit of this puts a little pause in my book.

Yeah, absolutely. This is something you guys are... It really is an opportunity for you guys to work through this and how great that this is popping up now before you're even married versus on down the line when you're all set in your ways. So I think if you both can look at it that way, I think that is a winning combination there. So thank you for that call. That's a tough one. It is a tough one, George. And that is the truth. These conversations, obviously, we make no bones about it here that money should be a joint effort if you are married. It should be combined. And what we mean by that is there's one checking account, both checks goes in there, and there's no side accounts that is like, Well, I put the money for the mortgage in here and I keep my money. No, both checks go in and both people are aware of the monies. Both people are on the budget. If there are assets, both people are on those assets. It's very easy to say that from a healthy perspective, but anybody who's been burned hears that and goes, Oh, H-No.

Don't listen to them. Yeah, don't listen to them. Protect yourself. Human nature is to protect yourself.

But- But I mean, part of marriage is letting go. You're risking something in order to be married in this financial merger. That's right. So think about it like mergers and acquisitions, right? Except you are acquiring everything she's got, and she's acquiring everything you got.

So romantic, George.

It can't work without that. If you're like, well, I want to keep my toys over here, but I want to play with your toys over there. That's not marriage. Doesn't work. That's just fancy roommates. And if you're splitting the bill with your spouse, you don't have a spouse. You have a roommate with benefits. I'm calling it like a sea.

Got them.

Hey, good folks. Dr. John Deloney here. Don't you think life is too short to hate Mondays? Listen, you're worth loving the work you do and where you do it. So guess what?

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All right, back to the phone lines. We go where Melanie is in Minneapolis, Minnesota. Melanie, you are on the line.

Hello. Thank you so much for taking my call. I have a question that would be in the category of radical generosity, and my question is twofold. I want to give a very generous gift to my sister-in-law and her husband and their two best friends And I first... My question is twofold. First, I need to make sure that my husband is on board. He says it is excessive. And second, if I can get him on board, how do I get this gift to them without making it weird in our relationship?

What's the gift? And what's it for?

We want to send them, the four of them, to Hawaii, or I do anyway.

Why?

Well, they have experienced some health issues, both somebody in each of the couples. My My daughter-in-law is on the other side of cancer, and the husband of the other couple had his own health issues, and he's working his way out of that. My in-laws, they planned on doing this trip together when they were counting on an inheritance that they were going to get, and that fell through. So they no longer are going to be getting that money. We have the means to send the four of them, and I would like to pay for the resorts, the excursions and all, and maybe say, You guys get yourself there with the flights, and we'll take care of everything else.

I love that. How wealthy are you?

Well, I mean, we're fine. So we've retired, and I have a pension that is covering all of our needs, and we have 2. 1 in different types of savings, and we have a house paid for, and we're taking our own trips. We're living what we wanted to do in our own retirement, and we would really like to say. What will it cost to do all this for your friends and family?

I think $25,000 would cover it, and I have 27,000 coming in July for our early retirement bonus that will be coming in. Nice. So this feels like found money.

And I know a lot of these taxes taken out of there. Yes. And I just feel like, it's one of those where Dave says if you could put it in the middle of the- You could burn it. Table and burn it, you wouldn't even notice it. I feel like it's that category.

Yeah. This isn't even Like a % of your networth? No. It's like a % of a % of your networth. Right.

I just love your heart on it, too.

And is it just... Is your husband blindsided by this? Like, is this a big surprise that you're like, Hey, what if we drop 25 grand to send all of these You're not even going on the trip. So he's like, I want to go to Hawaii. No.

Well, we're going in September.

Okay, good.

So it's not like we don't ever do anything. We went to Greece, and so we had some really great trips planned for ourselves. He does to give me a hard time because he's like, Oh my gosh, you give away the house if you put it in for bumpers on the.

Well, there's usually one person who has a little more of that generosity muscle and one person who's a little more like, savor, what else could we do with the money? And that's totally normal. I don't think he's a bad guy. Have you gotten to the root of what he's feeling about this?

I do think that he's concerned with maybe what would happen. How do you say we would like to gift this to you? Could that be a problem? Why don't we make it weird? Because we are very close.

I don't think it's weird. Knowing the context. I don't know how it would be received. It's not like you're saying, Hey, you guys are so broke. We just want to send you on a trip. It's, Hey, you guys have had a lot of life hit you. My husband and I, we were trying to brainstorm things we could do, and we just thought the most fun thing to do would be to send you guys on a trip, and we'll cover blah, blah, blah. You guys cover the travel. That's what we decided. It's more of just like, it's up to them if they want to block the blessing, but it's not you guys making it weird.

I also love that you're sending them. It's not like we're going with you. Then the whole time, it's like, All right.

Just awkward force. Like, Thank you so much for everything.

Now, are the couples going together or it's like the in-laws are going on the trip, and then your two best friends are going on a separate trip? Or is it a group of them going together?

It's their two best friends. It's our in-laws and their best friends.

Their two best friends. Okay. So the four are together. I see worried that it feels excessive because that's clearly a lot of people, a long distance, a lot Is he afraid it's going to reveal something about you all's networth?

Or that it's going to feel like a flex? I think so.

We grew up in a generation where nobody talks about money. If there's income inequality, I don't want that to be something that will come between us.

I hear that. Well, the other question I had is, are they even going to be able to cover the other expenses? Are they in a good financial spot?

I think so. They don't seem to be hurting for money, but they definitely live furgily at the same time. But we've done things together, and it's not like they're complaining about money. They've been generous to their sons before on different occasions.

They're not like, drowning in debt. They don't seem to be tight.

How would you do it? I don't know. Is it writing a check or is it... Practically, how would you do this?

I hadn't thought that far because I hadn't gotten to the whether or not we should do it or could do it yet. It was an opened idea.

Yeah. Let me first say this. I love the idea of being generous. I love that you've seen that they've gone through a struggle and they could probably use a break. I love that so much.

This is the living, live like no one else part of live like no one else so later you can live and give like no one else. You guys are doing that last part, which is highly encouraged, and it's the most fun you can have with money. And so there's multiple ways to do it. I think that's less exciting and more just like, All right, we're going to give them the debit card number when they go to book. It's not like it's rocket science to pay for the trip.

Yeah, but it feels different to be like, Here's your check for $15,000, versus what George said.

I would try to do it directly to the trip. Otherwise, it's like, Well, we can get a lot of groceries with this money now. Maybe the trip will get delayed.

I do have a friend that's a travel agent that is planning our trips.

Oh, nice. That could be a way to do it.

She could plan it and I could just pay her.

I love that. I think that that also gives them the ability to choose when it's a good time for them. So if you said something like, I don't know, you set them down and say, Hey, we really want to do this for you. We love you guys so much. You deserve a break. I asked my travel agent if she would plan this for you guys. It's a total gift. So whenever you're ready, just- Get in touch. Yes. But please do this. I love that because then you're dealing with the travel agent.

It's less awkward because you don't feel like you're directly involved involved in this. You're just the fairy angel.

Yeah. And maybe you let them know, Here's what we're giving. Feel free to get what you want, but my husband and I, we want to put X amount of dollars towards this. And that way you've said it, but it's not in a weird way.

And if they decline it and go, Hey, we're actually not going to be able to take a trip this year for whatever X reason, that's okay. You still offered it. You were still generous, and you didn't just write a check that sat there, and you have to rip it up now.

Now, on your husband's part, That's the one that's going to be tough. I'll tell you, my husband and I are, to George's point, there's always one person that's like, Give it all, and the other person is like, Hold up. Chill out for a second. Let's talk. So maybe ask him, say, Hey, if this feels too elaborate, what do you think? And maybe you guys can meet in the middle. Maybe it's somewhere in between all of this that feels more right for both of you. And just be open to that as well.

Okay. That sounds great. I really appreciate your help. Yeah, no problem.

You're an awesome person.

Yeah. Thank you for the call.

I do think the ratios help me emotionally because I'm probably more like her husband where the sticker shock, I just go, That just feels crazy.

That's like Sam Warshaw. Yeah.

And then you go, Well, it's 0. 02% of our total networth, and we're going to make that much in compound growth this month. Yes. Oh, and also it's a bonus that she's getting from her early retirement.

Yeah, it's found money in many ways.

Yeah, that's girl math right there.

Okay, I don't You know what you and Whitney do, but whenever there's a moment where we're thinking about giving an amount, this is my strategy. I always say to Sam, I'm like, Okay, be praying about what this amount is. Oh, that's good. That's the first thing.

Be praying. Be praying about it. There's some spiritual conviction right there.

It's just like, Hey, I want to know that we both allowed the Lord.

Then it's like, Hey, it's up to God.

It's up to God.

Whatever he puts on my heart.

Then what I do, then what we do is we count to three and we say our number at the same time. I love that.

It is always- You're hired?

It is always hilarious. And then he'll go, I knew you were going to say that. And I'm like, Then why didn't you say the same number as me?

He likes to be contrarian.

Yeah. So let's do it, George. On this trip, the $25,000 that she wants to spend on the count of three, I'll tell you what I think she should spend, and you tell me what you think she should spend. Okay. All right. You ready? Yep. One, two, three. $25,000. Boom.

God told me. There it is. God told me, too. If you've been working the plan, paying off debt, saving, and changing your family tree, I'm proud of you. If you're in Baby Step 4 or beyond, it's time to celebrate. The Live Like No One Else Cruise is back, March 14 through 21, 2027. Join the Ramsey personalities and me as we sail to Half Moon Key, Cozimel, Jamaica, and Grand Cayman on the ultimate debt-free vacation. Cabins will sell out just like last time. Lock in yours with a $600 deposit at ramseysolutions. Com/events.

Richard is in Nashville, Tennessee. Richard, how can we help today?

Hey, question for you. I'm considering building an apartment on my property for my daughter and son-in-law to live in until they can purchase a home. They'll pay rent while they're living there. And my two options, I think, that are good for me is a Heloq, or I can do an auto loan on a vehicle that's paid off Probably looking at about 50,000 on the heelock, and can probably get about 40 on the car. I do have the cash on hand, but I think a loan would probably be a better idea. I'm just curious if there's any pros or cons one way or the other.

Well, there's all cons. All of them. Okay.

Why would it be a good idea to do the title loan or the heelock?

Well, because if I use cash on hand, I'd not have any cash on hand anymore, and I've got a ton of equity in my home, and I owe nothing, any... The only thing I owe on is my home, as far as in debt with anything. I don't know, maybe it's not a good idea. That's what I'm curious about.

Well, If it's a true title loan, it's like a payday lender. It's like 25 % to 300 % interest. You could lose the car. I mean, the repayment terms are terrible. Horrible. And you're going to get a payback in 30 days. Unless you're talking about... You're talking about taking a loan out against your car that's paid for?

Well, this is through the bank, and it's basically a reverse- Your car is collateral, though. Yeah, the car is collateral. I'd rather lose a car than a house, though, so I'm just- Why lose anything?

What's so urgent about this? Why can't Why don't they just get a normal apartment? Why do you have to build an apartment for them to live in? Tell us more.

Yeah. Well, both of them work ministry, and they're coming out of that. And So they're not financially set to do that. The apartment would be an asset to my current situation. I had considered doing it before because about two years A year ago, my father became ill, all of a sudden had to come live with us. We just bought an RV and let him live in the RV for a time. And so it just put on the radar, maybe we should have something like that available.

But what's the long-term plan for them. It feels like we're just temporarily subsidizing their lifestyle because they're not making good incomes. If they're going to be in ministry long term, they got to figure out how to put food on the table and cover rent.

No, I agree on that. And so I'm just wondering if I could help with that.

Well, here's the thing. I just don't think you can afford it. The last call, the lady wanted to be wildly generous. So we love generosity here. Hear me say that. But if you have to put your home up and your vehicle up for collateral, and you're still paying off a mortgage yourself, you simply can't afford to do so. You're cutting off your nose to spite your face at that point. It's It's putting you in a horrible situation, and it's putting them in a bad situation, because if this goes south in any way, you have a lot on the line that you can lose.

Sure. Yeah.

There's just too much risk here. If you want to bless them with a one-time gift, you can do that. You can write them a check, and maybe that covers a certain number of months of rent for them. But again, I would try to help them actually become independent long term, because otherwise, now they need you. Now they're codependent. Instead of independent. Ministry is tough because you don't make a lot of money. It's why we call it ministry. But they need to figure out a way, either it's bivocational, which is a lot of people in ministry, it's what they do. They have another job that actually pays the bills, and they do ministry with their free time. I think helping them craft a plan is so much more helpful than anything you could do financially for them at this point.

Okay. That's helpful insight. It certainly gives me a perspective to mull over and think about. And that was my objective and calling to find out, am I missing something? Is there a red flag that I'm just not seeing? So I appreciate your input with all that.

Absolutely. Absolutely. You're trying to do it just a nice good thing in a bad way, and then you're trying to justify it by saying, Well, I'm also building an asset for me on the side. And so I think that's clouding the judgment here because you're looking at it as an investment. But if you have to go into debt for it and put your car or home at risk, which is what's happening with either of these loans, it's a bad idea. If it hurts to part with that much cash because you'll be cash poor, then it's also a bad idea. I think it's a good gut check to say, If I paid cash for this, would it give me some pause and anxiety? And then the truth is, we just can't afford it right now. Not that you never can do something super generous.

Yeah, it's something to aspire to, possibly.

Yeah.

I think that's... Hopefully, you'll think long and hard about that, but please hear George and say, We would not do this. And by the way, if you don't do this, it doesn't make you a bad person. It doesn't make you a person who doesn't support ministry. It just makes you a person who is a financially responsible adult. Okay, let's go to Sam, who's in Maryland. Hey, Sam, how can we help today?

Hi. Thanks for taking my call. Can you hear me?

Yeah, we can. What's up?

So I'm a 25-year-old. I'm hoping to get married this year to my boyfriend. He's also 25. I'm a two years post-grad. I'm working full-time, and he's a full-time pharmacy student. So the question is that if we were to get married this fall or winter, essentially, we would be financially independent. He's fortunate enough right now where his parents pay his pharmacy school tuition. Nice. If we chose to get married, that financial support would end because we'd be independent adults at that point, and that would be four semesters of tuition at around $17,000 per semester. Okay. So the question is, do we delay potentially getting married until after he graduates, or do we take the risk and take out student loans of a significant amount and get married sooner than later?

Is there an option C? Because A and B suck right now. We can both agree on that. I would not take out student loans. I would not delay marriage until this is all sorted out because of his beneficiaries here. What I'm confused about is why the parents are saying, Hey, the day you're married, no more. You're on your own, even though it's not like he has a job all of a sudden.

Yeah, he doesn't. So both of us come from non-American families, and I think Traditionally, with both of our cultures, it's understood that you're essentially independent once you're married. So I don't think his parents are budging on that department. I think both of I think his parents are for the match. I think his parents would prefer waiting a little bit longer.

Yeah. Do they like you? Is this part of... Is this despite you?

From what I've been told, I'm well liked and accepted.

Okay. I don't think that's your concern there.

Well, because here's the funny thing. If I'm him, I'm like, sweet, I guess I'll just never get married because then my parents will fund my life forever. Do you also see how insane that is? Yeah. No.

Yeah, I get that.

And what about as a wedding gift, they go, Hey, as a wedding gift, we're going to cover the rest of his school, but you guys are on your own for the wedding. Would that be a compromise that they might be willing to go for?

I'm not sure. I think maybe you'll have to talk to them a little bit more. But again, in his culture, I'll just throw that under the bus. I think traditionally, it would be my family paying for the wedding for the most part. And then we're also not thinking of doing anything significant. I guess we could ask about if there is a gift, I'm not sure.

Well, what are you making?

I make 64,000 dollars a year.

Okay. So the question is, on the other side, how do we figure out how to cash flow the 17K a year, if that's what it's going to take? Well, it's- A semester.

Yeah, exactly.

So we got 68K we got to cover if we're on our own. Over how many years?

So he has two more full years. So four semesters total. If we're beginning this fall.

Yeah. So you're not going to be able to cash flow that making 64.

Exactly.

And so we run into a problem here, which means he needs to do this slower. You could delay getting married. I wouldn't delay getting married just for this purpose. But it sounds like he hasn't even proposed yet, and then there's still the engagement period. So there still could be another year, year and a half or two years.

That's the question I had, is if the man hasn't even proposed, then maybe that buys you some time right there.

Maybe we plan the wedding when he graduates, the wedding happens. Yeah, I like that. Boom. Best of both worlds. Best of both worlds. All right, let's cut to the chase. It's easy to get discouraged about crazy house prices and interest rates. But when you have the right real estate agent to help you buy and sell the right way, you'll have confidence to make smart decisions. Ramsey trusted agents aren't just experts who guide you through buying or selling. They're people you can trust to have your back from the first call to closing day. Find a Ramsey trusted agent near you at ramseysolutions. Com/agent. That's ramseysolutions. Com/agent. All right, our Ramsey show scripture and quote of the day.

Colossians 3: 23 says, And whatever you do, do it heartily. As unto the Lord and not to men. Merck Twain said, 20 years from now, you will be more disappointed by the things that you didn't do than by the ones that you did do. I like that.

Avoid regret. Seize the day.

Carpe diem. All right. Katie is in Huntsville, Alabama. Katie, you are on the line, my friend.

Hi.

Hi.

Hi. I'm so pumped. So nervous, but so pumped. Love it.

It's a good combo. Yes.

We can't wait to hear what you have to say.

Oh, man. There's so much, but we'll wrap it up. So currently, right now, my husband and I are babysept, number two. And we have about $12,000 in consumer debt that I am about to send a $6,000 payment on. So about to cut that in half. Yes. I'm so pumped. And then I'm expecting to have the remaining balance done by April. And I've been working 25 hours extra every week, trying to pump out the overtime. And my husband, unfortunately, overtime is not available for his job, but we are in full gazelle mode. Love it. Just running and feeling the passion. However, I am 41 and he's 45. We have twin, almost 15-year-olds that are looking to get their apartment. I have a car loan that is $40,000, and I'm currently $13,000 upside down on it.

What happened? You said you had 12k.

I'm confused.

Oh, sorry. I forgot about the car. I forgot about the car.

That's a big one to forget about, Katie.

How did you forget about the car in Baby Step, too?

I can't forget about the car. I can't forget about the car. It's the whole reason I'm calling.

Okay. So 40k loan. . 40k loan. And you're saying it's worth 27?

Yeah. Yikes. Yeah, maybe 33, if I'm lucky. I might be able to get 33 for it. But in the end, I'm upside down, $13,000 on it. Okay. Roughly.

What's your household income?

My husband makes 93 and I make 54.

Great income.

Yeah, it's not terrible. I mean, we used to make better money, but we moved and It's a total bad thing, and this is where we're supposed to be. So we're just trying to keep our eyes on that and stay focused.

Yeah, it means like double the average household income. So you guys are crushing it by America's standards. But when you're in crippling debt, it doesn't feel like that.

So what's the main question?

So my main question is, I got kiddos that I'm going to need to get cars for. Because I know Dave says, if you can pay the car off within two years, then it's potentially a thought for keeping, right? So do I keep the car or do I forego the car because I got my kids' potential driving coming up. And then I have one more wrench to throw in there. I'm currently living on folding tables in my kitchen because we bought a home that needed repairs and it ended up being a disaster. So I've been in a year in this house with no kitchen. Oh, boy. So on top of everything else, I'm surviving and it's fine.

When you say, Folding tables.

I have no cabinets. I have no kitchen counter.

You have a sink?

I have a utility sink in my laundry room that doubles.

Girlfriend. I know. You're making salad in the bow town.

There's a Porta Potty in our back that we all use. It's a good term.

Okay, there's a lot. No, see, we did review all of the We did review all the electrical because our inspection came back horrific.

Actually, no, the inspection came back fine. So once we started going through things, everything had to be replaced. Everything was a firehouse. When did you- Our plumbing was about to go.

When did you- Oh, boy.

Okay. So is this going to be like $50,000 to get this thing up and running?

No. So we've got most of it up and running. So we dug into our nest egg, which is half the reason we're in our current situation.

Wait, you robbed your retirement accounts?

No, no, no, no. Just the equity from our house that we sold in another state.

Okay. Oh, okay.

A secondary house.

Yeah. We used to live in Colorado. We sold everything to move here.

This is like days of our lives. It just keeps unfolding.

The bad decisions keep going with you wherever you go.

You had a house in Colorado, you sold that, you had a sum of money, and you've been pulling from that. Yes. How much was it and how much do you have left?

I don't have any left. We're down to our $1,000 emergency fund, and we're slowly getting rid of that credit card.

How much was it originally?

I think it was like 50.

Okay. Okay, so here's where we're at. So the $40,000 car, you just told me now you can't keep it because of all of this- You got too many priorities. Yes. And as it relates, and I'll just give you a couple of thoughts, even aside from in the kitchen, malfunction. I'm thinking, Okay, $40,000 in this car. Surely you have another vehicle that's worth something. And then you've got these kids. We don't want more than half of your income in vehicles going down in value. So you're likely going to have to lower this because you've got about 70,000 that you can spend on vehicles, right? So all four of you having vehicles, somebody's going to have to shift down.

And it doesn't mean you should have 70,000 in vehicles. That's just the upper, upper, tip, top limit if you really want it.

Right now- And my husband's car is paid off.

But what was it worth?

We got his car paid off? It's a 2020 Chevy Silverado.

Yeah, that sounds expensive.

So it's still... It was. We got it in COVID. But we got it during COVID.

Besides the point. That's besides the point. But it's paid off. But the point is we're going to go down to the credit union. We're getting some loan to get out of this $13,000. Because you owe $40,000 now. So if you take a loan for $13,000, $13,000 is less than $40,000, that's a better deal for you.

Plus, we need some cash to get you a car to get from A to B right now.

Yeah. So maybe try to get the loan for $18,000 and you spend 5,000 on a clunker. That's what I would do.

And then give that to one of those kids that are driving because they're inevitably going to make it even more of a clunker. Indeed. You're so smart. And then you can upgrade with cash once you guys have it. So that's up to you how you want to prioritize. Hey, we got to get a car for Junior. We need to get some cabinets in this kitchen. We got to clean up the other $6,000 of debt that you have left.

And if Junior has to wait a while for a car, by the way, he or she will be strong. It's okay. They don't have to have it the day.

I shared my parents' cars for a long time. Yes, yes.

Absolutely.

Well, it's two of them.

They're twins.

That's okay. They can ride together.

They'll be fighting over it. Get them a tandem bicycle. Absolutely. That'll look cool going down the road as twins. Oh, gosh.

Yeah. Either way, if they have to wait for a while while mom and dad get their life squared away, that is fine. They will survive that.

Absolutely.

Now, the kitchen. Let's talk about finding the money. So how much? Did you say 50,000? Or how much is it going to cost to just get this in working order? Finish everything. Yeah. Oh, the kitchen?

We've already done almost everything except countertops and cabinets.

So honestly, we've priced- That's like the expensive part.

I know, but we've priced, and we're looking at about 7,500. And then we will be done with the kitchen. Oh, that's not bad. No, I'm not a bougey girl, okay? Sounds bougey, but I'm not.

Okay, good.

So I- I'm not looking to make it crazy.

Okay. Well, if you get rid of this car and you knock out the other 6K, you can cash flow that 7,500 pretty quick. Over the summer. And cash flow a couple of cheap cars as well. So this is all very doable. We just need to start putting things in order. And I think getting rid of this car is going to give you such relief. And later on, you can get you a nice $30,000 car with cash. But right now, it's sinking you guys. Yeah.

I mean, put it to you like this. By the end of summer, You'll be driving, your kids will be driving, and if you go hard in the paint, you'll have your kitchen done. And I think that's a great feeling. The one thing I will throw out there because it's hard. Selling a vehicle, it is hard on the ego, okay? Because everybody knows something's up. You were driving- And you go from the nicest car you've ever driven to the worst car you've ever driven overnight. Absolutely. That's brutal. Because people are like, Oh, hey, what happened? They're at Chili's wondering what happened to Bob and Susan. They saw their Escalade.

They have my heated seats. My butt's cold.

But the good news is it doesn't matter what other people think. You guys are far beyond that at this point. If you're gazelle intense, that is one lesson that you have learned.

If you got real friends who have seen your kitchen, they won't care about your beater car.

I'll tell you that much. That's right. But for anybody who's doing this journey, just be prepared to not care what other people think is what we're telling you. It's a superpower. All right. Well, guys, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.