Transcript of My Parents Just Told Me I Owe Them $114K

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Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network in the Fairwinds Credit Union studio, this is The Ramsey Show. I'm George Campbell, joined by best-selling author Jade Warshaw. If If you know, you know. Give us a call at 888-825-5225, and we will do our best to help you take the right next step for your life and your money. Sarah is going to kick us off in Chicago. What's going on, Sarah?

Hi. Thanks for taking my call.

Absolutely. How can Jade and I help?

I'm 30. My husband's 31. Our household income is about $2. 35. My parents had set up a $529 plan for me when I was young, which I ended up using to pay the majority of my undergrad and grad schooling. I did take out a couple of federal loans just to cover the remainder of my grad school, which we still owe about $35,000 on. Recently, my parents asked me to pay them back, roughly $114,000 for the money that I used from my 25, 29 plan. What?

Come again now. So is that the money they put in or was that the balance of the account?

That was the balance of the account.

That's wild.

They don't even understand math. They may have put in 30 grand that grew to 114, and now they want you to pay the 114.

The interest.

They want you to cover the compound growth that cost them nothing.

Was this ever the plan? Had this ever been stated to you ever at any point that you would have to pay this back?

I don't remember it that way, but my dad is a lawyer, so naturally, he had created a promissory note.

He had signed it before.

You have a commissory note. Could you? You have it? Yeah, before I went to school.

Okay. Have you read this note now as an adult? Yes, I have. And what does the fine print say?

It says that I promise to pay my parents all sums paid to me for my secondary education, including without limitation, tuition, housing, and living expenses.

Yeah, but sum- Including interest.

Does that say interest? Sums is the interesting part. All sums paid to you.

Yes.

This is diabolical. I definitely didn't understand that.

When I was signing it, I understood it more as my requirements to be able to receive help from my parents.

You know what? Let him take you to court. I What do you think this would be a hilarious way to end the relationship with his daughter. What a way to go.

This is wild.

Yeah, that's what I'm worried about.

What was your relationship like prior to this with your parents and/or just dad?

Pretty good before this.

So it's coming out of left field. Are they broke?

They've been pretty- No, I don't think so.

What's the underlying reason why now, over a decade later, they're like, Hey, remember that contract you signed when you were a child?

Yeah. Have Have you brought it up at any other point other than now?

No, not really.

And how long have you been out of school?

I graduated grad school about a year and a half ago.

Okay. When you brought it up or have you brought it up?

I just basically asked them. I told them I wasn't aware it was a loan. And what did they say? They sent me the contract, and then they said, Let's talk about it. And So we're going to talk about it tomorrow, which is why I'm calling.

Okay. So you need prep for tomorrow's conversation.

Because I want to figure out how to best prop the conversation.

I'll tell you right now, I believe you when you say, I had no idea idea that that's what I was signing. If you know in your heart of hearts that you did not know what that was and that you had no idea that you were going to pay back this money, if you can say in your heart of hearts that that's the case, then I think that you go in there and you say, Hey, guys, I had no idea. I was 18 years old. I don't even remember this paper. I know that I'm looking at it, that it's signed. But when I tell you I had no understanding that that's what this meant, I am telling you the truth. There is no part of me that understood that I would be paying back this money if I had. I would not have signed this, and I feel very blindsided by this, and I don't have the money. I would like to ask if this can be forgiven because everything that I do know about money tells me that a 529 is there for education. I am under the impression that that's what this money is for.

I would just say it like that and see what they Yeah, I don't want to come off as ungrateful or entitled or like, I'm trying to take advantage of them.

I want to own up to my own debts. But I definitely would have made a different financial decision.

But if you didn't know- But if you didn't know- I'm not saying this was the case, but I'm just telling you as a person who's listening on the other side, there was an imbalance of knowledge. Here you have a grown man who you trust, who is a lawyer, who is giving you a paper to sign, and you just go, Okay, and I sign it. Do you see what I'm saying? You're not in an official office. You're not in a space where you're like, Okay, I'm going to sign for my loan, and you don't even remember doing it. Who knows if he slid that to you one morning while you were eating a waffle, right? Just, Oh, yeah. Go ahead and sign this for me real quick. Okay. I don't know how it happened. All I'm seeing is I'm sensing that there is a balance of power here, a I'm going to say, of knowledge and power. It feels, I'm not saying he was intending to, but it feels like he may have taken advantage of that, whether intentionally or on accident. And either way, that's what I would say is I just feel like I didn't know.

I'm asking if there's a way to... We've let it go for this long. Can my 529 just be for my education, which is what it's intended to be for?

Okay. If they decide to not not do that, do you think it would be reasonable to offer some money or me in the middle?

Maybe. Yeah. Yeah. Okay. Because at the end of the day- I would find out what their contributions were, what they actually put into the account.

Did he actually say 114,000 must be repaid in the last conversation you had.

Yeah, he gave me a loan payment schedule.

Based on the final amount that was in that account? Because I don't think this would ever hold up in court, that someone would have to repay compound growth. I think all sums repaid, could be interpreted as the money that they advanced you, essentially, to be invested in this account, which would be a fraction of that 114.

Yes, because it's been in there for, I don't know, 15 years.

But either way, we can all agree this relationship just turned into a transaction, and it's not going to be undone. Like, Thanksgiving is forever going to be different now. That part is on him. You can do what you can if you want to keep the relationship alive. You can never repay this. Again, he can try to come after you. I don't know if he has any legal standing to come after you from a dad to daughter, 529 perspective. But I would honestly, if you want to, consult with your own attorney and say, Hey, what is actually in this? Does this actually hold up? Should I actually be worried? What is actually my obligation based on what I signed? I would at least get that clarity.

Sarah, here's another thing. Here's another take for you because there is a relationship here. How does this make you feel, first off? Forget That's the money part of it.

I'm a little hurt by it and blindsided, like you said. My whole life, I was like, Oh, my parents. I was really grateful for them setting me up. I'm in a really good financial spot right now. I was getting ready to pay off my- I think you need to I'm grateful. Tell them that.

You need to share that. I'm grateful. And I didn't understand what I was signing.

And also tell them how you fear this could affect your relationship. I think if you lead with your heart on this and how you're really feeling and The gratefulness, the blindsidedness, how you're afraid for the future of the relationship, keep it less about money, I think you might have a better shot.

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My favorite moment from the Okay. John Deloney and I had this hairbrained idea to do stand-up comedy.

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So fun. Truly, truly. Come celebrate with us if you're baby step four or higher on the Live Like No One Else Cruise, ramseysolutions. Com/events. Click the link in the show notes. Stoked. All right, JD is up next in Denver. Jd, thanks for allowing us to have a little fun there. What's your question today?

Of course. I've just been through some pretty tough financial times recently, and I just don't even know where to start and how to get back up on my feet.

Man, what's the thing on your mind right now when it comes to, Hey, I don't know what to do next?

Well, the biggest pressing issue is I was in a car wreck, and so it does not sound like insurance is going to be too kind to me because I did not have full coverage. Oh, no. And so, reliable transportation so I can get back to working.

Are you okay, physically?

I think so. Like, walked away and everything. But honestly, that's one of the last things on my mind. When was it?

How recent was this?

Oh, that was on Monday.

Oh, wow. This just happened.

It hasn't been a week.

Yeah, and then on Tuesday, I got laid off. So, really good start to my week.

I'm sorry. That is just- Is there like a JD Voodoo doll out there?

Someone just really... You burned them? This is a lot of bad luck in one week, man. I'm so sorry.

That's why I've been asking everyone like, Hey, did I do something really terrible without realizing it?

No, you didn't. That's just why they're coming for me. When Murphy When he hits, he hits hard. And so it feels like it's all coming at you at once. So we need income and we need a vehicle.

Yes.

In that order, because it's hard to get a vehicle without the income. Do you have anything in savings?

I've got about $706.

Okay. And are you single?

Yes.

Do you have roommates? Are you living alone?

Well, I was living in my van because- The one that got totaled? Yeah, a fairly similar thing happened in September. And luckily, my family was really kind to me. And they said, So long as I'm staying productive, I can say it. Their place rent free until I get back up on my feet. That was a lifesaver.

So are you still there now? Yeah. Okay. What type of work were you doing that you got laid off from?

So I was working industrial in conveyor belt repair for like, mines and power plants.

Okay. So maintenance, repair, Yeah.

I like field technician. If you were to look for a job in your area today, what job would you be looking for?

Luckily, my experience is pretty vast, so I can go work for a lot of material reprocessing sites, a lot of other industrial technician jobs. So I'm not too stressed about finding a new job. When they laid me off, they gave me a recommendation letter. It was just due to them doing layoffs and me being lower on the list due to seniority.

Did they give you severance?

They did not, but they gave me recommendation letters and a whole list of places that they're in good standing with that if I apply for it, I could probably get a job on the spot.

Okay, great. Really, it's just a matter of you doing your due diligence agents in locking in something as quickly as possible. But you and I both know there's just that lull of I get hired, I do all the training, I finally do work, and then I finally get paid. The first paycheck is easily six weeks away at the very At the very least. So the good news is you've got a place to stay, right? You've got a place to lay your head. The thing I'd be wondering about coming into this is because you mentioned your insurance, you were under covered I want to know, is there a bill coming your way for damages?

So far, it does not sound like it. It sounds like I'm so frustrated about the situation. They found 50/50 even though it was not 50/50 fault. But it sounds like the coverage that I did have should cover the other driver's damages fully. It's just I don't get anything for my damages, so I only had liability.

Okay. Have you been in touch with the adjuster?

I tried calling her this morning, and we had a phone call, but it was not very productive.

Okay. I would try to move this part along so at least we know we have some closure on what the next steps are. If you're going to get check, if you're going to be in the red, if you're going to just be break even and be flat on this. But either way, we need transportation to get to that job that you will inevitably get. Can you borrow a car from family or anything like that right now?

No, I wish this had happened. Well, I wish this didn't happen in the first place. I wish this had happened a year ago because my family got rid of all their old vehicles. They had five vehicles and traded them for just two new reliable vehicles. And of course, they use those to get to work every day.

Cool. Jd, I'm also wondering, you seemed like you really were questioning the 50/50 fault. If you really do feel like, I know I wasn't at fault on this, you might contact a lawyer and see what they say. I wouldn't spend a lot out of pocket at this point, but just get somebody's opinion. Maybe there's a family member that knows someone that you can run this by.

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Michelle is up next in Raleigh, North Carolina.

Michelle, welcome to The Ramsey Show.

Thank you for having me. I'm excited to be on the phone with you all.

We're excited, too. How can we help?

So really quick background. My husband and I bought our house in 2020. He deployed last year We went from, at that point, 100,000 down to around up to 57,000. We also saved up 10,000 for a porch. And then, because of his deployment, We're getting $15,000, $16,000 back in taxes, which I know what you all say, Try to make it zero. And last year we owed. I think it's just because of the deployment. And my husband and I are trying to decide, Are we allowed to get a driveway or should we keep paying off the house?

So you want to take the 16,000 and put it towards paving your driveway? Yes. Okay. No other debt?

No debt, just the mortgage.

Do you have a savings aside from the 16K? Do you have like three to six months of expenses?

Yeah, we have another 15,000 emergency fund, and then we have 10,000 saved up for the porch, and now we're getting the $16,000. So last night I was like, That's almost $40,000. We could pay a lot on the house. If I whittled down the emergency fund or we could just have fun.

What's going on with the driveway?

We're both tired. It's just gravel, and we would like concrete.

Oh, okay. Will it cost the whole 16,000, or what will it actually cost?

Between 10 and 12, we're still getting quotes.

Now, this is not big chunks of money, but it's just things that I like to be in place before you do other fun things. Do you guys have life insurance?

Yes.

Are you investing 15% into?

Yeah.

Okay. So you've done all the things. You literally have extra money. Yes.

Why not? You are allowed, Michelle. You've been blessed by the Ramsey gods. Congratulations. You get a new driveway.

That is what I needed.

You don't need our permission, but I understand- We could keep going. Well, that's the thing. It's hard to let go of the gazelle intensity that you had and baby step two, paying off consumer debt. When you move to four, five, six, we say you move from intensity to intentionality. It's okay if the mortgage doesn't get paid off in five years, and instead it's five and a half. You are still doing better than 99. 999% of America. The key is you have a goal and you're aiming toward it. How much longer will it take to pay off the house at this rate?

Three years.

Wonderful. That's awesome. How old will you be then?

I just turned 32, so...

Thirty-five? Thirty-five. Do you know how weird that is to be 35 years old with a paid-for house? Amazing. With no debt?

Very nice. You're doing great. There's a point, Michelle, and I'll be honest, I struggle with this from time to time, but Especially when you're doing a plan that's very intense, like the Ramsey plan, and the way the first few steps are, you do have to be intentional about flipping the switch in your brain where you're not just building your life, you're actually living your life. And I have had moments where I'm like, Man, I need to actually enjoy the thing that I've created instead of just like, Let me just put this other brick in place. There's a point where you do have to stop and go, I'm just on the outside of this thing creating it. I need to get on the inside and start enjoying it and start living it and start being a part of it and just enjoy the fruit of my labor a little bit. I think that's where you're at, and it's a great place to be. There's a time and a place for the intense and balls to the wall feeling. Then there's a time to put your feet up and go, Life is good. We done good.

Let's get that porch done. Let's get some concrete down. Congrats, Michelle. Please tell your husband, Thank you for his sacrifice and service.

I will. Thank you.

You guys are awesome. Living the plan. That's what it looks like right there. All right, Ryan is up next in Miami. What's going on, Ryan? How can we help today?

Hi. Thank you so much for having me. Sure. I have a quick question. I got a decision I'm trying to make, and I can't decide what to do. I have some debt that I want to pay off, but I'm in a unique situation, so I don't know what to do. I have about 97 $1,000 in student loans from law school. Shortly after I graduated, I fell backwards into some money by sheer luck, and I was told, don't lay out the- What spot did you fall?

Just out of curiosity, I'd like to visit that spot. What do you mean you fell backwards? Was it an inheritance that you didn't know about?

I got a personal injury settlement of just short of a million dollars.

Oh, wow. Are you okay? That's a serious payout.

Yeah, I'm fine now. I got some arthritis in my knee. I got some injuries that are used for a young man to have. But all in all, I'm whole. Wow. I consider myself a very fortunate person.

So where's your quandary?

Well, I didn't know what to do with the money. You see, so the advice I got was to invest it, don't pay off the debt, And we use the growth or the return on the investment to pay off the debt over time. And I was in some investment with a financial advisor. It didn't perform well. I didn't like it. I actually pulled the money out of that and ended up buying three single family homes that I now lease to people. So my current plan has been to use the rental profit, live off my base pay for my day job, use the rental profit to pay down the student loan debt. But I really hate making all these payments, and it's eating up all the money I make every month.

You didn't buy the rentals in cash?

I paid for them outright. Okay. Yeah, three single-family homes, outright.

What are they worth?

Let's see. One's about 300, one is worth about 250. The other, I would say high twos, low threes, 290 range, probably.

What do they cash flow totally every month?

One rents for 1,800, one rents for 1,900, one rents for 2,000 a month after homeowners insurance, property taxes, maintenance repairs, About 37, 38,000 a year.

Okay. And what's your base pay? Or how much are you bringing in from your job?

For my day job, my base pay is 70,000 a year before taxes. And then I just got a bonus. It's like a once a year bonus, recently $10,000.

I mean, if you like these properties, you paid for them in cash. If they're cash flowing, I would just use your income and the cash to pay down this $97,000 bill. I mean, if you wanted to sell one of them off, you could. But I have a feeling, I mean, it's just you, right? There's no family, no wife.

I'm a single I'm 30 years old. I live in an apartment. Yeah, no wife and kids, not even a dog.

What do you have in savings? What's your cash position right now?

Let's see, in savings, I have about 93, a thousand in a savings account, about 20 in a checking account.

Well, you buried the lead, man. There you go. You could pay off your debt today.

Instantly.

My worry is I would like to get into a primary residence and own a house that I live in. So that's another hesitation I have with you.

Okay, that's two different things.

There's a time and place for that, but it's once you're completely debt free and you have a fully funded emergency fund. And think about it, once you don't have these student loans, it's all pure cash flow. So you can save up a down payment real quick.

And I might change my advice on that. Now that you throw the fact in that you want to get a personal residence, I might say, take the cash that you have, pay off the student loans, and then I might sell one of these properties to free up some cash. So you've reupped your emergency fund, and now you have cash to come in and buy whatever house you get for you, that needs to be in cash. So maybe you're selling two of these properties to have what it is that you truly want, and maybe that leaves you with one rental property. Because what I wouldn't want for you to do is to put a mortgage on your personal residence, and now you've got rent people living in paid-for-houses, and you're not even living in a paid-for house, right? So maybe you sell off two of these to get what you want.

I'm not mad at that. It's all about your timeline or your urgency. If you really want your own home, then I think you might go, Hey, I'm going to sell one of these because I don't want to have to save up for the next three or four years. That'll speed up the process. You have a lot of options. You've done a lot of things well, but you became a landlord by default because some dude told you it would be a good idea. And so the good news is you have options, my friend. When you've saved up and paid cash for a reliable used car, you want that thing to last.

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Kelsey is in Austin, Texas. Up next. Kelsey, welcome to the show.

Hi. Thanks for taking my call. I'm working the baby steps, and I just need some advice. I am a real estate agent, and so all of my income runs through my business account. I have an S-Corp. I like to keep about three months of my payroll in there just to keep my anxiety levels at a lower level, just in case a month is slow or a deal falls through. I'm a single mom with two kids, so I guess I'm just I'm wondering if that amount in my business account would be enough to consider as a starter emergency fund or if I should have that starter emergency fund in a separate account.

I like that you're doing that. The only change that I would make is this is not an emergency fund. Whenever you're a person who's on irregular income, whether you're in real estate or just anything that has those major opportunities for fluctuation, it is smart to keep a month's worth or two months' worth, whatever you feel like you absolutely need a side. Yeah, just in case something happens, a deal falls through or it gets pushed later, and that way you can continue to live your life. But that's not your emergency fund, because your emergency fund is there for the things that emergency funds are there for, something that's completely unforeseen, something that's completely necessary, and something that is completely urgent. That's your roof, your car falls apart, that thing. This is just part of your budget. This is just part of In many ways, it's just an extended cushion for you letting your budget adjust to a regular income. I would not, to clarify, you can have this money here. Maybe you take half of it and you have a month and a half. Only you know how much your income truly fluctuates and what you actually need there.

But maybe there's some of that that could also go towards building a dedicated emergency fund.

Okay. Yeah, I could definitely at least start the $1,000 just to have that there and then put some towards debt, especially once I have things under contract that feels a little safer.

How much debt do you have?

I have 46,000.

What debt is that?

So 22 of that is credit card from just putting my head in the sand after a divorce. And then 13,500 on a car. And then my AC went out over Thanksgiving, so I had to put that one on a loan, so it's 10,000 on that.

Okay. I know. So do you have a business checking and a business savings account separate from your personal?

I run the profit first model in my business account, so I have a couple of accounts in there. So I stash a little bit away every closing for profit, and then I have a personal checking.

Okay, good. So they are separate? Yes. You're not doing this all from one bank account?

No. Yeah, I finally got all that in order a couple of years ago.

Okay, right. And how much do you have across your personal checking and savings that's not tied to your business?

Sorry, can you repeat that?

How much do you have a cross-checking and saving in your personal life?

Oh, I am. I could probably have, well, I would have a thousand dollars in savings, and then personal is Just, obviously, I pay myself every month, so I pay about $6,000 in payroll every month.

So the good news is once you start paying down... So if you do $6,000 in payroll, what do you have? $18 stashed aside? Is that what you have in your business?

I like to stash 20 just because with the payroll, there's taxes associated with it. So it works out to be about six months.

Do you really feel like you need three? I feel like you could get... I mean, only you know. I'm not trying to push you because I know that this is your sole thing. But if you don't need three, I would knock it down a bit. And then the other thing is, the good news is once you start paying off this debt, the amount that that needs to be, because that should be a bare bones budget, not like your bells and whistles budget, you We'll be able to knock that down because once you pay off the 10K, that's a payment you don't need to make anymore out of your budgeted money. Once you pay off the car, that's a payment you won't need to make out of your budgeted money. So as you're paying this debt down, you're also able to reach over and pull a little bit of that extra. Does that make sense? And that can then also go towards your debt.

Yeah. Right now, my debt payments are like 600 a month. And then I think it's going to go up in June as long as... I mean, I'm going to try and get the smallest credit card knocked out before June. But then in June, the AC loan, it was zero % for the first few months, and then it'll be 10 %.

So it's going to go up a little bit. So what's your current plan to pay off all the debt? What's the timeline line? And how much can you throw at it a month?

I am throwing at it as much as I possibly can. I'm doing extra side hustles on the nights that I don't have the kids and just trying to throw everything at it. I just have gotten a little... I mean, this is my first month actually doing budget in every dollar, and I thought I had it all planned out, and then things happened that I didn't account for. And so I was like, Oh, man, I missed the mark this first month.

Well, it takes a couple of months. I mean, just to be honest, it takes three months and some to really lock in The first month is experimental, truly. Then after that, you start learning your behavior, and you should be locked in in in the next 60 to 90 days for sure.

I would have a game plan to go, Hey, my goal is to put $2,000 a month toward the debt. Minimums plus extra. That gets me out of debt in 23 months. Once you start doing that math, it shows me that you're serious about getting out of debt. Because now you know the benchmark. You know if you're ahead or behind instead of just, Well, hopefully I'll have some extra to throw at it. If life doesn't get crazy, you need to So we free decide, Hey, no matter what happens, this is what we're going to do. And then we'll shift everything else around it.

The nice thing about real estate is if I have an extra closing, it can knock out a really big chunk of that.

When's your next commission check? Do you know?

My next commission check?

Is that what you said? Yeah. When is that coming in?

Tuesday.

How much is that going to be?

It'll be 6,000.

Okay, good. So you have your month covered. Okay, good. I like this. Okay, so it sounds like you've got it set up. You've got the system set up. It's just now letting it start to work for you. Yeah.

Hopefully, you can start making progress soon, and every dollar will definitely help. Jenny is in Miami up next. Jenny, what's going on?

Hi. Thank you for taking my call. So I'm a little nervous. My question is me and my husband, we have about 500,000 saved. We've been saving for a home for quite some time. The issue is that we don't have much in retirement. I'm 40, he's 45. So I'm really debating here if we should really put as much toward a home or we should allocate more towards a retirement account So that's eating at me because we haven't bought yet. We're looking at the moment, but that worry me. It doesn't worry him much, but me, it does.

Are you guys investing at all right now?

Honestly, no. Because I I work for a hospital, so I believe it's a 4 or 3 B. So there is money in there without me having put anything in there as of yet. How much? Eighteen. Eighteen thousand, I believe, or 19 for me. And I think on his, it's maybe three thousand. He just started contributing to that.

Okay. What How does this make you guys make a year?

Well, this last year, our gross was both of us, I did overtime about on 148,000.

Awesome. Okay, and what's this house going to cost?

We're trying to stick to 600, but it is Miami. So it's definitely difficult, but we're trying to stick with that, even if it has to be some repairs or anything like that. So we also have to consider those things as well.

Sure. And you're renting right now? What's What's your rent cost? We're renting.

1400. Okay.

We've been lucky. Yeah, that's amazing. With your income, that's fantastic. I'm thinking through this, you have 500,000 to put down. Does that include your emergency fund? Or you have a separate emergency fund from this $500?

So that's everything. That's everything across the board. We wouldn't put all that in. We would definitely leave our emergency fund. We have about 40 would be less at minimum for the emergency fund.

We'd like to. We put 460 down on a $600,000 home, for example, or a $650,000. You have a $150,000 to $200,000 mortgage, which is very reasonable for Miami. And the good news is you're going to be able to pay that off fast. So here's the deal with the, should I put it toward a retirement or not? I would suggest you guys start investing 15 % of your $150,000 income today.

Okay.

And then put as much down on that house as you can. And here's the simple reason. It reduces the amount of mortgage you need, which in turn reduces the mortgage payment, which then frees up way more money to pay down the house early to live your life in the meantime. It's a good middle ground play right now because you guys are 40 and 45. My guess is you end up paying this house off in the next seven years max.

The good news is if you keep doing what George said As you're investing 15%, if you invest 15% of your income starting now, a little over $20,000 a year, you're going to have $2. 6 million in retirement if you retire at 65.

That's calculator numbers. That's not an opinion. That's the truth. The faster you get paid off, then you can max out investing. You'll be making more by then. I have no fear that you guys are going to be just fine if you become completely debt free, and then you invest all of that margin you create. Every year, I hear the same excuses for why people don't get the life insurance they need to protect their families. So this year, Let's clear the air and look at the facts.

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They've been my choice for all my insurance for over 25 years and are the only people I trust. Welcome back to The Ramsey Show in the Fairwinds Credit Union Studio. I'm George Campbell, joined by Ramsey personality Jade Warshaw. Open phones at 888-825-5225. Sarah is in Memphis up next. Sarah, welcome to the show.

Hello.

Hey. How can Jade and I help?

Hi. My question is, how should I be investing to build wealth, but also to leave an emotionally abusive relationship?

Oh, gosh. How long has this been going on?

This I've been in this position for the last four years.

Are you safe right now?

Yeah, absolutely. It's no physical abuse or any of that, but it's just too toxic for me to stay. I feel like I'm not evolving.

Are you guys living together?

Yes.

Okay.

Okay. So what's your timeline?

On what?

On exiting the premises.

I would say I want to leave definitely within the It's six months, six to eight months.

Okay. Tell me what you think. Tell me what's precluding you from going now. Because when you say, How can I build wealth? Wealth is different than, I need first and last month's rent to be able to get into my own apartment.

Wealth is like a 10, 20-year journey. And so right now it's, Hey, what is the next step I need to take? What is the minimum amount I need to leave this situation? We'll get to wealth later.

My dilemma right now is I did have roughly $10,000 saved. I've recently paid off my car and got rid of absolutely all my debt. I'm waiting on my title in the mail. I currently have about $8,000 left in my account. My lease was up. The reason I moved in with him because my income at my job is quite low. I only make $17 an hour. So I was a little bit worried about getting an apartment just due to the requirements. And so I'm trying to figure out if I should be investing with the $8,000, maybe buying a quadplex, living in one. That's what I'm trying to figure out.

Let me say this back to you. I'm sorry, I didn't move out. Let me say this back to you and make sure I've got it. So you've got zero debt at this point. You've got $8,000 cash, $17 per hour, what does that equate to a month? What do you bring in after taxes every month?

I think around $2,300. Okay.

So no to your thing about investing. Right now, cash is your friend. You need liquid money because you're trying to get a place. In the $17 per hour, are you working 40 hours a week or are you part-time? How many hours do you do?

I work a little under 40, It'll be like 36 hours.

Okay.

What work are you doing?

Medical assistance.

Okay. So are you wanting to stay in that field?

No. I'm currently looking for jobs to expand my income right now to hopefully build my savings account.

Well, yeah, I'm saying, are there the next step rung on the ladder in the medical world from assistant to XYZ? Can you move up in the field and place that you're in right now, or is this it?

No. I've tried.

Do you know what... I think a lot of your skills would transfer in the medical field to other assistant work, because you could be an executive assistant and go make 70, 80 grand. Okay. So I don't want you to just limit yourself going, Well, this is the only thing I can do. You've got to think about what skills can transfer. And I'm going to give you, our friend Ken Coleman has a great tool and resource called Find the Work You're Wired to Do, and it comes with a get clear career assessment, and that will actually lay it all out for you. And so that will help you immensely. And then on top of that, do you have any community right now, friends, family nearby?

No, that's the problem. I don't have anyone to stay at their house for a set amount of time or help me out in this situation. So it was like this was my only option.

Well, I'm wondering, can you get a roommate?

That's what I'd say. I'd be looking at rent in your area and what you can, and think about it through the lens of a roommate. It's like, Okay, who can I split this with? Because I think if you can get a roommate, and I'm not saying you live like that forever, but this is just for you to get out of a toxic environment to your own point, and to get someplace where it's a split cost, that's what I'd be looking for. That's the research I do tonight. Have you done that? Any research on apartments?

I've already tried that option, and yes, I have been looking for apartments. Honestly, the roommate situation probably is unrealistic in my case. I don't have anybody. I was looking about renting a room like the Airbnb or something like that.

How much does that cost?

I haven't gotten prices yet. I was thinking about doing that as of today. That's why I'm like, Maybe I should call first.

Yeah, I think that's a good starting point. See what it'll cost you. I mean, the cheaper, the better. Cheap and safer are the two things that you're looking for. And it's just you, right? Yes. Okay.

I know you don't have people close to you in your life, but I would jump on some local Facebook groups, and you can see their photo, their name, and say, Hey, can we meet at this coffee shop and see if this is a good fit? I know it's a scary step, but it's a much safer step than the situation you're in right now. The truth is, you can't afford an apartment on your own. That's the next step. Then we can work on the work and career piece to get that income up. But right now, 2,300 bucks, you can survive if you can split a two bedroom at 6, 700, 800 bucks. Yeah, right. That would be my next step is roommate, followed by income. Do you have a separate bank account, separate from partner?

Absolutely, yeah.

Okay, good. And they don't have access to it. They don't know your passwords? No. Do you have shared location services on your phone?

No. No, I'm pretty good. I'm pretty clear to exit if I can figure out what I can afford. But I just wanted clarity on if I should be focusing on investing and that could be my way to move out.

I would not invest a dime. So in the steps, you'd go, Hey, I don't have any debt. Now I need a fully funded emergency fund of 3-6 months of expenses, and then I can begin investing. But right now, we need some stability and a foundation. You're close. If you can get your income up and get in a safe situation with where you're staying and get the emergency fund, now we're cooking with gas. Now we have the recipe to build wealth. Because right now, one emergency could tank you, and now you have no money to build wealth with.

Okay. I appreciate that.

You're doing all the right things. I would not wait six months, Sarah. I would be gone by this weekend. Yeah.

Once you find an Airbnb or once you find a roommate, in many ways, I think your chances are better. Well, they're both the same thing. If you rent a room on an Airbnb, you have a roommate, and this is somebody that you don't really know very well and you're up in their place. But the good news is if it doesn't work out, you could easily move to someplace else versus a roommate. I guess you'd be locked in lease-wise. So I see what you're doing there. I think for you, the ultimate thing is the price on it because usually in order to make progress, we don't want rent to go over 25, 30% of our take home pay. For you, that's a very low number at 2,300 a month.

Talking like 600 bucks.

Yeah. So you're, 600, 700 bucks range. Luckily, you have no debt way to go on that. But that's what I'd be looking for, if at all possible.

Okay. Okay, got you. I understand. Thank you.

You bet. You're welcome. I'm wishing you the best getting out of this situation. Jade, when it comes to abusive situations, it's so easy to tell yourself, Well, it's not that bad, and I can just wait another six months. I'll be okay.

You never know when people are going to shift into another gear. That's my thing. Yes.

You need to get out. She's taking all the right steps on the financial side. She's got no debt. She has separate accounts from this partner. She's got some money in the bank. Now is the time to go. Don't have some random, arbitrary number. Once I have $12,000, then I'll feel comfortable. That's you justifying why you're going to stay in the situation. You need to be out. If you need to call a hotline, you need to get in a women's shelter, you do whatever you need to do to get out of that toxic situation, Sara. We're waiting for you.

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Sarah is in Boise up next. Sarah, what's going on?

Hi. Thank you for taking my call. Sure. I'm in crisis mode, and my question is, how do I manage my husband's business since he had a stroke about a month ago?

Oh, my goodness. What is his current health?

Physically, he's doing very well. It was a large stroke, and somehow physically, he's good. But the area of his brain that was most affected affects his reading in writing, understanding of spoken language and ability to speak accurately.

Sarah, I'm so sorry.

So he's not available to consult with.

Yeah, I mean, your life flipped upside down overnight.

Yeah. Wow.

So what is the pressing thing that I got to figure this out tomorrow?

He is a business owner, and he has one employee. My husband does He has pretty much everything for the business, and his employee is not able to take over.

What business is it?

Essentially, it is a pilot school.

Okay. Is there a physical location? Give me a picture of all the things tied to this business.

He has several airplanes that are housed at a local airport, and he pays leases to have slots for those airplanes hangers. And so he pays those leases by check every month. He has an employee who is not getting paid because my husband's not here to run payroll.

Do you have any knowledge of all of that? Is this something you could even step... Even if you wanted to, you had the capability, is this something you could go, All right, I can figure this out. I can pay the bills. I can handle payroll.

I know enough of who to I know enough of who to contact to figure out what to do. My problem is we don't have power of attorney or anything set up, so I don't have access to his business finances. What I do have is a wad of cash that he keeps around, and I can pay the leases by cash until he gets out of the hospital.

Until you can do it through the business.

And can come home and can do it through the business. Yes.

Wow. So he's still in the hospital? Yes.

He'll be there for the next one to three months. I just need to keep it going for a few months until we see where things are going to land. He has enough communication ability. He's been trying to communicate to me about his work, but there's a lot of guessing what he's trying to say. He can't get it specifics. I'm just trying to keep things going as he's I'm wondering and hoping that we'll be able to talk about it in a few months. I just don't want everything to fall down.

Yeah. Is this your only source of income?

No. I make a good income, and I can cover our personal expenses. Good. How much are you making? Without a significant... 150,000.

Okay.

So the biggest concern is there could be leases piling up that are past due, and you wouldn't be receiving them because they might be in his email or something that's And you have a password-protected, right?

Correct.

Okay. I did get a bill in the mail from a mechanic.

And so I could just call them, but I can't pay it out of the business. I can either pay it by cash or out of our personal accounts.

Do you guys have any money saved, you guys, aside from the business?

We have about $2,000 left. I've used $3,000 of it on business expenses so far.

Okay. Yeah, I would start This is very tough. You're not lying that this is a tough situation. I would start by compiling as many folks as you can. I would sit down with the employee and I'd be like, What do you know? Tell me anything you know. If there's any numbers for anybody that you have, please give them to me. And I would just start trying to... You're almost a detective on this, trying to figure out the mechanic. I'd contact them and say, Do you know of any... Tell me what you know, and just derive as much as you can. Because you might find. Yeah, I know you said there's no power of attorney, but you might find out that maybe he was working with somebody that was just helping him with some of the accounting or some of the numbers.

Okay.

Then the next thing, I'd be talking with the doctors and saying, What's the timeline for us to understand his recovery? What can we expect in the next couple of weeks regarding speech, those sorts of things.

Do you have an estate planning attorney?

No.

Okay. I would contact one today and say, Hey, what are my options here? Because one option, if he can't understand or communicate decisions right now, then you likely need to go to court to request guardianship or conservatorship. And so the judge would have to grant you legal authority. And if he is able to, you might have a shot here to get that power of attorney. The estate planning attorney can help with that step, and that's a big step. That unlocks a whole lot for you to be able to manage and run this business and just keep it stable. Just get the bills paid. Is the employee Are they aware that, Hey, you're not going to get a paycheck? There's no money coming in to pay you with.

Yes. I've let him know that I don't have access to that. He said that he will do everything that he can and continue working and that if he reaches a financial point that he can't continue, then he'll just get a second job and keep doing his part of the business and logging his hours because he knows that we will make good on it.

I'd also look into, since your husband's been paying him, if you know even what bank your husband's using, if you can get with an attorney and say, Let's go to the bank, let them know what's going on so we can get access into this account. I think there's those things that I would do to just... I mean, obviously, you're in a situation where this person cannot verbalize what they need. Working with the lawyer to get access is going to be what you're going to need to do.

Are you a joint owner on anything?

Why would you use that cash?

Okay, so let's pretend. Let's play that out. Let's When you get with a lawyer, you go down to the bank, they're like, Oh, okay, we see what's happened. Yes, you're obviously legally married, whatever, whatever. You get into the accounts. Then I'd be hiring somebody to say, Help me understand what we have here. Is there money? Can you look back? Can we now look at a past tax return to find out what the situation is with the business? Then from there, you can decide, Is this something I can keep up? Is this something we maybe need to sell? By then, you've heard from the doctors about recovery. There's part of this, it's It's like a puzzle that has to come together for you to decide, Is this going to be something that you're going to keep, or is this something that needs to be sold? Maybe in the distant future, he can reopen this again based on his knowledge, but not based on the previous business.

Okay.

Yeah. Man, I'm sorry that this is happening.

This is really tough. You got a new full-time job of just trying to track all these things down. It's not a fun thing to deal with. It's not something anyone could even plan for, Sarah. I'm so sorry you're going through this. I'm glad that you at least have an awesome income on your own. It can cover all the bills. Do you have any margin each month just on your income alone?

We are still paying off our personal debt, so all of our margin is going into that.

How much debt do you have between personal, the business, everything?

Well, I don't know about the business debt. I don't think that there's any business debt. But as far as personal debt, there's a car loan for 34,000 and a credit card for 2,000.

I would look into selling that vehicle if you can even make what it's worth. If you can get 34 for But do you have another vehicle?

Yes, but it needs work.

How much work?

I don't know. I don't know anything about mechanics. Okay.

I'm just wondering, if you can sell that- Before this happened, my husband told me it was unsafe to drive.

Okay.

Well, I would do some homework. You can jump on Kelly Blue Book website and find the private party value for that car. You'll just type in the VIN number for the vehicle and answer a few things. It'll tell you what the car is worth. If you can sell that, you free up that car payment. So what does car payment every month?

Five hundred.

So you just get $500 a breathing room. And now, if the repair is $1,000, great. Let's go ahead and do that. That is well worth it to free up $500 a month forever. And so there's all these pieces, you have a lot of variables that are in your control, and that's all you can do right now, is focus on what you can control and bring in all the community you can find, bring in all the professionals and experts at your disposal to help you through this. You do not have to do this alone. I'm wishing you the best navigating your husband's health issues, the business, and just the grief of what the next chapter of your life looks like. Thanks for the call, Sarah. Hey, guys. George here. Listen, just because it's 2026 now, doesn't mean 2025's ideas all go away. Some things are timeless. If you want to win with money, it's still the same playbook. Budget like your money depends on it, avoid debt like $10 lattes, and build wealth on purpose. But here's the truth almost nobody tells you. Most banks make money when you lose yours. They want you swiping, overdrafter, and racking up fees because that's how they stay rich while you stay broke.

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Hi. Thanks for having me.

Absolutely. What's your question today?

My question is, how best do I approach a conversation with my husband who recently purchased a home as an investment without telling me, had no knowledge, didn't know it was a plan, It came up fast, I guess, and called me after he did it. And my question around that is, how best to approach that conversation? Do I approach it from a financial perspective of understanding, can we do this, or more so in the fact of the personal side? I'm struggling being a numbers person, focusing on the financials rather than the emotional side. So that's my question on how best to approach that.

When did this happen?

Yesterday.

Listen, let me just- This takes impulse purchase to a new level.

This is wild.

I applaud you. The fact that you had enough self-control to be like, I'm not going to even mention in this? You've held this to a radio conversation. I applaud you because I would have been like, What? So good job. That's great.

How did this all come about as far as him telling you? What happened here?

Well, so long story short, this is his goal. He's good at it. The man has a 2% error rate in life, which frustrates me.

But he- He's got 100% error rate with his marriage.

Yeah, well, How mad are you? On a scale of one to 10, how much does this just hack you off?

You know, it's surprising because normally I'd lose it. The fury is not my normal jury. Okay. I'm trying to listen and go, Is this Is this an opportunity to have a discussion? Because we do struggle with his impulse control because he is a very smart person.

The fact that you're not shocked by this tells me there has been a pattern of this your whole marriage.

This is the biggest. Usually, I'm involved, but we've done some pretty high-stakes investments that he research. He's smart. So he's not impulsive, I wouldn't say.

Hold on.

He has a high-risk threshold, and you've trusted it.

Jennifer, he's impulsive. He bought a house without without telling you on a whim.

Well, it wasn't a whim. So come to find out, he's known about this. He's researched it. It was an auction.

Okay. How much?

$750,000.

Oh, man. Was it cash?

No. We have very good networth.

What is it?

My networth?

Yeah.

About 2 to 2. 1 Is it all real estate or is some of that?

Can you tell us what that is?

Yeah, majority real estate. We have very good equity in our home. Then we have an investment in some land that's in high a very nice area, so it's worth quite a bit. And then we've got some other assets. So our cars are paid off.

Okay, good.

What debt do you guys have?

So when I say they're paid off, we do have a loan on one of them. So I shouldn't say that. We do have a loan on one of them, but it's going to be paid off here soon. So total debt is $798,000.

And that's including this- Sorry, 698,000. Well, now it's double that because there's a $750,000 mortgage.

Does that include the new one? No. What's the mortgage on that?

The new one? Well, so we haven't closed on a loan yet.

But it was 750, right? Yeah. Okay. Okay. The first question you asked was, do I approach this from basically the dollars and cent side or the emotional-relational side? The dollars and cent side goes without saying. I think I would go first for the emotional-relational side, since honestly, that's the most important problem at hand is if you're going to do these purchases, I understand what our history has been. The point is not to insult intelligence here. The point is to say that I'm part of this marriage, and when we make decisions like this and I'm not included, I feel like I'm not a voice that matters. That's what you're telling me, is my voice doesn't matter, and I need to know, is that how you actually feel because that's the way you're acting. So I would make him understand that what you're feeling is not consistent with what you think his intention towards you is. Does that make sense? And that that's not going to work for you going forward. So I would get pretty strong on this because in my mind, and I'm not trying to project onto you, but in my mind, if you can call me right after the deal, you could have called me right before the deal, right?

It's the same amount of time. And I understand it was an auction.

I think he legitimately thought he wouldn't get it because he texted me, actually. That's how he told me. I think he legitimately didn't think he'd get it.

But this is not a Pokémon I had a bond card on eBay that I bid on and went, Oh, my gosh, babe, I won.

But the fact that he was even going to an auction means I have the intent to purchase something. And once the auction starts, here's the truth. Once the auction starts, sure, you could be bidding and be like, I don't have time to text. I'm bidding. But when you knew, I think I'm going to go to an auction today, that's the time you email and go, I'm thinking about going to an auction today. Here's the property I'm thinking about bidding on. If we get it, here's the extent that I'm willing to bid to. What do you think about that? That's a conversation should have had. He knows that. Go ahead and remind him of it. I think, Jennifer, for you, you're going to have to decide how serious you're going to be about this because to George's point, it seems like there's been a bit of a pattern. It's not to say that he's not a smart guy or hasn't had great luck or great outcomes with his knowledge. I'm not saying that. But it's not put you in a place of mattering, and you do matter. And that's the part that needs to be figured out here.

Now we can go back once that's deciphered, now we can go back and talk about, Okay, keeping this house, what's it going to turn into? All that stuff. But first and foremost, how much do you matter in this relationship when it comes to our money?

I think that's where we struggled our whole lives is I'm risk averse, and he's obviously a risk taker. And we've always struggled with the fact that he does do his research. He's willing to take a risk.

And I usually say no. Jennifer, that's not the problem. You being risk averse. That's not the That's just you guys having personalities. The problem is your vote weighing and mattering when it comes time for the rubber to meet the road in a decision. That's the piece. So your challenge is, because I Like I said, you're very, very patient. But your challenge is going to be, when you have this conversation, not to get bogged down in those minutia. Because that doesn't matter. It doesn't matter how smart he is. It doesn't matter how risk averse you are. None of that What matters is, do I matter? Does my opinion matter? Because so far it has not, and that is not okay with me going forward. If this continues to go forward, here's what that's going to look like on my end. That's what you have to decide, and that's a firm conversation. So that's my advice to you. And again, I can't say it enough, has nothing to do with smarts or not smarts.

I don't care if he won the lottery. This is still financial infidelity. I mean, think about if this was a person. He went, Well, he didn't cheat on me impulsively. He's been talking to this girl for months. That doesn't make it better, does it?

No.

And so if he knew he was looking at this house, he should have said, Hey, I've been looking at this property. I think it could be a really great investment. Here's what I'm thinking. You guys aren't communicating at all when it comes to money. I mean, my wife and I don't make purchases over $500 without talking about it let alone 750,000.

Yeah, and I don't make anything without asking. I think, again, this is the first time he's done it without telling me. It's always been he brought it to me, and then I tell him know or he talked about it.

Which is why you got to put the line in the sand on this, because what you don't want is for this to be seen as, Oh, that wasn't that bad. I could maybe do this again. This is you putting your stake in, putting your line in the sand. Hey, do you earn? Are you a contributor of money in the house? Yeah. Okay. I just wanted to check on that.

I think that's the hard part. We have substantial annual income, and he uses the debt, obviously, to build wealth, and he has.

He's built all of that. Fine, fine, fine, fine. All of that. Fine. But you need to make sure he understands, and you need to understand, too, this is not a money conversation. It has zero to do with prior success. You cannot let the conversation go in that direction. It's It's about respect on your name.

That's it.

Well, Jade, we just took a call where the husband bought a house without telling his wife.

Unreal.

Pretty wild. You know, buying or selling your home is a big deal. It's the biggest financial decision you'll ever make. With all the click bait headlines and conflicting data out there, it's hard to know what is actually happening with the housing market. We are here to make the latest trends easy to understand. We've seen mortgage rates dip, which is nice. We did 30 years for the first time in a while, so under 6% and 15 years been dipping down along with it, which is nice. If you want to learn more about the housing market trends and get free tools to help you buy or sell with confidence, go to ramseysolutions. Com/market or click the link in the show notes if you're listening on podcast or YouTube. All right, let's get to the phones. John joins us in Portland up next. John, welcome to the show.

Good afternoon, gentlemen. I'm Ms Jade there.

Thanks for including me in that. I was concerned.

I was happy to be called gentleman.

You're a hood on the show. I enjoy listening to you guys almost every day. Oh, thank you.

How can we help?

So I'm looking to get engaged with this young lady that I've been dating about nine months, and I'm just getting into figuring out her financial situation, and it's really a freaking mess to be on the I have an understatement here.

Oh, boy.

So she's co-living with her mother, her sister that is married, her other sister that is married, and of course, herself. And they all cosigned signatures and such and income to be able to afford and purchase a home together.

Oh, boy. Six of them?

So they're all in the deed. They're all on the mortgage.

Right. They're all in this And then there's a food truck business that they run as a family business, and there's other income. And then there's private and business credit cards all mixed together. And my girlfriend's credit score is tied to all of these as a cosigner, and two auto loans that she's also tied to.

Oh, boy.

Okay. So I'm going, okay, so in six months, if I was hoping for a spring or summer wedding here, that I cannot join doing finances with over $100,000 of small debts and a house that I have zero equity or input in. And I don't think she has equity in any of those things. She's been coaxed into signing as a cosigner all of those things, but does not have equity in any of those things.

How much of this does she understand? It sounds like you are well-versed in the world of finance, and I'm worried she just is like, Oh, I didn't understand all this. I just signed because it was family, and I thought it all worked out.

I don't know if she understood the weight of... When you cosign a loan like that, how much are you on the line for? I don't think she really understood that.

She doesn't understand that if they all default, that it all reflects on her and that she could be the one that's responsible for all of it.

Correct. So there's another curveball here. One of the sisters has cancer, and so her and her husband aren't really working. And so they're soaking up some out of the household. They pull their money together in the house. And her mother wants to go back to Mexico. So she's Mexican, but I don't think debt companies can chase you and collectors can chase you once you're on the other side of the border, an idea, is from my understanding. So her mother is obviously participating and created some of this debt. And I think that they're all going, Oh, well, now she's found this nice guy. In other words, me.

Okay.

Let's not go- What do I do with this?

Let me go back to what I think is the most important things first, because there's a lot here. I'll try to tackle some of them. I know George will tackle some of them. So first things first is the conversation where you're getting her to understand your fears around this. And then, and only then, if she's in a space to move forward, Here's what I would say is the ultimate goal. The goal is to find out first, Hey, this mortgage situation, who can buy you out? Who can buy out your portion so that you can get your piece? And can we get folks to refile refie and get you out of this? Because that's the only way is to refy this mortgage so she's not on it. So that must happen. It must happen. Same thing with these auto loans. It's just so serious. So that conversation of her understanding that, that's why I say that's paramount to this entire thing working. Because after that, she's going to have to have some serious conversations of, I need to refie the mortgage. I need to refie these auto loans. And I need to find out how to get my name off of these credit cards.

Because if I were in your shoes, I don't think I would move forward with marrying her until that's done, because you are going to get... That's a horrible way start off your marriage, period. It's just going to cause problems.

I agree. Is she willing to essentially be exiled by her family? Does she want out of this, or is she like, No, everything's great. I like everything that we're doing right now?

She honestly has confided me that she's very stressed about the financial situation because I explained to her a lot more the depth of, you don't have equity to play with as a bargaining chip. It's not even about equity. You're only stuck with a liability.

It's not Yeah. It's not even about the equity. I think that that's burying the lead a little bit. The thing that you guys have to be most concerned about is the risk on her life when these people stop being interested in paying, especially because there's so many involved. It's very easy for Bob to go, You know what? I'm not working in this season. It's okay.

Five other people are paying it. Yeah, sister has the health care, mom goes to Mexico and goes, Good luck, guys. Now what? Now she's on the hook for everything, and collectors are coming after her, and Sue doing her. And that's what she's up against right now. Yeah.

That's the thing you need to be laser-beam-focused on, is the risk. Forget equity, forget any of that other stuff. It is risk, risk, risk on her head right now.

And so to start to reduce some of that risk, I looked at it like, Yo, you guys need to sell these cars because one of their cheapest car, they are at an 18 % interest rate on it. So I was like, You guys cannot be paying $750 a month on a 2018 Nissan Pathfinder. Yes, you're right.

They need to sell it.

They're underwater by 5K on that one. They got offered eight for it. I was like, sell it, but they don't have any money to pay off the loan so the dealership will take the car.

Then whoever it is that's driving the car needs to see if they can get a loan for the difference.

And they need to be selling at a private party. The dealership's always going to give you a super low-ball offer.

Correct. Yeah, they have to have their margins.

So they might actually be able to sell it for what they on it if they sold at private party instead of going to the dealership. The people who screwed them over to begin with.

I think they owe just about even with KBV on the vehicle.

Do they need it to get from A to B?

No. So I'm a mechanic for a living. I was like, Look, I'll find you a Toyota Camry that needs a water pump and a timing belt for $1,500. Put $80 in parts in it and ship it. You guys can have reliable transportation. Who's is it? Is it the sister? I can get you transportation in a week. Is it the sister's? No, this is what my girlfriend drives, and her mother and whoever else needs the car.

Okay, so for all intents and purposes, it's your girlfriend's car? Correct. So what you need to do is you need to go with your girlfriend and say, Hey, we're getting a loan. Once we find out KBB, if there's a difference, we're getting a loan for the difference, and then we're going to sell this, and you're going to get your mom and your sister to agree to that immediately. Is that the case for both cars, by the way?

Yeah. So there's a 2024 Dodge Ram 1500 Laramie that they have. They're paying about $1,000 a month for on the payment, and they owe 38. 5 on it. And it got appraised at dealership last week for 34.

And who's the main driver?

That's one of her brother-in-law drives that, mostly. And he's currently not working, so I don't know how he gets the privilege to be driving the vehicle.

Are they all chipping in to cover all these payments?

Correct. They just pull all their money in a pot and pay bills out of that. In some months, they have enough for all the stuff.

Okay.

I'm going to be straight up with you. There's so much toxic codependence happening here.

Well, yes, but I think what you more so... We can look at it on the outside and say, toxic code of Lindsay, but it sounds like it could be a cultural thing of this is just how we survive, and this is what we're used to. Your work is cut out for you, and I don't know if you're going to be able to win this battle, my friend. This is deep, deep, deep, deep, deep.

This is going to be a part-time job for you just to help her. She's going to need to pull her credit report and go line by line and go, How do we get you off of this? How do we get you off of this? Explore all the options, and then she's going to have to fight with the family and be excommunicated for ditching them in their time of need.

I don't know if you want to be the guy who's responsible for that.

Welcome back to The Ramsey Show in the Fairwinds Credit Union studio. I'm George Campbell, joined by Jade Warshaw. Open phones at 888-825-5225. Jake joins us next in Madison, Wisconsin. Jake, welcome to the show. Hey, thanks for having me. Absolutely. What's going What's going on?

So I am in the process of building myself a house and looking for some guidance on if I should take the 15-year mortgage option where the payment is about 31 % of my monthly pay, or should I take some of my six-month emergency fund and try to get that down to 29%? Or is there some other route I should try to pursue?

Cool. What's the house going to cost? A total So what we're tracking at right now is about 380,000 all said and done. Okay. And how much are you going to put down? So I've already put about 180,000 down of my own money to get the project started before I even went to the bank.

How much more do you need to get it, percentage-wise, to where you want it to be?

I believe it's close to 20,000, which I do have.

That would just be most of, like I said, a six-month emergency fund. It would be most of it? What would it take your emergency fund down to as far as months?

About two.

Okay. The most I would personally be comfortable with is three months. If you're like, Hey, I'm going to take three months of the fund out, leaving three months in there, and then I'll restock it once we move in, you're going to be okay. That's not on fire. If it's 29%, nothing is on fire, because the truth is your income will go up over time. Sure. Right? That percentage will go down.

Yeah.

The other thing is when we talk about the 25% parameter, which for everyone listening, we tell people, Hey, if you're going to buy a house, do it once you're out of debt with an emergency fund, you've got a solid down payment, and make sure that you get a 15-year fixed rate conventional loan where the payment is no more than a quarter of your take home pay. But when we say that, you got to remember this is after tax, but before other deductions. So we're not going to include the 15 % in retirement. We're not going to include the health care premiums. It's just after tax. So have you done it based on that math?

I would say not entirely.

I was doing it more so including the 15 % that I would have in retirement and all that. Okay. Because then my guess is once you redo the math, you'll go, oh, it's actually like 20 % of my after tax income, but before the deductions.

Yup. Okay.

That makes sense. Good. So you're in great shape, man. I'm proud of you. How did you do this?

So I had a house on 30 acres previously that I sold for quite a bit more than I owed on it. I was able to take the bills, proceeds, pay off my car, and then my parents were kind enough to let me and my girlfriend live in their basement while we're building this house.

And basically every month that we've been there, I've been able to set aside quite a bit of cash to- You got the savings muscle down. And you're completely debt free? Yes. Fantastic. Man, green lights over here. Congrats on the new house. I hope the build goes smoothly. Hope it's on time. Is it on track so far?

Yeah, we're about three I'm two months ahead of schedule. Wow. We're technically my own general contractor, my dad is helping me with that. He's like an inspector, so he's got all the certifications for that. So I've been able to do a lot of it myself.

That cost savings all over the place here. Yeah.

Cost and time savings. Time savings has been the big one for sure.

Yeah. Well, congrats, man. Super excited for you. Thank you. I appreciate it. Best of luck with the big move in finishing the construction.

Thank you. Yeah, I appreciate the insight and the discussion.

Happy to do it. That's what you want. That's a good best case scenario right there. It is.

Good for him. I'm happy for him.

If you're arguing about is it 28% or 25%, it's the right argument. Versus most people just go, Well, we just needed a house, and it's 54% of our take home pay. We're like, Oh, my goodness. It's a hard one to crack. All right. Nora is in Nashville up next, right down the road. What's going on, Nora?

Hi, George and Jade. I am just calling because... Sorry, of course, somebody tries to call me as soon as I'm on this call.

Who could be more important than us?

Put him to voicemail. Nobody.

Nobody is more important, unless it's my husband or my kids.

Truth. There's a lot of people ahead of us.

I came to the event, and actually, Jade You gave me your book.

Nice. I'm the one who asked me questions, and I have been reading it. I gave it to you from the stage?

From the stage, and I gave you a hug.

I remember you.

Great. Yeah. So it lit a fire, and the next Tuesday, we joined Financial Peace University. Yay! So we're trying to get our emergency fund together, and things were so tight. But I just started selling stuff on Facebook marketplace. And so since the 14th, I've gotten $230. 52. Way to go.

Way to go.

And I'm still selling stuff, so one's coming at four o'clock to get something else.

Got to take that call.

So once I get that $1,000, I was looking at the Every Dollar app, and it looks like I should pay my IRS debt first before I attack my smallest debt. Is that true?

Yes, ma'am.

Okay.

How much is the IRS debt?

It's $2,266.

Good. Yeah, that's one debt that always jumps to the top of the list no matter what, because it's just such a volatile situation to be in. And so we want to get you out of that as soon as possible. So yeah, That or if you had back rent or back mortgage, those things would jump to the top of the list.

How much other debt do you have?

So we have about 62,500. And yeah, that's It's been great.

Great. So what can we help you with? Was it just the IRS thing or was there something else?

Well, I make good money, pretty good money. My husband and I together make about 117 But I've just been really irresponsible, like I said, at the event. And it's just trying to get my behavior on track.

Have you seen some traction?

I have. I haven't I use my credit cards. I haven't been on Klarna or PayPal paying for- Did you cut up the credit cards? Cut all of them up.

Great. Now, do you want to know what I would help if I were in your shoes? If I had a problem with impulse spending, Things like buy now, pay later, Klarna. I would do a couple of things. A, I would start with my phone because that's usually the thing that speaks to us the most. Obviously, unsubscribed all the ads. I would take Amazon off my phone. I would take those apps. Anything that's an app, I would take it off my phone that has the ability to purchase things with just so it's not talking to me all day long.

I have been unsubscribing to the emails that get sent from all the places that I've bought from before. I'm like, Okay, let's just unsubscribe from all this.

It gets addictive when you start to go, Look how many inputs are just trying to get my money from me.

It's pretty wild. Yeah. And I'd set up notifications that notify my spouse when money is spent, both ways. So you get the little text when a transaction comes out of the bank, and so does he. Just an added layer of accountability and transparency, because it's easy to go through the drive-through when you're thinking, Oh, I can just go through. I'll get these fries. So-and-so probably won't see it. I can get away with it. But if you know their phone is going to light up with the notification, 595 spent at Wendy's, then you're less likely to do it.

Oh, that's my favorite. I get all the transactions texted to me, and so I'm always texting my wife, What's this? What was this about? Or usually it's more like, What did you get at McDonald's?

Oh, yeah. It looks like you had your break today.

Did you get some for me? You have enough for the whole class? That becomes a fun discussion once you're not broke and out of debt. So we're rooting for you, North. Thank you so much.

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Okay dokey. Today's question comes from Vince in Rhode Island. He says, My wife and I are buying a used car, but instead of paying cash, we're thinking of leveraging the debt, considering we can get a low interest rate, we'd invest the 30,000 into Vanguard funds and contribute more each year to fund a family cabin down payment. We're in our 30s, have over 200,000 4,000 in 401(k)s, no other debt, have an emergency fund in place, and a steady income. Does this sound like a good plan?

No. No.

Here's my thing. You're doing so much right. I think it's just a patience issue because, like you said, there's no debt. You've got the 401(k) set up, and you've got the emergency fund squared away. Why divert? Why abort the plan and go into this lifestyle of debt for a vehicle that you can pay cash for? Pay cash for the vehicle that you want, and then from there on, yes, go ahead and invest for this cabin down payment. Why can you not do both and do both of them the right way is what I would say.

George, you got me? I'm so confused. I'm like, what? You would invest the 30K that you would have spent on the used car, but then you've got a car payment, so now your income is locked up there. Just invest what you would have paid that car payment and paying cash.

Easy.

Easy button. You can do all of it. And if 30K feels like, I don't want to sink that into a car, maybe rethink buying a $30,000 car.

Get a cheaper car. You can do both of these things. You just need to do them both the right way. And you can You need to do them both almost simultaneously. You just need to do them both the right way. Get the car, invest.

You guys are in Baby Step 4, so you're investing 15% of your income and buy the car in cash. Then any extra money, you can save up or even invest for that cabin down the road. It can all be done. Just do it in the right order. Don't go backwards. Don't go backwards, please. Thanks for the question. David is in Los Angeles up next. David, welcome to the show. David, you're with us?

Oh, yeah, I'm here.

Hey, how are you all doing today? Doing great.

So my wife and I were going to plan to get pregnant later this year, and when we do eventually have a baby, I'm going to need a new car. Right now, mine only has two seats, and I'm probably going to need something with at least four. I was looking at getting a USDV because the prices on them are pretty attractive, at least compared to a normal gas car. But the one thing that has me worried about them is the amount of depreciation that they get hit with every year. It seems like they depreciate way quicker than a gas car. And I just wanted to know, is that something that I should be factoring into my car buying decision, or should I just completely ignore the depreciation and go for whatever car fits me?

Are you paying cash?

Yes, I would pay cash.

Okay. What's this car going to cost? What exact car are you looking at? Because I think the depreciation, it really depends on the make, the model. Now, EVs, obviously, it's... Think about iPhones. How many people are in the market for an iPhone 8? Yeah, not many. Not many. So the price is going to be a lot lower because everyone wants the latest and greatest technology. Evs can have a steeper depreciation, especially when Elon's changing the price and the model every day, and you're like, Oh, man, I just paid 30 grand for it, and it's only worth 20 now. That is something to think about when it comes to resale value. But if you're going to drive the thing for a long time and you pay cash for it, you don't have to worry as much about depreciation.

Okay. Yeah, I do typically drive my cars for a while. It's just my car right now has I really appreciate it all. I got a pre-COVID pandemic pricing spree, so that's working in my favor right now. But being able to get out of it whenever I want to just seems like a really nice option to have. And I feel like I'd be a little more trapped with an EV if I did go that route.

What are you looking at?

What are you looking to spend?

I'm looking around $25, $30,000 to spend on a used one.

Okay. And can you give you a make and model you're looking at?

Sure. Yeah, I'm still looking around a little bit right now, but Right now, my front runner is probably one of the Hyundai Ionic fives. They seem to be some of the best deals out there, at least for the used ones, in my opinion.

Okay. And have you looked at the depreciation on them? Those specifically?

I have, yes. So currently, they're about half the price that they were new. And I've done some research online, and they're still forecasted to lose another half in the next five or so years.

Yeah, that tracks. Have you looked at Tesla as well to compare the depreciation?

I have. I'm not a huge fan of the Teslas, just with everything buried in the screens and stuff like that. So I was trying to go for a more traditional car.

Some analog controls and things like that.

Yeah. Yeah.

I mean, I've experienced this because I've purchased EVs now. My last two have been EVs. And looking at that appreciation really just hurts your soul. And then I have to remind myself, who cares? Do I like the vehicle? It's paid in cash, so I can never be underwater on it. And yes, I'll take a lick when I go to sell it and go, Oh my gosh, I paid so much more for that. But that's the nature of cars. They are just boxes that exist outside and go down in value. And you'll find that with any car. But EVs can, depending on the make and model, go down value a little faster because people want the latest and greatest, and especially if it hasn't kept up with technology. And so that's the key. You just need to know going in, there's pros and cons.

Okay. So, yeah, don't treat it as like, I'll save so much money on gas. Treat it more as like, this is the car that I enjoy driving and I should go with this.

I never use the math to justify it. I just go, I enjoy it. I like not having to stop by a gas station. That's just me.

Yeah, that does seem like a huge perk, in my opinion. That really seems nice to be to come down to your car every morning and have a full charge, a full tank to go wherever you need to.

I still have to go to the gas station to fill my wife's car because I'm a gentleman and a scholar, and I get brand reports.

I might be in the same boat. Yeah, she's got a gas car that I would We still need to fill up every now and then.

Yeah, that was the compromise. She was like, I don't feel good about having all EVs, just in case you want to have the ICE car. But I think you guys are on the right track, man. The fact that you're paying cash, you guys are debt free, you're investing. Our has just become a thing, and now you can buy a more enjoyable one that makes sense for your family.

Perfect. Yeah.

Thank you so much. Yeah. I wish you the best starting a family, man. That's a big step. Austin is in Salt Lake City up next. What's going on, Austin?

Hey, guys. I got, hopefully, two questions. If you got time, I'll make them quick. But if not, my main one. My wife and I are also preparing to have a baby this year, and currently maxing out our HSA. I I'm just wondering, should we use the HSA to pay for health care expenses like that? Or if we can, should we cash flow them and let that HSA continue to stay invested and build, and do the whole save the receipts, and put it on the line type of a deal?

I'll say this. That's what Dave Ramsey does. Dave Ramsey has never touched his HSA. He maxes it out every year, and he cash flows it because he can. And so if that is you, and you're in the case to do that, where you go, Hey, we can cash flow it. It's not going to bust our budget to do that. We can max it out, then yes, keeping the majority of it invested is always going to be beneficial. Like you said, a lot of people don't realize, hang on to the receipts and you can reimburse it later on, and that money will show up in your bank account. It's pretty cool how that works. Yeah, I agree. Jade may have different thoughts, but- No, that's what we did.

That's exactly what we did.

Okay, cool. That's what I was thinking, but I just wanted to take you guys' opinion on that. And then if you got time for another quick one. Sure. I just got married over the summer, so we've been married about seven months now, and we've combined our finances, combined our lives and everything. I already had a house and our vehicles before we went into the marriage. I'm just wondering, is there a way or do I need to get her on the title of the house or on the mortgage or on the title for the cars? Or does that really matter?

It's not really necessary, technically. It's going to roll over to her anyway as your spouse. If something were to happen to you. If it were something that she was like, I just feel better about this, then you could.

Yeah, nothing's on fire here. So if it makes you guys feel more united, awesome. But there's no like, this is really going to benefit us in this explicit way. It's not really the case. You guys have legal protections as a married couple. And so you're doing all the right things, man. I'm proud of you guys. Wishing you the best with this baby. Very exciting. Thank you. Two calls in a row. Look at this. I know it. That's the best thing you can do, I think. It's outside of the baby steps. But we tell them, Hey, there's no baby step to have a baby. If you want to start a family, go for it. Go get it. And you'll work even harder to sacrifice to take care of that little one, and it's a good time.

When you're tired of feeling stuck with money, there's just one solution. To get different results, you have to do something different. No one accidentally wins with money. You have to have a game plan, and that begins with our get started assessment. Go to ramsey solutions. Com/start, answer some questions, and we'll show you what steps to take next. Don't stay stuck. Take control of your money starting today. Go with ramsey solutions. Com/start.

If you're wondering where all your money went in 2025, that's normal.

And normal is broke. But the good news is this year can be different. You can get a head start by downloading EveryDollar. Everydollar builds you a personalized plan and coaches you to find extra money and then put it to work to beat debt and build wealth. Just answer a few questions and you'll find thousands on average in just the first 15 minutes. And every dollar still has the same great budgeting features to help you tell your money where to go. So don't go another year feeling broke and stressed. Start every dollar for free in the App Store or Google Play. Marie joins us up next in Charleston. What's going on, Marie?

Good afternoon, guys. So my biggest question, I'm a single mom with three young kids. I was widowed in 2023. I have a limited budget because we are currently living just on Social Security survivor benefits. I'm trying to go to school, get a certificate so I can add to that once my four-year-old is in school. I'm trying to, right now, with where I am, knowing I probably won't be out of school until next year, trying to figure out what my wisest steps are going forward. I've never been good with money, and I just want to do better for them and for our situation.

Well, that's a great why. That is what's going to fuel this journey is those three little ones that you're taking care of. What's their ages?

My youngest three are eight, six, and four.

Okay. And what's the certificate that you're pursuing?

Health Information Technology.

And what's on the other What side of that? What job are you aiming for?

I'm looking for something that keeps me the ability to have flexibility in remote. So that's one of the reasons I chose that path.

Okay. And are you cash flowing this certificate? Are you able to pay for it all?

I'm actually able to get it through financial aid, so it's Pell Grants. I'm able to get through all of it with Pell Grants.

Great. When will you be finished?

I think it's not this coming December, but then the December following.

Okay. So you've got two full- But I have a potential to go into an internship or to where I can do on the job clinical type training at the hospital and make money through a portion of that.

Okay. Okay. So end of next year. And then in the meantime, we're going to be living off of these survivor benefits, which is how much per month?

So right now, I take in about 52,000 a year. 52,700 a year. Okay.

Is that enough to cover all of your bills?

It is. And I do have quite a bit of credit card debt that I was left with because of my late husband's- Was your name on them? He opened a bunch of credit cards in my name. Correct.

Okay. How much?

Yeah. Right now, without my car, I have 27,000 left in credit card debt.

And then what about with the car?

With the car, total of... It's just under 70,000. I had to get a new car this last year when mine- Your car is 43,000? It's a 2022 Subaru.

What's left on the loan?

It's 33. 33 and some change.

Goodness. That's a huge portion of your yearly income.

It is. And the thing that I do have going forward is I am in a relationship with someone that it is leading to a marriage. And he's encouraged me to not try to... Because if I tried to sell that, I'd be really upside down at this point. I wasn't wise when I bought it, and I'm clear about that. But my financial situation will drastically change once we're married. I'm with the Dave Ramsey plan that you don't combine those things until you're there.

Are you engaged?

So I'm trying not Not yet, but it's hopefully this spring.

Okay.

It is in our conversations. It's a very active topic. There's an aspect of this that being that I haven't always been financially responsible, there's a percentage of me wanting to do this and struggle. I need to feel the struggle.

Yeah, I don't want you- Because I know if I don't- I don't think you're in a position just yet, and I hope you get there, but I don't think you're in a position just yet to write on this. And I don't think that you are. I just want to caution you against thinking about, Well, in the future, I'll have this financial help because this is leading to marriage. Correct. Because you're not even at engagement yet. So I just want you to be really focused on what you are doing. How upside How down are you on the car?

I'm not quite sure. I just got it in June of last year. I know that as of right now, once my... Because I'm living rent-free, I'm able to live in a home that my mom owns, and I just pay utilities. So that is a huge help. I check on the car immediately.

I'd go on Kelly Blue Book, see what the value is, and- The private party value, not Tradeinn, because that will make it seem like, Oh, my gosh, I'm 10 grand under.

I would never sell it. But if you can save up the difference with the margin you have because you're living rent-free. Maybe you're $5,000 underwater. Okay, well, let's come up with $10,000 in savings. Five will cover the difference on the loan, and five will get you something to get from A to B. Now, maybe you get a nicer car, but it doesn't need to be a $33,000 car. It could be a $20,000 car. Those are still safe and reliable, even for the kids. It's not a death trap. Don't let anyone scare you into thinking that or even yourself. That's usually how we justify it. Well, I had to get a new car. The kids, you got to have something reliable. We had to get a $40,000 car.

Less debt is the goal.

What's the payment on that?

Right. The payment is $655.

Yeah, that would rock your world right now.

It would change your life.

It definitely could, for sure. I Two, the man that I see, him and his youngest daughter come over and eat all the time. So he does throw me $500 a month for groceries because he does care. So that does help some. So right now, without what he does help me with, my disposable income after paying my debt, which is 1,700 bucks a month, and my just fixed expenses, like my bills, is 822. Leftover disposable, I have 1,800 bucks left over.

Without his help. And that goes towards your smallest debt?

The 1,800? That's what I'm asking, because I know I have to have my... I haven't even started my emergency fund yet, and I know that that's like step number one.

So with the 1,800, let's put it practically to... With the 1,800, I take 1,000 aside this month when you were left with that margin. 1,000 of it, put it aside. Savings account done and done. Baby step one, knocked out. Then you have $800 to look over at the credit cards and go, What's the smallest credit card? And so what's the smallest balance you have on one of those credit cards?

I have something as low as 123 up to 5,300.

Great. So we're going to knock out- I can knock Go ahead. Quite a few of those. Yeah, knock them out. I could knock quite a few of those. Knock them out all the way up to 800 bucks. And then if there's any other margin left out or that money that comes through at the end of the month, just go ahead and throw it at the next credit card. And you're really going to do that, Marie, until these credit cards are knocked out. I do like the idea so, so much of you getting in a cheaper car because knocking that out is going to make this journey feel so much more feasible for you. Plus, it's going to free up money. Like I said, even if you go from a a $33,000 car to a $23,000 car, that's still going to free up money for you. So please just be willing and open to do anything to lower the debt, if that makes sense.

Our parameter around cars, just so you know, is that everything with wheels and motors in your life shouldn't add up to more than half of your annual income. And so we're well over that. And I understand that. And so even if you could- That's before I really started listening and being active. Oh, sure. I'm just saying in the sense of keeping the car, it's still too much of your world depreciating and value you every day. I know it feels like, Well, I'm already underwater. Well, let's cut it off right here and not be more underwater. Because if you did that, right now, you said you have how much total consumer debt?

Total consumer debt is 69,000.

Okay. What's the extra nine? Because you said 27,000 on credit cards, 33 on the car. That's 60. Is there more?

I don't know. That's student loans.

Student loans. Okay. Because right now, I'm doing the math for you. 1,800 bucks and you have 69,000. It's going to take you 38 months. You're talking over three years at this rate. That's a long time.

Yeah. I mean, that's the thing for me is I want to... I have zero retirement. I was a stay at home mom for 10 years. Right. So I have zero retirement. And unfortunately, he passed, and because of the way he passed, he had life insurance, but we were two months shy of getting the payout for that. So I've been trying to float up for two years now.

Well, you've done a great job. And I finally am to a point. You've done a great job. Keep going. The car is a huge part of this because I don't want this to take three years.

So a question on the car.

What if I don't have cash to buy a new one? You'll just go over to the credit in and you'll get a loan or you'll go to the bank and get a loan for the difference. At this point, just remember, going down is worth it. So get you a loan for the difference however you need to get that done.

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Our scripture of the Day, Isaiah 41: 10. So do not fear, for I am with you. Do not be dismayed, for I am your God. I will strengthen you and help you. I will uphold you with my righteous hand. Simon Sinek said, When in doubt, be yourself. There you go. That's good advice if you've got a good personality, Jade. Very simple. Sometimes I'm told, Hey, don't do that.

Don't be yourself.

Don't be that vulnerable.

Be a different version of yourself. Yeah.

Austin is up next in DC. Austin, welcome to the show.

Jade and George, thank you for taking my call.

Sure. How can we help?

So between my wife and I, we have about 142K in consumer debt, and a huge fork in the road right now. I've got a toddler and a kid on the way due to this summer. So very I carry a situation, and just trying to decide if I should do a single filing for a Chapter VII or go another route. I really don't want to do Chapter 7, but if I have to, if it makes the most sense, then I will. But thought I would call you guys for advice first.

Well, how much money do you guys earn?

Well, right now, we only make about 78 total, which is well below the median. Okay. The median what? I got to lay off median income, median household income for my area.

Well, who cares about that?

I'm not even care.

Is that both of you working? That's not the reason you guys are in this situation, Austin. Yeah, I agree. The median is like, what? 79, 80? Okay, you're two grand short of the median. The problem is we're $142,000 in consumer debt. So break this down for me so we can see if there's a way out of this faster.

Yeah. So myself, I have 72 to my name and then another... Well, it's actually 181,000 if you include student loans. Tell us the debts and what they're each worth.

So student loans, X amount of dollars, cars, X amount of dollars.

Yeah. So student loans is 39, car is 17, 284, and then everything else is personal loans, personally guaranteed loans, and personally the guaranteed credit cards.

Okay, and how much is that amount?

We'll do some math and math here. So minus the car. So if you subtract 17 from 142, that's all of the personally guaranteed loans and credit cards. Okay.

All right. So you're talking about... I mean, 125 grand between them? Mm-hmm. Okay.

What was it for? A business? Did you have a failed business? What is all of these personally guaranteed loans and credit cards?

Yeah. So the dream was basically to retire the wife from the military. And I went about it completely the wrong way, obviously. And I just dug myself into a hole doing business ventures, Airbnb, and then we tried an Amazon store. And then after the layoff last month, we ended up having to live on the revenue from the Amazon store. So I'm not able to pay off any of the consumer debt that I used to get the Amazon store. So that's where we're at now.

And- Do you still have this property that you were doing Airbnb on?

I made a mistake of doing rental arbitrage last year.

Dude, how much TikTok have you been watching? Well, I'm actually not on TikTok. This is like, buy the book, every TikTok business hack scam out there.

Yeah, they sold me a dream, and I own up to that. And it seemed like a good idea at the time when my father-in-law died, and I was just really trying to find a way to make as much money as possible to retire my wife. So what is she doing now? I was a normal father, but I went about it completely the in a way. Yeah.

Listen, at this point, you've got to just say that's in the past. I think you realized that it was erroneous, and I think you're ready to go the right direction. So the 78,000 of income, is that both of you combined, or is it just you working since she's pregnant?

Both of us combined right now since she's full-time, active duty, and I'm still in the process of getting work I'm trying to get a certification for cybersecurity down the road.

What are you earning? What portion of that is your income today, of the 78,000? What portion of that is yours today?

Of the 78,000, what portion of that is mine?

Yeah. What do you bring in?

I'm doing some side gigs in the meantime before school starts, or if I get accepted. So monthly, monthly, every month, how much money do you bring in, every month? How much money do I bring in? Probably If I'm being realistic, probably between 2000 and 2000 right now doing side gigs with media and stuff like that.

Okay, so that's our biggest issue is I know that you're doing a certification for cybersecurity. How much of your day does that take up?

So I'm not doing it yet. The program starts in... Would start in March. If I get accepted, I'll find out if I get accepted.

Okay. So I'm cutting you off a lot because I want to get to solutions, and I don't want to around on this. All right. You need to get a job instantly. Any job, any job. Not side gigs. You can fill in space with side gigs. But I want you to apply for anything that you think you could possibly get. I want you to make a list tonight. Your job tonight is to make a list of anybody you know that might know somebody that's hiring, that has an uncle that's hiring somebody, that whose father-in-law is hiring somebody. And I want you to put the word out. I need to work immediately. I need connections. If you know anybody, I mean, you're going to be like a dog on a bone trying to get a job because you can't make a thousand. You can't make 1,500 bucks a month. Now, your wife seems like she's carrying the bulk of that. But like you said, there's a baby coming in the summertime. So her situation of working is getting more and more precarious as the months go on. So this is your number one deal. Yeah.

Well, the issue is we got a toddler at home, and I need to get a job that I'll make enough to qualify for a county assistance. So that's the bottom in right now. I wouldn't love to get a job.

So you're saying you need to limit your income in order to get assistance?

No. What you need to do is find a friend because you're in a community. You need to find a friend that's like, Hey, I need help watching with the baby sometimes because I need to go over here. If there's family in town, this is you reaching out to everybody you know, because what I don't want is for you to file bankruptcy. That's what I'm getting at. Once you file bankruptcy, that is you losing all control. That is somebody else stepping into the situation and saying, You're going to sell this, you're going to do this, you're going to pay this amount, and you're going to do this amount.

And you can't bankrupt on the student loans. They're going to take the car. And so a lot of this is not going to solve the major problems.

And you'll be able to do those things. We can look at this and say, Why don't we just look at it and go, Okay, here's what we're going to do. We're going to pay this, we're going to sell this. We're going to do... You can look at it and do that and not decimate your- Your financial life in seven years. And you personally, right?

Are you guys renting? Yeah. What's that? Are you renting?

Yeah, we're renting right now.

Okay. How much is your rent every month?

2,500.

And that's steep for the income. Is your wife going to continue to have income when she has the baby?

Yeah, maternity leave, so I'm guaranteed income.

Okay, good, good, good, good, After taxes, 6,300. Oh, great. Great. So once we get you working...

I mean, right now, when you guys pay your bills at the end of the month, are you in the green or are you in the red? You should be in the green. It's really close. If we pay all the minimums, I think if we're not breaking even, we're probably at a couple hundred dollars deficit.

Okay. So we're going to give you every dollar because I They want you to know exactly how much money you have and exactly how much money you're spending. That's going to give you a lot of peace just seeing the numbers there. And then you can say to yourself, Okay, if we're in the green right now, at least we're safe For a moment, we're not operating in the red. Everybody else can wait, right? It can wait until you get a job. It can wait until you because you're giving them the minimum payments. But once you get that job, it's attack mode on this debt. Smallest to largest debt snowball method.

You got to fight, man. Don't give up now. That puts the sour of The Ramsey Show in the books. Remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.