Transcript of Own Your Choices, Starting Now New

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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 Jade Warshaw. Next to me, Dr. John Delony. We are taking calls from you all hour long. We're headed out to Seattle, Washington, where we have Shelby on the line. Hey Shelby, what's going on? How can we help today?

Hi, um, yes, I'm just calling and wondering if the way my fiancé is splitting the finances with us, with me, um, is the right way.

Okay, I can already tell this is going to be a fun call, Shelby.

Yeah, tell us about, tell us about the, the right way that he has it split now.

Have you listened to our show before?

Yes, I have, and I actually listen to you guys always, and John, like, James, I, I follow you guys Religiously. So yes.

Okay. So whatever answer we give you, same team, right?

Yes. Okay.

All right, good.

All right.

Let it rip.

Uh, so long story short, I'm— my fiancé are a blended family. Um, we do own a home together. Um, I have 3 kids, he has 1.

I—

my ex who passed away, uh, years ago left me in a financial situation where I did have to file bankruptcy before I got to my fiancé. I then built myself back up, got myself, you know, a very six-figure paying job, you know, moved throughout. And now we have one joint checking, but the mortgage is the only thing that comes out of that. And then everything else, Venmo.

Interesting. Okay, your phone's breaking up a bit. Make sure you're somewhere where your phone's not breaking up.

You said you Venmo each other?

Yes.

All, all hot relationships stay hot through Venmo.

So here's, there's some things going on here that might be outside of your belief system, but I'm just gonna say it because I try to give the advice that I would do in my own life and that I think is something that would really help you. Mm-hmm. So you've got the one account, all the money goes into it because both of you are paying for the mortgage. And then who pays for, Who pays for the other stuff?

Well, so the one— only the mortgage money goes into that one account, right?

But that comes a little bit from both of you, right?

Yes, it does.

Okay. And then is it half and half or—

yep, it's half and half.

Okay. And then, and then tell me how the rest of the bills and, and kids stuff and how that's divvied up.

So things like internet, power, garbage are half and half. Um, groceries, we've We go back and forth on, well, you have 2 more kids than I do, so maybe you should pay for a little bit more. And I'm like, well, you knew how many kids I had coming.

How do you think it should be? How do you think it should be?

I think we should, I think we should each have our own accounts for spending and fun and leisure, and then we should combine the rest of our finances and majority of our finances and pay all the bills from one account. Um, he is the father figure in my children's life because their father is no longer around.

How long has he been around? How long have you guys been in this field, in this relationship together?

3 years.

Okay, and when's the wedding?

That's a good question.

Don't—

he wants to wait until we've been engaged for 2 years before we get married.

Why?

Oh wow, I don't know.

Is it— are you— it— is this like level 2 in his test?

I, I feel like it. I mean, and I've watched your show many times before, and I'm just like, you proposed, why? And he's like, well, I just— I want to make sure that you're the one. Yeah, and that's what I said.

I was like, you don't change. Here's the 100% I guarantee both of you will change a million. My wife's on version like 41 of the idiot 24-year-old she married. Thank God, right? I'm glad I changed.

The ring doesn't mean, and now I'm considering you for marriage. That's not what the ring means. The ring is, we're going to get married. I have decided you are the one I'm going to marry.

Yeah.

The engagement is just simply a planning period to have the party. That's really all it is. All right.

So I, I agree.

Let, let me ask you this. How much of, 'cause I wanna honor this, how much of your concern about, um, I need to have my own on the side here, how much of that stems from the absolute mess you were left when your first husband passed away?

Um, in the beginning I was terrified to join any type of finances with him because my late husband did significantly put me in a bind where I like could barely feed my kids. But now that I've gotten to know this man and I see him and he runs his own business, um, you know, I see the dedication and work that he puts in every day and that I am like, okay, yes, I am now comfortable with this. However, I would still like my own account for like getting my hair done or my nails, you know, leisurely.

I'll still tell you, I, I think the, the, the, the nerd work, the research data on this confirms it. Um, what, what we've been teaching for more than 3 decades, all of it goes into the same boat.

Mm-hmm.

And together you'll have the conversation about hair and nails and haircuts and shampoo. Mm-hmm. Like all of that stuff. I have to tell you, like, just as a husband of, uh, a wife of almost a quarter century, you're worth more than you're getting right now. Yeah, you're worth more than, than being in a, in a trial period. Number 2, you're worth more than— no, no, no marriage I've ever heard of— I'm sure they exist, and I, I, I get a, I get a sample size of the ones who are in crisis, right? I've never heard of a successful marriage where they're Venmoing and bickering over who— you like it colder, so you have to pay more of the electric bill. You know who does that? 19-year-old roommates who share an apartment.

Yes.

Not people who are ride or die till death do us part, like making a life together that they both want to be awesome.

And I think that's part of the— I think exactly what John said is part of the problem. There is a very shallow commitment here. And because of that, I think you're experiencing that. It's like, I'm only going to go so far in. And you have your reservations as well that you're only going to go so far in. And I actually think it's a wonderful thing that you're not combining money right now. Because you're not married in this thing. Even if you were the most solid engaged couple ever, I would still say, hey, right now you don't need to have your money combined because the deal is not done. But I don't hear like a super solid engaged couple. And so the reasoning still applies. Now is not the stage to combine money. I understand that you guys are all living in the same household and probably while you're in that scenario. Yeah. Having a fund where you both kick in your parts for the rent or for the mortgage, that probably makes sense for how you're choosing to live at this moment. But I wouldn't, I wouldn't combine money until you are married. And I would push for marriage.

Yeah.

Because, well, let me, let me caveat that. I would not push for marriage if you don't think this is the guy. But if you were like, this is my guy, I believe in him, I trust him.

Yeah.

I trust that we're gonna grow together and change together and we're gonna be able to get on the same page. Yes. Get married. But if you're having reservations, and I want to say this because you said I got burned before, the calls that Jon and I get where people have been burned before, there were red flags. There were red flags and there were little behaviors that was like, "Uh, that doesn't feel right." And there was just this more and more of a separation that occurred. And so, I wanna tell you, if you can create a relationship that from the beginning, there is transparency, everybody's involved, everybody— we may not think about things exactly the same or have exactly the same values, but we're both very, very interested. It's our priority to show up for one each other. For one another. So if he values something, I have to show up and show, hey, I care about it too, just because you care about it, and vice versa. And if you don't sense that or feel that or see proof of life in that area, you need to consider that deeply. Because, John, these are the things— red flags are red for a reason.

Yeah.

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Alrighty, back to the phone lines where we have Jonathan who's in Fort Campbell, Kentucky. Hey, Jonathan, how are you doing today?

Hey, Jade. Hey, Jonathan. Thanks for the call. I appreciate it.

You bet. How can we help?

Yeah, so, uh, my question today is just, um, how do my wife and I buy a house with the mortgage payment being around 25% of your take-home pay in the situation that we're in? I give you like a little, little quick details, um, too, here, if that's cool with you.

Yeah, the more the merrier.

Um, so awesome, awesome. Um, so we've been renting for 7 years. We're debt-free. Uh, we got debt-free last, last May actually. Um, and then, um, we do have our 3 to 6 months of expenses. Uh, so we follow y'all's plan and the dilemma is, um, I get paid $46,280 a year. Um, last year I've earned like $55,000 with overtime. My wife makes $8,000 a year just because she's a stay-at-home mom and she has like a side gig with the church because she does like the lead worship and stuff. So combine like $55,000, just base salary. I could get more with overtime, but the dilemma is, I mean, like a job where I like, it's kind of a dream job. So it's kind of like I could leave and go find something making more, but you like it. I want to, I like it. And so, and my wife, I don't want her to go get a job because again, we like it. And so we don't know what to do, but we want to own a home and it's like we're stuck.

So brother, they, you are running right up against one of our culture's greatest lies. That we could have it all, all at the same time, just how we wanted it. And every one of us runs up against that at some point.

That's true. That's very true.

I wanna have these great values. I wanna follow my faith convictions. I wanna follow my educational convictions. I wanna follow my, my follow quote unquote, my passion, working at a place that I believe in, that I like, but only pays me this much money. And it runs up against this awful thing called math.

Yes, exactly. Right. That's where we are. Yeah.

And so y'all, y'all gonna have to ask yourselves, what do we value more? Home ownership or me working at a place where I feel valued? I don't, they're paying me as good as they can. I trust that's, that's happening. I love my work environment.

Yeah.

Or a value of my wife stays at home and takes care of our kids cuz that's a value for us. And if the, if those two values are immovable, then that means we're gonna be renters because those two values are that important to us. Or if we want, if we value home ownership above all things, then I'm gonna work a job that may not be my favorite work environment, or I may not love, but it's gonna provide this kind of life for us. Or my wife is going to, in one year when the kids are old enough to go to school, we're going, she's gonna go full work full-time. And you get what I'm saying?

Yeah. No, I'm, I'm definitely following you.

And I hate it for you, man. All of us face it. Um, I hate it for you.

Yeah, I, I, yeah, what you said, it's a, um, it's something to think about. And I like what John said, just because you make a choice now, it doesn't mean it has to stay that way forever. Because to his point, when you say yes to one thing, you, you're, you're automatically, it's an opportunity cost, you're automatically saying no to something else, even if you hadn't stopped in the moment to consider what that is that you've said no to by saying yes to to stay-at-home mom and yes to the career. But yeah, there's a future that maybe that doesn't work for you guys anymore. And then you look up and you go, you know what, I am ready to move on into a different career or see how I can expand. And she might think, you know what, I've been staying at home for X amount of years, I'm ready to get out there. So there's no permanence in any of these decisions. And home ownership is always there waiting for you. It's not, if you say to me, Jade, I really wanna buy a house, I'm not gonna say to you, Great. That's impossible. I'm going to say, okay, with the choices that you've determined, your timeline is just a lot further out than other people's, and you're going to have to be very intentional about getting there and just know, hey, what might have taken somebody else 3 or 4 years could take you a decade.

And if you're fine with— I don't know, how old are you? Are in your 20s?

So I'm 30. My wife is 27.

Okay. So if you think, hey, we're not buying our first house till we're in our 40s, That's your choice to make and that's your road if you wanna walk it. I, you know, folks call in here all the time and they love their careers and there's not a strong upside financially. And I just go, okay, you're gonna be in that Camry life. You're gonna be that used Camry life. And that's okay if that's what you love and you get most of your joy out of the work that you do.

Here, here's the thing I wanna make sure you hold though. Okay.

Yeah.

I don't want you to feel like this world that you and your wife live in is happening to you. I want y'all to, and it might be you call and get a babysitter and y'all go out for, um, half a half morning, right? I want y'all to take full ownership of the choices you're making. 'Cause if you, if you walk through life feeling like this is happening to us, then chances are your wife is gonna end up in the guilt factory. She can't do anything right. And you're gonna feel like, uh, you're gonna live in the failure factory. Yeah. I don't make enough.

We both live in the failure.

Yeah, that's right. I, I, I'm not, I'm not providing enough for fill in the blank. And the problem is that finish line of the guilt factory and the failure factory, it just, it just moves on you. It just keeps moving and moving until you opt out of both of those factories and you just say, hey, we're, we, we're choosing this. That's great. We're choosing stay at home. We're choosing a job where I can clock out and come be present at home. And that means we're choosing this financial situation and that means we're choosing to rent for a while. But the more you feel like a victim to your circumstance, the more you both are gonna end up in pathological responses. That's a nerd way of saying you're gonna be reacting to your life and nobody makes loving intimate connection while they're reacting.

That makes sense. That makes sense. So we choose it. If we choose it, find a way to enjoy it and, and, and be proud about it.

And, and if you make, if you make coming together once every 6 months, once a year, hey, what life do we wanna choose this time? We've never been married and had a 3-year-old and you're pregnant again. We've never been married and had a 4-year-old. We've never been married and had a kindergarten. Like your marriage changes every year. And so, To Jade's point, this particular year, what do we want to choose? Well, actually, I want to choose to go back to work. All right, well, let's navigate that. And that's gonna come with guilt and what— and let's choose to buy a house. Okay, then what must be true for us to do that? But it's you owning this thing, not you responding to this thing.

That's so good. And that's a great question. And I actually think the way that you explain that, Jon, is really the crux mindset that you have to have around everything that we teach, because all of it is a, um, all of it is I'm I'm giving up something here to get something I want over here.

00:17:20

Yes.

00:17:20

Right? And so, even something as simple as a budget, when we say, "Hey, make a budget because when you make a budget, you have control over it." You're choosing and saying, "This is how I'm gonna spend my money." It's not, "Oh, somebody's making me spend my money on groceries and my car note." No, I chose this. I chose, I said, "I'm gonna put this much of a line item towards entertainment. I'm gonna put this much of a line," right? And already you feel way better about the things that maybe you're gonna say no to, or maybe that you're not gonna be able to do in this season because you made the choice of making the budget. Same thing with getting out of debt. You chose, okay, this is the season where I grind. Nope, the IRS didn't do it to me. Student loans didn't do it to me. I chose that I would like to be free. I would like to get out of debt. Therefore, now I can feel really good about and just kind of almost set my expectations to know, hey, this is the season where it feels like a grind.

Because I'm choosing it.

I chose it.

I chose it. I chose to walk into the gym this morning or not. I chose to stay up. I'll tell you, I chose to stay up way, way too late last night. And I then made a choice to cost myself this morning.

That's right.

Right? And so, even going all the way back to something like student loans, the number of times I blamed this amorphous "they." We've all done it. "They told me I had to go to college." Who? "Well, they did." And it's a combo of parents and culture and teachers, right? And they didn't tell me how bad this was gonna be after college. And they, at some point I had to say, you're right. But I signed my name on that paper.

I chose to believe it.

I gotta pay that back.

Yeah. Yes.

Right.

I signed the paper. I'm gonna pay that back. And, and that means I'm gonna choose to have a pretty crummy car for a while.

Right.

I'm gonna choose to move into a dorm for a while. I'm gonna choose to sleep on air mattress for life.

Yes.

I'm gonna make these choices. And man, that's the shift out of, Here's the thing, I spent my whole career sitting with people, assault victims, people who have loved ones pass away, people who made choices to, you know, sell or use drugs. And we always end on one question, what are you gonna do now? And that's a choice.

Yeah.

Like, this happened, it did, and it's for real. What are you gonna do now? And I think that's the most empowering question somebody can ask somebody else.

I think so too, because then, you know, hey, no matter where things end up, I, I didn't— somebody didn't put me there. I put— there's more peace in knowing.

I got in the driver's seat of my life.

Yes. That's one of the reasons I almost will never, ever, ever— you'll never hear me suggest bankruptcy on this show because you lose control. The government steps in and now they are telling you to sell this and do that. Control, guys. It is a wonderful feeling, even if things aren't going specifically your way, to be able to say, I chose this. It's everything.

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Kyle is in Boston, Massachusetts. Hey Kyle, how can we help today?

Hey, good, how are you? Thanks for, uh, thanks for taking my call today. Yeah, I had a question around student loans, so I'll give a quick background before I ask my question. But I went to a private college, got a small scholarship, but still took on some debt, sitting at around $25,000 in student loans debt. That's the only debt I have. I'm a very diligent spender, very good with my money. If I invest in the market, standard return puts it above my interest rate. I have a hard time struggling with, should I pay off my student loan debt or should I take that minimum pay or the money and invest it into the market instead?

Dude, I love talking to smart guys. Like, for real, like, thoughtful. You thought this through and that's awesome.

Yes, definitely.

Yeah, I mean, there's, there's a mathematical side of that that you can play out. I'm more on the emotional side of it. You know, over here we believe that the borrower is slave to the lender. And you do feel that that's a, that's a soul tax that you pay. It's a sleep tax that you pay. It's a relational tax that you pay. And it's clearly bothering you because you're also calling into a show about the student loan debt. You're not thinking, I'm just going to go over here, invest and invest. You're thinking about it in relation to the student loan debt. So that student loan debt is weighing on you and weighing on your body in some way. I would challenge you that there's a world where you get to do both. You just need to do one first and the other one second. And I don't think in the long run you're gonna go back and go, "Man, if only I had invested that money instead of paying off my student loan." I think you're gonna go, "Let me just clear out this student loan." It's a private student loan. It's a private loan, right?

Yes. Uh, no, no, it's a federal loan. It's a federal loan.

Oh, I thought you said private. Okay. So it's federal loan. Um, how quickly could you do it? Cause something tells me that you make a fine income.

So honestly, the reason I'm calling today is I hit the breaking point where my brokerage account meets the debt. I could do it today.

I bet.

Done.

I bet.

Right now. Right now.

Hey, hey.

Yeah. Here's a, here's a bet I'll make you. Okay, cancel the debt today. Live debt-free for 2 pay periods, 2 months. If you hate not owing anybody any money, go down to the local credit union, take a $25,000 loan and put it back in the market.

Money-back guarantee.

Yeah, yeah.

I mean, just call, call our bluff. 2 months.

Yeah. And, and John, that's part of the reason I'm calling, right? I just don't think I'd do that. Like, I, I—

again, of course you would.

I make fine money. It would— I, I could probably get that back in another year, maybe two. I mean, I've only been out of school for a couple years now, so— but you see the point he's making?

It's not a dilemma.

There's no dilemma. You have never been 100% in the driver's seat of your own life. You're at your parents' house financially now. You went to a college where they told you what to do and when to do it. You got a job and they're telling you what to do every and you got a bank telling you, I don't care if you're sick, I don't care if COVID's here, you owe me that money. You've never sat in the car of your life completely autonomously with agency, as the nerds say. And I'm telling you, on the other side of where you are, bro, it's pretty sweet.

That's such a good point. Anything that's in your life, you're saying yes to. Right? So, you should look at the things in your life intentionally and say, "Do I wanna say yes to that? Do I wanna say yes to $25,000 of debt now that I know kind of what it is and what it costs me?" And John made such a great point. Obviously, the answer is no, you don't wanna say yes to that. Because if we said, "Hey, why don't you go and take out $25,000 of debt?" And you don't have any, you say, "No, I don't want to do that." That's dumb, right?

That's stupid.

You know, you ended up with this debt, probably like all of us did. You weren't thinking straight. You know, you didn't understand that that's what Choosing, right? You got it. But now that you have the choice, exercise that and say, I don't, you know, I don't really want that in my life. And I love what John said. If you pay it off, you decide, ah, you know what, I actually miss it.

I miss it.

I miss it. I need it back.

I love having to look every third night because you're a guy who looks. I look at my balance to see what the interest is and how much it's grown.

Like, just to make sure it's still there.

I just miss it. Yeah, dude.

How old are you then? So I'm 23 years old.

Homie, bro, wait a minute now.

You could be free before you're 25. Yeah, 25, freedom, homie.

He could be free today. He said he has the money today.

You're 24.

Yeah, what's the payment on his student loans?

What's the payment on them?

So my minimum payment is $207, and that would rope me in for, I think, another 7 or 8 years maybe at this point.

Um, have you, have you done the math? Have you done the math on just if you said, you know what, today I'm going to, I'm going to bite the bullet. I'm going to take this $25,000. I'm going to go ahead and pay it off. And then starting, you know, next month, because I have, you have more cash laying around. I just know it. Starting next month, I'm going to invest 15% plus the $207,000. And I'm going to do that from age 24 to age 64. Have you just done that math?

So, and I have, and I've done the math on what if I was, so in my mind, I have X amount that I'm putting towards the market and student loans combined. Right. So if if I take that minimum payment out and take that number that I have in mind and just put it towards the market, there is a little bit of a higher number in keeping the student loan around because that interest rate is below standard return on the market.

I know, but you're—

and that's the question.

My point is, let me tell you my point. My point is if you pay this off today, yes, you're breaking down your brokerage by $25,000, but you're also becoming $25,000 freer. You become a completely free individual. Individual. And then, if you do what I said, you're— the point is you're gonna have a bazillion dollars. Maybe if you kept the student loan, you'd have a bazillion and one. But do you see what I'm saying? There's going to be something that you pay. It's— everything is an exchange. We've been into this heavily today. Everything is an exchange. It's like, well, what do you wanna exchange for your freedom? It's a short sacrifice. There's always a sacrifice to win. And winning isn't just in dollars and cents.

It's in peace.

It's in peace. It's in deciding who you want to be. Jon and I are people where like, hey, we don't borrow money. We just don't like having that sense of attachment.

I don't want another grown man telling me what I have to do. I have enough of that already. They tell me what, what, when to be at work. They tell me how fast I can drive. I don't like it. So I don't want to give anybody else an opportunity to tell me what to do with my life.

And it just sets the— it's a, it's a, it's a test. For how we treat other things in our life.

And hey, uh, since you're a guy who runs data, can I challenge you with yet another calculation?

Sure.

Are you dating anybody?

I am.

Seriously?

Yes.

Okay, um, I just finished a 2-year project studying marriage.

Okay, okay.

I would recommend— and this is going to sound crazy to you in the short term— Maybe don't even put that $200 into the market right away, but go take this date of yours and y'all go have fun. Go laugh, go have joy. Yeah.

Right.

You, you're debt-free at 23. You make a great salary. You're on your path to be a multi, multi, multi-millionaire. And the ROI on a married couple who's locked in with their money is the highest ROI. Two people who get to combine time, energy, and financial resources over a long period of time, their net worth outpaces anybody, right? So if you wanna do the ultimate ROI, get married and do marriage really, really well.

Yeah. Yeah. And that's the plan. I mean, I guess just start it sooner, bro.

I, I, dude, I, I'm smiling because I'm, I like talking to young men like you. Because you're the guys that I want leading the next generation of, of human beings, that my kids are going to walk on the sidewalks that you, that you're, that you're pouring.

Yeah, I, and I appreciate that. And the reason for my call is, is because of that, right? Like, I, I have that question of what do I want? Do I want peace? Do I want logic? And it goes back to also the, the point that I think Jay was making is It's Bitcoin plus one or peace of mind early and focus on life earlier on. Right?

That's right. That's right.

If you unshackle yourself from people telling you what to do at 23, how fast you can run will astonish you. You'll get so far, so much further ahead of your peers, your neighbors, the people around you. It's, it's, you're in a pretty amazing spot. Choose freedom today, brother. Debt-free today.

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Here's the deal, buying or Selling a home is actually a very, very big deal. And with all the clickbait headlines and conflicting data out there, it's very hard to know what's really happening in the housing market. But we're here to help make the latest trends easy to understand. For instance, last month, the average 15-year fixed rate mortgage— that rate, it ticked up to about 5.56%. But at least it's still below 6%. And if you're financially ready, a small rate increase really shouldn't hold you back, especially since waiting could mean facing higher home prices as the busy season continues to ramp up. Also, Median home prices went up to $415,000 last month, which is typical for the spring market. With more homes available and more buyers entering the market, it's still a great time to buy or sell. Now, to learn more about the housing market trends and to 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. We got Richard, who's in Austin, Texas. Hey, Richard, how can we help today?

Yo, what's up, you guys? It's great to be on your show.

Yeah, what's up?

So here's what's going on. I moved to Austin from Florida about 4 years ago, and I think I have the golden handcuffs of the 3% interest rate. So I kept my home in Florida and it's been a rental property since, and, um, I just had it appraised at $350,000 and I owe $190,000 on it. Now I've done a ton of work and renovations to this home because it's 100 years old So right now I don't have a high amount of cash set aside. And so it's kind of a lifestyle thing as we're right now in Austin, I'm living in a 1-bedroom apartment, but the house does have a 3% interest rate. The mortgage is just under $1,500 a month and it's rented for $2,200 a month. And so I'm curious if I should hold onto that house because the 3% interest rate isn't coming back, or if I should sell it and look at maybe getting a place out here where I'm looking to stay for quite a few more years.

I have a great idea for you. I want you to get on a computer, OG style, use clip art. Don't use like any of the AI tools. Use clip art and make a sign that says 3% and print it in color. And I want you to frame it and I want you to put it right in the middle of your teeny tiny one-bedroom apartment kitchen.

Ah, okay. And every time you, where you going with this?

Every time you have to turn sideways to get by your stool so you can get into your fridge, I want you to look up and be like, Yeah, 3%. This one's for you.

Yeah. Yeah. And when I, and when I go on dates, I'll say, hey, but, but I do own a house. It's just on the other side of the country.

Yeah. Yeah. But in, in the meantime, why don't you come back to my place and, uh, I can, we can both squeeze into the, the futon I have in my combined kitchen slash breakfast nook slash living room.

Oh gosh. Yeah. Why are you doing this to yourself?

150 square feet.

Dude, do what?

I said it's a whole 650.

Oh man, this— you know, I'm gonna tell you what, I'll give you one worse. That's like when you have like a really— and I know you're, you're a man, but like if you have a pair of jeans you love or like and you gain a couple pounds and they don't fit anymore and you just keep them in there and it's just taunting you every time you see them. It's like just a reminder like you're fatter than you were.

Yeah, yeah, bro. Today Call today. Uh, here, here's a good question to ask you. If you had $150 grand right now, would you take out a mortgage even at 3% and buy a house in where? In Nowhere, Florida? No, no, you wouldn't do that.

Just by default, man.

You're, you're a long-distance landlord. Sell the place, have, get that money, buy yourself a place in Austin and enjoy your life, dude.

I guess just looking into the future, my thought is it'll be paid off in just under 20 years.

And what are you saying, homie? Have you been alive the last 10 years?

Yes, sir, I think so.

Could you have predicted any of what's happened?

No.

Okay, no. So trying to read 20 years into the future that is this madhouse, man, I— man, best of luck to I would solve.

All right.

I would solve perfect.

I figured y'all would go down that, that road, but, uh, but you, you don't think it's worth keeping it just for the loan?

No, you don't live there anymore. You don't live there. You don't live there. And to John's point, you can call it a rental house, but it's really not that because if you were on the hunt for a rental house, you would not have chosen that house. So it's just a house that you lived in and now you don't live there anymore. So you sold it. Like there's nothing, there's no loss there. There's no failure. There's no, and it's almost like you're viewing it as a failure to sell this house. House and let it go. And it's not. You, you moved on, and that's okay. It's a natural part.

You're not winning of life. And I'll go one step further, brother. I— this is me and my house. I had a 3.1% interest rate, and I paid my house off. My wife and I scratched and clawed and worked like crazy to pay our house off. And I could have made more money. It, like, in the years since, I could have— if I took the gap and put it in the market, I would have made money.

Me.

But dude, I wouldn't trade that arbitrage for anything because I put my head down on my pillow and that house is mine and nobody can take it from me.

So, so probably shoot for— because the way I set up the lease is that it'll be vacated, uh, this— not this spring, but a year from now in the spring.

No, too long. Tell them you're selling the house. Tell them you're selling the house.

Really?

Yes. Well, you're gonna keep it for another year?

Yeah, I guess that's a good, I guess that's a good point.

At some point I want you to start considering what do you want your house to, what do you want your life to feel like right now? You're, you're, you're over-indexing on a ma, an imaginary future and you're under-indexing on the life you live right this second. You get about, yeah.

And that's the thing is the, is the ego hit of living in an apartment, uh, for the time with the thought of, well, you know, and when I retire I'll have a paid off home sitting there, something like that. Yeah.

Maybe. Or maybe a hurricane takes it. Like, who knows, dude?

Yeah. You change what you want. I mean, you could change what you want and that's not even in your purview when you get that age.

Yeah. Well, all right. Well then dang, dang it. Let's, uh, I guess I'll get on the phone with one of y'all's endorsed, uh, real estate providers.

That's right.

I, I would before the day's over. And I, dude, I, you, you'll be smiling so big when this thing sell. I'm just telling you, man, when that money deposits in your account and and you're free, we'll be able to feel that smile all the way here in Nashville from Austin.

Yeah, that's a good thing. Yeah, that, that whole, we get that call all the time. A lot of times it's military folks who are moving around a lot and they end up with like a handful of houses in different states.

Yeah.

And I, it's almost like, well, someone's in 'em, someone's renting it, so it must be a good idea. And the truth is like being a long-distance landlord, the, the places are getting tore up. You're probably not as involved as you need to be, or you're paying somebody to manage the property. And it's just like, if you, if you reverse it, you never would've selected, you never would've chosen that place.

We have like recency amnesia. We just went through a global issue where in many markets they said we're freezing rents or your people don't have to pay for an undisclosed amount of time. It's like, it's like we've just all forgotten, man.

Well, I mean, I do think like COVID obviously was an isolated incident, but, but it happened. But the whole point is, and 2008, 2009 was an isolated incident.

That's true. And, and it's always another isolated incident.

But I would say like the, the biggest part is what we've been saying for the last several calls, which is not letting life happen to you, but being so intentional about what you're choosing and knowing that if you say yes to one thing, you're likely saying no to other things. Yes. And that's okay. Yeah. Like it's not a negative thing. It's a choice that you're making and being really intentional that the things that are in your life, you have said, you have looked at it and given it a once over and said, yes, I like that the way it is. I would choose that again tomorrow. I would choose that again the next day. And if you can't say that about things in your life, it's time to cut it loose. That's that on that. All right.

Roll out.

A little question here from the social media. Peyton from Facebook says, my wife wants to upgrade rooms in our house, but I feel like it doesn't make sense since we will still have a mortgage on it. Should we use those funds to pay off the current mortgage and then renovate it when we fully own it?

Ooh, I have a bias there.

So tell me, tell me.

I'm on, not on Ramsey principles, I'm on his principle. Like that's what I would want to do in my house. And I also know—

Keep the current one and upgrade it.

Like I'm gonna pay it off when it's mine, then I'll start tinkering with it. But I also know like that question doesn't tell me what the state of the house is in.

It doesn't tell us what baby step they're on.

Yeah.

Yeah. If you listen, if you're in baby step 2, now's not the time to upgrade the mortgage. I can tell you that right now.

Upgrade the bedroom. Yeah.

Yeah.

Well, she, it sounds like, uh, sounds like she wants to remodel a room. Oh, okay. I read that a little bit different, differently.

And he still has a mortgage and he says, hey, should we pay off the mortgage? I'm assuming they're in Baby Step 4, 5, and 6.

And, ah, you know, okay. I, I'll, I'll reframe my answer. If you're in Baby Steps 4, 5, and 6, there is no wrong answer there.

I'll fix it up, man, if you want to, or pay it off.

But yeah. And if you're in Baby Step 2, well, you already know what to do.

And I'll just say, if Mama wants to change up a room, probably change up that room.

Unless you're on Baby Step 2.

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All right, welcome back to the Ramsey Show here in the Fairwinds Credit Union studio. I'm I'm Jade. This is John, and we're going to Beth, who's in Denver, Colorado. We were just there hosting The Ramsey Show live. Beth, how you doing?

We're doing all right today. How are you?

Doing good. How can we help you today?

Um, my mom is, is 67 and currently living on Social Security. She is married to my stepfather, and they both had pretty major surgeries this year. My mom had a back surgery, and my stepdad had open heart surgery, and they can't really work right now. They bring home about $4,400 a month. Um, but I recently— she started like being short on things, and finally I kind of asked to look at her finances, and she has $51,000 in credit card debt. She has zero savings, like literally zero. Um, she has never really been really good at money. She's lost two houses and filed bankruptcy, um, before, and I'm currently debt-free. After following Baby Steps, I'm worth, with my husband, about $1.8 million. And she knows that I have money, and so she keeps calling me and expecting me to help. And I've kind of put all of her stuff into a budget for her, and she keeps overspending. You know, she'll order DoorDash or something and then wonder why she's short every month. And so I'm trying to figure out how to kind of get it through to her that that, that like she has to stop.

And I, um, you know, I've talked to my husband and we, we just like don't feel like helping her. Sure.

Yeah.

What about your stepdad? What's his role? What's his role in all this?

I mean, they're both equally terrible at money, just generally speaking. And so, um, you know, she's asked me to buy her a house and she's asked me to do like all of these things, and I'm like, we, we can't do that. Like, that's—

oh, this is extreme. This is far worse.

I asked my buddies for nachos, not a Yeah.

Oh boy. And how long, how long have they been married?

They've been married since I was 5.

Okay. So this is not like, oh, this is kind of new. They've, they've, they've been a mess for a while.

A long, long while. And they had money when I was in high school and like kind of just spent it and leaned into that lifestyle. And then they tried to downsize and so bought another house, ended up losing both houses. And they've lived in, in rentals ever since then. And I, you know, I thought that they were kind of getting back on their feet, but I, I just think that they're terrible at budgets and they are, they feel very entitled coming from, you know, living a, a lifestyle that was above their means for so long. Yeah.

I mean, they made choices. I, they made choices the same way you made choices, right? They were dealt a hand and they said, here's what I'm gonna do. You were dealt your hand and you said, here's what I'm going to do. Um, if you spend too much time and, and John, this is your area, but if you spend too much time trying to sort through why other people made and make the choices that they're making, it is just, you're gonna go insane, right? Yeah. You will go insane, especially if you're using that framework to determine what you're gonna do. It's like you just gotta look at you and just go, hey, I, I see what's going on. It's very apparent. I don't need to do a bunch of mental gymnastics here. It's very apparent what's going on. And the fact that here's, here's what did it in for me. When you said she was literally coming to you saying, hey, will you buy me a house? Right. That's when I knew we don't even need to go through a whole lot of the rigmarole of what they're doing.

Yeah.

This is ridiculousness. And I'm wondering, have you just gone to her and said, Mom, here are the ways I can help you. I can help you with the budget. I can help you as accountability to stick with the budget. I can help show you the things that I've done. I can provide a plan for you. But one thing I cannot do, because you guys actually do have money, is I am not going to give you monetary help because you have money coming in that if you manage it properly will be enough for you. And I think when you say that very clearly, that's all you can say. And then when, when, when your mom oversteps the boundary, because she's going to, you can just say, hey, just remember what I said before. Let's, I'm happy to sit down with you and do the budget.

Yeah, I think the tricky part right now is that like about half of these things are already in collections. Like the credit cards are in collections. She, she doesn't even have enough room in her budget to pay these crazy minimums. And so I kind of told her to start with one credit card and like not pay the rest right now. And I've said, like, I've set up a budget for her.

I know, Beth, hold on. Beth, Beth, Beth, she's lost two houses before. Yeah, she, she's had the worst thing that can happen to somebody. She lost her home and then she had it happen again. And then she's about to have it happen again. What does that tell you? What does that tell you?

I mean, I just feel like they just don't learn from their mistakes.

Okay. So, so you, here's the thing you're right. And like they, they blow by natural consequences. The rules of the world of reality don't apply to them when they have money and when they don't. And yeah, no, no amount. Let me free you from this. There's not a thing you haven't said in just the right way that would solve this for them. They're really fortunate to have you as their daughter. The fact that you care this much, because I know in a family with finances like this, you've been through a lot also, right?

Yeah, yeah. I mean, yeah, yeah, listen, listen, we went to food banks when I was little. Yes, same reason, probably.

Yes. I wanted you to hear me say, you have changed your family tree. You didn't take the baton from them, you picked it up off the track and you decided to run as fast as you could with it. And you're gonna hand it off to your kids in a much better position than you were given it, right?

Yeah, I mean, that was my huge motivator for not ending up like that.

That's right.

I just promised I would never leave my kids like that. Like in this position.

Yeah. And you've done that. And I want you to hear me and Jade say, we're, man, we're so proud of you. 'Cause what you've done is really hard. It's harder than just doing the baby steps. You also had to take care of that 7-year-old little girl that was dealing with chaos and divorce and new boyfriends and food insecurity growing up.

And now it continues to be hard because here you are doing well and you have to sit and see.

You got survivor's guilt.

That's right.

Yes.

Yeah.

And so let me say, yep. Here's what I know about you. I can tell it by the way you told the story. If this, if your mom and stepdad were doing really well and suddenly their house got hit by a giant limb, you would be there with a checkbook on day one. That's who you are.

Yep.

But you can't keep showing up to the bar of a friend who's struggling with an alcohol addiction and saying, all right, I'm gonna buy this round and then you gotta go.

Yeah. And you, and into that same analogy, you've been kind.

Yeah.

But you've been kind. You've said, I'll pay for therapy, I'll pay for rehab.

Yeah.

I'll pay for, and, and if they say I don't want it, they don't want it.

Yeah. Yeah.

I offered to pay for Financial Peace and, and they don't, they don't want it.

I don't even wanna do, I don't even wanna do it because I don't think she'll do it.

Yeah. They, they, and they won't. And, and they don't, they don't, they don't want your help. I mean, they don't want your advice. They want your money. And that means it's not a relationship. It's a, it's, it's transactional.

Mm-hmm.

And that breaks my heart for you because everyone needs their mom.

Yeah. Yeah.

Yeah.

I feel like the adult.

Yeah. You, you 100% are the adult and that means you have to act like the adult. And when our toddlers, I, I, I never, it never ceases to amaze me when people are like, man, my 10-year-old only wants ice cream. I'm like, yes, they're 10 and ice cream's awesome. They need adults in their lives to say, hey, we can't do that all the time. Time. And, and similarly, you are, you're the adult now and you have to say, hey, I'm, I'm not giving you any more money. And then you're gonna have to go home with your husband and be real sad that your mom put you in this position. I hate it for you.

Yeah.

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Uh, how are y'all doing today?

Doing pretty good. How can we help?

Uh, I have about $30,000 in debt. Roughly. It's really just, it's really just my truck payment. I have all my credit cards paid off. I have a couple other vehicles. Everything's paid off, but I want to pay off my truck and I want to start saving for a house. I need to know what to do to do that.

Okay, I love that you're interested in paying off vehicles, your vehicle. Why do you have multiples? What other vehicles did you have?

I have a 1993 7.3 IDI diesel truck. I have a motorcycle and a couple four-wheelers.

Oh boy, you like them wheels, don't you?

Yes, sir.

What's your income to have all these?

You better be making a million— a million bucks, homie.

Uh, no, just terrible with money.

Well, at least you're honest.

Hey dude, yeah, admission is the first step.

Okay, so tell me again, tell me, what are you earning?

Uh, I'm making about $3,200 a month after taxes.

Okay, so I'm just gonna put you on blast. My screen says that this truck has a 30% interest rate. Is that true? You left that little part out.

Uh, did you buy it from the mob?

Yeah.

What did you do?

Uh, I don't— I'm not really for sure why they gave it to me at such a high interest rate. I didn't have a cosigner. It was a year ago, so I was right— I just turned 21.

No, no, wait, wait, wait. You said, I'm not sure why they gave it to me. I I wanna know why did you take it? Why did you receive it?

I didn't know any better. I was going to travel on the road and, you know, be a welder out on the road. Well, my dad got cancer, so I came off the road. So I come back to making regular people money.

Got you.

Okay. I know, but you just walked into a truck dealership and they sold you a truck and just, is it like a, was it like a payday lot or is this like a dealership? Dealership?

It was an actual dealership out in Mississippi.

And they rolled you up for 30%? Yes, sir. Wow, man.

I—

whoever did that is a terrible, terrible person taking advantage of a 21-year-old kid who's trying to take care of his dad with cancer. I won't say what I'm thinking in my head because I'm on the radio right now, but that's, that's a terrible, terrible person that took advantage of you like that.

Yes, sir.

Sorry.

Well, you live and learn. Hopefully I can do better next time.

Hey, you know what? That, that's right. The path forward is, okay, you took advantage of me, you got one in on me, but I stepped in the ring. I signed that paper. You're right. Now, now what am I going to do next? So good on you, brother. Like, that's, that's the, that's the right way to handle it. Now you got a mess, let's just go walk through it and clean it up.

Yes, sir.

Um, so when you pay your pay, how much is your payment?

$800 a month.

Okay. Um, man. All right. The only way you're going to get out of this is to just quickly blast through this. That's the only way. Or you can turn around and sell it.

But how upside down are you?

Yeah, I know that you are.

Uh, I'm not, I'm not upside down at all right now. I mean, I make enough to pay my truck payment, pay my insurance, and have a little bit of fun with the money and everything else.

It's just upside down, meaning how much is that truck if you went and sold it today? How much would you get for that minus what you owe on it?

Oh, uh, I'd be upside down by $10,000.

Okay.

Okay. So here's the plan. I want you quickly today, tomorrow, I want you to go to your local credit union and I want you to say, can you please— somehow I got into this crazy loan. I want to sell the vehicle. Can you please give me a loan for $10,000? That way, when you go and you sell this car, for what it's worth, you can close that gap and be able to get the title. You can be able to pay it off and have a clear title on it. So that's what you need. You need $10,000. And then in the meantime, you've got another truck, you've got four-wheelers, you've got motor— you've got other ways to get yourself around town until you can use your income to save up, I don't know, $6,000. Something tells me you're good at working on vehicles. So get yourself like a $6,000 or $7,000 truck. Truck or car and let that be your beater that you drive around town until you can save up and, and kind of get yourself on track.

Does your dad— is he feeling better? Is he doing well?

Uh, he's got a cancer appointment this coming Monday. He's got another surgery. This will be his fourth one.

Does he have a car you can use in the meantime?

Uh, he does, but he's disabled and he's always at the house, so I'd hate to leave him at the house with nothing. Yeah.

But if he's not going anywhere, then I, I'm just trying to give you options and you wouldn't be the only person cruising Memphis on a four-wheeler. That was, that was, I'm in Nashville. So that was my, that was my Memphis dig. But, um, yeah, man, you, you're gonna have to just swallow all of your ego and all your pride and all of the things that you think had made you a man at 21, a big truck, four-wheelers, toys. And you're gonna have to say the thing that makes me a man at 21 is absolute freedom.

Right, right.

And you know, like, we don't— I don't, I don't think we're gonna have to convince you to do this because, you know, 30% is just astronomical. And for, for your income that you're bringing in, I mean, it's just gonna, it's just gonna eat your lunch. And you're gonna hate driving. You probably already do hate driving it because it's just, it's so detrimental to anything you're trying to build right now, right?

I go through about $250 a week in diesel.

Um, do you use your truck for work?

Yes, sir, it's my daily driver.

I know, but do you— is it have like a welding rig on the back, or is this— could you do the same job with a Prius?

Uh, I could do the same job with a Prius.

All right, brother, it's Prius tax time. You got to drive a Prius for a year. That's your— that's your tax on what— on your stu— that's your stupid tax. I'm just playing. You don't gotta do that, but you do need to get that loan.

Will you do it?

Uh, I can try. Uh, my credit is 650 or 660 right now.

Listen, dude, here's the thing. I don't care. I don't I don't care how you need to get this loan. You're not— nothing's going to be worse than 30%.

No.

Right.

And you're not, you're not close to a house right now, man. So set that dream aside for a second.

Yeah. You could put the, the, you could put the $10,000 anywhere else and it's going to be better than what you're paying right now on this car loan.

Or could you sell both those four-wheelers and come up with $10,000 on the sale of those?

Oh, yes. A great idea. That's an even better idea, John.

Uh, not a chance. I could probably sell my motorcycle.

How much is that worth?

$7,000.

Yes.

Today.

Today, put it on the market.

Okay.

And here's the thing, when— if you think about buying a house right now, that's like you are out in the ocean and the ship had a hole in it and you're treading water and you're, and you're trying to get online on your phone and buy curtains for a beach house. Like, your thing you should be worrying about now is swimming to shore.

Yeah.

What about your other diesel truck? What's that worth?

Um, about $4,000. It's an old, old truck. It's got a lot of high miles.

That's your new— that's your new daily driver?

Yeah, that's your new daily driver. So yeah, this This is even better. We sell the motorcycle. I would still put the four-wheelers up because who knows, maybe you can close that gap and get the $3,000. I don't know what a four-wheeler is worth, but you need $3,000 to go with the $7,000. Then you sell the $30,000 truck and you've got your diesel truck, your older one sitting there ready for you to drive. This is, this is what's called a clean slate. Like that gives you a completely fresh start and it's not what you were envisioning. But man, what's your—

what's your trade, brother?

Uh, I'm a welder, welder slash heavy machine operator.

Okay, can I tell you right now, in our current world, a 21-year-old who is a licensed welder and heavy machine operator that has— that has no debt, you know what you can do? Anything you want. You're one of the freest men on the planet. That sounds real nice, but right now you got a dad who's struggling with cancer and you have a four-wheeler dealership saying, I don't care what What's going on? You owe us money. You go to work. You have a diesel truck, evil people who just sold you a diesel truck over your head. And they're like, I don't care if your old man's past is getting sick, is about to pass away. You have to go to work 'cause you owe us money. Right. And we're cutting all those chains today.

Right. That sounds like a plan to me, dude.

Welcome to your freedom. Good man.

Yeah.

I'm proud of you. Listen, And John, here's the thing. Whenever we get calls like this and the solution is so sweeping and it's just so extreme, it's like, sell the car, sell the motorcycle, drive the old truck, get rid of the four-wheelers. I am always so proud of the people. Now, don't get me wrong. Like, when we say that, I know they're going to get off the phone and they're going to sit in their car or they're going to sit, you know, in their break room and be be like, okay, like the true test happens now.

Yeah.

Where he has the next, you know, 30 minutes to an hour to really think about what we said. And am I actually gonna do it?

Don't think, just go, just go, just go, just go.

Just do it. Just do it. The people who— and we're not saying just listen to us and don't think, but you know what we're saying is right. You know it's the right move. Don't talk yourself out of it. Strike while the iron is hot. Change your life today.

Just go ahead and do it.

Do it. You won't regret it.

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Alrighty, let's go back to the phone lines where we have Leanne who's in Oklahoma City, Oklahoma. What's going on, Leanne? How can we help today?

Well, I need to find out if, uh, profit potential is worth the liability and worry, uh, My husband's father had a recent illness, quickly put him in a nursing home. Um, the siblings— there's 4 of them— decided they wanted to do a Lady Bird deed to protect the only asset, which is his house, from creditors. He has $30,000 in credit card debt, no savings. There's a $140,000 loan on this house, and it's probably worth $350,000. $500,000. Um, the siblings are going to have to split the cost to keep this house running. Um, if, uh, it's sold, the creditors or Medicare can take it.

Um, that's who's going to be paying for his nursing home. And so that's, that's telling that we've been told that that will be $400 apiece um, per month to take care of this house.

Uh, it's 15 hours away. The profit might be $20,000 to $30,000 when he passes away. Um, one of the siblings has had over $30,000 in gambling debt. Um, there's also two 2 children from a deceased sibling, so it'll be divided 6 ways.

Um, after it's divided 6 ways, that's the $20,000 profit, right? Okay.

And who knows how long we're gonna have to pay this $400 a month. I'm the only one that works. My husband had an injury. He'll be beginning retirement soon, but he can't work, so it's me paying the $400. If something does happen to my husband before his father passes away, his proceeds will go to his children.

It won't go to you?

I will be—

no, it'll go to the children.

And I guess it just, that's the way that works.

Are you expecting your husband not to make it in the next 2 to 3 years?

Well, he has some significant health problems, so there is a risk.

I mean, for that, when I look at the nursing home situation, most people, it's a 2 and a half to 3 year stay. Like, that's the maximum. That you can usually count on. That's just average time. So if I were going to do the math on this, I would calculate it at, okay, if I pay $400 a month, you know, for 2 to 3 years, that puts me in this, you know, X amount of dollars, what, $12,000. And then I, I stand to make at that point, I don't know, $10,000, $8,000 off this entire deal and off this entire headache. If, if I get the $20,000, $1,000. So that's kind of where my brain immediately goes.

Um, let me, let me dig it. Like, do you, do you have $400 a month?

Yes, but there's a lot of resentment on my part because he didn't take care of his finances.

Sure, I, I get that.

Um, I don't think—

I just don't— I don't want to be on the deed.

I don't, I don't think it's an I, I would not do this as an investment. I would do this as a way for me, like, in service to my husband who feels like he needs to take care of his dad at the tune of $400 a month for the next 18 to 24 months. If you get some money back, yippee-doo-dah-dape. I wouldn't count on it. I would look at it that way.

The only, the only thing is, um, it's his dad's going to be taken care of.

The siblings are using this as a saving savings, a way of savings to keep the house.

I know, I know.

And they can do that. They can do that out of their heads and out of their minds.

Resentment is a, is a, is baggage you're carrying, right? You've heard the old AA saying, you're drinking poison hoping that they will get sick. I'm going to choose to send $400 to my father-in-law. Me and my husband are together, and we're going to send $400 to take care of him. His siblings have been, have had their struggles before They've always had struggles. They're always gonna have struggles. I'm not getting in their mess. I'm not doing business deals with them. Yada, yada, yada. That's all wise and good. I'm not looking at this as a, what? And by the way, he technically is getting taken care of, but he's getting taken care of with your tax dollar. You're paying for this in anyway, right?

Correct. So that's another thing that's—

If you don't wanna be part of this, you don't have to be part of it. Yeah. And you know, you asked a very clear question like, is there basically a return on investment for me if I do this? Yeah, maybe you come out with $8,000, but I don't think that's worth it for you. You don't know that you're going to get this money. You don't even want to be a part of this.

Can you— can you—

you don't have to.

Can your husband just say, hey, we, we want out of this deal? Y'all split it and do your thing with it?

Yes.

I would do that.

Is there a liability with this house?

Can someone come back on us? On you?

You're not on the deed.

You're not on the deed.

Right.

If they're not on the deed, but the husband would be put on the deed.

No, no, no.

You can go in and say, I don't want anything to do with this deal. I'm, I'm foregoing my piece of this, my potential piece of this. Best of luck to you all.

Mhm.

Yes, that's, that's exactly what I would do.

Because to your point, he's not— and I don't know what you guys have going on with your personal finances, but he's not the one paying for it. You would be the one paying for it. And you're saying, I don't want to do it.

We only owe, uh, for our house and our vehicle.

Yeah, yeah, please. Yeah, if you can convince him— I don't know if he's like dead set on this, but if you can convince him, I don't want to be a part of to this. I think that's the answer. Nothing.

Y'all will come out looking like the good guys. Tell, tell his siblings, hey, you know what, we, we're, we, we're doing well. We want y'all to split it amongst yourselves.

Yeah, there you go. That's even better. That's even better.

And this ends up, by the way, this ends up in multiple lawsuits because somebody's cousin of one of these stepkids is gonna be like, well, I want a piece. And they're gonna have a friend who knows a guy who will write a legal brief. Uh, I mean, not a brief, but a legal letter just, yeah, stay away.

Yeah.

Stay away from the whole thing.

Absolutely. Absolutely. Well, John, another social question I have here in my hand. Let's see here.

You love them social medias.

I do. I like 'em because people, sometimes they don't want to call in. They just want to talk to us here. All right. Joni from TikTok says, is hiring a credit repair company a smart move?

No.

I don't have a lot of current debt. I just have some real old things on my credit that I want to get rid of?

There's that old Seinfeld exchange when Kramer comes in and he's like, they write it off. And Seinfeld's like, they write off of what? He's like, I don't know, they just write it off. Like, it doesn't just go away. Just pay it.

Yeah, I would say pay it. And you can probably, if it's really, really old, you can probably settle it.

Settle it. Call them.

That's what they're going to do.

Yeah.

By the way, let's, let's talk about that a minute because we get a lot of credit, credit repair are, uh, debt settlement companies, like that whole thing. And just a reminder, they do what you can do. They just make deals. They hold the money for a long time so that you are in default. Basically, it wrecks your credit, and then they go in and make deals, which is exactly what you can do. And you're already in the position to do that because the thing's been sitting around for however long, old on your credit. Just call them up, and however much you owe— let's say you owe $1,000 on something, save up $400 cash and say, this is what I'll give you. They weren't expecting to get your money anyway.

At this point, a credit repair agency is like this. Let's say you were driving down the highway and you had a flat tire and you pulled over. You can call a tow truck and negotiate with a tow truck, or you can call a credit repair company. They'll get back in your car and they'll drive it down the highway into a brick wall, and then they will call the tow truck company for you. That's what they'll do.

Like just wreck it for me.

They'll, they'll take your credit and they'll, they'll hold your money. They'll destroy your financial picture and then they'll get the same deal you were gonna get anyway. Just get $400 in cash. Call 'em.

Yeah, that's right. You can do this. I, I believe in you. Again, like John, there is such a theme on this show about being in control. This is like the fourth one that we've talked about of just, just take control of your destiny. You don't need anybody to do it for you.

No. And if you call a, a, a, your, a creditor, an old creditor, and they, and they say, hey, Hey, um, this $1,000 debt's now worth $8,000 in fees and whatever. Say, I got $400 in cash, I'll pay it right now. And they'll say, well, I'm not authorized. Hang up. Just hang up the phone.

Hang up and call somebody else back.

Call the number right back.

Be as annoying to them as they are to you.

Yeah.

And pretty soon they'll settle it. And when they do, just get it in writing, laminate that bad boy and keep it for life in the folder, uh, marked, you know, open in case of emergency. And it's there for you.

You know, we wish we could get to every single call here on The Ramsey Show, every single question, but it's just not possible. So if you do have a money question and you want an answer for your situation, head over to our website and use Ask Ramsey. Ask Ramsey Ask Ramsey is our free AI tool that's built and trained on proven Ramsey principles. You'll get an answer the same way we'd answer it right here on the show. Ask your question today at ramseysolutions.com or just click the link in the description if you're listening on podcast or YouTube. All right, Aaron in Minneapolis, Minnesota is on line 3. What's up, Aaron? How can we help?

Hey, how you guys doing today?

Chillin'. How can we help?

So I just recently turned 19. Um, I am working full-time. I have been dating this girl for almost 2 years now, and we are about to fully move in together. Um, she's full-time going to college at a university and whatnot, and I live very close to her campus. And so, um, usually most of— pretty much throughout the entire time of her being a freshman, she's pretty much just stayed at my place all the time, um, even though she's technically lived at the dorm. But now she's for sure, like, coming up soon on this next lease, she's fully going to be moving in with me and my roommates. And we just have some financial disagreements with you and your roommates. We know how to resolve.

How many roommates do you already have, dude?

So I currently have 3 roommates.

Oh my God. Oh, she loves you. She's about to live with 4.

Wow.

This is different.

Yeah. I got, I got really lucky. Um, my rent is very cheap, obviously having to do with the fact that I do have roommates.

Um, how many bedrooms is this place?

Really well, 4 bedrooms. Wow.

Hey, if you actually see a future with you and this girl, don't do this.

Please don't do this.

She's gonna see too much.

She can't unsee the things that she's going to see and experience.

Yeah, so just a little bit. Good.

Just listen. Dude, I was 19 too. I was head over heels in love when I was 19 too. Please don't do this.

What's her name?

Uh, her name is, um, Madeline.

Okay. I know you just made that up.

Good. Hey, I'm proud of you for protecting her.

Madeline, wherever you are, please don't do this on behalf of women everywhere. I'm scared for you. Um, I'm making jokes, but seriously, with John, I'm with John. Please don't do do this. Um, there's no way that this is good. There's no— there's no good parts to this in many, many ways.

I mean, yeah, so, so here's, here's kind of where I stand on it. So the, the main reason for this— and then again, I, I've gotten really lucky. One, my rent is super cheap, and we have gotten along, not just me but me and her, because like I said, she, she's been over to my house.

She's your girlfriend, of course you get along.

Oh yeah, of course, of course. But yeah, and so we get along very well with roommates. Um, we always hang out together.

It's so different.

Very true, very, very true. But again, you tell me—

hey, you tell me why it has to be this way. Give me, give me 3 good reasons why it has to be this way.

Give me one.

So I am currently— I, like I said, I work a full-time job. I'm not in school or anything like that. She, she has a part-time job, but she does not save her money. Um, she, like I said, we're kind of on two ends of the spectrum when it comes to money and finance.

So you'd be rescuing her pretty much.

And she'd be—

hold on, hold on. And she would be using you. Go ahead.

Um, yeah. And it's just obviously, like you mentioned, you know, young and in love. I'm 19. You know, I, I want a future with her and I'm trying to overcome some of these things that I'm trying to work things out the best way possible. You know, should we— we, we're from about an hour and a half away from where we currently live.

Uh-huh.

We're both from the same hometown, and she got the opportunity to go to school up at this place, and I didn't want— if I didn't move out, I was just gonna be living with my parents, and I didn't want that. I want to get out and kind of—

so you moved there because she was there?

Pretty much.

Okay, that's all good.

That's— there, listen, I'm gonna repeat back to you what you said, and I want you to really think about each one of these, because this— my, my job here is to make you think. I'm not going to be able to convince you by giving you my opinion. I just want you to think about the things that you said. First off, you told me, when I said, hey, give me 3 good reasons why this is a great idea, you told me— and I'm going to say them in reverse order— you said well, she was moving there, so I just moved there too. She had a plan for her life. I didn't really have much of a plan, so I just went where she was. That was the, the last thing you told me. Then you said, well, it's kind of convenient because her lease is up, and so since her lease is up, that's kind of like a convenient thing, so I'll just roll with that. Then, then the next thing you told me was, well, Well, she doesn't really work much, so whatever she's doing now, she's probably not gonna be able to afford it.

So I can afford it. So I'll just do that too. And I'll just rescue her and she can use me. So when you give me those types of reasons, Jon, all of those are just kind of like, hey, I'm just letting life, I'm just rolling. I'm just letting anything happen that I want to happen, right?

Yeah. And here's the thing, dude, we want y'all to be successful long-term. I want this to work out for you. I like the idea of moving moving to go be with the person you want to be with. I love that. And you're working your full-time job, but A, you're bringing her, a 19-year-old young woman, into a house with 3 dudes not— who aren't going to school, who live very different lives. You are, um, not aligned on how y'all spend money, how y'all earn money, how you— you're not aligned on core values. Use and you're not aligned on who's gonna pay for what, how are we gonna pay this? I'm just telling you, cuz I want this to work for y'all, dude. I'm such a romantic at heart.

And I know, don't do this. And try to think, this is a horrible thing for me to say, cuz I don't, at 19, your brain is just not there. But if at all you can muster up the thought of if your daughter said, yes, I'm gonna go live in a house with 4 dudes who are 19 One of which is my lover. You would, you would do the Fred Sanford and have a heart attack and fall out. That's what would happen. Now, we dropped your call on accident. I think the call dropped. You're not here to respond to this, but just know we love you, dude. We're rooting for you. We are on your side.

And don't, don't do this. Please don't do this.

He's not going to do it. Let's go to April.

Oh no.

She's in Cleveland, Ohio. April, how can we help today?

Hi. Um, well, my son is 22 years he just received a settlement in February. So we are discussing things that he should do, and he already has done some stuff, but we're not sure what to do with the rest that he has from that. We already put in investments, and he opened a growth savings, he did investment, and then he did pay off some things that he had to pay off, and he got a car. But we don't know what to do with the rest.

How old is your son?

22.

Okay, and how much money are we talking from the settlement?

He got $250,000.

What happened?

Um, he received a Tdap shot when he was 10, and, um, he got a blood disorder and he had to get his spleen removed. He's good now, um, but it came back that it was from the shot.

I'm so sorry.

Okay, will you do me the— you're asking a money question, and we'll get to that right here real quick, but I want you to do me a huge favor.

Yes.

You've been taking care of this boy since he was young because you're a good mom, especially through medical stuff. I want you to put your son in the driver's seat of this situation. He's a 22-year-old young man, and so I want you to— I want in your home, I want you to tell your son, hey, you know what I've been saying, what are we going to do with this money? Mommy, this is your money and I will sit by you. I'll help you make wise choices, but you're 22 years old. And his, his, a 22-year-old man needs his mommy to sit in the backseat or in the driver, I mean in the passenger seat at best.

Right.

Preferably not in the car at all.

Okay. Exactly.

And I know this is hard, but that's, that's, that's my 2 cents there. Jade, what do you think?

Is he responsible? I get the sense that he's responsible.

He is, he is responsible. He wants to make, he wants to grow. Yeah.

I believe that. And, and if I were in your shoes, it sounds like he's paid off his debt. He doesn't have any more debt. It sounds like he has a, he has a reasonable emergency fund set aside. Yes.

Yeah, he, so he, um, he, he's a barber. My husband's dad has been a barber for 28 years.

Amazing.

So now he's a barber and they're at the same shop.

So, so he's making a reasonable income. As long as he's making a reasonable income, he's set aside some them savings, I would take this money and honestly, the next big goal for me, and if I were him, I'd be like, I want to buy a house.

Yeah.

And I want to buy, I want to put as much down on that house as possible. Maybe I can even buy it completely in cash. And if that is a shorter than 5-year horizon, which I think it will be, I'd park it in an HSA until that day comes. Welcome back to The Ramsey Show here in the Fairwinds Credit Union studio. We're going back to the phone lines where we have Susan, who's in Huntsville, Alabama. All right, Susan, you're on the line. How can we help?

Hi, how are y'all doing?

Great. What's up?

Good. Um, I'm excited. Y'all are my favorite hosts.

So yes, we're gonna, we're gonna clip that and send it to our colleagues.

Don't tell Dave. Um, we're just needing some help navigating our debt. Um, we have about $37,000 in debt and that's including like car debt and credit cards. And we started in January listening to y'all and, um, trying to attack those debts and we're down $5,000 in the credit cards already that we've paid.

Great.

Um, but every time, it just seems like every time we have that $1,000, like, life is happening and somebody— we both needed new tires and, um, like, our fridge went out last weekend and we didn't have the $1,000 saved back up. So it felt like a sin, but I had to go put it on a Lowe's credit card. So now it just feels like we're adding to it feels like we're just taking 2 steps backwards. So anyways, I just feel sick knowing we're further into debt now than we were. And yeah, it just makes me nervous not feeling prepared when things come up. So I just wondered if y'all could help me navigate that.

Yeah, so here's what I want to say. You know, part of— and we can do a better job of saying this, but when you decide, hey, you know what, I'm going to work the Baby Steps. I'm going to do this thing. I'm going to pay off the debt. I'm going hard into this. Almost the number one thing that you need to do next to budgeting, the number one thing you have to do is you have to look yourself in the mirror and say, I draw a line in the sand. I don't borrow money anymore. I just, I do not borrow money anymore unless I'm like John Q and my son is in the, you know, remember that movie with Denzel Washington?

Oh yeah, yeah, yeah, yeah, yeah.

But you see what I'm saying? I draw a line in the sand and I just don't borrow money. And the way the Baby Steps are, especially Baby Step 1, it's very unique because it's $1,000 saved. And I get it, in today's world, people are going, "You're off your rocker, Jade and John, if you think that $1,000 is gonna get it." But the way I explain it, Susan, is $1,000 is exactly the amount that it takes to turn on the creative part of your brain, to go, okay, if something happens, I actually don't have the money to do this. What else can I do? And so when you take debt off the table, suddenly go, well, I don't have to go to Lowe's and buy a brand new fridge. I could go, I don't even know if Craigslist exists anymore, but I could go on Facebook Marketplace and I could buy a slightly used one for the meantime that is maybe $800, but I can scrape together that cash. Or $300 and scrape together that cash. Do you see what I'm saying? That is the gritty challenge of the baby steps. It causes you to just turn on that brain and go, "Okay, what can I do?

What can I do? Where can I go?" And that's what I wanna challenge you from here going forward. I'm not telling you that to beat you up. I'm letting you know that's the way it feels and that's the way it's gonna feel. Everything is gonna feel inconvenient. Most things are going to feel like a challenge, and that's good. Like, that's how you know it's working. So from here on out, that's gotta be the line. That's gotta be the feeling. Otherwise, to your point, it will be two steps forward, one step back, or one step forward, two steps back if you don't make that call. So going forward, we gotta do that. So when you went, so the $37,000 that you quoted me, is that including the new fridge?

Yeah.

Okay, great. So now we've got a car. How much of the $37,000 is the car?

So we have 2 car payments. Um, one of them is $339 a month. We have about $7K left on it. And then we have a minivan for $630 a month with about $27,000 left.

Okay.

And last time I checked, we're about $9K underwater on it.

Oh boy. Okay. And on the— and then the credit cards are how much? The rest bit?

So the new Lowe's card is $2K.

Okay.

And then we have about $1,000 on another credit card left.

Okay. So my— the number one place I'm looking is at this $27,000 car because it's $630 a month. You desperately need that money.

Yeah. Yeah, it's hurting bad.

It's hurting you bad. And because what's your income every month?

So my husband does work a lot of overtime, or he does work overtime here and there throughout the month, so it does vary, but we're bringing in about $4,500 to $5,500, um, a month.

Each month? Yeah. I mean, to have that $630 back, that would be like breathing again. So what my goal would be be, and it, it's up to you how, how you guys do this, but I would be trying to get out of that $27,000 car. And yeah, you could, you're gonna have to play this just right. Otherwise it's not gonna be worth it. But you could say, okay, I'm $9,000 underwater. Can I get a loan for the difference? And can I find something that's, I don't know, while, while I'm at it, can I ask for another maybe $4,000? So I'm $13,000 in. In and I just kind of buy a junker, or I ask for $5,000 more and now I'm $14,000 in and I get a junker. And now instead of owing $27,000 to a bank, I owe $14,000 or $15,000 to a bank.

Mm-hmm.

I would do that.

Okay.

And then you start driving husband's car and he drives the junker.

Yeah, he drives the junker.

I don't know, his is looking rough too.

Then you're both driving, you're both driving junkers for a while.

And listen, listen to what Jade's saying. Like, I want you to paint the picture of your life right now. You have two cars that you can't afford with brand new tires on them.

Yeah.

You went and bought a $2,000, which is a pretty nice fridge.

Mm-hmm.

The other side of this thing, if you, if you have like, uh, like Stranger Things, if you go to the Upside Down version of this, you have one car with all the same tires on it. You just know, man, we are, we're, we are six months away. You have one tire that you got replaced. Replaced and it doesn't match the other 3. You have a $500 fridge that you got off Facebook Marketplace and you shook hands and that guy said it worked. And yeah, sell this minivan and you're driving 2 clunkers. A, you don't owe anybody anything. And B, you look around and say, hey husband, you and I, we want a different life than this. Let's start being intentional in saving money so we can get another car here, a nicer fridge there, and you start taking control of your life back. Like part of the $1,000, part of having one new tire on a car instead of all four new tires is you don't wanna stay like that forever.

It's a reminder.

And it's, it's, it's more gasoline in the tank to keep going down this route of freedom, not this, this route of let's just solve for today and let all these other people speak into our life. All these other banks, all these other loaning lending agencies.

You get what I'm I'm saying, right?

Yeah, it's not cool for the first year. It's just not. It's miserable.

And for you guys, the good news is you're not going to stay there for long. No, you're not there long at all, because once you do this car deal and instead of paying $630 a month, maybe you're paying $230 a month or $330 a month, you get half that money back, and now you're able to use that money along with your other margin, and you can knock out the $1,000 credit card in one month and then the next month maybe you're able to knock out the $2,000. Like, you're going to be done with this. I'm saying I think you can knock this out in a year, but this is with you guys working so hard, him taking all the overtime he can get, you picking up extra work, you guys selling everything you can think of. Go through the garage, go through the attic, go through the basement. Look at the kids' old clothes. Can I take this? Can I put it on Poshmark? Can I put it on, you know, one of those consignments? Everything you can do anything you can do to sell something and get this money. This is a 12-month play for you guys if you go hard in the paint.

Dave Ramsey here. Most people stay stuck with their money because they're not paying attention to it. Most people are living paycheck to paycheck, stressed out and broke. Don't be most people. You work way too hard to be broke and feel broke, and you deserve to have something to show for it. That's why we built the EveryDollar budget app. It gives you a personalized plan for your money that shows you how to free up extra money every month and use it to beat debt and build lasting wealth. Plus, you get real coaches guiding you through your plan step by step. Look, most people hearing this will just keep hoping something changes, but not you. You're ready to make change happen starting now. Go download EveryDollar in the App Store or Google Play and start for free today.

All right. The Ramsey Show question of the day is brought to you by Yrefi. Defaulted private student loans can leave you feeling stuck and overwhelmed, but Yrefi helps you explore refinancing options with a low fixed rate and a payment based on what you can actually afford. Visit yrefi.com/ramsey That's the letter Y, R-E-F-Y.com/Ramsey. Remember, it may not be available in all states.

Today's question comes from Greg in Arkansas. How do we determine the best car insurance coverage for our 2 teenagers? We provided each of them with a used car to get them through high school and college. We own the cars and they each have a value of under $500— I mean, $500— $5,000. We're currently paying for full coverage on them, but I'm not sure if that makes sense. What's your recommendations on how to cover them adequately and not spend an arm and a leg? For insurance. Well, having two teenagers, um, I just added a teenager to my car insurance. So adding two, that's tough.

Made you feel, it made you feel some type of way, John?

Yeah.

My, my rule of thumb here is, um, my son's driving a used truck and it has liability insurance on it. And so I've got enough cash in my emergency fund that if he wrecks that car, I can replace a similar cheap car. You got $2,000. Yeah. You got two $5,000 cars. Um, I would personally, in my house, I'd put liability coverage on 'em. I wouldn't carry comprehensive coverage. And the difference is liability pays for the car that your teenager might hit, but not for your car that just got wrecked. Comprehensive pays for both. And so, um, yeah, that's, that's what I would do in this situation. Um, if, if you have a car with payments on it, usually they, they force you to have comprehensive cuz they wanna make sure they get their money back on their car if you wreck it. I have comprehensive on me and my wife's cars. They're nicer cars. And so if they, something happened to them, I want to be able to go get them repaired. But for a couple of cheapo beater cars, like you're going to give your high school kid, like, yeah, I'd put liability on it and roll with it.

Yeah. And I go through Zander to—

Yeah. Zander does all my, they do, they do all of our insurance, our term life insurance, our car insurance, everything.

Yeah. They'll find you the best rates. Very, very good. Let's go to Casey in Denver. Dallas, Texas. Hi Casey, how can we help?

Hey, so, well, hi first off. Hi.

Hi Casey.

So me, wife, two toddlers moved in with her grandmother, uh, to pay off debt exponentially fast and start saving. Um, and now we have an expecting third in the middle of July and looking for some advice on a reliable family car We just paid off all of our credit card debt. Still some student loans left.

How much student loans left? How much debt total left?

Uh, $12,200. Yep.

Okay, $12,200 school.

Yes, my wife's school loan.

Okay, cool. Okay, and how's the arrangement with Grandma going?

Uh, great. I mean, we had to swallow the humble pill, you know, we lose some personal space. Had to get a storage unit to throw some stuff in, but it's, it's honestly been a huge blessing.

How long are you going to do it?

Well, that's the question of the day for me, but, um, for now it's to finish paying off the school loans, hopefully save up enough for a family car, then start saving for a house.

Oh, that's a long timeline.

That could be a minute. How much money do y'all bring in?

Uh, so I bring in about— so I have a day job and I do freelance photo and video work, and I bring in about $4,500 $1,000 a month.

Okay.

And is mom home with kids or is she out working in the workforce?

Mom home with kids. She caretakes, um, us on the side and she brings in about an extra $400 a month.

Okay. So if your initial question is how long should we continue to do this, um, I think that I would aim to— because how much have you paid off so far? You've got $12,000 to go. How much have you done for up until this point? How long did it take?

So we moved in December 1st. As of 2, 4 weeks ago, 2, 3 weeks ago, we paid off $13,000 credit card debt.

Okay. Um, I'm going to tell you what I would do. I think that I admire when people are willing to sacrifice to win. I think this is a, this is an imposition on you. As a family and as a married couple, it's just really tough to stay in a position like this for long. And so I would try to, I would really try to cut it short. When do you think you'll have the $12,000 paid off?

Crunching numbers, I can do that in about 4 months.

Okay.

I guess more freelance work to come in for sure. I can expedite that.

I would not extend this to buying a new car. Are saving for a down payment. I would not extend this that far because what this means is, and we've gotten a couple of these calls today, so this is nothing on you. Everything is a series of choices. And so for you guys, your careers are a series of choices. You know, starting a family and the amount of children is a series of choices. And how that affects your financial timeline is a result of that choice. And thereby you're choosing that as well. And what I would hate is for you to to pass that off onto grandma because it's part of you guys' choices. Do you see what I'm saying?

Yeah.

And even though she's probably like, oh, I'm so glad to have them. I get to be by my grandkids and da da da da da. If you kind of flip the script for a moment and you go, well, if I had a buddy or if I had a family member who was like, hey, let me move in with you for a little while. I wanna pay off my debt. I wanna save up for a car. You know, I wanna get it down. You'd be like, hold up, wait, wait, wait, wait, wait a minute. Wait a second. So there's a thin line between— do you see what I'm saying?

Yeah, absolutely. Yeah. What, what's the, uh, I wouldn't want to, I, I, I'll be more willing to push the loan, pay the monthly, maybe a little bit, get the family car outta the way and then save for the house, or at least for a good size down payment.

You, you've, you've mentioned the family car by adding a, having a third kid here in a few months. Is, is that gonna exceed your, the cars y'all have?

Yeah, so that's the problem is we only have, uh, two little 4-seater sedans. So, uh, we got to get a— got to get a bigger vehicle, which we want to sell one of them anyways, so it kind of works out.

I was going to say, yeah, it— I, I would save up the cash. And the discipline you're going to have to— you and your wife are going to have to put on the table here is 100% you're going to want to go get a brand new Tahoe or a brand new Suburban or a brand new minivan. Y'all just can't afford that. And so we're going to have to find a minivan with 150,000 miles on it that's a good car, a good Toyota Sienna or something and, um, and it's gonna have other kids' stains on the carpet or whatever, but that's what we can afford and we're gonna pay cash for it and then we're not gonna get ourselves further behind.

Yeah.

Uh, and by the way, that's all good. It'll be, it'll be good. Like, you know what I mean? Like, it's a choice y'all are making. So this isn't a thing that's happening to y'all. It's like, no, we picked that minivan cuz we choose freedom as a family over shiny things that go down in value.

Right.

Uh, can, and can I ask a question, Casey? I just wanna make sure I'm understanding. I'm not understanding. You're living— are you— when you say grandma, is it your kid's grandma, so like her mother, or is it your, your mother's grandmother?

Uh, it's my wife's grandma, so it'd be my kid's, uh, great-grandma.

Oh wow. So y'all doing caretaking too?

Yeah.

Is that what— is that the arrangement?

Yeah, it's kind of the win-win where, you know, she became a widow in 2020. The house she can't keep up with. There's an upstairs she can't even walk up the stairs. Um, she's been lonely, depressed.

So, okay, so it's not a bad deal.

It's not bad. Yeah. Okay, that, that does make it a little different. How How old is she?

Uh, she's— she'll be 80 this year.

Are you expecting to inherit this house?

No, we do not want it. No, absolutely not. There's a whole—

no, no, I was just trying to make— I was just trying to see if there was any other parts to this.

Jade, I could see a world where if with the caretaking arrangement you could do this for 3 or 4 years if it works out for your family. Y'all got the whole upstairs, you kind of have your own separate life, but y'all get to—

that feels different, I won't lie.

Yeah, and she's brightened up once she gets to live with her great-grandkids. They greet her every morning, so she's definitely livened up more. Yeah, that's cool. Like I It's been a great win-win.

And that can be a really remarkable experience for young kids if there's just no toxicity and, and, you know, you know what I mean? It's not a, it's not a gross arrangement. Y'all aren't living in a 3-2 and like, it's everybody's, everybody's got some space, but also everybody's involved in the caretaking stuff. That can be pretty amazing.

Yeah, I, I think that is good. You know, I'm gonna go back on my ruling here and I'm gonna say that I'm okay with this as long as you guys are okay with this. It sounds like she's being served. It sounds like it's a good thing for your family. And for that reason, yeah, I would ride it out and I'd go back, yeah, to your original plan of saving for a down payment. You know, it's funny, John, financially, um, multi-generational households, a lot of times we're kind of like, yeah, get out of that. But that used to be the way.

That was, that was the only way.

That was the only way.

That was the only way.

Yeah. Is, is you group up with your folks and you're right. It's so good for kids.

It's good for kids. Good for, for grandparents. And but you just gotta, you gotta structure it and do it the right way.

Yeah, no enabling.

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

So if you're working the Baby Steps, the best and fastest way to do it is by using EveryDollar. Trust me, it's more than just our budgeting app. Now the plan is built right in, baked right in. I love that. You can track your progress, plus get personalized recommendations and coaching for your situation that'll help you free up more money and work the plan even faster. It's truly like having one of us in your pocket, walking with you every day, showing you the next step and holding you accountable. So start EveryDollar for free today by downloading it in the App Store or Google Play. All right, we got Julian in El Paso, Texas on the line. What's up, Julian?

Oh, yes, I'm calling because I had a house fire in November of last year and the insurance company is gonna pay me some money to repair, but it's pretty severe, so I'm wondering if I should use that check to just rebuild and do with the process and keep my normal monthly payment, or if I should take that check, pay off that mortgage for that home, and use the difference to put me and my son into a new place.

They're not paying you to rebuild the house?

Yes, that's— the check is for— is for rebuilding the house. It's about $310,000. $100,000, but with the war and all materials increasing rapidly, I'm— they cut the check in November— in December, excuse me. So I don't know if it'll still continue to cover the cost of the construction, honestly. And I'm kind of in panic mode after the fire, so I don't want to make any decisions. Yeah, emotionally.

Yeah. So did everybody get out safe?

Yes.

Can I just tell you, I got out Safe. Yeah, got the two dogs out.

Good. You got everybody else safe?

Yes.

Can I just shout you out? Good on you, Dad. That's what— that's— I hate to gender this, but that's what dads do, man. You run back in and you get everybody out. I'm proud of you.

Sure did. Sure did.

That's good, man. Um, and I appreciate you recognizing inside your own chest, hey, I'm, I'm still in fight or flight from that deal, and I'm not making rational choices. I need to get some wisdom, and I want to shout you out too. That, that, that shows the level of—

but I was watching one of you guys' videos the other day, and I think Jade said, don't make emotions, don't make emotionally charged. And I was like, you know what, that's it. I have to call.

All right. Well, I'm glad you did. So here's my— anytime I feel a certain way about a thing, I've got real big feelings about a thing that I think, the first place I want to do is write down that feeling. I have, or the feelings. I got a bunch of them. I'm kind of dramatic. And the second thing I want to do is I want to go get real on-the-ground information. I don't want to scroll the news sites who are screaming and yelling, trying to get headlines, trying to capture my eyeballs because they are selling me my attention as a product. I want to go talk to an actual contractor and get an actual bid or 2 or 3 or on my actual home and get a cost estimate. And once you're looking at the paper in front of you, my guess is your, your next right step will be pretty clear.

Mm-hmm.

And you're gonna have to pay off the mortgage anyway, right?

Yeah. Yeah. Eventually it was just in the loan process. So I had been doing the 13 payments a year thing. Okay.

What, what did you owe?

Yeah.

What do you owe on the house? House?

I have about— it's under $100,000. I've gotten it under $100,000.

So where y'all living right now?

Um, the insurance company gets you like a temporary rental.

Okay.

But they only do it for like a year is what they're telling me. So I'm like, okay, so I'm 6 months into my year, my construction hasn't started because your contractors haven't done a lot pack out of my belongings and things that they're supposed to do. And I'm getting into panic mode again that since there's no actions being taken, I'm going to—

but is the action to be taken something you should be doing or is it something they're supposed to be doing?

No, it's one of their contractors that they're supposed to be sending in to pack out my house so it is ready for a bid and stuff like that.

Okay. So you need to contract it. Their clock should not start until the house is ready to be worked on.

Is that how that works?

I, I don't—

that makes sense.

I don't know how that works, but that would be my legal argument is I, I, I want you to have a lot, a, a bid in hand ready to rock and roll the day that this stuff is done, but I don't think your clock should start until they have finished their work.

Mm-hmm.

Right. But yeah, they're not just gonna pay for you to have a house indefinitely while you sit around and decide what you're gonna do or not do or whatever.

Yeah. They give me a 1-year lease in this temporary housing, so that's why I'm in a panic mode, you know?

Yeah. Let, let's, let's, uh, feel the panic and then let's, you're, you're not gonna solve panic by thinking about panic. You're gonna solve panic through, and, and you're gonna by, by going right through it. Action. Okay. And if you hate this house, you're scared of this house, I would rather you, this may not be the wisest thing to do. I'd rather you fix this house up, get it rebuilt, get it redone, get it clean as a whistle, and then choose to sell it then. 'Cause you're gonna pay this thing off. You're gonna have a burned down house on a lot that you own. You're gonna have to do something with it, right?

Mm-hmm.

Mm-hmm.

At some point the HOA's gonna come sue you. Somebody's gonna come.

Yeah. It's gonna have to be rebuilt regardless.

You gotta do something with it. And so what I would hate for you to do is to take this money, go buy something else, be responsible for two mortgages, and then get a bill from the city that says, hey, you gotta go deal with this burned-out home. You can't just have a burned-out house in the middle of a neighborhood, right?

And the reason it seemed okay to me is because I would only have one mortgage and it'd be substantially less because I would use that construction money instead to pay.

I know, but what we're saying is you can't just—

you can't just leave the lot burnt there. So what you're saying is out of the $310,000, you'd pay off the $100,000 and take the other $200,000 and buy something else?

Is that what you were saying? Yes. And then what I would do with that is I would eventually continually, you know, go back to the house. They're pretty close to each other, the one that I'm eyeballing, and I would still continuously be working on it. But my— I hate trusting contractors, mechanics. I'd like to get my own contractor's license, honestly.

Yeah, but, but you're talking years.

Yeah. And how would you fund it if you've already spent the money on, on a different home?

With my mortgage payment pretty much that I would need— I wouldn't have.

Got it. Okay. Yeah, I'm with John. I think you're going to cause yourself more headache if you, if you do it, if you don't do it this way, because now you're going to have to figure out, well, how long can this lot sit like this in my neighborhood? What does the HOA say? What does the city say? Right?

You've got some, you You've got, I'm afraid the city's gonna come do it for you and they're gonna send you a bill for $75,000.

Yeah. You've got your work cut out for you now. I, I don't even know if this is possible. So this is something you could research, but if you're like, hey, I'll clean off the lot and I'll get it fresh. Can we sell the lot? Absolutely. And not rebuild, right?

Sell it to a developer.

Yeah.

And then, and then if they give you, I don't know, $100,000 for the lot, you take that and that, that makes you clear with the mortgage company. You see what I'm saying? And now you can take, I haven't considered that, that's, that's where my mind is going. But again, you're going to have to research and make sure that you have the ability to do that. I don't see why you wouldn't, but just do some due diligence on that. But it seems like you don't want to live there anymore, and I totally understand that. Let's just get creative on how to do that and you're not— and you not be stuck with a, with a problem later on. Does that make sense?

Mm-hmm.

But you're not, uh, the meta of what we're saying is you're not working with real information. And I want you to go get, I want you to do the work to go get real information. And you can say, I don't trust contractors and whatever. You're gonna have to deal with contractors. So call a couple of friends that you respect and, um, find a guy that, or a, a company that you trust or that they trust. Right.

Mm-hmm.

And find out how much it would cost to raise the build, like this house to the ground. Find— call a couple of real estate developers and ask them how much they would pay you just to walk away from the thing.

Okay.

Right.

I, I only felt like I was locked into like those two options, and then this is opening up a lot of ideas for me. Good.

But I want you to listen, stop thinking about ideas and start getting after it. I think when you get some real data and some real information in front of you, you might find that you can re— like, fix this house. And by the way, get it all back up to code, the wiring, everything. Get it all perfect how you want it. Um, and it might cost $150 grand, and you might still have a bunch of extra money laying— who knows? Who knows what the deal is?

Um, the point is, you've got op— you've got lots of options.

And I'd be on the phone with my insurance company about them following through with their responsibilities.

Hey, George Campbell here. So you're thinking about buying or selling your home. It's exciting, but there's a lot to think about, and all those decisions can feel overwhelming.

Well, here's the good news.

You don't have to tackle the process alone. Ramsey's Real Estate Home Base is the place to find all of your free tools and resources for help to get prepared to buy or sell your home with confidence. You'll find calculators, start-to-finish guides, a podcast, and even an in-depth video course hosted by yours truly. What's not to love? So if you're ready to take the next steps toward your home goals, go to ramsaysolutions.com/real-estate. That's ramsaysolutions.com/real-estate.

Ramseysolutions.com/realestate.

All right, our Ramsey Show scripture and quote. 2 Timothy 2:15, also known as 2:15, says, do your best to present yourself to God as one approved, a worker who does not need to be ashamed and who correctly handles the word of truth. John Carmack said, focus is a matter of deciding what things you're not going to do. I know, that's right, John.

And I'm sitting by my friend Jade, otherwise known as Jade.

Listen, when I said it, it gave me 2 Corinthians vibes, and so I needed to— I needed to say it back the right way.

I'm big into reading the Bible.

I need to stop. I do read it, I promise. And I also know how to say numbers.

I love 2 Corinthians.

All right, Sean is in Spokane, Washington. Sean, please get us back on track. How can we help?

Hey Jade, John, pleasure to be talking with you.

You too, man.

Um, the, the crux of my question is trying to really understand stork mode.

Ah, you got a kid coming?

Uh, yeah, I do. Yeah, we are expecting.

Congrats!

Congrats!

That's exciting.

Yeah, um, baby is due in October.

Are you doing all right?

Is it baby number one?

Uh, for, for me, yes. Okay, you're feeling it. This will be baby one.

All right, can I just tell you?

Yeah.

Your panic is real, your fear is real, and I'm telling you, on the other side of this thing, um, like another chamber opened up in my heart that I didn't know existed. I did not know love like I thought I I knew it. So buckle up, man, it's about to be the ride of your life. I'm excited for you.

Yeah, it's all good.

Thank you. Um, I'm super excited too. My wife is healthy, baby's healthy, so all those good checkboxes are there.

Perfect.

So you can ask for—

good.

So how can we help? You want to explain stork mode, huh? So that means you guys— what do you have going on? You've got some debt?

Uh, so backstory is 2 years ago we got debt-free, and then last year we were all one income. My wife was working, she finished school. And so now we're back to two incomes. Um, and then now we're expecting. So in terms of saving for the emergency fund, we're about 2 months in terms of that savings total.

Baby Step 1 or Baby Step 2? Uh, I mean, or Baby Step 3. Okay, great.

Yeah. So we're, we're in 3 with almost 2 months saved.

Great.

Um, her, her desire, right, it's been a grind for over 2 years now, would be to go on a trip to Italy, go, go explore Europe, place that she, she's baby— she's lived there previously, and it would just be a joy for her to show me her stomping grounds. And, um, you know, we take the whole family.

What's that cost?

Be I'm running, I'm estimating between $15,000 to $18,000.

Okay, and when would you do that?

That would be mid to late July.

Do you have time to save up that money by then?

We could cash flow it, and then that means we're not really saving in stork mode. So I kind of wanted to get an idea of where this whole stork mode and savings.

Stork mode is something we tell folks, like, and I would tell you, especially as a first-time parent, uh-huh, if you're paying off debt and like you have a baby coming in 6 months, you can pause paying off debt and just put cash aside just to make sure if something happens, there's a NICU stay or there's an emergency C-section or something, I've got that. I don't, I'm not gonna get us out of debt 6 months and then have to go all the way back 6 months. Mm-hmm. So this cash is on the side just to make sure everybody gets home from the hospital and we didn't have to spend any extra money. That's, that's the point. To that.

Does, does the money that you have saved, does that cover your out-of-pocket max for your family, like for, for wife and baby?

Yes.

And is there anything left over after that with what you have saved now?

Um, maybe $10,000.

Okay, that's a, that's a pretty sweet spot.

So, so, and is mom gonna stay at home with the kiddo after, or she gonna go back to work?

Should be going back to work.

Okay. So it's not like you're going from one income down to two. I mean, I'm sorry, from two incomes down to one.

Correct. Yeah, we both go back to work. Okay.

What's your living situation? Are you renting, owning?

We're currently renting. Would love to own a home, maybe this time next year.

Okay. You know, I think that you have the emergency fund that you need. I'd love for you to get at least to 3 3 months before you consider this, because then you can officially kind of tick the box and say, all right, we got, we got through the 3 hardest steps. And then if you want to move a little bit slower getting the 6 months, because again, whether you have 3 to 6 months, and this is for anybody listening, you, you throw several things into the equation, right? It's, are both, are both spouses working? If you're single and you're the only one working, yeah, you need 6 months. Uh, but if you have 2 working working folks, you could opt for 3 or 4 months if you wanted to. Is everybody healthy? And that's the one part where, for you guys, it's not that your wife is unhealthy, but she's in pregnancy mode, which means there's a lot of variables there. So I personally, I'm not going to lie to you, I love the idea of if you had 6 months saved, that would just personally make me feel great. Next on the list is, well, let me at least make sure I have out-of-pocket maximums covered and some extra money on the side.

Just because when you go through pregnancy hospital stays, there's, there's extra meals that you need and there's, oh my gosh, I can't believe we buy this one item that we really, really need. Like, right, there's going to be things that pop up.

I was stunned. I thought, uh, baby went to the bathroom once a day like a regular person. I didn't know they went 400 times. Like diapers, whatever you have budgeted, quadruple it, right? Like, so things like that, you— it just expenses come out of nowhere.

Yeah, I'm all for trips too. Um, what's you guys' income? What do you make?

Um, combined about $240,000.

40. I think that in the parameter of your income, like I said, I'd love for you to get to 3 months of expenses, and I think you probably can cash flow that. And I think that you can cash flow this trip. My, my, my thing for you would be, it's gotta be, you can't touch the emergency fund for this whatsoever. It's gotta be completely cash flowed. And yeah, and with, with reasonable spending, I think that that's totally fine.

Can I ask you one more question, brother?

Please.

Do you want to go on this trip? It's just, it's just you and me and a couple million people listening.

I, I, I've never been, and it's, it seems, it seems dreamy. I am a spreadsheet guy, so I'm like, I don't know.

You're thinking about this is hard, this is down payment money, right?

Yeah, well, that's just it, right? You look forward in the next year and like, you know, that's 5% of what we're trying to put down on a home, maybe even 10 depending on where we land.

So, so is there, is there a conversation to be had that you sit down and say, I want to go to Italy too, sounds dreamy, to use your words. Is there a possibility that we wait till the little one is 18 months old? And at that point, here's a, here's a map, we have a home, and we cash flow this thing, we got an emergency fund, and we're just going to postpone this trip from trying to cram it in right now to— I want to do this thing upright. Is that a possibility?

I mean, yeah, I think about like, I'm, I'm over 6 foot, so I'm like, I'm gonna be crammed in that airline for 10 hours.

Yeah, I mean, I, I've done that. Like, I've gone to Italy, but I've flown international and I'm a big guy, like it just kind of is, right? I mean, I don't know.

I'm gonna play on the other side of this coin because this is your first baby. This is, I think she's viewing this as this is our last shot. This is our last, cause listen, with an 18-month-old, I wouldn't want to go. I mean, life changes in so many ways.

She's got other kids, right?

Uh, correct. Yeah.

How many does she have?

One. I have a stepson.

How old How old was he?

9.

Okay. So there's like, at 9 years old, they can go off with the grandparents or with the aunt, whatever.

Or go with you.

Yeah.

They can travel.

But I, I just think she's seeing this as she knows that independence changes greatly when you have a baby on your hip. So I, I would try to figure out a way that you can do a trip. Maybe the compromise is we don't spend as much or we don't go for as long, or, but I think there's a way you can meet in the middle because the trip truth is you guys have a great income. Um, you do have time to do the house. There's no, there's no rush for either of these. I just, I wouldn't want you to miss out on, um, experiences too, like as you're getting financially stable and as you're— does that make sense? Because you're doing like, you're on track, you're doing the things, you've paid off the debt, you've got the emergency fund, you've got all these other things in place. I just think that there is a level of enjoyment that you can have. I would probably say, yeah, $15,000, not $18,000. But other than that, I think you guys are on the right track. All right, guys, thanks for hanging out with us this hour. And remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.