Transcript of Quit Sabotaging Your Finances And Build Wealth

Brought to you by the EveryDollar app. Start budgeting for free today. 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. Jade Washall, number one bestselling author, Ramsey personality, is my co-host today. Open phones here at 888-825-5225. 5. The call is free, and some say the advice is worth exactly what you pay for it. John is on the line in San Antonio. Hey John, how are you?

Hey, I'm doing good, Dave. How are you?

Better than I deserve. What's up?

Good answer. Not much, man. I was just calling in to get some advice, Dave, um, dealing with the situation with my wife that involved like some financial dishonesty. Um, so just looking for some advice like on a plan on how to move forward. Um, with our situation.

Wow. Okay, what happened?

Yeah, so just to give you a little context, uh, my wife and I have been together on and off since high school. Um, we had our first son when I was 20. I'm 32 now. We separated for about 5 years, got back together. We just got married about a year ago, and we just welcomed our second baby boy in January. And up until recently, um, I mean, things have been great. Like, I think our relationship has been stronger than it's ever been. Um, but I just uncovered like some— a financial situation where she wasn't really being too honest with me. So what are you talking about?

What are you talking about? You uncovered—

yeah, yeah. So about a year ago, my wife's car broke down. She was— I was trying to fix it to save some money. Um, she ended up buying a new car without discussing it with me. Her dad helped her co-sign. Um, I was told that the original car was being taken by her dad's friend to a repair shop to get fixed and sold, which Didn't make sense to me because I know she was upside down on it. And I was under the impression that she was still making payments on it and everything was being handled. I just found out that wasn't the case. The car is no longer in our possession. She pretty much lied to me about making payments. And she didn't know what was going on with the car. It was at the shop. I mean, turns out her dad helped facilitate the whole situation. The car is pretty much gone. It disappeared. So I don't know what happened to it. But she wasn't being honest with me. About the car the whole time. I had to do some investigating.

When she was driving the car and she came home with a new car and you saw that she had a new car, what did you say and what did she say?

Um, I mean, I really didn't know what to say. I mean, she just showed up with a new car and said my dad took me to go co-sign on a new car. The old one was taken by one of his friends to a shop, and that was the last time we saw it. I thought it was sitting at a shop the whole time, but okay.

And then up till that point Up till that point.

How long ago was that?

Uh, oh man, that happened like back in February, March of last year, so about a year ago.

Okay. And you guys never had— you've never had combined finances?

No, we haven't. So the whole reason I was pressing on that, on that original car is because I was trying to like align our finances to, you know, start, um, investing, right? Like we, our house is paid off. We're in a really good situation. I'm trying to open up some college funds for our kids, which I've already done. Um, so she's never been honest with me about finances ever since we're married. I've been pushing on it. Um, and I just kind of had to find out the ugly truth.

So here's the deal. There's two problems. One is you're not aligned on the money, obviously, but the most important problem that you guys have to work through is lying, right? And so, um, you know, she has broken trust and now it's hard to trust her on anything.

Yeah, absolutely.

Because she's gone into this in-depth deception.

Oh yeah, it was like— that's the hard part because it's not like it wasn't one.

No, it's not a white lie. There's target bags under the bed. This is an ongoing major ongoing thing.

So operating on—

here's the deal, and y'all's relationship is a weird one anyway by the way it originated, and it's come and gone, and roller coasters and babies and all kinds of stuff going on that's out of line to start with. So what that tells me is, is that this money being out of line, and then her probably her shame around it, or her knowing your reaction wasn't going to be good, um, is probably what caused her to want to not tell you. So obviously, dude, what you all need is in-depth marriage counseling. Yeah, we all need to learn how to be married.

Yeah, I agree with you, man. Like, that was kind of like my non-negotiable, was like, um, like, if you want to work through this, like, we need to unpack all this stuff. We need to go to counseling. I need transparency into all of our finances. And we have a counseling session tomorrow. She's given me full access to all the bank accounts. Great, good.

That's a good start.

So if you—

okay, so if you can, if you can Begin to rebuild trust through extreme transparency and extreme alignment where you both see everything all the time. And gradually you will begin to rebuild trust and you'll work through all of the things that got you here with a good counselor. You're doing all the right things then. That's exactly what I would tell you to do.

Yeah, yeah, exactly. But there is like, obviously she's got a lot of debt tied to the old car, tied to the new car.

No, she doesn't. You do. You're married. It's you guys both together. You're right.

And that's gonna be the hardest thing for you is if she has said, "At this point, I'm all in. I'm ready to do the counseling. I'm giving you full transparency." Now your hard work is gonna be, "Okay, I've gotta kind of let go of some of those other things. I've said it, we've talked about it. We both have to now be focused on building this new thing." And that's gonna be the hardest thing for you because you got burned and you're still feeling that. And so—

The counselor can coach you through not continually bringing up the past all the time, unless there's a reason. I mean, the only reason you bring up the past is if there's some indicator that it's repeating. And so, you know, some reason to not continue to trust or rebuild trust. But, you know, the two of you sit down together and yeah, you have a right to have been angry for having been deceived.

Yes.

And but then you put that, like Jade said, you put that in the back pocket and you look forward. And we do, you know, or we don't. And we don't. We're not gonna be together, okay, because it's a deal breaker for you. But I hope it's not. I hope you guys can sit down and work it out and get the counselor coach you guys on working together. And it's probably going to lead to stuff like selling that car, because I'm guessing y'all probably can't afford that car based on the fact her dad had to co-sign. Hello, right?

Right.

And I also— it'd be kind of good to get rid of that car because it gets rid of her dad. And it gets rid of the memory. Every time you write a check for that car, you're gonna be pissed again.

That's a good point.

It brings up, boils it all up to the surface again. So I kinda like getting rid of the car just for those reasons. And I don't even know the numbers on the car. And I would imagine the other car is worth very little to nothing. Probably is in a scrap heap somewhere, or it got repo'd off of the lot. And she hid that too. But the guy at the shop is not gonna allow that car to just sit in his lot in perpetuation. He's either gonna, you know, sell it off to the scrapyard, or he's going to, you know, collect storage against it and based on that sell it, or he's going to call the repo company and they come get it. And in either case, you probably have some financial damage there too to work through. But the two of you can lock arms together and clean up this. I've seen people clean up more.

Oh yeah, and let's take a minute and talk about financial transparency for people listening. When we talk about financial transparency and combining money, it's not just, uh, there's a joint account that we put some money in. There's, there's one account between the two of you, and all of your money goes into there, and everybody has the passwords, and everybody has the account numbers. And if, if I toss my husband my phone, he knows my code and can put my code in. So financial transparency isn't just money, it is just relational transparency. You should want it's accountability. You should want your spouse to see and know the things that you're doing in multiple areas of your life, and you should give them access.

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Lynn is in Boston, Massachusetts. Hi, Lynn, how are you? Well, if I push the button, she can talk to me. Hi, Lynn, how are you?

I'm good. How are you?

Better than I deserve. How can I help?

Um, I am wondering, I'm in a kind of a unique situation and I'm contemplating selling my home. Um, I'm a single mom, I'm 52. My oldest daughter has special needs. She requires care. Um, I'm supporting her financially. Um, and physically sometimes, but she lives an hour and a half away from me. I do need to be closer to her, but I also have a second daughter who is a full-time college student in my area. Um, I'm just kind of stuck. I'm financially just in a huge mess. Um, been on FMLA to take care of my older daughter, so I'm behind in my mortgage. I'm behind in a lot of different things.

Um, You're behind on your mortgage, why?

So I have a single household income and I had, I was on like, to take care of my daughter, my income dropped because I was an intern in FMLA. And so you don't get, you don't.

Yeah, so you quit working to go take care of her.

Yeah.

And your income went away.

Well, not completely.

Yeah, but largely. And so you weren't— but you knew when you did that, I mean, what was your plan?

Well, I didn't have a plan because it happened sort of quickly. It was an emergency issue.

What was the emergency?

She had a hospitalization. She has special needs. She has new onset medical diagnoses of very We don't even actually have an answer to what's going on. She had a—

oh, is she on any— is she getting any sort of, um, income because of it? Any disability? Any SSI?

Yeah, she gets SSI every month.

How much?

So you, you just went to the hospital to take care of her at the hospital?

No, she had an admission, multiple admissions, um, and but when she came home, I have to take care of her and I have to get her back and forth to her appointments.

Yeah. How old is she?

24. So I'm— and it's just me, so there's no one else. I'm her guardian. But she lives in an area where she has supports, but not— they won't— it's not medical, like medical, it's like resources that, you know. Will take her into the community, things like that.

Do you have that by you or no?

No, no, that's why she's where she is, because there's nothing.

So when she moved there, all of this, you knew all of this? How— what was the plan then to take care of her?

No, we didn't. No, she was in a great place when she, when she moved.

Oh, so the medical has occurred since then, but the medical, not the special.

Okay, I understand.

Hey, hey, so you think the medical is chronic and ongoing?

It's going to be. Yep. Yep. We're in the kind of in the middle of figuring it out. And I think that, yeah, I guess you are.

I guess you're moving there, aren't you?

Yeah. I really need to. Um, I'm just, I, you know, I have my other daughter who's in college and, and I don't know if I sell, you know, I do have equity, about $200,000 in equity.

Yeah.

You need to sell it before you lose it.

Yeah, exactly.

Yeah, let's get it on the market and let's move it on the market and move and then try to establish some kind of income and career path around to work while you're supporting her.

Yeah.

What were you doing for work before?

I'm still working. It's just intermittently. I'm in and out.

What type of work?

I'm in the medical field.

Okay, so is that transferable to where your daughter is?

It is. It is. Yeah.

Okay. Either she moves where you are so you can take care of her, or you move where she is so you can take care of her. This not deciding is going to kill you.

Right. Well, the issue is just that how I'm going to, um, I think I'm going to probably have to rent, but yeah, wondering, you know, if I should rent my house out.

No, you should sell your house. You don't need a, you don't need a rental property in the middle of all this other mess going on.

Yeah, so just sell it.

Yeah, sell it, put the money in your pocket, go rent and live up there next to her, and move your job up there, get a job in the field up there. Or load her up and move her in with you, and you work your job down there, and you take care of her there. Because you're going to take care of her. You've established that.

Yes.

So the only question is which location, and both of you need to be there. This one foot on the boat, one on the dock, and the dock— the boat's leaving is not working for you. If this is an ongoing thing and you're going to be needed to do her care and you're choosing to be the one that provides her care, then, then that's what you're going to be doing.

So many different, different, you know, things. So thank you for that because, you know, people are saying, well, you need to rent it and move there.

No, people are stupid. Don't listen to people.

Are you going to buy something on your own? Let me get down there.

It's more, you know, you need to focus on the one thing right now and that's creating a sustainable life for you and her. And that's not being a real estate investor. So no, sell that thing, put the $200,000 in your pocket, make your decision that way. That's exactly what I would do. James is in Boston also. Hi James, how are you?

Hey Dave, how you doing?

Better than I deserve. What's up?

Great. Uh, so the reason I'm calling, I'm, uh, 22 years old, graduated from college last spring. I've been working full-time since the summer. Um, I would say that my, income and net worth are probably in the top couple percent for my age due to varying circumstances. I have a good job. A lot of my money that I have came from a life insurance policy from my father who passed when I was younger. And then some— oh no, don't be sorry. It's all right.

What's your degree in?

Computer science.

And what do you do for a living?

I do software engineering.

Good. And what are you making?

About $135,000.

Good for you. Okay. You got good income and you've got some money left over from that life insurance policy. How much is that?

Yeah. So that was about $100,000. I also had about $70,000 just from, um, money that my dad had put into high yield savings since the time my brother and I were younger. Um, my total net worth is about $320,000, $330,000 depending on how the market's doing.

What's the— so wait a minute, that's $170,000. Where's the rest of it?

So, uh, I worked 2 6-month internships while I was in college that contributed to a significant part of it.

And you don't have any debt?

Probably no debt.

Um, because you got $300 grand and you got $300 grand in investments, I hope, and $135,000 income and no debt, and you're 22 and you're in the computer science as a software engineer. Way to go. Great start, dude.

Sure. Thank you.

What's your question?

Um, so my question is, uh, You know, I'm kind of on third base, but I didn't exactly hit a triple to get here. I mean, I worked hard and went to a good school. I worked my ass off to get a good job.

You may be, you may be close to second base, but yeah. Okay.

Yeah. All right. Um, so my thing that I'm trying to do is I'm trying to reduce how much I spend, even though I'm already saving a lot of my income. Uh, I can't help but feel like the guilt of lifestyle creep is hitting me.

Yeah. Good for you. That's a good observation for a 22-year-old. That's very smart.

Yeah. Yeah. Well, hey, I see your stuff on YouTube and it hit me. I was like, I can't let this get to me. So I'm saving about 35 to 40% of my gross income.

Okay, when you're developing a piece of software, you lay out a plan, a flowchart, right?

Correct.

And you begin with the end in mind. You don't make it up as you go.

Yeah.

You have to go back and do some edits 'cause things, unexpected things happen, and you have to rewrite a portion of the code, but you begin with the end in mind and you lay out a game plan. Plan. So that's all you do with a budget. That's all a budget is. You begin the month in EveryDollar and every category is filled out. Every one of your dollars of income is already allocated to something that you decided it's going to be allocated to before the month begins, and then you follow that. And that allows some spending, but an amount of spending that you're comfortable with. What you've got right now is a bunch of unknown and the unknown is leaving you feeling like a financial hangover.

Yeah, pretty much hit the nail on the head.

Yeah, you need to know exactly what your goal is. If you're putting that 35% aside, what's the purpose of it? What are you trying to accomplish? What are you trying to obtain? And being conscious that you are enjoying part of your lifestyle. And Dave is exactly right, a budget will help you do both of those things.

Yeah, put on a countdown for fun and then go have some dadgum fun.

Yeah, you're doing well.

You're 22, you're killing it. I'm proud of you.

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Hmm.

Go download our EveryDollar budgeting app for free. It'll show you everything you need to do in the App Store or Google Play. Hailey is in Houston. Hi, Hailey, how are you?

Hey, Dave, how are you? I'm good.

Good. What's up?

I have a question for you. So I've been with my boyfriend for a little over 6 years, and I graduated Uh, in December 2023 with about 160 loans, $160,000 of student loan debt. Uh, I've paid off a lot. I have about $90,000 left. Um, thank you.

So you're what, 24?

I'm 26.

26. Okay. And what's your field of, what's your career?

I'm a nurse.

Oh, good for you. Okay. And so you got $90,000 left.

All right.

Mm-hmm. And my boyfriend makes $250,000 a year, but he does not want to propose until I'm completely debt-free.

Hmm.

Interesting.

You're not gonna like me. If you were my daughter, you wanna know what I would tell you?

What?

Dump him.

Yeah, I mean, he's a great guy.

No, he's not. No, he's not. No, he's not.

He's making you prove your worth based on money.

Yeah.

To him. You're having to buy your way into this relationship. Nope. You're a princess and you deserve more than this.

The reason I've been able to like, uh, put like majority of my paycheck towards my loans is because he does pay for all our rent.

Oh, so you live together?

Yeah, we live together.

So you're already married, but you just didn't admit it.

Yeah, it does feel like we're married.

Well, that—

gosh. So what's his incentive to get married? None.

And this, this— let me just say this, Haley, and I'm saying this because you're going to have relationships after this, and you're going to learn from this, and there's people who are going to watch this call and learn from this. This is precisely why, uh, one of the reasons why living together before marriage is a— is it's a bum idea. It's not a good idea, because what happens is you start to make bad relational decisions based off of the financial gain and based off of the pressure that you've already put on yourselves. Yeah. It's a lot easier to walk away from a, a messed up relationship when he lives over here and she lives over here and we just get together when it's time to go on our dates. It's a lot easier to go, you know what, this guy's a bum, I'm gonna walk away. It makes it a lot more difficult when suddenly you're in the same house and then you're splitting the bills and then he's paying for the rent. It makes it very hard to make the natural transitions that we would have made if we had not applied that amount of pressure.

And so you move forward in a toxic, unhealthy relationship because you chose to share an address. Anyway, now you're not going to do it. I can tell by the way you're talking. So here's the thing. We love people getting out of debt. You know that. And why do we love people getting out of debt? Because we love people and we want them to be able to prosper. And your number one wealth-building tool is your income. You have a fabulous career choice as a nurse. You'll always be employed and you can always work as much as you you want to work. You can work 80 hours a week, or you can work 20 hours a week. As a nurse, you'll be able to do that the rest of your life. And you can make a pile of money. All we tell couples to do is to be aligned, be in agreement on how money is going to be handled. Now, he is in agreement that he hates debt. You're in agreement that you've hated debt, and you've been working it down. Okay, but then he has put up a false block here. I'm just telling you, I love you, and if you were my daughter, I'd tell you not to marry this guy.

And because I think he's— this is a false premise. You're aligned on what is important. You're aligned on, okay, we don't like debt, we're going to avoid debt, we're going to get out of debt. And that's not— people have asked me since I came on the air here 35 years ago, should I marry someone with debt? And the answer is always yes. As long as you love them and you're aligned that we're getting rid of the debt. If you have zero debt, but one of you loves debt and hates saving and the other one loves saving and hates debt, you're going to get a divorce later. The number one cause of divorce in North America today is money fights and money problems. And guess what this is? This is a money fight. Yeah. You're just not having it out loud. You're having it in your head.

Yeah, that's right. Now, what could be going on, and I'm going to allow a little space for this, he could just be an idiot today, and he just needs to learn a little bit about what it means to be in a relationship and what it means to handle money together. You said one thing that might cause me to go, I wonder if I brought this to him and, you know, saw a premarital counselor, if we can get on the same page, is it seemed like he was willing to help with the debt. Now, you guys aren't, you know, married yet, but in a married relationship, it seemed like he was willing to help, but he was helping in the wrong way.

And so, that's the only thing that makes me think he might possibly simply be misguided, because he said, "Oh, I'll pay the rent." You could go to a marriage counselor, premarriage counselor, and say, "Look, let's get aligned on this, or we're gonna end this." But if at the end of the day, the answer to the question is, "I won't marry you." Yeah, then yes, we have a problem. "Until you pay off your debt." The question's answered. You value that more than you value me. See you later, alligator.

Yeah, holla.

After a while, crocodile, you'd be gone. Yeah, I mean, I'd be done with this. I'm just not doing this.

Absolutely.

Yeah, what do the cool kids say? "See you, Felicia," or something?

"Bye, Felicia." Bye, Felicia.

Yeah, that's the cool kids, like 20 years ago, the cool kids, right?

Yeah, that's gonna— I'm going to remember that forever, Dave. That was great. See you later, Felicia.

Get off my lawn. Okay. I'm that guy.

All right.

Charisma is in California. Hey Charisma, what's up?

Hi.

Hey.

Oh gosh, I'm kind of nervous to talk to you. This is amazing.

Well, we're glad you're here. How can we help?

I am currently working the debt snowball as of right now. I have Paid off $10,000 of debt in the last 6 months on a $50,000 income.

Good for you. Well done.

Yeah. Yeah. No child support, nothing. All myself.

Cool. How can we help today?

I have currently been paying off a credit card debt that I have, and I finally sorted through some collections that I have from my second child pregnancy. Um, my pregnancy with her.

How old is she now?

She will be 2 in June.

Okay, so these bills are 2 years old.

Okay.

Yes. Um, and I have, uh, notices from collection agencies. Um, however, most of them have not— like, I just have mail. They have not really tried to call me. Um, there's nothing that shows up on my credit report.

There's no other, like, Anything doesn't have to show up on your credit report for you to owe it. You went in the hospital, you had a baby, they sent you a bill. Is the bill accurate?

Yes.

Then you owe the bill. You owe the bill.

Okay. Okay.

Um, now how much is it?

I finally—

give me an example.

There's a few of them. There's a few of them.

Give me the big one.

The biggest one. Okay. The biggest one is $1,294.

Good. Okay, I want you to save up $200, and I want you to call them, and I want you to say, I'm a single mom, I make $50,000, I'm so broke I can't pay attention. I do want this off of my list though. It's $1,294 is the bill I have in front of me. I have $200. If you'll take that as settlement in full, I will send you the $200.

Okay.

And they will scream and yell and call you names. And then they'll take it.

Okay.

Get it in writing or don't give them money, and do not let them have electronic access to your checking account. Send them a prepaid debit or a wire or something else, but no access to your checking account and no money until it's in writing that the $200 is settlement in full. Might take $300, but you can get rid of that one. You can get rid of these at 20 cents on the dollar on average. Dave, we got a lot of calls on this show where life happens. One day someone's healthy, they're working, providing for their family, and then a curveball hits. You know, we hear it all the time. A car accident, a cancer diagnosis, a heart attack, and suddenly everything changes. Yeah, and that's why you've always said that having term life insurance from Zander is essential, because it protects your family if the worst happens. Yeah, that's right. You need 10 to 12 times your income in coverage. No gimmicks, no whole life junk, just straightforward term life protection. But there's another piece that people often overlook, and that's long-term disability insurance. Yeah, it's important to understand the difference between them.

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Protect yourself, protect your income, protect your family. Shelly is in Tampa, Florida. Hi, Shelly, how are you?

Hi, I'm I'm so happy to be on with you guys today. I have a question for you regarding anxiety over money, and that's kind of recent for me in the last 5 years.

Okay, anxiety over not enough money, too much money, piles of money scare you in the middle of the night?

It just is a fear of handling money. Um, I don't— we have— we live very comfortably. We have absolutely no debt. Um, my husband makes a great living for us both.

Um, our kids are a fear of messing up.

Maybe that's it, but it's— I mean, it's even— I, I can handle paying bills and it's kind of been my responsibility during the marriage, um, because he's very taxed with his job and, um, But even incoming checks or things that come in, I'm just very anxious. And it's gotten to a point now where— and he knows—

I'm sorry, so you get a check in the mail and that makes you anxious?

Yes, it's strange.

Is it— have you always been the one that kind of handles the kind of like the day-to-day of the money, or is that new, a new role for you?

No, no, I've always handled it and I've always done fine with it. It's only in the—

are you in therapy for something else?

No.

If you had to link it, I would—

what would you say this is linked to?

Yeah, if you had to link it to something, maybe the way you grew up, something that happened at this time in your life or in your childhood, what would you say?

I would— I link it to kind of since COVID it's become very magnified for me.

Okay, so uncertainty.

And we— yes, yes, I would say uncertainty. I try not to listen to all the noise. I, I call it noise, but it is noise that you can listen to a million different things. And I try to just walk forward being very stable, listening to— for you, you guys, for example, and My husband's very, very stable in everything as far as—

Okay, so I would do a couple of things. I don't know the answer. I'm not a therapist. I wish Dr. John was on with me today. I'm sorry, I mean, I wish he was on with you. Anyway, I wish he was here, but I'm not trying to throw you under the bus, because we're not qualified to do therapy, and he is. So, I'm gonna send you a copy of Rachel's book, Know Yourself, Know Your Money. And I'm going to send you a copy of Dr. John's book on anxiety. Yeah, Redefining Anxiety, because he says anxiety is your friend because it's an alarm bell going off warning you about something. Okay. And, and he teaches to solve for peace so that the alarms can go off. In other words, if the fire alarm is going off, we don't want to take out the batteries. We want to put the fire out. Sure, because the fire alarm is actually my friend. It's keeping me from burning the house down. That's what anxiety is doing. It's keeping you from messing up. And so he sees anxiety as your friend because it's saying, get out of the street, a car is coming.

That's anxiety. It's fear, right? And so I don't know if there's an actual thing here, but it could be. So I'm going to send you both of those books. I want you to read through them. The second thing is I want you to get on a detailed budget on every dollar, and I want your taxed husband to look over it with you, and the two of you together approve the budget together. Okay, that won't take a lot out of him. Then when you're writing the checks, you're not making all the decisions and writing the checks, meaning you're not emotionally carrying the weight of the management of the household. You're simply the check writer. Okay, we as a team sat down and looked at every dollar and said, this is where our money's going to go, then it doesn't require any anxiety at all for you to simply execute what the team has already told you to do. In other words, if the CFO and I sit down and say, these are the bills we're going to pay this month, and we hand them to a lady in accounting and she writes the checks, she has no stress at all.

Sure. Because she's not worried about it. I told her what to do and she did it. So you and your husband are the CFO. You're gonna decide what to do, and then you're gonna be the lady in accounting that writes the checks. And that's a different level of stress, because right now they're intertwined, and each time you write a check or deposit a check, you're also making all the decisions. So each of those transactions is carrying the weight of the whole household, and it shouldn't be. Okay, is that logical?

That's very logical. In his defense, he has tried. I'm not asking—

I'm not— I wouldn't throw him under the bus. I don't think he's a bad guy. Okay, I just want him to help.

I just wanted to make that clear.

Yeah, but he starts helping today.

Yeah, the day-to-day, you're right, is 30 minutes a week.

30 minutes a week, he looks at the EveryDollar budget and we make our decisions of where our money is going to go, and then the rest of the week you execute, submit payment on the website. Okay, and that's really easy for you then. And so when a check comes in, that decision's already made before the month begins. We know that check is coming in, and if an unexpected check comes in, well, then we have a celebration and we sit down together quickly and say, what are we going to do with this extra money? And we decide that towards our current needs and our future wants.

Understood.

Yeah, and I think that's kind of lowered a lot. And I guess the last thing is start setting some saving and investing goals, because I can promise you, when you have $1 million in a mutual fund, your stress level, your anxiety level is lower than when you're broke and can't pay your electric bill.

Well, that's just it. We do have—

you're in between—

net worth.

You have a what net worth?

We have a great net worth.

What's that? What's a great net worth?

It's probably just south of $10 million.

Okay.

Michelle, I can tell you some things practically, and again, Dr. John's not here, but I can tell you some things that I've done. 'Cause what you're saying, the things I've heard you say, they're so vague. It's like, "Ah, I'm just afraid I'm gonna ruin everything." And it's very hard to solve a vague problem. But what you can do is spend some time in writing down exactly, try to get as specific as you can, What am I actually afraid of? Am I afraid that, you know, if I take this check and use it for something fun, it's gonna cause us to not have enough money to pay the mortgage, therefore, you know, a snowball effect, right? Write down what it is, and then you can actually have a clear solution to the problem. If you keep it vague, there's never gonna be a solution and you just get to keep spinning your wheels. So try that, it has worked for me.

00:40:53

Yeah, details, if you can push facts out onto the page, facts are your friends. They will cause your brain to calm down. You know, John talks about in a trauma situation, what are the actual facts versus what are all the things that are spinning up? What drama narrative is spinning up in the trauma? And I don't know, there's something happened somewhere, probably, maybe your childhood or somewhere, but there's something associated with this. And I'd want to know what that is if I could figure it out. That's why I think Rachel's book, Know Yourself, Know Your Money, might be a She talks about the different kind of households we grow up in, where the toxic views of money or high stress around money. I mean, if you saw your mom crying every week over money, then you think that's kind of how things are supposed to be. You're supposed to cry every week over money. I got $10 million, but I'm still crying every week over money. And I don't know what it is. I have no idea. But I appreciate your question. It's an excellent question. A lot of people do struggle with that.

More than anything though, they struggle with this feeling of inadequacy, like, "I'm not competent. I'm not good at this. I'm not good at math. I can't do money 'cause I'm not good at math." Well, the math is like 7th grade, 4th grade, somewhere in there you learned the math. It's really not difficult. I mean, if you passed your driver's test to drive a car, you can do the math. It's not that hard. But it's intimidating if you categorize it over there as like some kind of mythical thing.

00:42:24

That's right.

I promise you I can teach your 12-year-old how to do this stuff, and even ones that aren't good at math. So it's just, it's doing it and developing a little bit of a rhythm and a practice and a confidence in your competence, and then your stress level just goes down with that. It's a great question though, 'cause you're not the only one feeling this, I promise you. You might be the only one with $10 million feeling it. No, I'm kidding. Hey, thanks for the call. When you're drowning in credit card debt and collectors start threatening lawsuits, a rep from some call center debt relief company can't protect you. A lot of so-called debt relief programs leave people wondering, am I actually protected if I get sued? When all you've got is a legal plan added on as an upsell, of course you feel stuck. But Guardian isn't another debt relief company. They're real attorneys. And with Guardian, you're assigned an attorney from day one. That means if a creditor sues, you're not scrambling and you're not hit with surprise legal fees. Now look, I'm telling you straight, debt settlement isn't pretty. I'd rather see you get out of debt the old-fashioned way.

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I'm good. How are you today, sir?

Better than I deserve. What's up?

Hey, I've got a lot going on financially. I inherited some money when my dad passed away a few years ago. And it feels like I've just kind of jumped from one disaster to the next with it and really just haven't had any peace since then. I've got some rental properties and things like that that I've spent a bunch of money on that are just eating me alive and I'm debating on selling them and just being done with it.

Okay. So how much did you inherit?

Uh, I inherited, uh, let's say $750,000 in cash. Between cash and stocks and then another $750,000 in equity in a business.

Okay. What happened? What's the status of the business?

The business is still there. Um, my uncle who owns 50% of it, um, is kind of like taking over it and we're taking it over and he's just robbing my brother and I blind. And I helped my dad run it for a long time before he passed away. But my wife and I had a daughter and we figured it was best to move closer to my mom and her family, which is back up here in Oklahoma. So I stepped away from it. And now that I've stepped away from it, it's made the same amount of money every year. And the profit, like what my end of it is, just keeps going down and down and down. And my brother's keeps going down and down. And you know, my brother and I are really debating on forcing him to sell it or suing him or something. Cause I mean, we've had a financial audit and it's pretty clear he's, he's taken a lot more than he should be. And I just don't have the bandwidth to deal with it anymore.

Why not? Uh, let's just say $750,000 gets you some bandwidth, dude.

Yeah, I know. I know. It's just, I don't have any help. There's a problem. My brother's not interested.

Why do you need help? Hire an attorney, go sit down with your uncle and go, this is over, we're selling this, I'm tired of you screwing me. It's a 10-minute conversation.

Yeah, I tried, and he starts, you know, he starts yelling and feels like it just had to go through attorneys.

Well, that's fine, that's fine. You want to yell? I'm going to sue your butt. Well, the judge will help you with this. You can't screw me anymore. I'm done with you screwing. You think you can yell at me and that makes you allowed— that makes you okay to screw me? Matter of fact, that makes you less likely to be able to screw me.

Oh, he just is under the impression because, you know, you're wussing out, dude.

You're wussing out.

Yeah, you're correct on that. It's just, I don't know, it's just I hate having drama in my family.

And it's okay, then get a piece of paper and sign the thing over to him and walk away from your money. Quit your whining. Yeah, I mean, you know, either fix it or give it to him. But don't just stand there and get screwed and like it.

Yeah, I definitely don't. So I guess that'd be the solution to that.

I'd do one or the other. Make a decision. Either walk away from it or punt him. Personally, I'd take great joy in punting a crook.

Why are you scared of him?

I don't know. He's just the last member of my dad's side of the family left.

Yeah, which just means he should— the last thing he should be doing is screwing you.

I know, that's what it feels like too. It's really made me angry because I grew up with a guy who was almost like a second father, and then like, you know, the second—

No, you're not angry, you're afraid.

Yeah, I think you're scared of him.

You're afraid he's gonna yell.

Yeah, yeah. I mean, it's just unfortunate because it's like, it's not how I used to be. And then as soon as like the numbers got as big as they are now, it's like I just don't trust myself to make a correct decision anymore on this.

Well, I mean, you trusted yourself to run the business with your dad, and you know how to run the business, and you know what's right, and you're just— for some reason, you're unwilling to address this.

What's your brother say? Your brother knows, right?

He's a wuss too.

Yeah, no, he's just— whenever I was running it after my dad passed away, I stayed down there and I did it on my own for a while, and I didn't have any issues. And then I had my daughter, and I told my brother, I said, hey, if you want to come here and fill my role, you know, you're more than welcome to. And he said he wants to just keep being a mechanic and getting a check. And, uh, I said fine, but you know, it's going to be a— it's going to be a problem. And I knew it was going to be a problem.

The other $750,000 in cash and stocks, you— did you say you lost that also?

No, I've still got—

you bought properties, right? Quarter million.

And yeah, I've got a quarter million in stock and cash left, and then probably I don't know, $200,000 in equity between two properties, but the properties have been, uh, I thought I was going to be real estate barren and I bought a duplex. Then I was going to live in one side, rent out the other, fix it up. And I ended up buying it in the worst neighborhood in town. House got broken into, car got stolen, and that's not a good place to raise a 2-year-old. So we moved out of that and it's just been one disaster tenant after another. And I make good money at the job I have. I work full-time and How long ago did you buy that duplex? 2 years ago.

Can you just sell it?

Yeah, I mean, it's like, it's— I've just got people in there telling me, oh, don't sell it, property only goes up.

People are idiots.

They're not in your life. They're not— they did not experience the things that you just listed off.

There's no joy around this duplex. Sell the stupid thing.

Yeah, it's, it's been a major point of contention between my wife and I. She just, she wants it gone, and I'm just I think I'm finally on board.

You're not exactly a man of action.

You're kind of like a glutton for punishment. You're listing off all these horrible things and we're suggesting, hey, just get them out of your life. But for some reason you want to cling to them with a kung fu grip. And we're telling you, just let it go, man.

So do Netflix. Listen, there is such freedom in making decisions and taking action, even if it's wrong. But right now you are completely captive to all these things that you feel like are happening to you. And they're not happening to you. They're just happening and you're doing nothing about it. So you got— you need to become a man of action starting today. Ready, set, go. When you get off the phone, call a real estate agent. Go to RamseySolutions.com, get a Ramsey Trusted Real Estate Agent, put the stupid duplex on the market. When you hang up from that, call an attorney in the town where your uncle lives and tell him to call your uncle and yell at your uncle. 'Cause turnabout's fair play. And we're getting ready to take you down. We're gonna take your underwear, Uncle. We're gonna take everything you have. We're gonna clean out your house. You get nothing. We are taking you to the ground. You're gonna sell this place and write me a check for my half, a fully audited portion, or I'm gonna bankrupt your yelling butt. I got a whole new thing for you. And turn that attorney loose.

Hire an attorney that you don't even like 'cause they're so mean. And turn that guy, take him off the leash and say, sick him. You're gonna have to do some stuff, man. You're standing around watching your life go by like it's someone else's life. You need to step into this thing and punch a few things and take some action, and all of a sudden your stress level will go down and your confidence level will come back up. Even if you screw this up, it's gonna be a whole lot better life than you have right now.

I don't think he can screw it up any worse than it already is.

Light him up. Light him up.

I can't think of anybody who sold a duplex and then was like, oh, let me get it back.

In a bad neighborhood where they stole the car out of the front yard.

Right.

Yeah.

Oh, I wish I had that back.

Yeah.

Never has been said.

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Well, tax season is upon us. Yuck. To get free checklists and guides that'll help you with your filing, free, go to RamseySolutions.com/taxes. Paul is is in Columbia, South Carolina. Hey Paul, what's up?

Hey Dave, appreciate you taking my call, sir.

Sure, how can we help?

Um, I've got a real estate question. I am looking to buy a lake house and I have found a house that pretty much checks all my boxes. I've called the listing agent and got some information from her, and I think I'm at the point now where I either need to enlist the help of my own real estate agent or get involved in a dual agent agreement with her. Mm-hmm. And my question is, what are some advantages and disadvantages of being in a dual agent type of scenario? And would a dual agent scenario benefit me in any particular way?

Well, typically what happens— and it's technically negotiable— but the typical transaction is, say, 6% commission. The person bringing the buyer seller gets half of that and the person that has the listing gets half of that, as the real estate agents go. If you are— if the agent that has it listed does the contract with you, the buyer, she or he gets both sides of that, so they get the entire commission. Obviously, I assume you knew that. And so the only advantage might be that since he or she's getting paid a lot more, that they're going to work really, really hard to get this deal done. Um, you know, they got twice the incentive to get this closed, right?

Uh, she's already working very, very hard because there's a lot to unpack with the owners. And, uh, I just figured that if we entered into a dual arrangement agreement, it would remove one link from the chain of communication. It could turn into a pretty complicated sale. Why? Uh, well, the owners are in their mid-80s. They live well out of state. I think they live in Maryland. Um, she said their cognitive skills are on the decline. Um, they have a reverse mortgage on this property. Uh, they are supposedly upside down. I don't know how you could be upside down in a reverse mortgage.

It's impossible.

It seems to be, uh, their financial situation seems to be headed for a short sale or maybe even a foreclosure, she said.

Oh, well, okay. I guess it's possible because the property could have declined. Is it in disrepair?

It's not pristine, but it'll take some work to update it and fix a few things.

So you have any reason why it would have gone down in value 35%? Because reverse mortgages are supposed to cap out at 65% loan-to-value.

Yeah, I don't really know anything about reverse mortgages other than they're terrible.

Yeah, I mean, 65% maximum though, so means there should be 35% equity unless the property went down in value by 35%. They wouldn't be upside down. That's what I'm confused. I don't know. Okay, so it doesn't matter. She's still got to untangle that barrel of fishhooks anyway. And dual agency simply means that she has a responsibility to both you as the buyer and a responsibility to the seller, which morally and ethically she does anyway. Okay, you're not, you know, if you're a member of the Board of Realtors, you're supposed to represent all parties in the transaction with ethics. In other words, you don't set out to screw the other side in any case in the real estate business. It's against ethics. You get you thrown out of the Board of Realtors for one thing, get you sued for another thing. And so you just can't, you know, just because one party or the other is paying, getting paid, does not remove you from ethics and your fiduciary responsibility. So I, if she's got the mental capacity to work through all of their complication, meanwhile getting you on contract and you and her ganging up on this thing, there's no downside to the dual agency.

It just adds another, it adds another cook in the kitchen if you bring your agent in at this stage.

Well, she's already working very hard to get all this information out of the seller, so I mean, she would probably be interested in keeping more of the commission, to be quite honest.

Yeah, well, I'm sure she would.

Yeah, and there's no issue with that.

And honestly, she should have done that before she put a stupid thing on the market. So it's kind of incompetent. But, um, I mean, how are we going to sell this house that I have for sale? That's a question you would ask before you put a sign in the yard.

But yeah, well, yeah, like I said, they're, they're in their 80s and they're old and grumpy, and, and, uh, I just— it could turn into a mess for her.

Yeah, not sure you're gonna get this house, it sounds like. "Okay, I'm not sure we're gonna get these, you know, this ski rope's got a lot of knots in it. Maybe a while you'll be standing on the boat untangling this puppy." I don't know, it's possible, but, you know, I don't see an upside or downside either way for you that's dramatic. So you're working with her, you think she's got it on the run, I would just go with her, honestly. I mean, there's— but if you're out there just wandering around, you're starting to look for a house and you want to get a buyer's agent, a buyer's agent. That's very standard in today's world. There's nothing wrong with that either. And a lot of our Ramsey Trusted Real Estate Agents have a buyer's agent on their team. And that's a good thing. All they do is represent buyers. That's all they do. And that's a very clean transaction. You're not questioning who's getting what. This guy's my guy, that's your guy. But they still both have to operate from ethics. They still have to tell the freaking truth. You know, and so that there's a lot of discussion around the dual agency thing in just the last few years with some antitrust lawsuits and things that came through.

But overall, you know, if you're dealing with good people, they're supposed to do the right thing anyway, and that is legally and, you know, from the Association of Realtors, all of that is all guiding all of that. All right, James is with us in Los Angeles. Hi, James, how are you?

Hey, I'm good, thank you. How are you guys doing?

Better than we deserve. What's up?

So I want to see if it makes sense for me to sell my car. Um, I owe about $11,000. Well, it's a little complicated. I— it's worth about $9,000 to $9,500. Um, I owed about $11,000 on the car, but I actually did something kind of stupid and I consolidated my debt into a personal loan, and that included my car.

Okay.

Um, so you technically owe nothing on the car, right?

So technically I do have the title and—

yeah, and you have a $9,000 car. Okay. And how big is your debt consolidation loan?

Uh, $27,000.

Okay. And what's your income?

Uh, I make about $4,400 a month.

Okay. I would not sell that car.

Okay.

Unless you just hate it.

It would just make more sense to keep it.

Yeah.

It's not out of control, right?

I mean, the main, the main reason why I was thinking about it is more for like the monthly expenses for the car that I have, you know, without the payment, say like gas, insurance, things like that. If I were to get something cheaper that was better on gas, you know, but it probably wouldn't— well, I was thinking like, so right now I have to budget about $500 a month for gas because I commute for work. You know, if I were to get get, say, something more fuel efficient, you know, I could maybe cut that in half. Or— but it might be— it might be that I'm just trying too hard, you know, I'm trying to move stuff around.

Yeah, I don't— I don't know if you're going to cut that budget in half. I mean, what are you driving? What kind of gas guzzler is this?

Uh, it's not really a gas guzzler. It's a Ford Edge, so it's an SUV. Uh, I mean, you know, right now our gas is about about $6 a gallon over here, you know. So, uh, you know, and then I do commute about 40 miles each way to work, so about 80 miles a day total.

Yeah, I mean, run out some actual miles per gallon and do that 6th grade word math word problem thing. You remember that one? And, you know, and if I had one that was— and what are we going to buy that's going to have half of that? I don't know if you're going to get that, get half of that.

You're right. Okay.

I really don't. I mean, you know, if you could buy a car of exact the same value and cut your gas bill in half and you love the car, that's fine.

Sure.

But the actual $9,000 car is not killing you out of $27,000. You got other issues there.

Oh yeah, for sure. Yeah. I mean, yeah, I was thinking like if I could sell it, you know, get something for like $4,000, put, you know, move some of that equity, you know.

Yeah. Are you married?

Is it just you?

You?

Okay, just me.

Yeah, I, I don't think that's your problem. I think, I think you're, you are, I think you're right. You're chasing the wrong thing. Instead, what I'd be looking for is extra income and other places I can cut in the budget.

That's a good point. I think there's easier ways to get the $250 back.

Yeah, because your car, if your car was $20,000, I would have sold it already. But it's just, it's, it's not that big a number as a, in the ratio of the rest of your numbers to where it doesn't, it doesn't change your life. You know, a lot of times we're talking to somebody, the car is killing them, and so selling the car changes their life. Murphy's Law means if something can go wrong, it will, and it usually happens when you're not prepared. That's why a big part of what I teach is staying prepared for whatever curveballs life throws. Have a fully funded emergency fund, buy term life insurance, and get a will from Mama Bear Legal Forms, because the last thing your family needs is trying to figure out what you wanted head after you're already gone. I've seen families torn apart because no one wrote things down. A will spells out exactly what you want to happen after you've passed away. No questions, no court dates, no family fights— just clear directions and peace. It's one of the most loving things you can do. And on mamabearlegalforms.com, completing your will is fast, easy, and affordable.

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All right, today's question comes from Andre in California. He says, "I have a 401(k) that will be maxed out within the IRS limit before hitting the recommended 15% invested. Will that be enough, or should I invest the remaining percentage in a brokerage account outside my work-sponsored 401(k)?" So Andre is referring to Baby Step 4. In Baby Step 4, we tell folks that they need to be investing 15% of their gross income every month into a 401(k). If they have a Roth 401(k), even better. And so obviously this guy is a high-income earner. The max this year is $24,500. So if you're able to do that, no problem. You're making over $160,000 a year unless you're over 50, then the limit goes up to $32,500, which means he'd be making over $200,000, $215,000. So yeah, I probably wouldn't go straight to a brokerage. I'd probably see if I could do some backdoor Roth IRAs first. One for you, one for your wife, if you're married. And then from there, if you have access to an HSA, I'd probably go there next and max that out. And then if you still have money, then I'd go to the brokerage account.

That's the way I would do it.

Good advice. I like it. So, you know, if you did a backdoor Roth IRA, the way that works is you invest in an after-tax regular traditional IRA, not a pre-tax, an after-tax traditional IRA. And this year that's $7,500, okay? And you can do one for your wife and one for you. And then as soon as you make that investment, instantaneously you roll it to a Roth. And you can do that regardless of income limit. So I did one, and I have done one every year for many, many years, and my wife every year. I do it in January, put $15,000 up, boom boom, and here we go. Actually, I can do $8,000 because I'm old. $8,600 this year. So I max them out, whatever I can put in there. That's the most you can do with a backdoor IRA. If you want to get super fancy, you can do a brokerage account beyond that. I don't know what your income is, we don't have that, and we don't have your age, Andre. So, but let's say you're making $600,000 a year and you're trying to keep the government's hands off of as much as you can.

You could do a backdoor Roth IRA, and you can also do a mega 401(k) backdoor if your company has a Roth 401(k). No, it doesn't even have to have a Roth. So what you can do is you can put up to $72,000 into your 401(k) in a year. But anything over the 24.5 or the 32.5, or if you're over 60, it's 11.2 going on, anything over those limits limits, you can go after-tax 401(k), a 401(a) it's called, and then immediately roll that to a Roth, just like the regular backdoor. So that's called a mega Roth or mega backdoor. And so you could do even more. I don't know if I would fool with all of that. It's a lot to screw with every year. But the big thing is just make sure you're investing money. So, you know, if you max out your HSA, you did the regular individual IRAs, and then you did brokerage beyond that, you'd be just fine.

Yep.

You'd be just fine. The good news is you're making a lot of money and you're saving a lot of money, and so you're going to be very wealthy. And that's how the formula works. Betty is in Fort Worth, Texas. Hi, Betty.

Hi. I just have a question. We have a 33-year-old daughter who has 5 kids. She got married— well, she got pregnant when she was 18 and then 19, and it's been on and off, on again, off again, relationship for 15 years.

Um, are they married?

Yes, they are married now, but he can't keep a job. They moved across country last year because he had an opportunity. He lost that job within 3 months. He's on his third job already, and they've only been there a year. Um, the problem is we have no debt. We're, we're doing great, and And I like to help them out as far as the kids. I don't send mom and dad money, but if the kids need something, I like to help out.

What's an example of something they need?

Um, school clothes. Um, maybe if they want to go to a movie, you know, it's nothing elaborate. Um, I go take them to the book fairs. I'll send money. She sends me the link so I know the money's going to the book fair. Um, sometimes I'll send her some cash for gas.

Um, it's just, what is your all's nest?

What size nest egg do you all have?

I'm sorry.

What size is your nest egg?

Well, we'll be right into a million real soon.

And how much money are you giving her a month average? Oh, I'd say $100 if that, because we're talking about a couple of thousand, a couple of thousand dollars a year.

Maybe.

Does she ask for it or you just see the need and step in?

Sometimes she'll do both. She'll send me an Amazon link and say, you know, I need to— the girls need this, do you mind buying it? You know, that kind of stuff. Or sometimes I might DoorDash pizza to them just because I want to.

Yeah.

And you're—

so your question's what?

My husband's tight and he feels like I'm enabling them. And I don't want to enable them because somehow they've got to come out of this somehow. I mean, they get a big tax return, obviously, if I kid that they go through it because they have no common sense whatsoever.

If they were doing what you would consider well in life and you're still the grandma, do you think that you would still sometimes send them a pizza because you're thinking of it? Do you think you would still take them to the book fair? Do you think you'd still want to go back-to-school shopping? Because the things that you're describing, my mother-in-law does, and we don't need it. She just likes to do grandma things. And in her mind, those are grandma things. So is it the same for you, or does it feel different?

No, it's the same for me.

But yeah, I think your husband's just tired of your daughter— his son-in-law being a bum.

He is, and I get it.

Yeah, I get it too. I get it too. But I don't think it's any reason to quit doing what you're doing. I don't think what you're doing is enough money that it's enabling anything. If you were sending them $1,000 a month cash, that's different. I'd call you out on it, but you're not.

When they moved, you know, they had put the money down for the house, and then they didn't know they had to put a down payment down. And so we had to scramble and go get $1,500, you know, so they could do that, which they've paid us back. He has never just given them money. Never. He makes them pay everything back.

Yeah, I think there's two issues. I think there's two issues that you're blending together. I think there's the, the grandma moves of those little things that you spend money on that you like to do. And then there's the whole issue of like, like Dave said, you just don't like the son-in-law. There's this whole issue over there. I would try not to blend them together because I think it, it'll take the joy away out of the grandma.

$1,500 for them not having a down payment or whatever. Is a completely different discussion than we had early in this phone call. So I don't even put those in the same category. They're in different buckets. I might have sided with your husband on that one. I would have just said, "Hey, you guys made your bed. Figure it out," because you seem to be just constantly screwing up everything. So I'm gonna let you figure this out. I'm gonna let you fly until you hit the rocks or learn to fly. And so in the meantime though, if you buy your grandkids a little bit of school clothes and a pizza, you have not enabled the workless, shiftless father.

Well, I mean, what point can he change?

You need to talk to God about that one. I think that's a matter of prayer.

He could change tomorrow.

You just have no control over it. Deciding to work hard is just a decision. And deciding to actually show up at work and be pleasant while you're at work so you keep your freaking job, that's a decision, right? Take a bath, brush your teeth, all these kinds of things. These are decisions. Connections that some people can't even figure out how to make in today's world. But that's a different thing than what we're talking about. What you called about at the beginning of the phone call, I would defend you on. And I preach against enabling on this show harshly, but that's not enabling. That's just buying your grandkids some stuff, and it's partially because your grandkids' parents aren't bright.

Leland is in Oklahoma City. Hi, Leland, how are you?

All right, how are you?

Better than I deserve. What's up?

Um, so I've got a question. I'm 22 years old and I started a business last year, and it's kind of just went backwards on me where I'm to the point now where I've got a piece of equipment that I'm sitting here staring down the barrel of a gun where they're basically probably gonna have to come repossess it the 1st of April.

So you started what kind of business, hon?

Um, custom dry fertilizer spreading business.

Okay. And so you bought a— what is the equipment?

It's an applicator that applies dry fertilizer on fields.

And what— how much do you owe on it?

$178,000. My annual payment on it's $40,000 a year. And everything's just went backwards.

I'm confused why they would loan a 22-year-old $178,000 on a piece of farm equipment.

Well, because I had a way to get into the business. And then since then, it's just went backwards since then. I had the money for a down payment, put the money down.

How much did you put down?

$12,000.

But still, I mean, you were not even— were you in the business already?

I've been in agriculture business all my life.

You're 22?

Yes, sir.

Yeah. Okay. All my life is not long.

Um, well, I've been doing it ever since I could.

I know, honey, but I'm talking about what moron loans you $178,000 with a $12,000 down payment? When you're 22 years old. There's nothing, there's nothing that says this deal should have happened.

Leland, you can't turn around and sell it?

I've been trying to, I've tried selling it with an auction company, but they wanted me to put $100,000 up front before they'd even sell it.

Yeah. And so you had grand plans of spreading a lot of fertilizer. What happened?

I put my name out within a 100-mile radius and the farm economy the way it is, fertilizer prices are high and there's not a lot of people doing dry. They're all going different routes.

Cool. I'm sorry, hon. This is scary, isn't it?

Yeah, it definitely is. Yeah, it's definitely scary to be sitting here in this position. It's just been haunting me ever since, I guess. Yeah.

All right, well, I went broke when I was 28, and I had more zeros on the end of my stupidity than you do, so I got you beat. Um, right. Because this was straight up stupid, and the guy that loaned you the money deserves to lose $100,000. Whatever company did this— what's the name of the company?

I can't remember off the top of my head, and I—

you owe them $178,000 and you don't know the name of the company?

Well, I do. It's on a piece of paper at my house, and I don't have that information in front of me.

You bought it at a dealership, didn't you? What brand is it?

John Deere.

Yeah, I guess so. So you don't know John Deere incorporated the money?

No, no, absolutely not.

Okay.

All right. And my plan was, you know, do 10,000 acres a year. That can be done extremely easy. And I found out the hard way that it has not been near as easy as what everybody said it was supposed to be.

So the moral of the story is we don't borrow money to start businesses because things never turn out exactly the way they're supposed to in business. That's the right business. And so that's a lesson that sadly you have learned. The only good news is you learned it at 22. I learned it at 28. So I had the rest of my life to not do that stupid mistake again. And you have the rest of your life to not do this stupid mistake again. So the next time you have a bright idea and someone wants to loan you money to do your bright idea, you tell them no, right?

Yes, sir.

Okay, good. All right, so we've learned our lesson. Now let's walk through it. I'm so sorry, honey. So I do not know a way around this because I don't know your world. I'm still just sitting here aghast that someone loaned you that money, loaned you $178,000 to spread fertilizer. There's just so many fertilizer jokes that I could weave into this, but yeah, they just roll off the mind right now. Anyway, the spreading of fertilizer is pretty thick here. But the— so let me tell you what I think is gonna happen and how you can handle it, okay? I think you're gonna get repo'd at the first of the month. I don't know how to tell you to stop that with anything that's reasonable. One thing you could stop it with is a Chapter 13 bankruptcy, but that's a— or a Chapter 11 bankruptcy even in this case, but that's a pipe dream because the business idea is dead and there's no way to revive the cash flow. If you could revive the cash flow starting 2 months from now, you know, we could delay the repo by putting it into a bankruptcy, but I wouldn't do that here because I think this business idea is just a swing and a miss.

Right.

So I think they're taking it at the first of the month. Okay, then what's going to happen is they're going to sell the piece of equipment for X number of dollars at that same auction. and then they're going to come knocking on your door for the difference. It's called the deficit. Okay, so let's play pretend. Let's play pretend, and it's $178,000 owed, and they sell the piece of equipment for $100,000, and they come see you for $78,000. You're 22 years old, you don't have any money, right? That's where we're going to be. It's probably going to be a year before they knock on your door wanting the difference. It's not gonna be soon, okay? And when they do, normally what happens is they push you and push you, and the person files bankruptcy, and they get nothing on their $78,000 in our example story here, okay? However, you have a year to prepare for this battle, and were you to save up during this coming year by working your little tail end off $25,000 and you offer them $25,000 as settlement in full on the deficit, they'll probably take it because they're used to getting nothing.

Right.

We settle deficits on car repos at 20-25 cents on the dollar every day. I've not done it much on farm equipment, so I don't know that world, but it's probably pretty close. And the reason we're able to settle those deficits at that is because they very seldom collect anything Usually the person files Chapter 7 bankruptcy, they get a big goose egg, zero. Especially when you look at it through the creditor's eyes, not to put you down, Leland, but looking at it from the banker's perspective. I'm trying to get money out of a 23-year-old who's broke. The likelihood of that's close to zero.

Right.

So if he stands up and offers me $25K, I do a little happy dance and take it. It if I'm the banker. You follow me? So what are you going to do for a living now that your life is starting over, sir?

I mean, I'm pretty much self-employed and don't have— I mean, I don't have a college degree.

And what are you gonna do for a living, sir? You're gonna farm? Whose farm are you farming?

Uh, some, some friends.

You're going to work on a farm?

Yes.

For someone else?

Yes.

And what does that pay?

It just depends. Sometimes $25 an hour, depending on who you're working for.

Okay.

All right.

And then ask yourself, what do I want to be doing when I'm 32 that I'm a millionaire? And it's not $25 an hour work. I'll help you with that.

Yes, sir.

And it's not going into debt $178,000 to spread manure. Oh no, this was dry. I'm sorry. Okay, but anyway, you see the point. Yeah, so you got to figure out what am I going to do next? Because one of the things that I discovered when I went bankrupt, because I couldn't turn it around the way I think you actually can turn it around if you'll work like a crazy person and stack cash and keep your living expenses very, very low, I think you can scratch up some cash and settle the deficit when they do come after you 1 or 2 years from now. Don't call them. Wait for them to call you, and in the meantime, build a war chest and then settle it in full, in writing settlement. And I think you can get through this. I really do. And then you could just look at this in the rearview mirror as that dumb thing I did when I was 22. I can look at my life in the rearview mirror, that whole series of dumb things I did when I was 28. You can— you guys paid off hundreds of thousands of dollars because of dumb things you did in your early 20s.

A lot of stupid things.

Yeah, and so it's, you're talking to the choir here, okay? Singing with the choir. But I do want you to develop a future and a plan that doesn't involve a Hail Mary. You threw a Hail Mary into the end zone and got intercepted. Don't do that again. Learn from the mistakes. And we'll walk with you. Anything you need, Leland, you call me. And if you want to save up that money and when they mess with you, you call me, I'll walk you through it. I'll show you how to negotiate with them. Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. Jade Washaw, Ramsey personality, is my co-host. Abigail is in Norfolk, Virginia. Hi, Abigail, how are you?

Hi, how are you, Dave?

Better than I deserve. What's up?

So, um, I am calling you today at the, uh, behest of my 10-year-old son, who is also a huge fan, um, with the question of how can I be financially secure, my family be financially secure, and get out of debt when, um, my husband is dragging his feet and not willing to participate.

I'm kind of disturbed that your 10-year-old son is involved in that discussion.

Right.

Well, um, I have been pretty disrespectful towards his father. Uh, yeah, he's not the only one. I have 4 sons and, um, I've been very transparent, not, not, not, not sharing everything obviously with them about our financial situation. But we have lots of discussions about what is or isn't in the budget and what has been happening and what needs to happen. And I do now have an 18-year-old and a 20-year-old son who are actually making great decisions. But my, my situation over the past year has really been very, very difficult as I've had funding cuts and been ill and needed surgery and, um, was this December recovering from surgery, worrying about how we were going to pay the mortgage.

Okay. All right. Please don't put that burden on your 10-year-old. Oh no, his shoulders— your shoulders are not big enough to carry that.

Yeah, I have not put it on him.

Well, he said for you to call and discuss this with me, so that's what you said.

So tell us about, um, tell us about what's going on.

Why have not— you and your husband not sat down with a marriage counselor yet?

We've been sitting down with a marriage counselor for a year.

Good. Are you making progress?

Um, very, very, very small baby steps.

That's right.

All right.

There's a lot of issues in our marriage, as you probably would guess, right? Um, every type of infidelity, um, including the most recent issue actually discovered by a 10-year-old. Um, and, uh, um, so, uh, I'm sorry, what did the 10-year-old discover, darling? He discovered my husband's infidelity last year with a woman. Yes. Yep, through text messages.

Y'all are a hot mess. What is your 10-year-old doing in your husband's texts?

Oh, he, um, he intercepted them on his iPad because it was connected. It was a completely innocent thing on his end.

I'm just— I, I, I—

oh boy, it was very traumatic. It was very true.

So the answer to your original question is you can't. How do we move ahead financially and build wealth and build stability You can't. Yeah, until you work through a lot of these dysfunctions. And you have so many major dysfunctions going on that you've mentioned that minor baby steps are not enough. So I either need my therapist to put it into gear, or I need a new therapist, because I'm not going to exist in this environment very much longer, and I'm certainly not gonna allow my child to exist in this environment very much longer. So, "We've been in therapy a year and making baby steps, but just the other day, he discovered infidelity." Did I get that right?

Yes. Take this as a grain of salt, 'cause I have no letters behind my name. But it sounds like there's a lot of things, probably, in therapy that are supposed to be happening, and they're not happening on his end. She can't control that, so she's looking for something she can control, which is probably the baby steps feels like something that's within her control. That's what it sounds like. And this is, to your point, Dave, so far down the list of things to be.

I can't give you great hope that you're going to become financially prosperous and efficiently work through the Baby Steps to get out of debt and into wealth in this environment. So, the environment has to change for you to be able to win, hon. And I desperately want your 10-year-old to have a new environment.

I agree.

This is very disturbing. And so, yeah, if I'm in your shoes, we're going to turn up the heat in therapy, or we're going to call this. We're going to end it. And if there's recent infidelity while we're in therapy on the marriage, I don't know what your percentages are from recovering from that, but they're low. And so, I've never personally dealt with that, so I just don't know. But honey, you got a lot of things that are hurting. You got a lot of wounds, a lot of open wounds right now that are just gushing, and you guys need to get some help through that stuff before you can even talk about the financial stuff. So guys, here's the thing. Personal finance is 80% behavior. It's 20% head knowledge. Behaviors are affected by our spiritual walk. Behaviors are affected by our relationships. Behaviors are affected by our family of origin. How much fun did your dysfunctional family put in dysfunction? Yeah. And so, you know, all of that, right? What did you come from? Where are you going? What soup are you sitting in right now? And those things affect your ability to build wealth more than the mathematics do.

The mathematics will correct themselves if you can get functional human beings to function functionally.

Yes.

Yes.

You know, I mean, you know, it's— I mean, so marriages that don't work very seldom, that aren't working will almost never create a solid financial situation. Very rarely. Very rarely, okay? People who are— you know, one of the things we've dealt with, I've been doing this for 40 years, is 100% of addicts have financial problems eventually because it's a dysfunction that costs money, whatever the addiction is. And so, 100% of them end up here. But when we're dealing with the money, we're not really treating the problem, we're treating the symptom. The addiction is the problem. If you're dealing with a divorce and a marriage that's falling apart, that's the problem. The money issues are the symptom. And so, you can't fix the symptom, you have to fix the problem. You can cut a dandelion down with your lawnmower, but it's gonna grow back with 3 more. More next week. So, the only way to get rid of the dandelion is out by the roots. You gotta go to the problem all the way down, right? And then, the dandelion's gone. And that's what they are. And so, when I went broke, it was a reflection of my lack of character, my lack of maturity, my lack of a quality spiritual walk.

And, you know, I wasn't like some kind of pristine human being. Being that just did the math wrong. No, it never works that way. It never works that way. So, you know, anytime you're struggling with money, you always want to go to the source and go, what is causing my behavior change or my behavior to be dysfunctional? That's why I'm having money problems.

Yeah, it's a foundation you have to build on. The foundation has to be stable.

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Investor.

Guys, your personal and professional growth can hinge on communication more than just about any other skill. That's why I'm excited about my new book, Stop Talking, Start Communicating. It's now available for pre-order. It's paired with the DISC assessment and uses your results to help you adapt your Your Communication Style, so you can build trust, connection, and influence. Pre-order today at $34.99. You get the book, a DISC assessment, plus over $30 in pre-order bonus items, which includes an additional assessment because you're pre-ordering for your spouse or your friend, and the ebook. Pre-order today at RamseySolutions.com/store, or if you're watching on the YouTube or podcast, you can click the link in the description. Karen is in New Jersey. Hey, Karen, how are you? How are you?

Hey Dave, I'm, I've been better.

Okay. What's up?

I missed calling because I wanted to know, cause I know I listened to your show a lot and I know that you talk to people just not just about finance, but how to kind of like deal with issues. So my husband recently, um, took out money out of, um, well, I say, or it's his 401(k) or on a HELOC loan for more mortgage, but without my knowledge, and then ended up getting scammed out of that money. How do you rebuild, like, from that?

How much money was it, and what, what did he use it for that he got scammed out of?

So it It was like close to $100,000. I know, I know. I listen.

Um, what did he do with it?

Basically, it's kind of like he was giving it to this, um, under an ear quotes, um, person who said that they were in our online bank that said that it was investing. Um, Yeah, invest in it to get a return.

How'd you find out? Did he tell you or did you just see it?

He came to me. No, he came to me and he told— it took him, you know, a little, but he came to me and he told me.

Wow. When did he tell you?

Um, a little while ago. Yeah, I know.

I'm sorry. Well, I don't know what a little while ago is. Yesterday or 6 months ago?

No, no, like a month ago.

Okay. All right. And what is your household income? What do you make and what does he make?

Um, we make over $100,000.

Okay.

What was the 401k? Did he take it all out of there?

Did he cash it out?

He must have borrowed against it.

Yeah, he borrowed against it.

Okay, and how did he take out a HELOC without you signing for it? It's on your personal residence.

Yeah, no, the HELOC I knew about, I just didn't know he was going to be borrowing from it. Like, I—

oh, you knew it was open and you had signed for it, and then he just drew on it, right?

Exactly. Yeah. And at first, because—

okay, so there's two problems. Problems. One is we're out $100,000, and two is you no longer trust your husband because he lies.

Yeah. And yeah, I think that's the harder part.

Oh, it is the harder part. You're right. Good, good, good observation.

Yeah.

So what are we doing to rebuild trust, respect, to keep you from killing him in his sleep? I'm kidding. Um, I'm kidding. That was a joke. Don't kill him.

No, I know.

And, uh, no, I'm serious. Are y'all sitting down with a marriage counselor?

Not, not yet.

It's, it's been a month.

I know, I know. And it's something that—

but it's not going to get better. You're getting progressively pissed.

Yeah, what's the holdup?

Yeah, I— he's not ready yet.

He's not ready?

What are you saying?

He ought to be on his knees begging forgiveness. Not only did he lie, he was stupid with the money. Yeah, yeah, he got scammed by Nigerian prince. Come on.

I know, I, I know.

And he's still walking around like this is okay.

Yeah, that's a problem. You didn't make him realize he needs to be sleeping with one eye open?

I'm trying to give a lot of grace.

No, you don't need to give grace till there's repentance. I hear no repentance. Yeah, no grace, no repentance. No repentance, no grace. These go together. I was stupid. I will never lie to you again. I have screwed up beyond belief. Please don't leave me, good woman. These are the words that should have come out of his mouth as soon as he uttered the fact that he'd screwed up and gave $100,000 to the internet Nigerian prince. Oh my God.

Yeah, I know, like, he has—

he has said he's sorry and unapologetic, but he's not ready to make it right because those are just words. That's just lip service. Right? The work, the actions are what make it better.

Dr. Deloney says behavior is a language. So, I want to make it right. And I want to figure out how to rebuild trust in this relationship. And so, we're going to sit down with a marriage counselor. And this is you talking to him tonight, and we're going to do this within the next 7 days, or you're going to have another problem with me. I'm not going to be here because I can't trust you.

You.

You're a liar. We have to start there and rebuild.

It's tough, man.

Okay.

Yeah. So, I mean, you gotta— you have to go to ground on this and start from solid, and, and then you put systems and processes in place where you agree. Okay, I'll give you an example. I used to do lots and lots and lots of real estate deals that my wife never knew about, not because I was hiding them from her, but because she was playing Southern Belle and said, "Whatever you wanna do, honey. You just do whatever you do down there at the office. That's okay." And I did, and I screwed up Christmas, okay? I messed up everything. I lost my butt. And so one of the things I've learned from that is that I no longer make any major financial decisions decisions without my sweet little Southern passive-aggressive Belle wife involved in the decision. Okay, and so we don't buy trucks, we don't buy boats, we don't buy houses, we don't buy commercial property to develop, which I bought one the other day, drove her down there in the truck, we sat on the dirt and looked at it. Do you think this is a good idea? She said, yes, this one's going to work.

We don't make decisions unless we make them together. That's a new system that went in place after Dave was stupid. You have a new system that goes in place. He don't make any more decisions without you knowing what the flip's going on and you being in agreement. That's a system that's in place that helps you begin to trust him gradually over time again. This is major. This touches the same nerve in your relationship as if he'd had a sexual affair with another woman. Woman. It's the same level of betrayal because he lied about $100,000. And then on top of that, he was stupid about it.

And then on top of that, he acted like he's the one that has to be ready to fix it.

I have to be ready. I'm not ready to go to a counselor. I got you ready. Come on, man. Yeah, no, you need to— you need— you guys need to be in marriage counseling yesterday. And they can guide you a good way. No one can guide you through the process of transparency, being in agreement before we move forward on anything ever again, the rest of our lives. That was 30, almost 40 years ago that I went broke. And I still, to this day, not because I'm in repentance about it, but because it's a good way of living your life.

Yes, absolutely.

The right way to live my life is I have a better life when Sharon and I are aligned and in agreement on things. I make better quality decisions. She makes better quality decisions when we do these things together. We don't just come in and announce, "I just invested heavily in a Nigerian prince on the internet." You're killing me.

You're just killing me. Because the questions you have to ask yourself if you're in her shoes is, "If it hadn't gone wrong, when would he have told me? Or would it have just been this thing?" And then you have to— when somebody lies like that, you have to ask yourself, well, what else are they lying about?

Yeah.

When he got to $1 million, is that when he was going to leave?

Right. Yeah, it's tough. That's, that's tough. I don't envy that situation one bit. But she— it's the ball's in her court.

We're mad with you and for you because we want healing to happen there. And the beginning of healing is repentance. Repentance. I'm sorry, I goofed up. What do we got to do to make this right? That's repentance. Repentance is I'm walking the wrong way, I stop, and I walk the other way. I do a 180. He's not doing that. I'm not ready. I got you ready. 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, 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 ramsaysolutions.com and try Ask Ramsey today. That's ramsaysolutions.com/askramsey. In the lobby of Ramsey Solutions on the debt-free stage, David and Penny are with us. Hey guys, how are you?

Yeah.

We're doing pretty good. How are you doing?

Better than I deserve. Where do y'all live?

So, we live about an hour north of Salt Lake in a tiny little town called Hyrum, Utah.

Oh, fun. Very cool.

Yeah.

Well, welcome to Nashville. And how much debt have you paid off?

$336,834.12.

Love it. How long did this take?

2.5 years.

Whoa! And your range of income during that time?

So, we started at $200,000, and by the end of it, and we're making $250,000.

Nice. Cool. What do y'all do for a living?

So, I'm in the military. I'm in the Air Force, and she's working for a defense contractor.

Wow. Well, thank you for your service, both of you. Incredible, guys. So, I'm gonna guess and say that kind of debt in that type of town in Utah might have been in your house.

No.

No!

Oh, no. No.

That was 13 years of bad choices.

Holy smokes, yeah.

That's everything from school loans, loans, credit cards, cars.

Wow.

Personal loans to pay off the credit cards, which were just more credit cards.

Yep.

This just got very interesting.

Wow. It makes you kind of sick. So what happened 2 and a half years ago that your life turned completely upside down or right side up?

So I was at work, and I really did not enjoy my job, and I was listening to just YouTube on my headphones phones, wondering what in the world I'm gonna do from a day-to-day basis. And your show popped up, and it became kind of like a therapeutic thing just to listen to people who had more credit card debt, who had it worse than us. And like, hey, yeah, we're not that bad. I mean, we have $86,000.

Compared to Ramsey callers? That's not who you want to compare to.

Exactly. And then all of a sudden I started getting the debt-free people, and I was like, wait, no, you can't live like this. Like, That's normal, you need a credit score. And then I started, you know, actually listening. I'm like, okay, maybe we can do this. And I went home and I looked at my finance stuff, 'cause even though he was over it, it was just completely separate. It was a mess. And I was like, wait, I think we can actually do this. And I paid off my first credit card. And I was like, oh my God, I think we can do this. And I went and I got a side job as a janitor scrubbing toilets out of college on a a weekend to start putting more money towards it. So I was making $100,000 a year working with people and they're like, you make how much? I'm like, yeah, I know, you just, just trust me, we'll get there at the end of this. And then I showed it to him on one of my lunch breaks. I was like, hey, can we please just look at this together? And showed him that there was a path forward out of this.

Which was amazing 'cause I didn't see any path forward. Every night would be just up in the night pacing, worrying, stressing and—

Wow.

There's no way to get out of it. And then she showed it to me. We took the numbers, we broke them down, and like, oh wow, this is really doable. We can do it.

Wow.

And that day we canceled every single credit card.

Wow.

Without hesitation.

They all went that day.

I think they were all done before the lunch break.

Yeah.

And then we started paying.

How'd you feel right after?

Scared, because it's just a different way of being. But you know what? In 2 and a half years, we have not had to use any sort of debt product, and it's been amazing. Amazing.

I've slept every night.

You've slept like a baby, I bet it.

Never once stressed again.

So, same amount of debt, but going down. But you had a plan and you could see a light at the end of the tunnel that's not an oncoming train.

Oh yeah, we hit it hard. That next month we started selling anything we could sell. Just sell it, get rid of it, we don't need it.

Yeah, we were in the, so we bought an older home and we were in the middle of a bunch of home renovations and those all came to a halt.

At all.

So one of my most excited things is I'm gonna get baseboards because we haven't had baseboards in years, but now we can afford it.

Yes. And this woman has a low bar for happiness.

Yes.

And that was part of our— what we did when we had no— or when we're trying to get no debt, if we just— we could tear down everything in our house to get, get everything ready to do projects. It was free. So we have at least half the house is just bare walls.

Yeah.

Ready. Ready to be remodeled.

Well, that'll motivate you.

Yeah, that's very interesting.

So cleaning toilets, that's probably one of the most extreme side jobs. What else you got, David? Did you do anything crazy?

Not as crazy as that. I took an assignment that put me away from everyone for a year, so we actually had to live in two separate, two separate areas. She was living there in Utah. I was having to live in the middle of Southern California doing a job that was going kind of help us continue making more money, continue just bringing our life down to as low as we can. And I didn't drive for a whole year. I biked 14 miles back and forth to work every day.

Oh my gosh.

Just trying to make sure we can save as much money as we can.

Yeah, because you guys did this fast.

Yeah.

I mean, you lit into it. But here's what's interesting. I want you guys that are watching this or listening to rewind it at some point to when they were talking about when they both sat down and looked at it and he said, I saw a way for forward. You— if you watch, you can see their faces change just talking about that moment that hope came. Hope is so powerful.

It really is. One of my favorite quotes by you is, hope deferred makes the heart sick. And that was us. I mean, we were living financially just separate. We— even though our bank accounts were together, we weren't talking about it. We didn't have goals. We didn't have dreams. It was just, what can we do to get to the end of the next paycheck?

And now "it's not like that anymore." "I saw a way forward." That was your word, David, I believe. "I saw a way forward." And you know, you looked at the math and you went, "For the first time, I see a way out." And that just makes me cry. I mean, that's so powerful because when you see that, then you can run. You can run. I mean, I don't care how tired you are, you can bike 14 miles. You can do anything. You can clean toilets. Oh, wait a minute, you did. Yeah, hello. And so, you know, I mean, you can do, because you see a way. You know, if you're just doing those things to exist, that's completely different than seeing a way out. And I'm so proud of y'all. Well done. So, who was cheering you on?

So, that's the weird part about this. I grew up extremely poor, like 7, you know, people on $10,000 or less a year. We were on welfare.

Care.

So, it's not like we ever had a ton of money given to us. And his grandma actually cheers us on and she believes in us and she's taken these principles to heart. But outside of just having like below average earning family members, we didn't really have a ton. We just had each other to feed into this whole process.

We learned to live life for ourselves.

Yeah.

To make something something better for what— for us, for our kids.

Yeah, well, you did change your family tree for sure.

Oh yeah. Wow.

I mean, you knock out $337,000 in 2 and a half years, folks. That's $150,000, $170,000 a year only making $200,000 to $250,000. I mean, they're living on beans and freaking rice.

I'm not eating rice anymore.

We can't eat rice anymore.

Ever. I don't ever want to see rice again. I don't want to eat no rice no more.

Wow.

You just had two really amazing transformations. The one is going from separate money and having things separate to just deciding one day, "Ah, we're gonna put it together." And then from you, your background and just deciding, "I don't want to be like that." No, I could not bring myself to live like that.

I can't put my kids through that. I can't have them worrying what's gonna happen when it comes time for mom and dad to retire. So yeah, it's just, this is it.

Well, they've had a front row seat to watching heroes in action though. I mean, they watch you do whatever it takes to win. You pay a price to win and you win at it and they watch it. You've changed their lives by the example you set, not to mention the mathematics that are gonna be going to them now, 'cause you're gonna be multimillionaires now.

Well, you know what's funny is through this whole process it was, hey, can we do something this weekend? So, we did a ton of hikes. We went to the library a lot. So, now, if we go to buy something, my oldest one will be like, "Can we afford that? Do you have money for that? Is that in the budget?" She'll call us out.

Wow.

Well, again, and so, that's gonna affect who she goes on a date with, as to when she's choosing a husband someday. She's gonna go, "No, I don't think you're right.

No, I'm not doing that." Yeah, the second they pull out a credit card, I hope she gets up and walks out the door.

Or you'll help him out.

Or grab some scissors and get across it. I love it. You guys are great. I'm so proud of you. Very, very well done. All right, David and Penny from Utah, $337,000 paid off in 2.5 years, making $200,000 to $250,000. You guys are amazing. Count it down. Let's hear a debt-free scream.

3, 2, 1.

We're debt-free! Yeah!

Woo-hoo-hoo-hoo!

This is how it's done, boys and girls. Hope in action.

When I talk to people on The Ramsey Show, 90% of the problems I hear come down to one thing: not having a plan. They're not living on a budget. Budgets. They have no idea where their money's going. Money is just happening to them instead of them happening to their money. And guys, that is so normal. But it doesn't have to be normal for you. And that's why I want you to go download our EveryDollar budget app. EveryDollar not only helps you tell your money where to go with a budget, it also builds a plan to free up extra money so you can pay debt off faster and start building wealth. And the best part, Your plan is completely personalized to your life. It's the same advice that you would get if you called the show, and it's right in your pocket. So, don't keep living normal. Go download the EveryDollar app, answer a few questions, and get your plan today.

Our Scripture of the Day, 1 Corinthians 16:13-14: Be on your guard. Stand firm in the faith. Be courageous. Be strong. Do everything in love. G.K. Chesterton said, there is only one certainty in life, and that is nothing is certain.

Facts.

We'll go with that. Kyle is in Nebraska.

Hey, Kyle, what's Hey, thanks for taking my call.

Sure. How can we help?

Uh, so with my current job, housing is provided in my salary. So, um, in approximately, give or take, 8 to 10 years, I'll probably leave this job and take a job in which I will need to have my own home and purchase it. So the question really is, uh, is there an advantage one way or another to take out a mortgage now now and pay on that during this time and pay the interest and possibly rent that house out, uh, while I'm here, or just wait and stack up cash. And when I leave this place in 8 to 10 years, just use that as the down payment towards the home.

What do you do for a living?

Um, I'm a rancher.

Gotcha.

Okay. Yep.

So are you single or married?

Nope, I'm married.

Okay. And what does she do?

And right now, just, okay, right now, stay-at-home mom. She raised the kids, but in a couple months she's going to take a full-time job, which is going to double, basically double our annual take-home pay. My take-home pay right now is about $40,000.

Okay. You're very wise to start planning this because a lot of people in your situation when the housing arrangement ends with the job, they seem to be surprised. And so I don't know why, but they are. And so you're very wise to look out there into the future and say, "I've got to get ready." So there are two possible things that you can do. One is, like you said, take a mortgage out and buy a home. It probably will not be the home you live in. I would not recommend that. I would just say, what is a good rental property, a good price range, a good location that's going to go up in value, and we're going to do that with the idea of getting it paid off during this 7-year period of time. By the way, the people following the Total Money Makeover Baby Steps and becoming Baby Steps Millionaires eventually typically pay off their home in about 7 to 8 years. And so your schedule kind of fits with that. That. All right, so we're going to put a renter in it, we're going to have a little bit of a mortgage, and we're going to pay it off as fast as we possibly can, 7 years or less.

So when this happens, you sell that house, take the money from that, and buy a home that you live in. Okay, because you will have had the increase in value during that 7 years. You'll have to do some repairs to it when the renters move out, some repairs to it while the renters are there, but you'll have, you know, the hassle of being a landlord and all that And that's part of the program. But you're investing money that's going up in value. Okay?

Yes.

That's one way to do it. Another way to do it is a lot simpler and will give you about the same result, is sit down with a financial calculator with your SmartVestor Pro by finding them at RamseySolutions.com and say, how much do I need to put in a good growth stock mutual fund per month to have the equivalent of a house price 7 years from now? "and so I want $500,000, and how much does that mean I need to put away on a 7-year schedule?" And basically you pay yourself a house payment into mutual funds, and they will be growing at the typical rate that the market grows, around 11 or 12% during that time. So you're getting all that growth, and you're of course adding to it each month, and you just have in your budget a house payment, but you're paying yourself a house payment. So when you leave there, you look up, there's the half million dollars that you planned on or whatever the number is that you want to aim at.

That feels like the simpler path.

Yeah, that's the easy one.

Sure.

Okay. Yep.

So either one of those will get you there, but you are going to have to allocate time and effort and money to this starting today, or you're going to come up short when you make this transition.

Yeah.

Ashley's in Birmingham. Ashley, how are you?

Hi there, I'm doing all right, how are you? Thank you for taking my call.

Sure, what's up?

Well, actually, I wanted a little bit of advice on, because my husband and I, we've been together for 21 years, married for 19, and we've been very lucky to stay out of debt since we had paid off our last home, but it got to where, as the years went by, things got to where it was just practically unlivable. So, um, around this time, my Uncle Billy had passed away from COVID and I was like his next of kin, but his, uh, you know, his, uh, I don't want to go into it, you know, too much, but just in short, uh, his girlfriend was, you know, stole a large portion of my inheritance. And, um, when all that was said and done and I was having to pay her a large sum of money, I only had, uh, you know, a portion of the stuff that I've got to be able to—

I'm sorry, how did you have to pay his girlfriend money? Money, right?

We went through a media— what it is, is, uh, she was claiming to be common law wife, um, and, uh, and she was—

so you got the money from the estate, uh, and then they made you give it back?

Uh, yeah, I had to, uh, we went through a mediation. She was wanting to keep the house and pay me $50,000, and, um, and yeah, I mean, you were living already, okay?

and then he died and you got the money from the estate and she came at you and you ended up having to give some of that up in mediation.

Oh yes, I gave her $74,000.

No, you gave her $74,000 that Uncle Billy had given you shortly before that at his death.

Yes, so it didn't go well at all. She sold— actually, she sold a lot of stuff.

But that doesn't cause you to be in debt.

No, but see, I— but the thing is, is, um, I— well, the reason why I'm kind of going into debt is because because I've got— we had to get a loan, like, to renovate his grandparents' house because, you know, since we could no longer live in our old home because it was getting to the point where it was just unlivable, and we were— it had already been paid for. But what happened was, is my husband's grandfather offered to let us have the house that him and his wife lived in when they were first married 69 years ago. And he was giving us the house, and, you know, but we would have to renovate it.

It.

So we had to take out a loan for like $40,000. Now we're kind of suddenly like going into debt. Now I've got— I've still got to pay.

What about the old house? What about the other house that you, you and your husband—

oh, it was like a mobile home. It wasn't no house.

Understood. But what happened to it?

It was just— it's just in shambles. I mean, like, the roofing is really bad. It's just— it's—

I mean, okay, so you were living in the mobile home it turned into a wreck. You were given a home, a family home, but it needed to be renovated. How much debt did you take out to renovate it?

$40,000.

$40,000. And we don't even know if that's going to be enough, but we're trying to make sure.

What's your household income?

Well, uh, we're only recently— I got a better job, uh, cause I was only making, uh, what's your household income? Um, well now it was more so like $43,000 for him. And last year I only made like $14,000 and something.

So you don't work much. Okay, sounds like you need to be working more. We need more income coming in this house, and then you guys are gonna have to start happening to things. Everything in this story happened to you. You didn't happen to anything. Dr. Stephen Covey says in the book Seven Habits of Highly Effective People that highly effective people, one of the seven habits is they are proactive. They happen to things. Instead of things happen to them. You act like all this happened to you. No, you chose to take a family home that you did not have the money to repair, and so you chose debt. You could have chosen to dump the trashy trailer and rent an apartment and had no debt. You could have chosen that. I hope to God that Grandpa put his house in your name if you're putting $40,000 of your borrowed money into his house. House, that would be double stupid. So don't do that. Get it into your name, and you guys are gonna have to start happening two things. Now you happen to this $40,000 by working like crazy people. Both of you work 6 jobs and live on beans and rice.

Get this done and then pay cash for any more renovations above the $40,000 that you're doing. Don't put another $40,000 in debt on this house.

You can't when you only make $40,000 in the year.

You gotta stop this. And Uncle Billy's story had nothing to do with any of this, except that you thought it was going to bail you out. That puts this hour of The Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.