Transcript of Set Money Goals Your Future Will Thank You For

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 and the Fairwinds Credit Union studio, this is The Ramsey Show. Rachel Cruz, number one bestselling author, co-host of the Smart Money Happy Hour, and Ramsey+ personality, and my daughter is our co-host today. Open phones at 888-825-5225. Jennifer's in New York City. Hi Jennifer, how are you?

Hi, how are you?

Great, how can we help?

I am feeling very overwhelmed right now. I, I have a daughter going into her senior year of high school, another one going into her 10th grade of high school, and I over the last year or two have been trying to tackle our bills while also saving for college. So right now, I am— I don't know what I should be tackling first. I have $8,000 that I owe to the IRS, $25,000 in credit card debt, and I am putting away about $200 a month for their college.

And how much do you have saved for their college?

Um, almost nothing because I just started. So I opened up 529 plans about a year ago.

Okay.

So $200 a month for one year is $2,400.

Yes.

But where is your senior in high school planning to go to college?

We're looking at SUNY schools, um, because we're trying to stick to $20,000 a year.

You're looking at what schools? City?

Uh, SUNY, State of New York school.

Oh, oh, okay.

All right.

Yeah.

Yeah. In-state tuition.

They're affordable.

So yeah, in-state tuition. Yeah, for sure.

How much do you guys make a year, Jennifer? Or you make?

Sure. We, we, my husband and I both work full-time and we both also have second jobs and our combined income is about $267,000 a year.

Okay. So you're just kind of getting started on this paying attention to money thing.

Well, well, we've been, uh, yeah, well, not yes.

I mean, you make a quarter of a million dollars a year and you're broke. So explain that. Why?

We have a lot of expenses. We've been sending our kids to private school and instead of college. Yeah, well, the, the idea was that they were going to get college scholarships from the school that they're attending.

Will that happen at any level?

I mean, I think so, yeah. But in case it doesn't, right now we're still focusing on SUNY schools. Um, but even still, we'd like to use the scholarships towards that. Um, also, we do live in New York, so I know $267,000 sounds like extreme amount of money, but New York is probably one of the most expensive places to live, so everything is just a lot more elevated in cost. Yes, we do live a very comfortable life. We are not holding back. We eat out frequently. I have started changing those habits recently, but I fear it's too late. And I just don't know.

It is too late for a senior in college.

Okay.

Because you're not at that— at your current pattern, you're not going to have money for the first year's tuition.

Okay, what do I do?

Well, I mean, you don't. I mean, you told me you're gonna save $2,000 and it's $20,000 that you need, right?

Were y'all gonna try to cash flow any level of it, Jennifer? Like if it's $10,000 per semester, is that part of the plan, thinking through that, or?

I mean, in a perfect world, I'd find a way to pay off, um, the, the bills, right? The credit cards and the IRS within the next 12 months.

Okay. So what y'all have to do— I'm sorry, Jennifer, I apologize for interrupting, but what you're going to have to do is y'all are going to have to decide what's important. Yeah. Is it important for your daughter to go to college? And, um, if it is, then you're going to have to stop doing a whole lot of stupid butt stuff you've been doing. Today.

Yes, for sure.

You don't have a choice. The arithmetic tells you that, okay? And so you're not eating out, you're not going out to eat, you're gonna be on beans and rice, you're gonna be living like you make $50,000 a year so you can put your kid into school, or she's not going. These are your two options.

Or a community college for the first year.

Or a community college, or she gets scholarships, or something, but you're not going to have the money otherwise.

I'm gonna, I'm calling because I want to try and have the money.

Yeah, well, what I'm saying is, is that all the stuff you're telling me that, you know, the excuses you made about where $260,000 went.

So Jennifer, the, but I would say the Baby Steps, you're new to this. So the order of importance for anyone starting this really regardless of kids and circumstances, it really is getting yourself in a place where you're debt-free. You and your husband have a fully funded emergency fund of 3 to 6 months of expenses. And then you guys start at that point then investing in retirement and kids' college. So that is the Baby Steps if you wanna look at the plan. So that would mean that if you follow that plan, there's probably gonna be some different courses of action in the next 2 years with not only your expenses, but maybe her school choice for the first 2 years, you know, if that's what you guys stick to. But if you and your husband sit down and decide, no, college is more important and we wanna cash flow that first before we pay. If you wanna do the Baby Steps out of order, you won't be doing the Baby Steps, right? You'll be doing your own plan. But the fastest way that we have seen for people to get control of their money is for you guys as a household to be stable and to get the spending under control, to get the debt paid off because you're feeling like you're trying to do 18 things at once and you just don't get a lot of traction when you do that.

But when you focus in on one thing at a time, again, it's not ideal timeline-wise with your stage of life with kids. I totally hear that. But it is the fastest way from point A to point B to actually have some control over your money long-term and building those habits. But that would mean college may look a little different for your daughter, the senior, for maybe the first year or two of her college.

I think you and your husband need to sit down and say, "We're gonna clear the IRS. We're gonna clear the credit cards now." Now.

Fast. And pause college. Pause the $200.

And she goes, "And don't put anything in college." And then she's not, you're not gonna have the private school tuition when she leaves that. So, you've got that freed up. Up in your budget.

Yeah.

To put towards college once she goes, and you put her in a community college and she applies for 73,000 scholarships. Okay, we had a lady that was a personality for a while named Christina Ellis, and she had a number one best-selling book called How I Got a Half a Million Dollars in Free Money for College. And she went on and got her master's degree in business from Vanderbilt, all paid for. Single mom's daughter, Single mom came and said, "I don't have the money. The only way you're going is if you go get scholarships." And she sat, she had to sit and apply for scholarships like 2 hours a day, like it was her part-time job, but it worked. She got hundreds of thousands of dollars. And you can look the book up on Amazon, How I Got $500,000 in Scholarships. And Christina's still out there teaching people this stuff. She's incredible. And the, so that's one thing. The second thing is choose a college and sit down the 3 of you right now, your senior, your husband and you, and say, "We cannot afford for you to go anywhere except here first year." And a community college for free, or almost free, is not a bad thing.

All those credits will transfer. You get a lot of your basics out of the way if you're going for a 4-year degree. And the kid is not, you know, no one knows where you went to school. All they know is where you graduated from. And even then, they don't really know that. They don't care.

And that's going to be a hit to the ego, in a sense, of going from private school in in Manhattan to a community college, but it's long-term, it's the smart decision, Jennifer, for her long-term as well so that you don't rack up student loans.

Yeah, but your family's gonna have to change your priorities 'cause y'all are way out of whack. As a dad of young kids, I'm starting to think a lot more about the world they're growing up in and how I'll help them make sense of it as they get older. And that's why I like World Watch, a video news service for preteens and teens. Because one thing I know for sure, if you don't teach your kids how to understand the world, somebody else will. And these days, that could be TikTok, YouTube, Instagram influencers, or whoever happens to show up in their social media feed. World Watch's 10-minute videos help young people understand what's happening in the world through a Christian worldview without all the outrage, negativity, and noise that that is everywhere these days.

The reporting is factual, engaging, and designed specifically for preteens and teens.

And World Watch creates opportunities for something every family needs more of, meaningful conversations. Instead of just reacting to headlines, kids learn how to think about what's happening in the world, and parents get a chance to keep those conversations going at home. Because when my kids are old enough, I want them informed, not overwhelmed. And right now, you can get a 30-day free trial. Just go to worldwatch.news/ramsey or use promo code Ramsey to get started. That's worldwatch.news/ramsey. Jamie's in St. Louis. Hi, Jamie, how are you?

I'm doing good. Thank you. Good. Sorry, I'm kind of nervous. I really didn't think I'd get on the show.

Well, surprise, here you are. You'll be okay. We've never lost a patient. What's up?

I won't let Dave be mean to you, Jamie.

Well, I just recently finished listening to the Total Money Makeover and been listening to George's book. I mean, it's really got me motivated to make changes.

Good.

And I just kind of want to keep that motivation going. We've already like eliminated $200 worth of subscriptions we've had.

Good.

We do live on one income, and I'm just, you know, it's giving us higher aspirations for the future, but I'm just wondering how we keep that motivation going and keeping that larger goal from kind of demotivating us in our current situation.

Feedback loop. The psychologists tell us that if we can see and feel traction towards our goals, we can keep going. When you don't feel like you're getting anywhere, when you feel like the only light at the end of the tunnel is an oncoming train, everyone quits. So you can, you can go through a long journey as long as you can measure your progress and sense it with a feedback loop. And so that's one of the reasons we want to do something like a debt snowball, where we list our debts smallest to largest and we attack the smallest one with a vengeance, because when we knock that one out, it gives us positive feedback. Oh, this might work. And then you knock another one out, you're like, your hope level continues to increase. And as your hope level increases, your sacrifices, you're willing to sacrifice deeper because it's starting to work, you know, and things are starting to move in the right direction.

Yep, absolutely. What, Jamie, what, what is your situation? You keep saying that. What, how much debt do you guys have?

So, so we're married and we have 4 kids. And we live on about $55,000 a year.

Okay.

And we're currently about $23,000 in debt.

Okay. Well, that's tough but doable. Uh, but two, two things tell me immediately when I hear those, that situation, one is a detailed budget in EveryDollar. You're going to feel like you got a raise because you've got a large enough family that there's a level of chaos.

Yes.

Yeah, that's just normal. I mean, you would be weird if you didn't. If they're all regimented little, uh, Stepford children or something, you'd have a weird bunch of kids, right? No, so there's a chaos level when you got 4 kids. And so, um, it goes with the territory. And so you guys have to force some order and some organization to the money side of the equation, and that's also going to add some order to the rest of the thing while you're doing it. You can't keep from doing that. And then the second thing that comes to mind is $55,000 is low. What's your and what's your aspirations there? We need to get your income up, man.

I am a floor installer.

Mm-hmm. How old are you?

I currently work for— I'm 34.

Okay, when you're 44, what are you gonna be?

Uh, probably the same thing.

Probably not a good plan.

Yeah.

Nothing wrong with being a floor installer, But maybe you need to own a floor installing contracting company and they work for you.

Or you're the leader of the division of the company who is doing it. You know what I mean? Like what, yeah, what are the climbing the ladder, so to speak, of how do you want to keep advancing is going to be big, Jamie.

And again, I'm 65. Your knees are going to be hurting when you get there.

Yeah, no, I totally agree.

Yeah. Well, Jamie, for you guys, I'm just curious, the, the debt that you have— what was it, $25,000, $22,000? Uh, what, what is the smallest debt there?

Uh, it's primarily just one. It's, it's, it's the work van that I have.

The what?

The work van that I have.

A work van? I misunderstood you.

Okay.

So you, um, so you do—

do you run your own company?

Uh, no, it's just— it's a private company. It's just me and another guy. So, so I mean, there is growth to be had still.

Wait a minute, I mean, you and the other guy do installing together and you're, you're independent contractors? You own your company?

I don't.

He, he's the owner. I'm his employee.

Why do you have—

why do you have a van?

Why do you have the van debt?

Uh, because I'm slow. I'm sorry, it was— I, I just— it was just a bad decision, kind of.

Okay.

I just did it so that I could try to make more money.

Okay.

Okay.

Uh, because I would have my own vehicle, uh, and I would also help with making more progress within the company.

There's two of you. Yeah, yeah. So, um, okay, so rule number one is we don't buy vehicles on debt. Rule number two is we don't buy vehicles, period, for someone else's company. We buy them for our own company. So I want you to take this van and start doing some side hustle work that doesn't compete with your current boss but that allows you to make some extra money here and there utilizing the skills that you have. And let's take this van and start talking about how someday you're gonna be self-employed and make a whole lot more than you make now. But let's start moving that direction because this van is a big, big debt with your income and with 4 kids. If you didn't have that van payment, you probably wouldn't even have been calling. But the good news is you're learning, you're growing, you've already gone through a couple audiobooks, you're calling us on the air asking, you're open, you're not being belligerent and prideful about this. You're saying, I want to learn, I want to learn. And you're the kind of guy we help all the time, and we love helping you. We're glad you're here, proud of you for taking those steps.

Those are big steps. 34 years old, 4 kids, van payment, you go, I got to learn something new, this isn't working. Good for you, good for you, because you do— if you keep doing the same thing over and over, you keep getting the same result. And, you know, it's pretty predictable. So, you know, so what we got to do is we got to think about how your career unfolds over the next 10 years and how this van fits into that and how we get the van paid off. And—

And I do think a budget, honestly, Jamie, in your situation, and for you and your wife to be on the same page and you guys have a plan going forward of where the income is going, because that will be tight with 4 kids to be on that. And so, I think it's even more important, right, for you guys to be looking at every single dollar. And you've already cut $200 of subscriptions, which is amazing. And so, you know, just continuing to look at that lifestyle lifestyle and just say, okay, where can we pull back to throw extra money at this van? Because if you, if you didn't have the van payment, to your point, I'm like, that margin would change everything. Yeah, the margin helps so much when you look at the monthly numbers. But well done, Jamie. And you and your wife get on the same page. You guys do this together.

Jamie, if you've made mistakes with money, that makes you over 12 years old. Every walking person has made mistakes with money. I have a PhD in DUMB. I've done things that make what dumb things you've ever done look horrendously smart. I mean, I have done some stupid stuff in my life. The trick we all have to learn is to not do the same dumb thing. You know, figure out what's dumb, never do that one again. Figure out what's dumb, never do that one again. Figure out what's dumb, never do that one again. And if you keep doing that, when you get to be my age, they call you wise because you've quit doing so many dumb things that there's not much left to do but some smart things. And you really do get a whole pile of that behind you. And so if you've made a mistake, there's no reason to shame yourself about it. You know, just go, hey, I made a mistake, I didn't know, that was a Dumb thing. Doing a dumb thing doesn't make you dumb. Doing a dumb thing 3 times in a row makes you dumb.

And you know what I think, Jamie, because you started the call with just like, "Gosh, it could feel discouraging as we start climbing this mountain." You know, how do you not be discouraged? Just knowing the season of life you guys are, and I'm just assuming 'cause of your age and the 4 kids, you guys got little kids at home and it's just, there's a lot happening. And you're in the day-to-day so much, that grind, Well, that's how I feel as a mom sometimes. I'm like, it's just one day at a time, one day at a time. And for you and your wife to go out, Winston and I do this once a year, we call it our dream date. It sounds kind of cheesy, but we just say, we put money off the table, we've done this for years, and we just look ahead. We usually do like a 10-year look ahead. And we say out loud that how old our kids are gonna be in 10 years, how old we're gonna be, and what do we wanna do within those 10 years? When we get to that age, what kind of house do we wanna live in?

Where do we wanna live? Where are our kids gonna be in school? What kind of bucket list trips maybe we've checked off, big financial goals. Like, just dream. Like, get out of the day-to-day, get out of the overwhelming numbers, and you guys together just start this, like, refreshed looking at the future together and just dream and have fun. Okay guys, let me ask you something. What would it take for you to switch your bank? Because if you're still earning next to nothing on your savings, you need to check out Fairwinds Credit Union. And I know what you're thinking, it might sound like a hassle. Moving your direct deposit, updating bills, getting a new debit card feels like a lot. But here's what most people don't realize: staying where you are could be costing you hundreds of dollars every year. Y'all, the average savings account pays less than half a percent. So let's say for For example, you've got $20,000 saved. You might earn around $70 a year. But with a Fairwinds High Yield Savings Account earning 3% APY or more, that same money could earn you over $600. And that's real money that you can use towards the Baby Steps.

So don't let temporary comfort keep you stuck. Check out the Smart Bundle from Fairwinds Credit Union. You get a High Yield Savings Account, a no-fee checking account, and the Ramsey Be Weird debit card. Go to fairwinds.org/ramsey Ramsey to learn more and make the switch today. That's fairwinds.org/ramsey, insured by the NCUA.

David is in Phoenix. Hi David, how are you?

I'm doing well. I love you guys.

Thank you, you too. How can we help?

I spent the first 2 decades of my adult life pretty income-driven in terms of my lifestyle. I'm married. I've got 4 kids. But we never really saved or invested too much. And I was also kind of in living-for-me mode and some knuckleheadery and personal sin. Led to us needing to sell our house and use the equity that we had built to pay off some of the consequences of my actions. And here in the last, you know, 2 years or so, the Lord has really given me a second chance in a lot of ways.

That's just special.

It really is. And So, so, you know, now for the last, I don't know, 18 months or so, um, we've been renting, so we're not homeowners anymore. Um, but I've got a small business that, uh, is doing increasingly well. Um, my, my income is, is, uh, is, is doing well. And, and we're, you know, our mindset is now very much shifted and we're, we're trying to very much aggressively save and invest. Um, and sock away for retirement. But, you know, certainly with an eye towards some of what we're socking away right now being the nest egg to help us enter the homeownership market again. However, I guess my question is, you know, we've talked about kind of a plan here of in the next 18 to 24 months, maybe purchasing a home again, but we would be using most of the investment and savings that we have set aside as the down payment probably for something like that. We're fairly comfortable in our renting situation. Um, and so I guess my question is, with as aggressively as I'm able to sock money away right now, um, does it maybe make sense for us to postpone that decision for a few years and not purchase a home in the next, you know, 1.5 to 2 years, but maybe 6 or 7 years down the road?

Um, I'd love your thoughts.

Congratulations on the turn you've made.

Thank you.

Obviously a complete 180 in your whole life, and I can just tell from the quick version of your story, and very, very cool. Rent is patience, and, and then the question is, what are we being patient for? And your question, the way you posed it, is the right way of looking at it, I think. And that is, you know, is it worth it to delay until we can do this with even more downstroke? And at some point that becomes a personal choice, okay? A first-time homebuyer, we tell folks, you know, when you're out of debt— are you guys, David, out of debt?

We're getting close. I owe my parents $10,000, which that should be knocked out here in the next couple months.

Okay. And what are you making? In the small business?

Well, it's hard to put my finger on it because it's only been around for 18 months and it continues to grow. In 2025, um, the gross revenue was about $320,000 and my overhead was about 8%.

What is it year to date?

Uh, year to date, it's about— gross revenue is about $300,000 in the first 6 months of the year.

It's on a hockey stick curve then. Good. Okay, so you're gonna make 6%. Yeah, okay. And so you're— yeah, good for you. Congratulations. Obviously the Lord is blessing the new direction of your life. That's cool. Well, with— again, but with a new homebuyer, well, you know, we just say put 5% down, whatever, or more. As much as you can put down, the better. Anything that's not in retirement savings is your down payment.

Throw it at it.

And 15-year fixed where the payment's no more more than a fourth of your take-home pay. You've got a couple of moving targets here. One is you've got the moving target of Phoenix real estate, which has a tendency to shoot up. We've had a couple times in my memory of Phoenix having a bit of a bubble. It got really, really hot there, no pun intended. And it may again. And, you know, I wouldn't want to be on the other side of that. I don't want to be riding that up if that were happening. So that's variable Variable number 2 is you've got this hockey stick business that's going up into the right, in the right direction, and you're gonna be able to do a completely different house 2 years from now what you could do today if that thing continues to grow that, at that rate, and do so reasonably. So you might choose a completely different house. So I'm gonna try to balance those 2 things against each other. How fast is the market increasing? How fast is my business growing? And then, and so how long am I gonna have patience? With this good situation with rent and stack cash.

I'll give you a guess. I would not be outside a 3-year window to buy if I were in your shoes. Now, I pay cash or I can't buy, so I couldn't do any of this, but I'm talking about the things that we recommend here on the air. 15-year fix, it's the only debt that we don't yell at people for, okay, is a house. It's the only one. And a 15-year fix where the payment's no more than a fourth of your take-home pay and you put as much as you can put down. So just past the entry level first-time homebuyer is someone probably in your situation where I'd love to see you have at least 20% down because you could avoid private mortgage insurance, which is about $75 per month per $100,000 borrowed. It's a lot.

That's one of our goals for sure.

It's a lot. And so avoiding that, and then beyond that, everything we're doing is, okay, we're either increasing the price of the house because we've got more and more and more money, or we're decreasing the debt on the house. That we buy because we've got more and more and more money, or some of each.

How old are you guys, David?

I'm 41.

Okay, so yeah, you guys, I didn't know. Yeah, I was gonna say, if you're getting close to that point of retirement, then investing was gonna be important, but you guys have plenty of time, so that's great.

I would take—

You sound more mature than a 41-year-old. I don't know why, David. You're older.

It's the mileage in the story.

I've been through a refining fire.

Yeah, there you go. There you go. But yeah, I was— I had 2 to 3 years in my head, uh, to rent and then to buy.

So yeah, I would not recommend a 5-year play in your situation with the variables you gave me. And if— and it feels like 1 year feels a little desperate. Okay, does that make any sense?

Yeah, I mean, we've got, uh, we've probably got about $200,000 set aside right now in investments and a SEP.

Well, you're not using your SEP.

We're not using your SEP. No, no, I would be not touching that. So primarily the brokerage accounts.

How much is in the brokerage account?

Between the— I've probably got about $130,000 in there right now.

Okay, so if you took 24 months and added to that, that's not a bad plan.

Yeah.

That's what it feels like to me. But long, you know, but renting in the interim is just patience. You know, it's just, we've got to get a couple of these changes have time to cook up in your life. Your life is completely changed, and every segment of your life has changed. Every compartment, department of your life has changed. So holistically, your life— you are a life that has changed, you know? And so awesome. That's power. And I want some time for those seeds to germinate and sprout and take advantage of them, if I'm in your shoes.

Yeah, have some settling.

What I don't want people to do is wait too long because you're lacking in hope, or go too fast because you're somehow desperate and you're like freaked out about real estate. And so, those aren't— neither one of those are good motivators. So instead, just a wise, you know, I'm the tortoise, I'm plodding, and I'm plotting while I'm plodding on how I'm gonna pull this off. And I think you're gonna be just fine, Dave. David, I think the house is going to be a natural next move in the next 24 months or so, and you're going to make a good decision. I think you got to, you know, you're like me, you got a lot of your bad decisions in your rearview mirror, and that's a good thing. That puts you in a good place.

Well done, David.

Hey guys, healthcare is one of the biggest stress points in your budget. It's confusing, and most of the time it feels completely out of your control. But there is a better way to handle it. Christian Healthcare Ministries isn't health insurance. It's a health cost-sharing ministry where Christians share each other's medical bills. And it's not a new idea. CHM has been around since 1981. It's predictable and proven, and they've shared over $13 billion in medical bills for their members. Plus, you get more flexibility. There are no network restrictions, and you don't have to wait for open enrollment. Now let's talk about how CHM helps your budget, because programs start at just $115 a month, and many families save hundreds of dollars a month compared to traditional options. So if you are tired of feeling stuck, check out Christian Healthcare Ministries. Right now, CHM is offering new members members a 50% credit towards their first month of membership. Go to chministries.org/budget and use promo code RAMSEY. That's chministries.org/budget and use promo code RAMSEY.

Thinking about our last caller getting back into the real estate market after a life change situation. You for sure, in any situation, if you're in the real estate market, want to have a pro in your corner. Someone that's high octane, high protein, and knows what the flip they're doing. Didn't just get their license 3 weeks ago in there at your church or wherever you met them. No, no, no, no, no, no. We— nothing wrong with being in church, but they need to actually be selling a lot of houses or they don't need to be listing yours. Okay, we do not endorse real estate agents unless they're high octane, high protein, high volume producers. And they get it done and they do it the Ramsey way. That's why we call them Ramsey Trusted, because we vet them and we obviously don't let everyone into that recommendation program. If you want to find a Ramsey Trusted real estate agent that has your best interest at heart, and you can— they work, you know, you can find them for free. Go to RamseySolutions.com/agent or click the link in the description. Rose is in Austin. Hi, Rose, how are you?

How are you?

I'm doing good. Thank you for taking my call.

Sure, what's up?

So I'm almost done with Baby Step 3, and I'm looking for any tips on how to move from gazelle intensity to taking my foot off the brake.

You mean just move to intentionality from intensity?

Yeah, I'm just a little concerned on going back, backwards, you know, take my foot off the brake.

So fear is the number one thing you would say?

You mean your foot off the accelerator?

Yes.

Oh, okay. Just making sure I understood what we're talking about. Okay.

We're gonna try to brake a little bit.

Yeah, we need to brake a little bit.

What was your situation, Rose, before you started doing all of this, the gazelle intense paying off debt and everything?

Yeah, so I actually have been able to move out on my own, get my own place. Before, I was living with roommates, so on and so forth. I've paid off about $23,000 worth of consumer debt, and now I'm finishing up that emergency fund. I do currently work 7 days a week between my primary job and my side hustle, so I'm concerned on if I take away that side hustle, if I don't have any margin in my budget, you know.

What does the math tell you if you take away the side hustle? What does your budget look like?

I can do it, but it's gonna be a little tight.

Okay.

Do you have to take away all of the side hustle? Can you take away half of it?

I could. My side hustle is waitressing, so I work nights and weekends.

Yeah, so you could work not as many nights and not as many weekends, and, and that, and then give yourself a comfortable margin until your budget gets to where you're really comfortable with it. So you don't have to go from zero to hero, you can just go from— or hero to zero— you can just go from, you know, gazelle and dial it back and go, okay, instead of a full-on sprint, we're gonna go to a jog.

Okay.

And then if that works, you can slow down, drop the side hustle altogether if you want. I mean, but if you want to— if you want some— if you want some emotional proof that this is okay, then just back off your number of shifts.

Yeah. And do you see your primary job rose, um, going up at all, that income over time? Like, I just wonder in 2 years if that margin is filled with just your, um, your career versus the side hustle.

Yeah, definitely. I'm currently— the company I'm with, I do see a career with them. So, um, since I've been with them, I've seen growth in my income, so I don't see that being an issue.

Okay. Yeah, because that would be ideal, right, that you work in your 40-hour week job and that sustains your lifestyle. You don't have to have that second job. Uh, but maybe for a season still while you're transitioning Baby Steps and just for your comfort level. Yeah, I mean, I think that's what Dave said earlier was great.

Just if you're going super, super fast down the interstate, like, you know, 130 miles an hour or something, those white lines are coming at you really, really fast. And then if you slow down to the speed limit, it feels like you're crawling. And so that's kind of the emotion that you're feeling when you do this because you've been busting it. I mean, you've been going 80 hours a week. Week. And just to go down to $60,000 is gonna feel like you quit emotionally. And that's different than the math. So, Dr. Delony always talks about, John always talks about, when we're dealing with something like this where there's a fear, facts are your friends. And so, let the math calm your soul.

Yeah, and Rose, your money habits are different today than they were when you started this. You're not the same person. You're not the same person. And so, I would start leaning in and trusting the Rose that has created great habits, that has found herself on her own. She's budgeting, she's paid off debt. Like, she knows what to do. She knows how to live on less than she makes. I mean, all of that. That's who you've become. And being confident in that part of you, I think, is important too. And you have to have the numbers work, right? So, yes, I would say, for a season, if you still need some margin, keep part of that side hustle going just to give you some comfort there. But ideally, you can phase that out as your main main career goes up.

David's in Indianapolis. Hi David, how are you?

I'm doing well. Thanks for taking my call, Dave.

Sure. What's up?

So my question, my wife and I, we've been together for 6 years. Um, and we've over those 6 years, um, always been comfortably financially, but, um, we've talked a lot about budgeting pretty much once every 6 months or so. We have a discussion on we should sit down and really budget, um, but we never get to the actual budget part that, um, allows us to track moving forward. We kind of look in the rearview and say, okay, we're doing all right. And then, you know, talk about we should try to cut back here, try to cut back there, but it never actually— rubber never meets the road, so to speak, where we have a budget that we execute against moving forward. So I wanted to get your thoughts on any practical tips to kind of implement that and move forward in a way that makes it effective for us.

You know, you're battling one of the hardest things that I think Americans battle, and that is doing nothing or handling money poorly. You could still have a pretty dadgum good life. And you know, it's almost like you need to have a crisis to wake your butt up, you know, because everything's just kind of going okay.

Yeah, that's—

there's nothing, nothing to kick you off the truck. Yeah. And so yeah, when I'm facing something like that, I just try to look in the mirror and sit down. Sharon and I sit down and go, okay, there's no There's not a crisis here, but we're gonna create one. We're gonna emotionally decide that we're pissed about this. We're not living like this anymore. You don't have to have a heart attack to decide it's a good idea to get in shape. You could just look in the mirror and go, "Hey, no more donuts, bubba." That might be me talking to me, by the way. But I mean, right?

Yeah, okay. Yes, yes and amen. Dave gets pissed. I was thinking on the other end is to, instead of, 'cause for a lot of people, yes, they have this like crisis moment and their past catches up with them and they have to change immediately or it's gonna continue what it's been doing, right? Your past hasn't necessarily caught up with you, right? You don't have great money habits, but it is what it is. So I would say, let the motivator be your future. And you and your wife sit down and be like, the money we are letting out of our hands without, because we're not being intentional, we're losing our future selves. Like the 60-year-old version of us is gonna be like, "Man, they're gonna be so pissed at the 31st of March." "Oh, they're pissed again?

Wait a minute." "Shoot!

Dang it!" Man, man, maybe I am more like you than I wanna admit. No, okay. So, yeah, the future, we wanna be able to do X, Y, and Z in the future. Like, this is where we want to be. And let the future be the motivator of your goals, right? So, you guys have to look ahead and say, "What do we want our life to look like in 5 years, in 3 years, in 10 years?" —nasty decision. And all of that, yes. And David, seriously, the EveryDollar budget is gonna be everything for you guys. I literally just tracked my transactions this morning, and Winston and I, we talked about our July budget, but it takes us 5 minutes now when we talk about it because we've been doing it for 16 years. So, what I would say to you guys is what we used to do is literally put it in your calendar on your phones, or set one of those reminders on your iPhones, and just say, "8:30 tonight, and we're having a 20-minute discussion about the budget," and do that. Do that 2 or 3 times a week. Seriously, do it a lot at the beginning so you guys get in the rhythm of just looking and talking and looking and talking and sticking to it.

Yes, but you have to, you have to change that habit. And then as it goes on, you don't have to do that as much, obviously.

What's your household income?

So base is around $215,000 and then usually around another—

so I would ask, I would ask, I would just ask the question to myself. I would say if If I had somebody working for me that made $215 and they handled money the way this guy does, would I fire him? Well, please don't ask God to bless you if you're gonna be mediocre in the handling of your money. He wants excellence. So be excellent. You know, treat this like it's your job. And you guys are not dumb people. So sit down and put it all in the budget. Y'all all talk about it, and then by God, stick to it. And then you're gonna go through about 90 days of back and forth to get it all figured out and get the rough edges off. Out. And you're doing all this.

Yes. And you do all of this for the goal.

One of the biggest myths about money is that if you're winning with money, you're never supposed to spend any. That's not true. Some of the best money you'll spend is making memories with the people you love. That's why I was excited to find out about Young Washington from Angel. This movie tells the story of George Washington before he became a general or president. It's about failure, perseverance, and leadership, and it's the kind of movie that's worth seeing on the big screen. And here's the best part: Angel has made it part of a bigger and better deal. Instead of just buying tickets at the box office, you can get a premium Angel Guild membership for just $15 a month. You'll get 2 tickets to Young Washington, access to Angel's family-friendly streaming library, and free tickets to upcoming Angel theatrical releases and every month. The truth is, the 2 tickets to Young Washington pay for the first month on their own. Celebrate America's 250th with a great movie this July 4th and a great deal. Sign up at angel.com/ramsey. That's angel.com/ramsey. Welcome back to the Ramsey Show and the fair Airwinds Credit Union studio. Adam is in Syracuse, New York.

Hi Adam, what's up?

Hey Dave and Rachel, how you guys doing?

Better than we deserve. What's up? How can we help? So a little bit of background.

I'm 26, my fiancée's 27. About 2 years ago, we bought a house from my grandfather, got a pretty good discount on on it. Um, 2 years has passed now. We have about $200,000 in equity in the house. Um, and we're planning on getting married soon. We've been thinking about just eloping, and then we have a wedding date already set for November 5th of 2027. Um, I have $55,000 worth of debt currently. She doesn't have any debt right, and we're thinking that if we get married soon, that we just sell the house, possibly pay off my debt, and then either rent for a little while or buy a lower-priced house. And I'm just trying to— I feel like I'm more on the fence of actually doing the renting, uh, and I feel like she's just I'm not. She's a little more on the other side of it.

What do you make and what does she make?

So I just got a pay increase of about $20,000. I'll be making $70,000 now. She makes mid-80s, probably about $86,000.

Okay, so you have how much debt?

$50,000? $55,000. $55,000. What's it on, Adam?

So $26,000 on a car loan. And then $30,000 on student loans.

Okay, well, the proper way to answer this is pretending that you all get married this weekend, and then this is what I would do. But I would not do anything else together until you're married. Okay, you quit paying people's bills that are your roommates. Roommates. And I don't care if it's your fiancée or not, it's still your freaking roommate, because you don't have any legal ties whatsoever. And one of you just walks off, or one of you— something happens to one of you or something like that, and those things happen in life. Yeah, there's no repercussions. There's no protection. So you're very, very vulnerable. So yeah, if you want to do a celebration in November of '27, that's fine, but I'd be married by the end of the week Happy Fourth of July. Woo-hoo! Fireworks. Okay. And so here we go.

America's birthday and Adam's anniversary. That's right.

On the 250th anniversary, we got married. And so, yeah. And whose car is the $26,000?

It's my truck.

Yeah. I'd sell your truck. I wouldn't sell your house.

Okay. To give a little more background on the house, the house was built in 1918. You don't like the house? We, we love the area and the property that we have, but we're not huge fans of the house itself. Yeah. Okay.

So if you were gonna move anyways, that's one discussion. I would not move because of the debt. But if you guys don't like the house and you wanna do something living-wise differently regardless of the debt, then that's, that's a totally different discussion.

Yeah. But I, I, in that case, I would sell the house and buy a different house. Mm-hmm. And I'd still sell the truck.

And I'd still live on one of your incomes for the next year after you get married and just pay off the debt, or sell the truck and then live off one of your incomes.

If you want to keep the truck, you need to pay it off inside of a year and a half, and the other debt too, and keep the house. And then when that's done, then we'll talk about selling the house and moving to a different house with the equity. But selling the house to get out of debt is—

We rarely recommend that. No, almost never.

Only in extreme situations where somebody's really gonna be broke. But there doesn't need to be an our house. And our anything because you're not married. It's very, very dangerous. Don't do this, folks. So yeah, you do what you want to do, but if I were you, I'd be married by the end of the weekend and have a wonderful anniversary that we can always remember was the 250th anniversary of the United States of America. And there we go. Hee-haw. And you can make jokes about fireworks on your honeymoon the rest of your life. Anyway, have some fun with it. But yeah, because dude, y'all have been everything but married for a very long time. You talk like an old married guy. I mean, you don't even sound like— you know, so you really do need to get this stuff in the right order so that you don't get— somebody doesn't get burned here. Christina is in Cincinnati. Hi, Christina, how are you?

Hi, I'm good. How are you all? Better than we deserve.

What's up?

Well, praise the Lord for that. Um, so my husband and I are working Baby Steps 4 through 6, and we were just curious on balancing working the steps at the same time. So we have a plan built, like a plan built as we work all 3, but we were just curious if we should be prioritizing working one more aggressively than the other.

Well, 4 is set. It's 15% before you move on. 15% of your household income going into retirement. That one's set. And then the only vacillation is between things that we want to do in the household because we're at intentional rather than intensity stage. Or do we need to save up and move up in car? Do we need to be saving up for a vacation? Those are kinds of competing things, right? And then, you know, age and and aspirations of the kids for college. You know, it's a completely different discussion about Baby Step 5 if you have two people in high school versus two 2-year-olds or two 3-year-olds or something, right? So it's just—

How old are your kids? We have just one daughter and she's one.

Okay. Okay. Well, there's no panic about Baby Step 5. And so if you, in that situation, wanted to just do something that was representative of having touched that base, meaning we're gonna put $100 a month or $200 a month or something in a 529 just to get started on it. It's not really enough, but it'll get us started, and then we're gonna concentrate on knocking out the house. That's what a lot of people do in your situation.

Yeah, or you look up and when the kid's 7, 8, and be like, okay, what's tuition looking like now, and what, how aggressively do we need to be saving for this then? But yeah, I wouldn't be concerned, but I would open one and start putting a little bit of money in it just to keep it going.

Just to say, just say I did, I'm on baby steps, Step 5, and you don't have to be putting a lot in there, and then attack the house. That's what most people do. What are y'all trying to do? What are you thinking, Christina?

Well, so we do invest currently in a 529. We opened it pretty much after she was born, like the next month. And I think I'm in a unique situation. We're planning for life, but I actually work at a university, and one of the benefits that we receive is that dependents can attend for free. Right. Now I have to be employed at the time time of attendance. So that's why we're kind of planning for life. But I think that's kind of what we're trying to balance. And then I know you guys talked about the 15% for Baby Step 4, but with Roth IRAs, we're actually coming in closer to 19% of our household income.

I wouldn't do that. Okay.

So we should kind of readjust that to 15% to apply either to 5 or 6?

Until your house is paid off, yeah. Okay. Perfect. Yeah. And I wouldn't— Um, I think you said it, Christina, but I agree with you on planning more of life happening, because I don't want you feeling like you have to be stuck in a job for 18 years, right? If you just— for your kid to get free tuition, right? Christina, in 5 or 6 years it may look different.

And so we need to save— they fired me when they were 17. Yeah, yeah, that's right. I know, I've actually gotten that call. Oh man. Wow.

But good job, you guys, being a young family and doing this.

You're going to be You're gonna be in such good shape. You really are doing great. Well done. Let me tell you what I get asked all the time. When should I get term life insurance? How much do I need? Is it affordable? Those are the right questions to be asking. So let's take a quick review. The fact is, term life isn't a baby step. So if anyone is dependent on your income, you need to have 10 to 12 times your income in life insurance now. And most people are surprised by how affordable term life really is. Even if you're not in perfect health. Look, I understand the hesitation since most insurance companies make it more of a hassle than it needs to be. Not at Zander Insurance. They're not an insurance company. They're a broker that works for you. That means they'll shop and compare the top term life companies to find the most competitive options on the coverage for your family. For almost 30 years, I've recommended Zander for straight answers, competitive rates and coverage that actually protects your family. Call 800-356-4282 or go to zander.com for a quick and easy quote. That's zander.com. If your private student loans are If you're in default, that means you've fallen so far behind that the loan is considered unpaid.

Yrefy might be able to help. Yrefy helps borrowers in tough situations explore low, fixed-rate refinancing options that fit their budget. Go to yrefy.com/ramsey. That's the letter Y, R-E-F-Y, dot com, slash Ramsey. Might not be in all states.

Today's question comes from Brett in Kansas. My wife and I are currently paying off $80,000 of debt. At what point At what point can we start to budget for a little bit of fun? We have been working nonstop to pay this off and want to add some fun money to the budget. Oh, it's a great question. And $80,000, that's a long trek, right? Depending on what you guys make, could be a couple of years. And so, you know, one thing that we have found that helps a lot of families when there's a lot of debt, a massive amount of debt, is after certain debts are paid,— and you guys look up and say, "Okay, after we climb this mountain," or "After we do this," when it comes to the numbers, just to have like a breather, to find something that you— not expensive and not, you know, that's gonna cost you guys a lot, but like, what's one thing we can do to enjoy ourselves that we can look forward to? And sometimes, that's like something for free, right? That you just plan, and you're gonna make this thing special. But I would say, to be able to piece it out, when you look at the whole thing, I feel like it can be very overwhelming.

Overwhelming. But when you find these milestones within the $80,000 journey, that's helpful. But also, the math is the math. And the deeper you sacrifice, the more money that goes to this debt, the faster you are going to pay it off. So, if you go and take a trip or something, and you pay off debt, that's not gonna work. Not gonna work.

I can never tell when someone asks a question this way, whether they are just whining, like, "Wha, get over yourself," or whether they really have been going like 100 hours a week and they really haven't even bought a jar of mustard. I mean, you know, what extreme are they on? Right, right. If you're on the whining side and you're just, "Oh, grow up, shut up, fun is not defined by spending," you know, if you're on the other side, yeah, do what Rachel said. Set yourself a milestone and and go, "Okay, we're gonna go buy Chick-fil-A with coupons," and that's our big woo-hoo when we knock out that particular debt, okay? 'Cause we've not been out to eat, but we're gonna go do that. But you know, what's interesting is that we define fun as with money. When can we do something fun? When you do something fun. It just doesn't necessarily require money. Money. But it's like the only way we can have fun is if we have money spending going on. Well, that's not true. We all know that's shallow and not accurate. So don't define fun as necessarily spending. So let's go throw the frisbee in the park.

That's fun. The one we've already got. You don't go buy one. The frisbee. Okay? And whatever. I don't care. But, you know, is it— you know, but we define fun as I want to go on a cruise. Cruise, you know? And no, you can't do that. You're broke and $80,000 in debt. If that's what you're talking about, no. But if you're talking about, I'm gonna find—

Well, that's where you have to get creative, because I do know, you know, have fun is— It's okay to have fun. It's going to the movies, it's going to the zoo with the kid. Like, all of this costs money to go and do experiences or to go do something for a lot of things. But what you're saying is exactly right. Find the joy in life. Like, when you can do that, contentment starts to build, and that gets magnified as you build wealth too, which is an amazing characteristic to have. So yeah, what are the things that you can do? Is it game night, you know, as a family? Is it going on walks? Like, go, go do something. Go live your life and have a great life. It doesn't have to cost a lot.

Yeah, I mean, think about families that never— that lived in a time when you could not purchase fun. I mean, you were stuck with family Monopoly. You had to play Monopoly with your family. That was the only thing you could do, because I mean, jigsaw puzzles, you were stuck with that. Remember COVID, when you were stuck in there with your family and you couldn't do anything? Because people found ways to spend money then anyway. Online shopping. Stacks of wine bottles outside their doorway. But yeah, but anyway, yeah, so, but be careful how you define fun. That's a good point, yeah. Eve is in Memphis. Hi Eve, how are you?

Hello, I'm fine, thank you for taking my call.

Sure, what's up?

So just a bit of background. My husband and I, we have been in education for years, and I mean our own education, and have followed unpredictable work, moving internationally, and really genuinely not having a savings margin for a lot of our adult life. And so we don't really have a habit for that. And I'm— we're wanting to get on the same page for that. But like, I grew up watching my dad go bankrupt twice from day trading on borrowed house equity. And that makes me scary, wary of risk. And my husband had the opposite background of growing up pretty humbly and family saving in very boring savings accounts and bonds. And I feel like now he's going in the opposite direction. He's drawn to crypto and IPOs, and he feels like he's older and he's had to wait so long to have the margin to invest that he wants a fast return. And he is reasonable, but we're both scientists. We like to see the full picture and get a full understanding. And I feel like I'm lost with trying to figure out everything. And with his hours he doesn't have time to like sit down with people.

Yeah, so, you know, I think, I think it's a good idea with his hours that he sits down with you and he sits down with people because he's getting ready to make some huge mistakes.

Yeah, I just feel like when I do the research myself, he listens, but like I'm not confident enough to explain it back to him clearly. He wants it like—

okay, well, so let's pretend for a second, let's pretend that we actually— because you sit down across the table from both both of you and say, "Hey, husband, your parents had it wrong. They never invested. They only saved. You have to invest." And by the way, Eve's parents obviously had it wrong. They daytraded into bankruptcy twice with the home equity. And both of those things are influencing these decisions in a toxic And then you add to that, he's decided he's going to be desperate and rash, which when I'm desperate and rash because it's coming at me, I don't— I'm late, I'm late to the game, I'm late to the game, so I have to play catch-up. I'm going to swing for the fence. I'm going to try to hit home runs only. You're going to strike out because soon as I get that desperate, the way your husband is sounding, I get stupid. And it sounds like he's getting stupid. Crypto's stupid. It's a stupid swing for the fence, okay? Day trading, stupid. It's a swing for the fence. But also, not investing and instead just saving, like his parents does, is stupid. So Rachel, your book, we've got to send it to them, Know Yourself, Know Your Money, because their family of origins are really impacting this.

Yeah, of the fear and the motivation of what's going on. On. But then you got to get beyond that, Eve. And I would want to know from him, like, what, what, what, what is that motivation? Like, I know, I understand that he feels desperate. Well, that he feels like he doesn't have enough time. But if you guys ran out numbers in an S&P 500 to see where you guys would be, because how old are you all? I'm 40.

He's 48.

Okay, so I'm just curious to say, like, yeah, in the next 20 years, if you did the safe route, get pretty much guaranteed what are we going to have?

So income and like net take-home right now is about $11,000 a month.

Okay. And so what if we put away $2,000 a month?

That's what I kind of want to do. And I think where— I think he's like, we could— we need to rerun some numbers of budgets. We've got some money getting freed up now. We have a kid who was in private school who's going to a public high school, you know, so we have margin. I can see the margin coming. We've agreed we're going to save up the emergency fund first.

Yeah, Eve, if you put $2,000 a month in just an S&P 500, which is an investment in the stock market, but it's not a day trade and it's not crypto, okay? The average annual rate of return in the stock market in the United States since it began is 11.8%. If it averaged 11% and you put $2,000 away from age 40 to age 67, you'd have $4 million. Oh, we have— That's what you should be doing.

To consider about as well. So I think, you know, We haven't been saving for college yet. I think we kind of need to look— we need a succinct, relatively succinct way to see what are the investment strategies, what are the ways to do this, and what point we should think about.

And that requires sitting down with someone that knows something that you all don't know.

Yeah, check out SmartInvestor at RamseySolutions.com and sit down with a financial advisor. Financial planner who gets excited about watching your money grow, right? They're not anti that kind of thing. They're pro all of that. And look at the big picture, and it's wisdom. And I feel like that's what's scaring me about his decisions is it feels immature. It does not feel wise. This show is sponsored by BetterHelp.

Summer is here, and listen, everything changes this time of year. The kids are out of school, the routines go out the window, you're traveling more, you're for sure sleeping less, and if you're not careful, you and your family can end up running on fumes. Here's the truth: if you don't slow down this summer and take care of yourself, all that stress is not just going to appear. It's going to show up in your body, in your work, in your relationships, your patience. It's going to show up everywhere. This is why I'm a big fan of BetterHelp. BetterHelp is an online therapy platform that matches you with a licensed therapist based on your goals and preferences. All of their therapists follow a strict code of conduct, and you can message your therapist or schedule sessions right in the BetterHelp app. If it's not the right fit, you can switch therapists at any time for no extra cost.

Listen, you don't have to carry everything all by yourself this summer.

Go to betterhelp.com/ramsey to get 10% off. That's betterhelp, H-E-L-P, .com/ramsey.

Bill is in Austin, Texas. Hey Bill, what's up? Hey Mr.

Ramsey, Ms. Cruz, I appreciate you guys taking my call. Sure, how can we help? So I'm trying to get on the same page with my girlfriend here, and we're trying to start saving money. I want to obviously start planning for our future. I think we just can't get on the same page. Every time I bring up finances, um, it often turns into a confrontation. So I'm just trying to figure out the best way to go about it and show her, you know, what we're looking at financially, because we've really never sat down together and looked at it as a whole. I just want to see what you guys—

how long have y'all been dating?

Based on the finances, um, we've been dating for 2 and a half years. Okay. How old are you guys? Um, I'm 26 and she's 28. Okay. Okay.

And so when you start talking about, you know, someday when we're married, we're going to combine finances and this is what it looks like, it turns into a confrontation. What does that mean?

So basically, like, I obviously want to start planning for our future and stuff like that. And I've told her that. Um, and she doesn't want to obviously take any steps, um, to start planning for our future because we're not married now. I know, obviously you said not to you know, get into houses and cars and stuff together until you're married. And I've already made that mistake. Um, but I'm trying to show her—

wait, wait, wait, wait, wait. You've already made that mistake? You bought a house together?

Yeah. So I, I work for a home builder.

I don't care. You bought a house together. Make sure I understand what you're saying.

Yes, sir.

And you bought cars together?

Um, I own mine outright and then I'm on— yeah, I'm on hers as well.

Yeah. So, and yeah. So, and you're shocked that this woman doesn't want to talk to you about money anymore until you marry her. Of course she doesn't.

Well, yeah, I just, you know, she's tired of waiting on you. I know. I just want to feel like it's going to be— you bought a house. I think that marriage flips a switch, you know, and then it's like, all right, well, now we have to— you bought a house.

That's not like a little small step. Like, this isn't like we shared coupons at Costco. You bought a freaking house, man. Okay, so then you bought a car for her and it's in your name, and she feels insecure about you talking about the future without a ring on her finger. Well, no kidding, dude. Yeah, this is you.

I've been thinking about, you know— yeah, I know, I'm thinking about obviously marriage and stuff. It just scares me because I'm like, I mean, bought a house.

We've been basically married, but how do you, how do you scared about marriage after you bought a house together?

Because a house is not a lifelong commitment. So I, I know.

Yeah, I just don't want to feel like that's the mortgage company going to flip a switch in her, you know, in her, in her mind that, wow, okay, now we're married, now we need to save money. It's like, why aren't we saving money right now?

Okay, so is the saving the money the tension point that you're wanting to put money away and she just wants to to spend? What is that, one of the tension points?

Yes, it's a good tension point on that. Um, she owes money back to the IRS, so I'm trying to tell her, hey, you know, this, this can really screw us, you know, in the long run if they start garnishing her wages and everything like that. So like, we got to get on top of that. She's making minimum payments, but like, we need to start, you know, taking it more serious. And okay, you know, I'm trying to—

all right, I'm gonna quit beating on you. What would I do if I were in I'm in your shoes. The two of you need to schedule a meeting with a marriage counselor this week, and I want you to begin pre-marriage counseling and decide if you're going to get married and if you can align enough on your finances in order to spend your life together. And then you either need to pull the plug on this thing and sell the house and the car and go on your merry way, or you need to get married as soon as you can get aligned. And I'm talking a month from now. You're going to make a decision, okay? Because you're trying to handle all of this while she feels like she's dangling on the end of a hook, like a worm over a bass.

And she's tired of it because, yeah, she's tired of it.

And she doesn't know how to focus. You're not in a seat to tell her what to do about anything. You're just the boyfriend. Yeah. So you guys cannot, you know, you can't go— if it's your wife, the two of you can sit down and go, hey, we're the two of us, we're going to attack this IRS thing because this is going to screw us. So your statement would be correct then, but you're trying to make a statement from a position of power that you don't— position, a seat that you're not sitting in.

Yeah. Yeah, I'm just trying to—

I know you want everybody to be on the same page for the house and everything.

I pay for everything, you know, for the house. I pay for the house, I pay for my car, water, trash, and, you know, everything that comes to the house. I pay for auto insurance. What does she make? So, um, she makes $3,000 per month, and then she makes commission depending on, you know, sales that she makes.

So in your pre-marriage counseling, if you're gonna go do what I tell you I want you to do, you guys need to sit down and do a mock budget that says, "If we were married, we would put all of our money on the table, and here's what we would do with our money. We would pay the house payment, we'd pay the car payment, we'd pay the IRS, we would eat, and our money would be shared, and we would make decisions together that are wise and going forward." But you're starting to regret, you're starting to resent her for not carrying her half of the load, and yet you signed this deal.

"you made this mess." And Bill, I would also— and lead with a lot of humility too. Yeah. I feel like, you know, you're pointing at her, "You're gonna screw this up if you don't, if you're just doing minimum payments." And it felt a little— I understand what you're saying. You have an urgency, but the urgency can come off as very shameful and down-putting, and you have it figured out and she doesn't. And do you know what I mean? Like, The emotional intelligence of, I think, a healthy marriage is both sitting down and being, "Okay, what's your desire? Here's my desire. Here's what I'm thinking. Here's the story that I've made up in my head, Bill, is that you think I suck with money, and I have to get this right for you to marry me, to make me worthy of marriage. Am I not worthy now?" I don't know, like, there could be so many things attached to this. And you guys gotta walk through all of that. I've been married for 20 years. I would, before you get married.

I would go to a pre-marriage counselor today, and I would get these— get to the down to the basics. Get to the root of it all. And let's see if we can get aligned, and then very, very quickly get married, or let's start taking this thing apart.

Because if I'm her, my car is attached to this guy. Yep. My home is attached to this guy. Yep. I make $3,000 a month. Yep. And here he is— And I owe the IRS. Here he is telling me what I need to be doing.

Now, after he signed me up for all this, he still resents me because he has to pay for everything.

Yep. And do I— and if I— I don't know. There would be a lot, I think, there that she may not even realize. I don't know.

But man, I— She feels hung out to dry. You know, and no, she don't wanna talk about the future with you, because the present with you sucks. Of course not. I mean, it's not good.

But it's all good intent. No. But Bill is— I hear you, Bill. Like, because we have some people that they're so hardcore, with— I mean, obviously not our principles, because he went and bought a house and— but like, people are so good— I mean, their motivation is good of like, "I want to save money. I want to be responsible and I want these things." But you end up coming off very unattractive, very controlling, kind of shameful.

When you do it out of order, particularly.

Yeah. Yeah. So, there has to be a lot of humility in this. And you guys need to get on the same page. And she's gonna be different than you too, Bill, when it comes to money. She might be as the spender, always. And you may be the saver, always. And that is the dynamic, which is beautiful. And in marriage, you need each other. So that's a good thing. She doesn't need to turn into you, but she does need to be a responsible adult too. So I hear, I hear that, that side of it. Oh, man.

Bill, put a ring on it.

If she's the one, if she's the one.

The only shot you've got at this is not continuing like it is. And it's not just go get married this weekend either, because you've got a mess. You don't know what you're getting into. So you guys need to get some good coaching, some good counseling from a good marriage counselor and settle in and get married very quickly, as soon as you can.

Yeah, make a decision. You guys are 26, 27, and so—

Because she's dangling on the end of a hook and she's tired of it. I promise you that's what's going on. Promise you. And, you know, that's the way it is. Open phones at 888-825-5225.

I'm all about practical ways to save time and mental energy, especially during the summer when life gets busy. Between vacations, camps, deliveries, travel plans, online shopping, and trying to keep everyone organized, my mental load can get pretty full. That's one of the reasons why I love DeleteMe. DeleteMe. Most people don't realize how many data broker sites have their information online, like old addresses, phone numbers, and even family connections. And that can put you at risk of being a target for spammers and scammers. But removing all of it yourself can turn into a giant project. That's why DeleteMe is amazing, because DeleteMe handles it for you. Their privacy team of experts removes your personal information my information from hundreds of data broker sites, and they keep monitoring it throughout the year. So far, DeleteMe has saved me about 90 hours I would've spent myself removing my information. And honestly, it feels so good knowing that someone is in the background helping me, and I don't even have to think about it. So this summer, give yourself a vacation with one less thing to manage. Get 20% off annual plans at joindeleteme.com/ramsey. That's joindeleteme.com/ramsey.

Ramsey. What would it feel like to have no payments?

Wow.

I mean, no car payment, no MasterCard, no American Express, no Discover Bond No fleeced vehicles. No student loan that's been around so long you think it's a pet. What would it feel like to have no house payment? No payments. What could you do if you were out of debt? Anything you want. How fast you'd become wealthy. I mean, Baby Steps Millionaires get there fast. If you follow the Baby Steps, it's the fastest way to get out of debt and become wealthy and outrageously generous. If you live like no one else, later you can live and give like no one else. If you want to learn how to do that, the EveryDollar app will teach you everything you need to do, and it'll put you on a budget to help you do it. You are in control of your life and your your budget. So why don't you do something with it? You track your progress, you get personalized recommendations, you get coaching for your situation. You do it the Ramsey way on EveryDollar. You can start it for free in the App Store or Google Play. Paige is in Denver. Hi Paige, how are you?

I'm doing all right, thanks so much for taking my call.

Sure, how can we help?

Um, so my husband was recently— his position was eliminated after several years with a Christian organization, and so we are He's actively looking for a job, but we have some medical debt. I have a child that has a chronic illness, so we have monthly bills for his care. Um, and so I have a little less than $3,000 in medical debt right now. We have 4 months reserve. We do not have any debt except our home. Um, but I'm trying to—

how much is the 4 months reserve?

How much money is that? Um, I have about $15,000. My husband. Okay, right now.

And then how long ago was your husband laid off?

He was— he was let know in April. His kind of contract ended this last month, and now he's been given 2.5 months severance.

Um, so he's known about this for months upon months upon months. What type of work was he doing in the ministry?

Um, Christian education. So he— he's been actively looking and applying for jobs, so hopefully— and there are a few things that he's got on the horizon Um, but we have these medical bills, so I'm trying to figure out how to pay those off the best. I understand like the snowball method and I was going to start—

No, that doesn't work. None of that works right now. Everything. Okay. Right now everything's on hold until he gets a job. Right. Are you working outside the home?

I do. I just, I work with the same organization. And so I, I'm looking for some other options. I think it's possible that my, my position feels a little precarious right now as well.

Ah, that's a problem.

Probable, right? So, um, so yeah, we're just trying to figure out— I've called the medical, I've called billing for all of it.

Doesn't matter, it's only $3,000, right? You could write a check today, but I'm not going to, right?

That's my question. What do I do? How do we move on from here?

We wait, we wait, and we go get income. Both of us go get income now. No. Is he a— was he teaching or was he in administration?

He was in administration.

Does he have the ability to start doing online teaching as a side hustle starting tonight? Ready, set, go?

Sure.

Do it. Yeah, I mean, I think—

sign up. Start being professor to some online classes tonight. You can sign up for those immediately. An income will start coming immediately. I want him to load up on that.

That. While he's looking.

And turn the television off or throw a brick through it. No wasting time right now. Fair, okay. No wasting time. Income. I want some interim income until he lands the next gig, because until then we're in limbo, and limbo is scary as crud, isn't it, Paige?

Indeed. So what's— yeah, because he was laid off in April, right? And you said they all had 2 months of severance. Severance? No. Okay, so, so you're ending— yeah, so you're calling at the end of— at the beginning of July when the severance is—

he— no, he was paid out, so he was paid out through his contract, which was the end of June. So now we are starting the 2 and a half months.

Okay, that's good.

Okay, so you have July and August of severance, which the way I look at that is if he lands something this week, that's 2 and a half months signing bonus to the next gig. Yeah, right, right. It's flush money. It's gravy money. It's extra money. And we write a check, pay off the— and but so what you've— what you're dealing with, and it's a fair thing that you're dealing with though, is my child has an illness, and I've got this financial stress, and we've all— or, you know, he's lost his income, I'm probably going to. So you've got a lot of angst in the air. In the air, and what I'm trying to do is get the— Get something controlled. The faster some kind of money starts coming in, even if it's not the permanent solution, the lower your anxiety goes.

Okay. Yeah. And we have— we've met our out-of-pocket deductible for the year. And that is part of his severance. They're going to cover COBRA for us through the end of the year. We have— like, we're not going to incur any more medical bills.

Well, you're probably going to get a health package at the next place, and he's probably going to land that in the next 30 days, right?

And he's working hard to do so. It's just a tricky time.

Yeah, it's just scary. Until it was tricky, right? We're walking the Grand Canyon on a freaking tightrope. I mean, this is scary.

Yeah, yeah.

And so, um, I, I think you're going to be okay. I don't hear anything that panics me, but I can relate to your anxiety, and I think your anxiety is valid, right? But I don't, I don't want it to be my activator. And so what we're going to do is we're going to protect the $15,000.

Yeah, but the answer is we don't pay the $3,000.

Don't pay the $3,000 today. Protect the $15,000. Protect the severance. Cut everything out of your budget. Go to beans and rice, rice and beans. You're not going out to eat. We're not going to celebrate the severance check, you know, unless it's with water and cereal, right? I'm I mean, so we're gonna, we're gonna, we're gonna— the storm is here. We're putting plywood on the windows, and when the storm passes, we'll take the plywood down. Sure, that's what we're doing.

And, and we feel like we've kind of— we've been taking those steps. I think it's just a matter of, do I call these medical companies and say I can't do it? Just let it ride. They're useless. They don't care. That's what I'm finding. It's been really frustrating.

You're not dealing—

you're not talking to intelligent Um, so we just let it sit until something lands and then pay it off.

They'll use the fact that you called and try to turn on your honor and turn on everything else to get you to go ahead and pay it. They'll shame you, won't they?

100%. Yeah, that's what they do. Yeah, we've had— I mean, already somebody say, well, we won't make another appointment until you pay this bill. And I've said, but I am pay— like, I have been making—

we've been making— well, I won't make another appointment with you anyway. I'm tired of you people. I think we'll go somewhere else. So I can, I can handle that.

It's just a trick. We just feel like we've been in this tricky place. And so I'm trying to decide, do I just—

what medical professional actually said that? Was that a collector or the actual administrator in the office?

It was the—

no, it was their billing department. Yeah, that's bull.

They don't have control of the appointments. So that was complete BS.

So it sounds like we are just— the best thing is to hold tight.

Exactly. Really? Exactly.

And I'm just trying to give you some information to that, that make— that normalizes where you are to where it doesn't feel quite so sketchy. Yeah. So the billing department doesn't make appointments. They're full of crap. They were just trying to collect a bill, and they make up stories, and they shame, and they do whatever to heck with that. And yeah, he gets a job, but he's got a game on. I mean, get part-time income, short-term income, long-term income, income, income, income, income. Both of you, like your hair's on fire, because the faster you stack cash, the lower your stress goes and the better he interviews. When you walk into interview and you're scared to death for your house being foreclosed on, you don't interview as well as when you walk in with cash stacked in the back bedroom. You walk different and you talk different. Your octave is different in your voice. Everything changes. You got— you have zero swagger when you're desperate, and you don't want to do that. You don't, because you're not attractive hire at that point. Scares people when you're scared. So you got— that's why I'm telling you, go get some income, and it'll help him close the deal on the permanent upgrade, and it'll probably get an upgrade in his job.

Wow. Sorry you guys are facing that. We're on your team though. We're here to help you. If you need us again, you call anytime. When I started, I had great ideas and I knew how to serve people, but I didn't have systems in place yet. At that time, I sold books out of the trunk of my car. It was a lot harder to start a business back then. Shopify makes it easier. Shopify is the business platform powering millions of businesses and about 10% of all e-commerce in the United States. If you've got a product or even just an idea, Shopify makes it simple to get moving. You can build a storefront, write product descriptions, and even improve your product photos all in one place. You don't need 10 different systems duct taped together. Shopify handles everything you need to make sales, from payments to marketing and analytics. Plus, that purple Shop Pay button is one of the best converting checkouts on the planet for fewer abandoned carts. And if you get stuck, Shopify offers 24/7 support. So if you've been sitting on the sidelines, it's time to turn those ideas into— sign up for your $1 per month trial at shopify.com/ramsey. That's shopify.com/ramsey. shopify.com/ramsey. Welcome back to the Ramsey Show in the Fairwinds Credit Union studio.

I'm Dave Ramsey, your host. Rachel Cruz, Ramsey personality, my daughter, is my co-host today. Johans is calling us from Australia. Hey, Johans, what's up? Hello there, Dave.

How am I doing?

Better than I deserve, sir. How can we help? That's great.

Dave, I have a basic question here for you. I'm a carpenter apprentice and I have a— me and my wife have a yearly income of $71,000 and— $71,500. We are struggling to make ends meet at this stage. We've been, over the last 12 months, we've been dipping into our savings just to try and stay afloat. And one of the My concerns is, uh, involving, uh, car insurance that I have for my, uh, ute. And, um, if I, uh, invested prematurely.

Okay.

Um, so do you have debt?

Um, well, yesterday morning, uh, when I called first, I thought no. And then after thinking about it, I do. I, um, I have a StepPay account with, with Cornwall, which is a small credit card. Um, it has about $400 on it. I mainly use it for fuel. Um, and the only reason I opened it up is to pay an electricity bill. Um, and then I have a personal loan from my dad, uh, of $3,000. And then, uh, I got a month-to-month phone plan, uh, paying my wife's phone.

Yeah, that's not— that's just utilities. Okay. All right. And, um, so $71,000, $72,000 coming in, um, so $6,000 a month. And how much is your rent or your mortgage?

Uh, we are renting, uh, it's $440 a week, sir.

So $1,800 a month. Does that sound right? Correct. That's correct. Okay, and what is— I don't know the tax rates and so forth in Australia. Out of $72,000 a year, how much do you get taxed?

So that's the net income. The tax— Oh, that's net of tax. That's net. Oh, good. Okay.

All right, so we've got $6,000 a month to operate from. We've got about $2,000 going out in rent, which leaves us $4,000 to do everything else with. Does that sound correct?

Correct?

Yes, sir. Okay. Where, where would you say it's going? Um, is there one big expense or is it a bunch of little things?

Uh, for the majority is a bunch of little things. The, the biggest expenses here is obviously groceries, which, which, uh, counting up the average groceries we've spent the last few months on a month-to-month basis, about $1,700 $100. Um, that because we got 2 kids, uh, as well as 3 pets. So nappies and baby wipes and stuff like that can get quite pricey here. Um, and then for work, uh, because I have to travel out of town quite often, I've been spending a minimum of $150 a week on fuel. Um, and then, uh, utilities are the other big one. Uh, it's about $600 every 3 months for power and about $200 every 3 months for water. So that's $800.

So what has, what has changed dramatically in the last year that put the pinch on?

So, um, we were, we were living in Stanthorpe, a small country town, um, and, uh, we moved about 13 months ago. We moved to a bigger city, uh, which, which, uh, for my job, um, which increased the rent and, and Uh, well, just about everything else, to be honest.

Yeah. Cost, cost of living is higher there than it is out in the country. Yeah, that makes sense.

Does your income go up for the move?

Um, it did, but my wife isn't currently working. Um, uh, she's a stay-at-home mom. She's got a bunch of undiagnosed medical issues that we're trying to sort out. Was she working in the other place? Uh, no, sir.

So, so that didn't change.

Receives a, well, she receives a, um, uh, like a, a state income, uh, like handling payments, right? Um, so with my, with my pay going up, her pay, uh, from the state went down dramatically.

So did you, you ended up netting less by moving or netting more between her going down, you going up?

We ended up netting getting, uh, slightly less by moving.

So, and your cost, and your cost of living went up dramatically. Yes. Can you move back? Um, can you go back to where you were?

You were better off before the move. I was, I was, uh, definitely. Unfortunately, that's not really an option for us at this stage.

Because of your job?

Uh, yes, yes, sir, because of my job. Okay. I'm doing a shift— I'm doing— sorry, I'm doing a carpenter apprenticeship, which is a 4-year-based job.

How far into the 4 years are you?

Uh, I mean, just over a year now, sir.

Okay, so you got 3 more years of that, and then what does life look like after that?

Um, well, life, life after that, I'll obviously be qualified and I want to get a few more building certificates behind my name so I can eventually grow up, like, uh, eventually move on in my career. Okay.

Um, but after 3 years, does your income jump? Yeah.

After I finished my apprenticeship, yes. So it jumped to what? About estimation, about 25 to 30, uh, a year net.

Okay, so you almost— it's like you guys have 3 years of this way of life. Yes, sir. Oh yes. Yeah, which I— yeah, no, no, you're good, you're good, you're good. Um, which is a good thing because at least you have an end date that you're like, okay, hang on, the $1,700, if we can cut that that to $1,300. Like, right, if you can just find these small cuts, and it's gonna strain. It's gonna strain you guys. It's not gonna be fun.

Yeah, maybe even rent something cheaper than what you are. I mean, I don't know. Anything you can do to get closer to balance. Nothing you're describing, your current situation is a difficult situation to prosper in, but it is an okay situation to hang out in until we finish the apprenticeship. It's like saying, you know, in the States, we'd say you're in college for 3 years. More. And when you get out of college, well, then you go— then your income goes up. Now we go into prosperity mode. But right now you're just paying a price to go win with this apprenticeship. But I think I'm gonna look around and go, you know, finish up her diagnosis so that you can figure out what she's struggling with, and then what opportunities she's got to create some kind of income that might be better than the state income. That's probably not hard to to do, once she's got some health, her health back. And then anything you're allowed to do while in the apprenticeship as a side hustle, I'd be picking up. And anything I can do to cut my expenses, like rent and other things, I'm gonna do that.

But if you don't do much, if you don't have much progress, as long as you don't go backwards—

Yes, the dipping into savings is where I would say make it a goal to don't do that. From an income, expenses, and it's just for 3 years, right? For 3 years, this is what this has to look like. And then, oh my gosh, it opens up. $30 grand changes your life. It sure does.

You spend hours researching before making a major purchase like a home or car, but it's also a good idea to put in the work searching for the right insurance coverage. To protect your biggest assets, I recommend using Ramsey Trusted Pro— pros. Whether you're looking for car, home, or any other type of insurance, Ramsey trusted providers have been coached and vetted to serve you like we would. Find what you need at ramseysolutions.com/insurance. Nick is with us in New York.

Hi Nick, how are you? Hi guys, thanks in advance for your help. Sure, what's up? Um, okay, so here's my problem. Uh, my wife, um, she's been to a number of different dentists and it's been an evolving problem— not evolving, she's been using the same diagnosis for a number of years, but we haven't really known what to do, do about it. They're basically— we've seen a few dentists that have all said the same thing. She needs to have like a total mouth reconstruction, and it's phenomenally expensive. We don't have dental insurance. It's out of pocket. The, the quotes are from like $70,000 to $150,000 that we would either— I mean, I don't know what to do about it. I don't know. I mean, technically I could take money out of my retirement and pay pay for it. We do have quite a big emergency fund that could probably pay for it, but that leaves us like wiped out. Then my sort of preference is to figure out a way to pay it incrementally, like, you know, $20,000 a year or something like that. But I don't know, I just don't know how to go about it, or I, I'm not really sure what, you know, my inclination would be to get a bunch of credit cards.

So how much is in your emergency fund? Like $80,000.

Grand. Okay. All right. So I think—

how urgent is the surgery? What is the—

I mean, there's obviously a tremendously painful thing.

It's going to be awful.

No, I mean, currently she's in pain, right?

Well, yeah, I mean, like, basically her bite has collapsed, so her teeth hit each other and the enamel wears away, so she gets a lot of cavities. Her teeth are all loose from sort of hitting each other incorrectly. Oh gosh. So it's not fun, but she can't bear the idea of spending all this money on— that's out of pocket on— I want her to get it done because I want her to be happy and healthy. But I also— what is your household income? It's, uh, she doesn't work and I'm a freelancer and it varies. It varies from about $140,000 to $200,000 a year. So I mean, theoretically we could tighten belt and probably pay for it this year. But that would be really—

could you pay for— could you cash flow some of it and take some out of the emergency fund?

Yeah. Yeah. Well, I could pay for the whole thing out of the emergency fund, but then that puts the emergency fund to zero, which I understand is the point of the emergency fund.

But yeah, or cash flow some of it and take it down to $20,000, right? Cash flow the rest of the surgery. Okay.

So I'm, When I run into something like this, the biggest problem is that I feel like I don't know what's going on, and I've got to figure out enough of what's going on to make a wise decision, okay? Right. So far you've gotten this wide variety of solutions from $70,000 to $150,000. $150,000, right? Right. And so that alone, if I'm in your shoes, that throws up red flags for me, and I says, "Okay, I've got to understand what the difference in $70,000 and $150,000 is. Why is that there? Is it because the dentist is, you know, one of them is a Bentley salesman and one of them is a Chevrolet salesman? Why is that?" Because that's true in dentistry. There's a wide variety of the way people approach things, the techniques that they use, the machinery that they have, the equipment that they have, how much they think of themselves, how much practice management has gone into jacking you up, and it's all over the place in the world. And who their clients are. Yeah, exactly. So I'm going to— I mean, on something like this, you know, it could be that she goes to Kansas City to get the work done instead of New York City.

That's what I was advocating, trying to find a cheaper dentist in a smaller market.

Well, it's not It's not cheaper in quality, but it's just someone that has a more common-sensical approach to this.

It's a different clientele than New York City, you know what I mean?

Because this is a big enough thing that it's worth a few plane tickets and a few hotel stays if you saved $100,000.

Have y'all looked at that, Nick, as an option? Did you price out other areas of the country?

I have.

I mean, I haven't taken it to like going to Des Moines yet, but Um, but like, I have, you know, like, I've looked in a bunch of different places, and one of the cheaper ones we found is in, is in Florida near Miami. Okay, that's the $70,000.

Okay, then I want to know why it's cheaper, and I want to learn enough about this to do this. So, you know, like, one of my buddies, um, about 2 years ago was diagnosed with cancer, and, uh, the good news is he's doing great, but he didn't know anything about cancer, and now he's a goddamn cancer expert, you know, because he's just studied it because he had to, to stay alive, you know, and, and to understand the treatment options and the protocols and the prognosis. And when someone says stage 2 or 3, what do they really mean? And we hear all that stuff, but it suddenly matters when it's you. Like, you know, the definition of major surgery is surgery on me, you know. That's that, right? So this is all of a sudden it matters. So I'm gonna learn a lot more, and I'm gonna do that because I want to gather enough information to make an intelligent decision and also to not get screwed over by an industry that doesn't mind overcharging.

Right.

And the dental industry has a component to it, not everyone, but there are members of it that don't mind overcharging. Charging, right? And so I'm gonna learn about all of that. And, and hey, you know what, I'm gonna put you on hold. I have been endorsing a dental operation in Dallas, Texas, just outside Dallas, Texas, in Granbury— Granbury Dental— for almost 20 years on a local, local Dallas radio station endorsement. And I know those guys, and I'm gonna put you on hold and we're gonna connect you with them and just let them— let them teach you and let them put in a bid, God help us, if that's what we want to call it, right?

Um, or at least let them give you advice as like a—

yeah, they'll— I do trust those guys. I've known them a long time, right? And if I had to do something like that, that'd be— that'd be one of the people I would talk to anyway. So, okay, I just made a national ad out of a local— but anyway, um, hang on and we'll get you set up with that. So I want to learn, because I— until I understand enough, uh, of the basic components of this, I am cynical and I worry about getting screwed. Me too. Once you get that, once you get that settled, you write the check out of the emergency fund, use the emergency funds, and you get your wife's health back. Okay. Yep.

And then you guys build it back up and just build it back. Yeah, because $80,000 $80,000 may be too much anyways. And you guys can always go to 3 to 4 months. Do you know what I mean? It won't take you forever to build it back.

And, and, but even if you use $70,000 of the $80,000, if that ends up being where you are and you're down to $10,000 and you rebuild and your wife's got her health back and this whole thing is in the rearview mirror, it's worth it. That's how I would do it.

Okay, all right, that's, that's very helpful.

But I'm not doing it except in the context of all the other stuff we said for the last 5 minutes. Okay? Yeah, it's true. In other words, I know what's going on. And so, because I don't have any doubt this lady has issues, okay, because she's had multiple people look at it. But I have had customers over the years that said, you know, the doctor told me if I didn't have this $20,000 dental surgery that I wasn't gonna have my teeth. And then they go to 3 other doctors and they go, no, you're fine.

Yeah, yeah, yeah. Totally. And she's obviously gotten multiple opinions over the course of time.

That's the first thing, is you start to get enough other people looking at it to call BS on the others, you know. So, but, and yeah, that's true in anything, whether, you know, if I'm dealing with a legal matter, I'm not going to just accept one lawyer that says, "You're screwed." I'm like, "No, I think I'm not." Yeah, I think you're not my lawyer.

But that's a part of life, of big decision-making anyways. Gathering information. You should get multiple options. When you're shopping for a house, have multiple ones that you're looking at. Car shopping, go drive multiple before you buy. You know what I mean? Like that's a wisdom play anyways. And especially something this high dollar with health attached to it. Yeah, you definitely wanna make sure that someone's not just outpricing you because they're in Manhattan and they can. 'Cause if they can, they're doing it. You know? You know, but if you can find something else, well worth it. Well, I hope it goes well, Nick, for you guys.

One airline ticket save you $20 grand.

Yeah, and I hope that, yeah, her health and all of that, I hope it shores up, 'cause that has to be not a fun thing to live with on a daily basis.

I have the pain tolerance of a, ugh, nothing. I've been in sick care. A little girl. A little baby girl, yeah.

Hey guys, Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here here to help. It's fast, simple, and free to use. Go to RamseySolutions.com and try Ask Ramsey today. That's RamseySolutions.com. Well, you can't control the market, but you can You can control how you invest and if you invest with confidence. 2 years ago, we did for the first time something we've never done. I opened my personal investing playbook and went through some of my real estate purchases, how I decide that. I went through how I decide about any investment, the ones I've decided to stay away from and why. And George Campbell and I put that together and did that as a a virtual 2-night event called Investing Essentials. We've only done it 2 times. We're gonna do it again, the 3rd time. September 1st and 2nd. My playbook and George Campbell, that simple.

And we're gonna go into taxes, navigating wills, and building a lasting legacy as well. Little basic on the estate planning stuff. Tickets start at $199. Get yours today at RamseySolutions.com. Andrewcorbett.com/events, or click the link in the show notes if you're listening on podcast or YouTube. Kim is in Dallas.

Hi, Kim, how are you? Hey, Dave, how are you?

I'm good. Good. What's up?

Just a quick question. I'm in a program to purchase a home. Uh, it's no down payment, no closing costs, no PMI. Uh, the catch is there is a lien on the home for 5 years. And each year you're in the house, it goes down. But, um, I'm completely debt-free. I have about 6, 7 months of savings. Should I focus more on building up my retirement or getting a conventional loan or going, continuing the route that I'm on?

Is this a, uh, some kind of a government first-time homebuyer program or what?

No, it's, it's a legitimate program.

Um, no, I didn't ask that. I said, is it a government government first-time homebuyer. It's a private company. It's a private company.

I guess you can call it private.

I don't know, it feels, feels like a government first-time homebuyer program.

No, it's—

I don't want to say the name, but it's— they help a lot of people get into homes. It's a nationwide program. Okay. Yeah. And it's, it's Yeah, it's an actual program and it's been pretty successful from what I've been seeing.

Okay. Well, it doesn't, it feels very risky.

It feels risky. Just say the name.

It's NACA, N-A-C-A.

NACA. Okay. Not familiar with them. Okay. All right.

Liens on homes and nothing down.

Nothing down, no PMI, all this scary stuff. Scares me, okay? And it scares me because if something happens during the 5 years, you could really end up seriously trapped here. And the other thing that I don't know the program, so I don't know details.

Neighborhood Assistance Corporation of America, it's a nonprofit to help own our— Yeah, yeah.

But anything that sounds too good to be true usually is, is my experience. And this sounds a little wacky.

Agreed. I really don't agree because I know someone that's in one of their homes.

So it's highly unusual, wouldn't you say?

Well, to a point, but they used to have the PMI and then they removed PMI and put the lien— put— did the lien requirement. And what it is, it's a $25,000 lien, and each year you're in it, it reduces by $5,000.

So you have to be there at least 5 What price range?

I'm looking at probably about up to $250K in my area.

And they're taking a 10% lien?

Well, that's just me. In other areas you could be a million. It just depends on where you're at. Mm-hmm.

Okay. Well, I don't, I'm not going to say anything disparaging about them because I don't know anything about them and I don't, I don't know enough to tell you to do it or to not do it. My tendency in general is to say, I'm gonna buy— if I don't have any money, I probably shouldn't be buying a home because that's going to put you into a pinch. Because homeownership on a monthly basis is more expensive than renting. Like, your air conditioner breaks and you don't have a landlord to fix it, you be the landlord. Your roof goes goes out and you got to put a roof on the thing. You know, the hot water heater blows, the stove goes out, and welcome to owning a house. The more stuff you own, the more repairmen you have to know. And so if you're moving to this, you don't have any money, and no, I would not be investing while I'm doing a nothing-down home deal. Absolutely not. I'd be stacking cash as high as I could stack it.

Get a big emergency fund.

To make sure I had a massive emergency fund. And in general, and again, I don't know enough about this to tell you not to do it. It sounds like you're going to do it no matter what I say. So I don't know exactly why you're calling. But in general, I'm going to say get a 15-year fixed-rate conventional Fannie Mae loan. Put down a down payment, 5%, 10% on your first time. You don't have to save up 20% to buy. And if you don't have the money to start working towards that, you probably don't have the money to own a house. All shit and it's time to do something with your career.

Right, that's where I would be more nervous. From what I can tell, it sounds like it takes months and months and months of documentation to even apply to be part of it. So I think they do their work on the front end to make sure that whoever's applying, you know, so there's probably a legitimate case for it, Kim, but getting into the home isn't what I'm as worried about for you. It's more maintaining it and not letting your home, keep you broke. Like, that's what we don't want either. You want your home to be a blessing and not a curse. And so, I would just think—

Habitat for Humanity has a program that's not dissimilar. Okay. And it's a known, a much more known entity in a way.

Yes. And that's kind of what this is.

And so, this sounds like it's modeled somewhat after that. And Habitat for Humanity puts people into homes that can't otherwise find a way to get into them. And, but they have had a problem. The dirty little secret is, and it's not their fault, but people get into the homes and then still don't go and save money. And they've had a problem with people get into a home, then they go buy a big screen for the wall, and then they go buy something else for the house, and they go buy something else for the house, and they've got payments all around them then that they wouldn't have had, had they not bought the home. Right, right. And so, they've had some issues. Issues with people actually losing their Habitat for Humanity home because they didn't have good, healthy financial habits when they went in. But Habitat does a good job. They're a good organization. So, if it's modeled after that, I was thinking that's what she was gonna say. But, and then I could have at least more intelligently done so, because we've done all kinds of stuff with Habitat helping them.

Well, and I just wanna, yeah, and it sounds like too, there's always a, there's a time limit to this. Whenever you get boxed into a time limit, that's like student loan forgiveness, right? If you go work for 10, you know, it's all these things that are long-term of what you're committing to. You have to keep that in mind. 'Cause I don't know what it looks like if, Kim, you have to sell in 3 years and get out of the program. What does that mean? You know, so I would know all of that information as well.

It sounds like it's pro rata forgiven, you know, $5,000 a year for 5 years on the $25,000 is what it sounded like. If that's the way it really works, and then at least you know what you're up against and you hope the house goes up in value that much. Right, right. And you hope you don't have a bunch of repairs that you can't afford to do. But get that emergency fund, Kim, in place. You gotta have the emergency fund in place and no, you don't need to be thinking about investing until this deal is settled. Get a 6-month emergency fund. Pile, pile, pile money up and have a nice fat juicy pile of money to offset the fact that you've not anticipated what all this entails and what you're getting yourself into. So, yeah, if it was a straight-up government— here's the weird thing, Rachel. 5 years like that, if you don't have that lien, that 5 years goes by so fast. If you do have that lien, 73,000 things happen during that 5 years.

It's just like it attracts.

It slows down the calendar. Yep. You know, it goes real fast if it's if it's free and there's no constraints and no liens, but man, when you're trapped in there, it just doesn't, it doesn't feel that way. Wow. I hope it works out for you, Kim, though.

I do too. Because we do, we want everyone to be a homeowner, but again, we want it to be a blessing, not a curse. So having some cash for when things go wrong is gonna be really important in your situation.

Dave Ramsey here. For more than 30 years, I've been talking to folks on the air, and I can tell you that most people are broke, not because they don't make enough money, but because they don't have a plan. You need to give every dollar you earn a job, because when you do that, something changes. You stop guessing, you stop worrying, you stop stressing. Our EveryDollar budgeting app will show you how to find extra cash, pay off debt, and finally start winning with money. But most people won't do it. They'll keep living paycheck to paycheck, keep hoping things will change without making a change. It's time to say enough is enough. It's time to take control of your money. It's time to start your EveryDollar budget for free today. Go download it in the App Store or Google play. Our scripture of the day, Philippians 3:17: Joining— join together in following my example, brothers and sisters. And just as you have us as a model, keep your eyes on those who live as we do. Margaret Thatcher said, "Don't follow the crowd, let the crowd follow you." Karen is in Cleveland, Ohio. Hi, Karen, how are you?

Good, how are you doing? Thanks for taking my call. Sure, what's up? Um, I recently found— I'm 65 years old, and I recently found out that my husband lost all of our retirement and all of our money, and I ultimately ended up getting a dissolution, and he— because he gave me the house. I have no debt, um, basically, but I have a $300,000 house. I had to get a job and have a little bit of alimony, a little bit of Social Security. I have about $70,000 from money that my mom left me, and I'm just wondering how to move forward. Do I sell the house and invest the money?

Wow. Oh, Karen, I'm so sorry.

Yeah. You said you're, you said you're how old?

65. How long were you married?

15 years. He's 59.

What did he do with the money?

Um, he retired at 54 and took a lump sum. And then because he dabbled in the market, he decided to do that full-time. And I managed the daily budget and he managed the retirement money. And what I did not know is that he moved his retirement money into his trading account, and last year he went all in on something and— oh my God— lost about $500,000. Whoa. And so he left, and then he came back, and when I found out we lost the rest of it, I told him to get a job and he left again.

Oh, Karen. So what do you make at your career?

Um, I retired a while back, many years ago. So I've got— because I'm 65, I don't want to start a career again. So I'm a receptionist and I'm bringing in about $2,500— well, about $1,600. I mean, yeah, $1,600 a month.

Other than your broken heart, how's your health?

It's okay so far. I mean, I Um, my plan is to maybe work for another 10 years. I'll have to.

Okay.

Um, is the house paid for, Karen? It is. It's paid. Okay. He had me take my Social Security early, so I don't get as much there, and my 401's gone. So that was part of what he lost? Well, we lived off of it for a while while he was investing because I was older and I was 59 and a half. So you could take it without penalty.

Yeah. Yeah.

So you got $70 grand and $300 grand and a $25,000 a year job. Okay. Yeah. Um, I, I, how we got here doesn't change the answer, although it just, um, it adds to the emotion of everything for for sure. But I'm still going to say, I'm going to set $20,000 of the $70,000 aside as your emergency fund. I'm going to sit down with a SmartVestor Pro and invest the $50,000. And do you sell the $300,000? What's the history on the house?

The history?

I mean, how long you owned it?

Yeah, we've owned it 14 years. It's in pretty good shape.

Okay. All right. I mean, if you— if we're only doing math and all we're trying to do is just maximize everything regardless of the emotion or regardless of just quality of life, you know, you go buy a $150,000 condo and you take another $150,000 of that house and you put it in good mutual funds. Now you got $220,000. At 65, now at 70, that $220,000 will be $500,000 if you don't add anything to it. So yeah, I'm probably doing that. Mm-hmm. Go get a condo or something. And then the second thing I'm gonna do is I'm gonna reset your narrative in your head of, I'm 65, I don't have time for another career. Yeah, you do. You got plenty of time. In the world we live in today, things spin up so fast and make so much money so so quickly. I would not take somebody as bright as I'm talking to and make them only a receptionist because I'm 65 for the next 10 years and I make nothing. Instead, I'd try to figure out a way to go make some money. And I think, I think you got chops, girl. I think there's some stuff you can do.

What was your former career?

Um, I was a medical lab technician making about $50,000. Hmm, okay. Which is pretty intense of a job and hard to start over. And yeah, okay. Um, he, he's supposed to be giving me $1,000 alimony, but that's not going to change your life. I— well, I don't know if it's going to be—

besides that, he's not dependable either. Yeah, he's not dependable. He's not— you can't, can't project where you're going to end up with that.

So if I rent, I mean, the alimony— I wouldn't rent. Pay my rent. I'd go buy something.

$150,000 to $200,000 for $150,000 condo. Yeah.—

and the condo fees.

Yeah, but you know, you got $150,000 freed up when you do that. And invest that, add to the $50,000, that's, you know, then you got $200,000, and that'll be— that will grow to $500,000 by the time you're 75. And so, by the time you're 72, 72. So, and you'll be adding to it during that time. And so you could retire in very good shape, you know, in your early 70s. But the thing, the very variable is if we could triple your income. Right. And that changes the math on this. Speeds it up. Dramatically. And increases the probability of a good outcome. And the bad news is you're by yourself. The great news is you're by yourself. You don't have to convince anybody to do this but you. And you know, all the baggage is in the rearview mirror. That's why they call them an ex. Wow, I'm so sorry. I know, Karen, that's horrible. Horrible thing to go through. So yeah, gang, we talk about this all the time— combining your finances and having full transparency and full decision-making as a paired thing. Both of us know everything that's going on. Both of us know, and so that gives us checks and balances when we do that.

Yeah, and I can And here, in my other ear, people are like, this is why you don't combine, you know, yada, yada, yada.

But here's the deal. It's exactly why you do combine. Because you got— you're looking over his shoulder. And the first time he day trades, you shut the whole thing down.

Yeah, well, if you're involved, if you're looking at the details of what you're saying, but he took her— they had money combined, and he took her 401.

Yeah, but they weren't combined in their operating of their household. Okay, 100%.

That's what I'm saying is I can hear someone say, "oh my gosh, that scares me. I want to keep my stuff over here to protect it, to make sure that he doesn't touch it." But what I'm saying is, you have to. That's it. That too. Yes, 100%.

If you can't sit down together and both of you talk about everything going on with your money, you shouldn't get married in the first place. I'm not talking about her. I'm just talking about in general terms.

Yes, yes. And it's easy in a marriage just to let one "You do this, I do this." And it's kind of— that's kind of what she said. "I did the monthly budget, he did the investing." And you both have to be doing both, as well.

And George just did fresh research, and it was amazing. It used to be a lower number, but he found that if a person day trades consecutively for 24 months, 97% lose money.

Hmm. That's a lot. Believe it.

That's all of you.

That's stupid. And all eggs in one basket. He put everything in one thing.

90% of the time I drive down that road, a kid throws a rock at my car. You know, I'm not driving down that road anymore. I mean, 97%? That's not even a statistic. That's just a fact now. So just day trading is stupid is what that means. And so soon as somebody says that, all All of your bells and whistles and alarms need to be going off and going, "No, no, no, no, no, no, no, no, with a capital H, no. We're not doing this. No." Wow. I'm sorry, Karen. I'm sorry, Karen. I'm sorry you went through this. We're not preaching at you or shaming you in any way. No, no, no, other people, let's just be aware of these things. These are the reasons, situations like yours are why we get so hyped up against some of the things that happen. To you. Yep, that's what it amounts to. Wow.

Karen, call us back if you need us though. We really are— we're cheering you on.

Help you any way we can, hon. Wow, absolutely. 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.