Transcript of Start Small and Keep Moving

Brought to you by the EveryDollar app. Start budgeting for free today. Normal is broken. Common sense is weird. So we're here to help you transform your life. From the Ramsey Network in the Fairwinds Credit Union studio, this is the Ramsey Show. I'm George Campbell here with Dr. John Delony, taking your calls at 888-825-5225. That's how you to get on the air and have a conversation about your life and your money. Joshua kicks us off in St. Louis. What's going on, Joshua?

Hey, thank you guys so much for having me on the show. I appreciate it.

Absolutely.

How can we help? So a little bit about what's going on is it seems like we can't catch up financially. So me and my fiancée, we have about $110,000 coming income. And then what is going on is we have a house payment of $150,000 left, between $150,000 and $180,000. We have 2 car payments. One's a Mini Coupe, and that is about $600 a month. And then we have a Chevy Colorado that is $738 a month. And it just seems like we are falling behind more than we are catching up.

Yeah, those car payments will do it to you. And you said the mortgage balance is $150,000 to $180,000?

Yes, that's the balance.

What's the monthly payment?

The monthly payment is $1,500 a month.

Okay, so as soon as the checks come in, you've got like $3,000 gone already.

Yes, yes.

Okay, and have you guys combined finances? It's because the way you're talking, it sounds like you live together, your money's pooled together.

Everything is pulled together. We live with each other. We have one bank account. We both have 401s. But after that, we have— I don't know where else to begin with my financial. This is all new to me.

We got you, man. You called the right place. We're probably going to tell you to sell the Mini Cooper at least, but I'm glad you called.

John would have you sell it regardless of there being a loan on it.

Just the Mini Cooper on principle, the miniature truck I could be all right with. But, but hey, but no shade. I drove a Prius for a long time. We're on the same team.

But there is some truth to this. We gotta figure out what these cars are worth compared to what is owed on them and see if it's worth selling these things.

Right.

Do you know the balance?

This is, this is, uh, like an important contact for the call. Are you done with this? And what I mean by that is, are you done with the stress and And cause here's the thing, you got two roads ahead of you. You can keep going the same road you're going on, drive the cars you wanna drive, live in the house you wanna live in. Y'all are making six figures, but you feel broke. You can keep doing that. And that's hard. Or you can have 24 months of challenging, um, a, a challenging road with you and your, and your, and your wife. And y'all can be free. Either path is hard, but if you're, if you're done with this, then George will give you the path that will get you there. Guaranteed every single time it works. If people just do it. Otherwise, we can just give you some principles and we can sing kumbaya and then call it.

Yes, I am completely done with it. I mean, it's getting to the point where I'm about to refinance our truck payment. Uh, we can get it down.

No, no, no, no, don't do that. Okay, we got you, we got you.

Yeah, if it has the word finance in it, let's just take that off the table. Yes. How about that? Fair deal?

Okay, can I, can I, uh, can I explain it really quick?

You can.

So, uh, to refinance, I am going through Ally and they have me at a 13.09% APR. Now I was going to go to First Community Credit Union and they offered me a 7.5% with adding on one more year, but my payment instead of $738, it would go down to $438.

Well, the goal is to throw more at the debt, not have a lower payment. Because you could have a $100 payment, but that just means it's going to take even longer to pay it off and even less is going to principal. Have you figured out what both cars are actually worth if you sold them private party?

No, not yet. I do believe the Mini Coupe would be around $28,000 or so, and then the Chevy Colorado maybe $20,000 to $22,000.

Okay, and what are they, what's left on the loans?

The loan for the Mini Coupe is $36,000, and then the Chevy Colorado is at $20,000.

Oh man, how are you that far underwater on the Mini Coupe? What happened? Did you trade, like rollover negative equity?

No, it's, we both had jobs where we got it, and then one of us lost our job for a little bit. And then I took over more of the payments because I work, I can work more, I can work more overtime. So I'm working about 50 to 55 hours a week.

How much is she working?

Actually, it's a he. Cody is working 35 to 40 hours a week making $30 an hour.

Okay, so here's what I'm gonna recommend. I would split your finances for the purposes of this debt payoff journey and you focus on your consumer debts and he focuses on his consumer debts, and then we can attack this a little more strategically. 'Cause right now it's all pooled and it's depending on who's more motivated and whose debt comes first. Instead, if you just made a list of all of your debts, how many are there?

I have the truck payment and the house payment, if you wanna—

The mortgage is in your name only?

Uh, it's in both of our names.

Okay. So if you sold this truck, you would be completely consumer debt-free.

Yes. Yes.

You'd walk away with $2,000. You said it's worth $22,000, you owe $20,000. So there's some good news there. You are pretty close to being completely debt-free. Do you have anything saved up in the bank right now?

We have about $700 combined.

Okay. So here's Baby Step 1: $1,000 in a starter emergency fund. I want both of you to have your own $1,000 starter emergency fund. And you can do that with the next paycheck. But that means is we're not eating out. We're not going to invest a dime into those 401s. We're going to pause all of that down to zero. We're going to start selling stuff around the house on Facebook Marketplace. We're both going to pick up a side job to do these journeys together. Now, the cool news is you have some built-in accountability. You have someone else to say, hey, remember we said we're not going to do that. But the other person needs to be just on board as you are. Otherwise, you're just going to be dragging them along with you.

Okay.

So do they feel the same level of urgency that you do? Because you're the one calling in.

It doesn't seem like it.

Okay.

Yes, it doesn't seem like it.

Okay, that's why I would separate and say, "Hey, that Mini Coupe, that's your debt. This truck is my debt. I'm going to focus on getting rid of this debt. You can keep it if you want based on your income." But it feels like you have the urgency to go, "I just want to be free." And if you can scrape together $5,000 and use the 2 that you profit from the truck, you go get yourself a $7,000 vehicle for now and free up that payment.

Okay.

And, and here's the thing, here's the reason, like the meta reason why we're telling you to separate is call after call after call after private conversation I have with folks. 2 people are dating, they share everything, and one person ends up paying the other person's truck off. And I, I don't wanna project this on you, But then there's a breakup down the road and there is zero recourse. None.

There's nothing you can do. Okay.

There's nothing you can do. And so you end up having paid somebody else's debt and then they're gone. And I, I wouldn't wish that on anybody, but that's, that's what I'm saying here. So yes, y'all each take full ownership of your debts and man, it sounds like you only have a values conversation too, which is, are, are we aligned on, we wanna be free. As a couple, as a household, or I'm gonna do this by myself and this is just gonna be a value set that I have.

And the hardest thing about this is not making the debt the villain. Instead, it's looking in the mirror and going, hey, it's not the mortgage that's the problem. It's not the car payment. It's the guy in the mirror.

Please don't refile and play a shell game with debt. Just burn right through it and get it paid off.

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Lewis is in Providence, Rhode Island. What's going on, Lewis? How can we help?

Hey guys, how are you? Um, listen, I am calling in, long-time listener, first-time caller, but it's really just focused on this affordability crisis we're all dealing with. It's no secret, but I'm a young adult and I just feel stuck in so many different aspects of having to navigate it. And I just kind of wanted to maybe touch on some things with you guys and see what you think.

Yeah, let's zoom in. Affordability crisis is like a great headline for the news, but it doesn't speak to the daily reality. Like, are we talking I can't afford DoorDash or I'm going to be evicted from my apartment. There's a big difference.

No, no, no, no. So I live at home still and I am, you know, trying to navigate the next steps of a relationship, moving out into my own place. Do I rent? Do I buy? Next steps of my career. It hasn't expanded as fast as I thought it would, having the degrees that I do. I graduated with my bachelor's in '21 and then my master's in '22.

What's your master's?

I have my MBA. Um, and I, I work in human resources and I did that as a concentration in school. And every job that I apply to, it's like, oh, this is an entry-level position. And then they want 3 to 5 years of experience. And it just boggles my mind. It's like, what, what are we doing?

So, so I, I don't want to, I don't want to be an old guy because the affordability crisis, like things are very, are, are much more expensive. There's no question about it. Okay.

Right. All right.

But what I'll tell you is as a guy who got his master's degree and then got my first PhD, I had the exact same experience.

Yeah.

And it, and what, what I think that has shifted is I went in knowing I've gotta work this job and I, I did it at university. I gotta go get this associate dean of students job and I gotta adjunct at 3 different colleges in the evenings and on Saturdays. And I gotta work on a PhD at the same time. That was just what I knew to be true. And what I hear now is I don't want, I don't want to do the other stuff. I thought that when I got this thing, it would just like the gravy train would roll out. And I think that's new. And so telling, like telling you, like, I, dude, as a, I've never not lived with a roommate ever.

Yeah.

Even before I got married, like that was just what we did. And even when we had a nice apartment, there was several of us living there. And so it's, it's you saying, okay, I had this dream and maybe somebody told you this and they did. I, I will say this, you were sold a bill of goods. If you just get MBA, you're gonna make $250,000 and you can do whatever you want.

And you'll buy a house. Right. As soon as you're out.

That's not true.

Right.

That's not true. And it was, it was much easier for me, relatively speaking, to go buy a house. No question.

The math was in John's favor.

Correct.

A little more.

But the, the work ethic and the, I gotta get roommates, I gotta get friends, I'm gonna live in an apartment, I'm gonna have a good life and I'm gonna have to work in the evenings, in the weekends so that when I get my 3 or 5 years, I'm, I'm going to be super far ahead of the next person in the interview line, right? So it's, it's both ends.

Yeah, yeah. And I, I wouldn't even necessarily disagree with you. I, I definitely think that's where my headspace was at. Like, I, I have certain expectations for myself, and I had expectations for myself at that time. Um, I don't know if it was just with the way that the pandemic rolled out and the timing of when I did it.

That was awful.

Um, awful. It was awful. Absolutely. And, um, I mean, I fortunately, I was commuting to a school that was right down the street from me. Um, and I, I, I don't have any student loan debt. I was able to, to work through school and pay my way through it.

Amazing.

Um, pay, pay my way through my master's.

So what, what are you looking at? What, what are you unable to do right this second besides go buy a, a big nice house, right?

Yeah.

And, and by the way, I didn't have a house without, uh, Formica countertops until just like a house or two ago. Right. So like, what, what, what are you not able to do right this second that, not that you realize, I wish I could do it, I just can't. What are you not able to do right now that you think you're getting ripped off, that isn't fair?

I, you know, I feel like—

Do you get the difference of the question?

A little bit, yeah, for sure. And I'm glad you can kind of re-navigate me here. I've got, you know, notes here and all these things I wanted to talk about, but for me it definitely feels more like I'm feeling stuck in what I'm doing. Maybe I'm not making enough to start my life. Fortunately, I'm not in a debt situation. Um, I'm— my parents are fortunately not charging me rent right now, so I'm able to save as much as I can and I have a nice little nest egg going. Um, but you know, I can afford these rates. I can afford to put, um, you know, a mortgage on, you know, just by myself. Um, and my, my, my girlfriend has a lease until April, so there's, there's a timeline here. Um, But for me, it's like, do we— is it smarter to rent? Yes. By that time, is it smarter to buy and be putting equity into an asset?

Am I—

because I'm only making, you know, like $40,000 a year in my current job.

How old are you?

Given I'm 28 years old.

Okay.

Given my education background, given, you know, how motivated I am to grow in my career, am I in the right career? You know, I—

well, you got a concentration in human resources, you said, right? Right. —so you want to be in leadership in human resources. If I snap my fingers. Yeah. So that's gonna take—

Do you still like that job?

It's gonna take 5 years of doing what you're doing to get into the leadership role that gets you to the next leadership role. So just know they don't hand out leadership roles just because you got the MBA. It's going to take a grind, but it may not be as long as you think. If you— I mean, you're a sharp guy. This could happen a lot sooner for you than most people. But let's focus on a 1-year goal versus the, well, I really wanted to have the 6-figure job with a house tomorrow and be married. Let's just focus on one thing at a time. So you have no debt, you're making $40,000 a year, and how much do you have in savings? Um, my savings account right now is about $23,000. Great. So let's call that your emergency fund plus some. Maybe it's a future down payment, maybe it's an engagement ring. Who knows? You got a lot going on in the next couple of years. Sure. So I would not be like, I got to be investing and I need to be saving. I think you're trying to do a lot of good things at once and you're not making progress.

And part of it is your income. You're right. You should be making more as a guy with a couple of degrees by 28. Yeah.

Like the average college doesn't help either.

So then can you go, all right, is this company not paying me enough? What is the market rate for this kind of position? Should I try to be applying for other companies? Or do you have to have a heart?

Like I just recently talked to a friend of mine who's a tenured professor and we were walking through their finances. This is just on a personal call. And I said, I hate to break your heart here, but you would make more money if you became the manager of a local Starbucks. Yeah. And if you're, if you, and you want to do this job, you want to talk about this particular subject with new students, it's fun, it's awesome, it's a great life, but you're making a choice to not go make more money and have a different kind of life because you want to do this thing. And so you—

it's kind of ironic because I, you know, like daily I'm jumping on LinkedIn and Indeed and I'm looking up career advice coach. Um, and here I am on the call with you guys, or I'm, I don't know if you've heard of like Strawberry, it's like another, you know, website.

AI career coach or something. Yeah.

But, but I worked with a great career advisor and I'm connected with her and it's fantastic. But like, like the fulfillment that I get from having conversations sometimes with people about their career aspirations and their finances and things like that, like I would love to be in you guys' seat, you know what I mean? Like, it's just like, it's just ironic that here I am in this like crisis, you know, I'm, I'm here with all these notes and I'm like, okay, well what's my next step? And maybe it's just cause I overthink everything, but it's like, yes, there's that.

Most people in their twenties, are on the struggle bus trying to figure it out. So just know you're not the only one going like, I'm not where I want to be yet. You shouldn't be. You're in your 20s.

Most people my age are still trying to get where they're, where they're going.

You're lucky you're figuring this out in your 20s and not in your 40s or 50s. Yes. So you're actually in a really good spot. If we just find a better job, half of your problems are solved. Now you can save more.

Or if you stay in that job and you do some adjacent things, like if you go, um, I went and ran with the crisis team and helped out police officers in the middle of the night, and I got paid like $7 an hour to do that. Right. And then on the side, I went and you have a master's degree. You could teach, you could adjunct business classes online for a company, right? For, for a university. And then when your 3 to 5 year window comes through and you've been working in human resources, then all of a sudden you've got a really nice resume where you've sat with hurting people, re like big time hurting people. And you've been doing the thing day in and day out and you've got some education where you're back in the classroom. Now you got a wide portfolio. But some of this, like, George, you just nailed it. No one is going to put you in charge of a thing unless you've done that thing for a while. They shouldn't, at least. And so you can out-degree your experience and you're just going to have to ride that out. But bro, you're in a way better position than you think you are.

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Greta is in Pittsburgh up next. Greta, welcome to the show.

Hi. Wow, excited to talk to you guys.

Thank you. You made it. Thanks for calling.

What's up?

Talk to you. It feels weird. Um, I'm glad it's you guys and not Dave. I'm a little scared of him. We are too.

We are. Lots of respect. No, Dave's great, man. What's up? He is.

Anyway, um, so my husband and I are working on our wills, and, uh, we do not have a lot of assets right now. We're working on that. But, um, we both have a million-dollar life insurance policy each, and we have 4, soon to be 5 kids. So I don't know, I'm going to the worst-case scenario, but like, if we both die, um, do we want them as a secondary beneficiary, and how do we set that up?

Mm, that's a great question.

What's the age range?

You guys talk about this, so yeah, so right now, um, we have an 8-year-old and then one due in December. Okay, we got 8, 5, 3, 1, and— wow, that is a party, dude.

Your house, yeah, dude, it is a disco ball in the living room of that house, man. Good for y'all.

The fact that you're asking this tells me that you are doing a great job with your estate planning to even be thinking about this. So I'm just so proud of you for calling in with this kind of question. And it's a good one because you got to think about those scenarios, the what-if scenarios, because they could happen. And so there's something you can do. So a simple will is a great start. People then go, well, I heard I need a trust. Well, it's not always true. There's ways to set this up where you don't need a complicated, super expensive trust to get started. You might just need a testamentary trust that's inside the will. —Okay. So that can then specify. So you and your spouse, you know, he'd be the beneficiary on yours, you'd be the beneficiary on his, and then a secondary, you can have the kids as beneficiaries, but you don't want them as first because the life insurance company cannot write a check to a 10-year-old. So it would go to whoever the guardian is.

Have you guys selected that? —Okay. Yes, so we do have a guardian. It's my brother's husband, or my husband's brother. Wow, we're getting weird now. My husband's brother. Um, and he, he is at the moment the secondary beneficiary. Is that how we would do it? And then specify in the will how the money would go?

Well, I wouldn't make him the beneficiary of the money. You can still make it the kids, but then they would be an appointed trustee. So with the testamentary trust inside the will, you can then name the trustee and name the guardian. Mm-hmm. So the trustee manages the money, the guardian takes care of the kids. They don't have to be the same person and sometimes shouldn't be. Right. Right. Some people are great with kids. Mm-hmm. Terrible with money or the opposite.

Yeah, I kind of feel like it should be different people.

Um, that's the way, that's the way my will— we ended up, we, we've got different, more than one property, so we ended up with it with a trust. But that's the way mine is. The one person that I've a trust, um, with the money that will be the, the executor, and then the people who would take my kids. And but I, I want with $2 million I would guess, um, you're not gonna need $2 million in cash to raise 5 kids, right? So you might think, I certainly hope not, at 21 we wanna distribute some of this money at 25 or whatever. So that's when a trust could help you.

And instead of naming the, the kids directly inside of that life insurance policy, what you do is once you have the will in place and you have the trust, mm-hmm, the testamentary trust, you can then name the trust created under your will. As the contingent beneficiary. So that's how we have it in my house, for example. Okay. And then the trust lays that all out. So the trust, the testamentary trust inside the will can say, hey, they're going to get this much at this age, this much at this age, and the rest at 35. So you can actually set up some staggered distributions because otherwise the kid turns 18, they get whatever's left. Yeah. Or it gets split among them.

Yeah. Don't want that.

You don't necessarily want that because I remember myself at 18.

But you also, Something to think about. You've got 5 kids. Okay. Mm-hmm. If your brother-in-law suddenly has his own family and suddenly has 5 more kids, he might need a new house. Right.

He already has 2. Okay.

So he might for sure need a new car. Right. And so, yeah, sometimes these things can get cat— you can cap your, the, the person who's taking your kids by saying only for expenses and food, right? Or whatever. Mm-hmm. And right. You're, then your kids can't get to soccer practice cuz all he has is a Jetta. Right. So like, it's, it's thinking through it big.

But I hope this is all hypothetical. And Greta, it is, it is. I got to make it clear, John and I are not lawyers, as much as we could have an awesome— yeah, please don't listen to us. Yeah, Deloney and Campbell, Esquire. No, but I would reach out to an estate planning attorney to get the specifics. And every state has different laws, and so I'd reach out to a good estate planning attorney in your area and explain, hey, here's what we're trying to do. What's the simplest, cheapest way to set this up? I don't want to set up a huge expensive trust that we don't really need. Can we just do a testamentary trust?

If I have a second, that's a secondary question is like, is this like what would be a reasonable expense for that? Do you have any ballpark numbers or—

Well, the testamentary trust should be like a couple of hundred bucks versus a couple of thousand dollars for a full-blown, you know, revocable trust that you would set up. And so that's kind of the ballpark. Again, it's going to depend on the complexity in your area and who you contact. But I would just get a couple of quotes, say, hey, here's what I'm trying to do. Can you help me set this up? And mamabearlegal.com is a great place to start to do a simple online will, and then they can tag on top of that with their trust. So that'll at least be a good starting point. Have something now. Don't wait until you have the attorney to set this all up. Just go ahead and get something in place.

And I'll tell you this, coming from a— from— I was— my first will I ever made was in Texas where the probate— there's basically no probate. And I've learned now that I, I don't live in that state anymore and I talk to people all over the country more than I ever did, man, some states have probate that is wild. Like the judge wants to approve every t-shirt that is bought for a child. So I think for me personally, that would play into it also.

Okay.

And do you get around that by having someone administering the trust?

Yeah, if you have the testamentary trust, then it, it bypasses the probate process and you set up all the the details through that will.

Okay, that's the thing I'm most concerned about, is just that my kids are taken care of.

And I'll tell you, for a couple thousand bucks, if that's what ends up being— yeah, we'll do soup to nuts for a couple. To me, that is a— what I would classify as a soul tax. I'm asleep at night, I paid a couple grand, it's expensive, I'm all good with that. If somebody comes back and says $15,000 or something out of the woods, then find somebody else. But for something, what it sounds like what you're dealing with is relatively simple. You don't have 50 properties and you don't have, or you don't have 2 property. Like this is just, I wanna make sure our kids are lined up and we're, if something happened to us, they'd have a ton of money coming their way. That's, that's a good idea to think through it.

And Greta, because it is National Make a Will Month, which I'm celebrating all month long, I'm actually gonna gift you, I'm gonna gift you a free will through Mama Bear. So hang on the line, we'll send you that. And on top of that, but wait, there's more, John. We've got our Investing Essentials event coming up and we actually are dedicating night to all to this estate planning topic of how do I not just build wealth but then protect it? How do I protect it from the government's, you know, grubby hands with taxes? How do I be strategic?

How do I pass it on?

How do I pass it on without destroying my children and making sure that I leave the legacy I want? And so Investing Essentials is coming up and I'm going to gift you a livestream ticket to that so you can access the virtual event. So you're getting the whole kit and caboodle here, Greta. Congratulations. Very exciting. For anyone else that wants to join us, Dave and I will be doing this event September 1st and 2nd, 2-night virtual event called Investing Essentials. We're going to unpack Dave's investing playbook, wealth planning as well. And he's going to talk about kind of unlock, hey, here's what the Ramsey family does. Here's the conversations we have behind the scenes. Here's the things that Dave has set up to avoid paying a bajillion dollars in taxes legally. So we're going to cover a bunch of that in this event with all new content, reducing taxes, 529 plans. How do I build wealth for my kids now that I've built I built it for myself. How do I pass on character and wealth? That's a good thing to do. Tickets start at $199. You can get yours today, ramseysolutions.com/events, or click the link in the show notes if you're on podcast and YouTube.

And John, even as we've been exploring this event, creating the content, it is fascinating how much stuff that there is to know. Yeah, there's so much out there and you're like, what do people need to know? Because we're trying to pack this into 2 hours per night. And you're going, how do we do like a masterclass on this without overwhelming with nerdery and jargon?

So I, I, I'm glad you said that. Here's an important thing I want people to know about the wills versus trust conversation. I think people get into it and they realize there's so much to it and it just creates inertia. So hear me say, every person, everybody 18 or older needs a will, period. Get a will, start there. And then if things get more complicated, then go from there. But yes, if you want to go down every rabbit hole, man, they'll— it's like, yeah, you can go.

And we're going to actually walk through the wills versus trust situation, probate, all of that in the event. But you're right, John, every single person get a will. If you love your family, get a will. If you don't, you do what you want.

Yeah, that's right. Hey, I want to talk to you for a second about love, and not love like in Titanic or something. I mean responsible love, the kind of love that moves you to take care of the people closest to you. And one of the most important ways to show that kind of love is by having term life insurance. If you have anyone depending on you, a spouse, kids, anyone, You need term life insurance. Term life insurance gives your family real protection if the unthinkable happens so they can spend their time grieving and not worrying about how the bills are going to get paid. Zander is a broker who works for you, shopping the top companies to find the right coverage options for your needs and your budget. In many cases, there are options available with no medical exam and instant approval. My wife and I had term life insurance through Zander for years, long before I worked at Ramsey. Because we trust them. Getting term life insurance is a way of saying I love you when you can no longer say it yourself. Go to zander.com or call 1-800-356-4282 to find the coverage that fits your family.

Ashley's in Dallas, Texas up next. What's going on, Ashley?

How can we help? Hi, um, yes, um, so I am kind of in a bit of a pickle. Um, I'm trying to figure out what to do about my car, um, I, amongst other things, um, but Essentially, I'm— a little bit of background, I'm a single parent. I have a toddler and I also have a disability. So, I've been kind of struggling to figure out what to do for work for quite a while, even before baby. But I'm just now trying to figure out some type of job situation, get back to work. However, I've been using my car for work, um, before baby and now. Um, and so I'm on the fence on whether I can keep this car. It's a very nice car, um, and it's paid for. I just don't know if I can keep it, you know, because what's making you want to get rid of it?

Just because it's too nice? Um, or do you have other financial problems that this can solve? Because you're not going to free up a car payment, so you're going to, you know, let— what's it worth if you sold it?

I would say I think private party value is about $8,000. Okay.

So you get $8,000, now you gotta go buy another car, right? Right, right. And you're gonna have to find a car at least as good as that. Is it a reliable car? No issues?

I think it's a reliable car. I just had to replace the alternator a month ago, so that's kind of what brought this up. That was a pretty big expense. I'm not making very much money. I don't have any savings. How much are you making and from where? Um, so I'm making about, I want to say, net $1,000, um, per month.

Is that part-time work?

Yes. Okay, part-time.

So you're not on disability as far as income goes?

No, unfortunately. I tried to do that a long time ago and was denied for disability. What's the nature of the disability? Um, I have MS. It's a lot of different things. Vision issues, mobility issues, fatigue, spasms. I could go on.

It's kind of a lot. Yeah.

Do you have health insurance?

No, I don't have that either.

Um, so I'm trying to figure out what's the next best move. The car is good. Um, but it also has 257,000 miles. Wow.

So what kind of car is this?

It's a 2015 Lexus RX 350. Okay.

So you definitely need income. We know that. Do you have any other debt?

Um, I think I have about $2,000 in debt. Luckily I got debt-free. I mean, I was debt-free right before I had my baby. Um, but now I've probably accumulated about $2,000 and that's about it.

Okay.

And there's no child support or anything coming in? You're just on your own? Uh, child support is about $650 a month. On top of your $1,000? Yes. Okay. So currently we're trying to get by on $1,650. How much are your monthly bills adding up to?

Oh goodness. Honestly, I want to say about $2,200.

How are you funding the gap?

Negative. Um, I was doing it through like, uh, some stocks that I was awarded through my previous job, but that is down to like maybe $1,200 now.

Okay, so we need a plan ASAP. I'm assuming you got pretty much nothing in checking or savings. Yeah. Okay. Yeah. So income is the name of the game. Um, with your disability, have you looked into work that you could do full-time?

Yeah, that's what I, I'm trying to figure out because whenever I try to do work to that level, my symptoms start to get worse and then I'll usually have a relapse.

That's what's happened.

Are you on any medication for the MS? No. Okay. Are you seeing a doctor?

Um, yes, I will be seeing a neurologist within the next month. I finally got some help with that. Okay. Okay.

Because I know I've got some family with that and the medication can be a game changer, but it's also crazy expensive. And so that's where I'm asking about the health insurance. If we can get you a decent job that has some health coverage, that alone would change your life, especially as a single mom. So then it becomes, and again, we can't coach you here to like help you find the job live, but what are you doing for work right now? Part-time?

Yeah. So right now I am doing Amazon and DoorDash. That's the only thing I I can think of.

You're just doing the side gig kind of stuff?

Yeah.

Were you working before?

No. I mean, that's what I was doing. I was doing DoorDash before I had baby, but before I had baby, it was, it was manageable. My, my rent was a lot less, you know, of course my expenses were less.

So, and you know, no family, no community around you?

No, not really. Unfortunately not. So that's why I was like, maybe I can just like, I mean, I know the car isn't really the problem, but then I'm afraid of another big repair. Yeah.

Um, because I was very lucky to have the money to pay for that.

Yeah. I, I, I, you got a lot going on and if I'm, if I've got one like meta thing I want to tell you, is you have to metabolize. You can no longer do this by yourself. And whether that's getting with the local social worker, whether that is getting with, um, an MS group there in Dallas, of which there are several, whether that's going to a local church and saying I need some support, you're gonna have to open your hands up and say I need some help. Yeah, because you're really close, and I'm saying this because I love you, okay? This is not a judgment thing, this is just math. You're really close to you and your baby being out on the street. I don't want that for you. Yeah, I agree. And so you're gonna find yourself pushed to knocking on doors for help. Go ahead and do that now. And if you can't, if it— I mean, man, I can't even imagine being at war with my own body like you are, right? Like, man, I can't get that because I don't experience it, but intellectually I just think that'd be a nightmare.

Make it a part-time job for you to constantly be looking for resources and calling people and not just sending out blanket emails, but calling and calling and calling. And even if you're laying down on the couch, calling for resources and support, reaching out to neighbors, again, going to a local church and saying, hey, I need some support. Do y'all have any resources here? Like, you cannot do this next stage by yourself.

Okay. Yeah. Sorry. It's ad—

it's beyond admirable that you're fighting this health battle and you're trying to squeeze in what work you can and raise a kid by yourself. I mean, you have strength that I could only dream of having, and you've reached the end of that, of your ability to carry all this by yourself. Is that fair? Yes. Okay. You're worth having people in your corner., but people in your community have to know they need to be in your corner. Okay. And it was, you're gonna get a lot of nos. You're gonna get a lot of frustrations. I want you to keep looking at that baby. I want you to keep looking at yourself in the mirror and keep plugging ahead. I'm proud of you for getting a doctor's appointment. Who's paying for that appointment?

Um, yeah, there's an MS, uh, group or organization. Sorry. I love it.

And I was hoping that there would be organizations that would help with medicine costs and things like that, especially for folks in your financial situation and your single mom situation, um, become your own, you and your child's best advocate. And sometimes advocacy is rolling up your sleeves and getting a sword out and going fighting. And sometimes advocacy is finally having the courage to say, I need a bunch of help. I need a bunch of help right now. And so make that your other part-time job right now, because you're, you're running out of, you're running outta runway and I'm worried about you and I'm worried about that baby.

Yeah, at the root here there's an income problem, and beneath that there's the physical health. So if we can get our health in order and managed, now we can fight and go work 40 hours a week and get our income up, and then we can get to a better place and upgrade the car. But right now, selling the car does pretty much nothing for you other than maybe turn into a different repair on a different car. And so I don't want to trade one problem for another right now. Let's focus on your health and your income first. Thanks for the call.

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Welcome back to The Ramsey Show.

The Fairwinds Credit Union studio. I'm George Campbell, joined by Dr. John Delony, taking your calls at 888-825-5225. Rainisha is in Los Angeles up next. What's going on, Rainisha? How can we help? Yes, hi.

I wanted to know, should I return a cruise that I paid for on my credit card now that I'm starting Baby Step No.

2? Wow! So the cruise hasn't happened. You booked it. And you're telling me you can get a full 100% refund?

I would pay a $100 penalty fee and then the rest of it would be refunded.

Yes! I would do it yesterday because that $100 penalty fee is so much smaller than the interest you will pay on that credit card bill.

And it will jumpstart you. In 3 or 4 months when you get tired of this thing and the grind of paying off your debt is really kicking you, you're going to remember, "No, screw that! I gave up a cruise for this.

We're doing this!" Okay, how much money will you get back?

Um, it will be— I was 900, so $852. Okay, great. How much debt do you have total altogether, including my student loan debt? $255K. Woo!

Okay, so this cruise is symbolic. This is not like the difference maker in you becoming debt-free or not. This is you drawing a line in the sand saying, I'm done. Are you a physician?

No, I am a mental health therapist.

What are you making? Oh no.

Um, currently, um, I'm still an associate, so about $70,000 a year. But once I'm licensed, I'm due to make much more. Not that—

not— John can tell me how much an average mental health therapist makes who's licensed. I'm guessing like over maybe over $100 grand, but not quite $150,000.

Is that accurate? Definitely over 6 figures, yeah. I would say that.

Mm-hmm. Okay.

What kind of mental health therapy are you talking about?

Just regular clinical therapist. I do cognitive behavioral therapy. Do you have your own practice? Um, CBT. No, no, no. I work on under a private practice.

And your private practice is gonna pay you as a clinician over 6 figures?

No, as a licensed professional, not my private practice. I'd probably end up in a, um, either doing my own practice or doing like growth Therapy or Headway, one of those platforms, stuff like that. It's all based on how many clients you take. The more clients you take, the more money you make.

Sure, 100%.

Man, you owe a lot of money. Yeah.

What other kind of debt is this? So $209,000 is student loans. Okay. $24,000 is my car payment, and $22,000 is a credit card payment. Credit cards.

Oh goodness, OK. So this is the same credit card you used to book the cruise? Yes. What is your credit limit on this thing?

Um, well, it's two different credit cards altogether that make the $22,000, but the one that the cruise is on is a $17,000 credit limit.

OK. And you're ready for Baby Step 2. You called in saying, "Hey, I'm trying to start Baby Step 2. Should I return the cruise?" So are you full throttle on this thing? Are you ready to cut up the cards? Yeah, that pause was so long because, Rachel, here's what you're looking at, okay?

You're looking at probably 3 years of you working clients full-time, and then you see in groups on Saturday morning, and you doing private practice work if your site will allow it, if the contract you have allows and you see people in the evenings and you get a contract with the police department to go do like crisis work in the— like, you're going to be working all the time for 3 years. And you just have to say, I want to be a mental health professional that can sit across from my clients and I'm fully whole because I have agency and autonomy on my own life, just like you're going to try to help your clients with, right?

Absolutely.

Yeah. So you, you just have to know the same as you would say, like with a client, you, you want to go from A to B, it's gonna be tough and you have to make some transitions and I'm gonna walk with you. You're gonna have to make that same commitment to Rainisha. Mm-hmm.

Is that fair?

That's absolutely fair. Yeah. Are you single? I am.

Are you renting?

I am.

Okay. You got your own place? I do. I'm trying to think of some solutions here. What's your rent every month? $1,271. OK. That feels right in all three regions.

Is this Los Angeles? Oh, well, they asked for the nearest major city. Got it. Good for you.

And what's the car worth? Worth?

Or what's owed? I'm not sure.

You owe $24,000. So what is it worth? Let's say you sold it private party. What could you get for it, you think?

What do you think? Probably like $20,000?

It's a 2-year-old car with low miles.

But you're still a little bit underwater on it. Mm-hmm. Alright, I'm just trying to find some quick fixes here to get you some margin. I'm guessing right now, if you did an EveryDollar budget, you laid out your income for the month, which I assume is— I don't know how much you're taking home. Is it like $4,000 a month? Yeah. OK. So $4,000 a month is what you're taking home.

Are you doing any investing right now? I do have some investments. I don't know, the market doesn't seem to be making me any money right now.

But yes, I do. Let's just pause that. The good news is you don't need to look at the stock market for a long time.

You're good.

You're not going to be a player in it. I would pause all investing. Do you have anything that's non-retirement that's invested? Yes. Like single stocks or something?

Yeah, some market mutual funds, I think they're called.

How much is in there? Like $1,200. OK. So you at least have a starter emergency fund. Do you have anything else in savings?

Just general savings. I have $8K. Oh, great! Well, that's in an HYSA. Yeah, yeah.

OK, but you're telling me that you could scrape together like $9,000 right now. Yeah. On top of the $850 from the cruise. Let's call it $10,000 you have to start. So $1,000 is your starter emergency fund, which means $9,000 can go to your next smallest debt. That'd feel pretty good to make some progress.

Now you're halfway through that first debt. Almost halfway.

Yeah. Is the credit card— is that the next smallest debt?

Uh, that—

the other credit card is the next smallest debt. The one that the cruise is on is the second one.

What's that smallest credit card balance right now? Um, $8,300.

Boom! Done! You just paid it off. Done! How good does that feel? One debt down. And then you're gonna cut it— I would cut up both cards because the good news is they'll still let you pay them off even if you close the card and cut it up. And so if you're serious about this, that's what you need to do. Cuz you're here, you put the cruise on the credit card, you're likely going to put other things on the credit card if it's still available to you.

Mm-hmm.

So as a promise to yourself, I would get rid of 'em. Yeah.

Is the same as if somebody came in and you were running a group on a Saturday morning and you were talking to brand new folks who were walking into AA, you would say the first thing you gotta do is gotta get rid of all the alcohol in your house.

Yeah, that beer fridge in the garage has got to go.

Yeah, fridge in the garage got to go. The secret stash under the counter's got to go. Everything's got to go.

Because right now, how much margin do you have every month to throw at the debts? None.

Not much. Yeah, exactly.

And so if, let's say, you put $500 a month towards the debts, guess what? It would take you, uh, forever, eternity to pay it off. So instead, what if we made a plan to pay this off in like in like 4 years. That's $63K a year. That's a little over $5 grand a month. Now we have a very tactical goal of what we need. And you just told me you make $4 grand a month. So you can see there's a big math problem here, which is why John was saying you gotta get 9 jobs for the next couple years.

And then you're gonna have to, there's gonna be a, a, a strong possibility. You have to swallow your pride on some things. You have a graduate degree, you are a mental health professional, and Saturdays and Sundays you're at Walmart or Best Buy. Slinging boxes. Like, I'm gonna do whatever it takes to set me and my house free.

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Today's question comes from Garrett in Iowa. Garrett writes, I'm 64, married, and will start drawing Social Security in January. We're consumer debt-free with a paid-off house. Dude, well done, man. All right. We have about $70,000 in retirement and about $600,000 in CDs, which are about to mature. CD rates have plummeted recently, and the best interest rates we can currently find is about 3.5%. What should we do with the cash as the CDs mature? We like to get about $25,000 from both the 401 and the cash to use each year to combine with the Social Security number. With our Social Security, which would leave us about $45,000 a year.

Woo! OK, well let's talk about CDs. These are called certificates of deposit, and people in their 60s love these for some reason. My own dad would text me, like, "Hey, I'm looking to get into some CDs." I'm like, "Why? Why?" Because usually what it is, is people who are scared to put their money into the market because they don't want to lose it. Which is a valid fear, right?

I get that, except my high-yield savings account is about 3.5%.

Yeah, that's what he's saying. He's saying the best interest rate they can find right now as these CDs mature, he's like, hey, once I'm done, the best place I can find is maybe a high yield savings at 3.5%.

And he's saying, I want to do better than that. Why would somebody put their money in a CD at 3.5% or put their money in a high yield savings account at 3.5%? But CDs lock your money up.

That's the problem. The CDs have to mature to actually get that interest rate. And they used to be much higher. Now, high yield savings accounts are pretty comparable to a lot of CDs.

You can get your money whenever you want.

Now, the high yield savings accounts is a variable rate, so that rate can change tomorrow. —can go lower. The CD, you've locked your rate for that period of time, for that 3 years, 5 years. For better and for worse. For better and for worse. Rates could go up and you don't get to see that. So what I would do personally is sit down with an actual financial advisor and map out a plan to help this money grow for you. Because if this is essentially— they got $70,000 of retirement. So to their name, they have about $650,000 in a nest egg. That's not a huge amount. No. To go from 64, because we know the stats. If you make it into your 60s, there's a good chance you make it into your 80s. Yeah. And so think about what the next 30 years looks like for this money, because if you were in the stock market the last 5 years, your money would have doubled. And so I don't want you to be spooked by the market because, you know, you want to keep your money more liquid. I would put a huge chunk of this into the market and a good financial advisor can help sort of squash the fears you have and put you into things that basically track the market.

Good growth stock mutual fund over time will net you probably 9, 10, 11% returns, which is far better than the 3.5% that we're talking about here. Now, in the meantime, the next year, it could be down 10%, down 15%, up 20%. We don't know, but we do know that the longer it's in there, the higher chance you have of making money. So if it's money you don't need for the short-term future, I would be investing it instead of saving it.

That's the key. And let me just say this, this isn't a huge nest Um, there is a chance, what is it, every 7 years. So at 71, that this $600K is $1.2M, right? If, if, if it's invested well and the, the market returns over the next 7 years. But here's what's awesome. You've set yourself up, Garrett. You don't owe anybody anything. Not for credit cards, not for cars, not for your house. So well, well done, dude. You've taken so much risk off the table and now it's just a matter of using this money wisely, not using this money desperately. So Good job, dude.

Thanks for the question. All right, let's go out to Kenneth in Riverside, California. What's going on, Kenneth? Hello. Hey, happy to be here.

What's up, man? Hey, so, um, I had a question. So my wife and I got married a little less than 3 years ago. Uh, we bought a house, put 30% down, we eliminated all our debt except for the house. We still owe $448K on the home, um, and I really want to try and pay that off as soon as possible. About a year ago, I started saving, saved up about $130K. Was hoping to put that into the principal refinance. Rates are still not great. So I'm asking about the idea of recasting the loan to save about $900 a month and then keep putting that into the home as well.

What's your income every month and what's the mortgage?

The mortgage is $3,800. Our combined income after retirement.

You can just give me after taxes, but don't include all the retirement healthcare because that'll kind of muddy the waters for us.

Okay. You might have to do some manual math. Yeah, so take-home actual is about $10,000 for us a month.

Okay. So that mortgage is taking up a good chunk of your income, like 38%. Yeah. But you've been saving all this money. are you doing it for the purpose of recasting? Is that why you saved up the money?

Yeah, I was hoping to put it into the principal, and if rates went down, I would refinance. But if they didn't, I was thinking maybe a recast could get that monthly payment down to where I could save money on the interest and maybe put that back into the home. Yeah, I mean, technically it will.

All it's doing is applying it to the balance and then recasting the math to go, okay, now your mortgage payment is lower. The balance is still the same, the terms are still the same. So it's sort of artificially making you feel feel better. But if you currently make your mortgage payment, the same thing is happening. You're paying the extra $900 toward the principal right now.

Oh, I thought that was going towards the interest.

You'll see on your amortization schedule how much is going towards principal and interest, but it's not like a magic trick. It's not necessarily going to cause you to pay off the house faster.

Okay.

Because if you just take your current mortgage and make extra payments, you'll knock it out. So that's where I'm asking about the mortgage comparatively to take-home pay. It's a lot of your take-home pay. You guys bought too much house and I'm glad you have this lump sum. It can sort of make it closer to that 25%, I'm assuming, if you applied it. But what I would've done in hindsight is just make extra payments to the mortgage instead of socking it up in savings on the side. Oh, okay. And the recast will cost you a couple of hundred bucks and it gives you some, if it gives you some peace of mind and you do see that lower payment, good. But I don't want you to stop from making extra payments and get too comfortable with that lower one.

Yeah, yeah. I think we want to get this thing paid off within 10 years. Either way, we're going to get this thing gone from our lives, I think. Good. That's awesome.

Remember this: every payment you make towards the principal balance drops the total amount of interest you're gonna pay on that loan.

Okay, yeah, true, of course.

Because they're gonna charge interest on what's there.

Yeah, okay, yeah, so then maybe I'll still put it towards— put the lump sum towards principal and maybe keep it. That's sort of—

I'm hoping that just sort of gets you to that 25% mark, but I still would use all the margin you can to throw it at the mortgage. On the mortgage if you guys are in Baby Steps 4, 5, 6. I assume you are. Am I correct?

Yeah, we're in 6. We have no debt and we're fully funded emergency fund and a good chunk in retirement, as well. Awesome!

I would be investing 15% of your total household income. Do you guys have kids? No, not yet. OK. So you can skip Baby Step 5 and then you're on to 6. Put an extra on the mortgage. Yeah.

How long did it take you to save up that $100,000?

It took me about— $130,000 was about a year.

Wow. How did you save that much?

We don't really— well, we don't have any other expenses, really. We don't have any car payments and we don't even really have an electric bill because one of the debts that we knocked out when we first got married was a solar bill, which was $30,000. We knocked that out when we got married.

You said you're bringing home about $10,000 a month. Month. So how did you save up $130,000 in a year mathematically?

Uh, yeah, I mean, we just didn't— I, it— there were— I think there were a couple bonuses as well. And okay, in there, um, well, your savings muscle is fantastic.

Yeah, I would just— I would retool that to go like, now this is the mortgage payoff muscle. And so every dime you were going to put in savings for that mortgage lump sum, I would just throw it at the mortgage because seeing that balance go down does something for you psychologically. And once that mortgage goes down to $200,000 and then to $100,000, now it's under 6 figures. Now you can see the finish line. That's when it gets real. So I would set even a more aggressive goal for someone in your shoes. 5 to 7 years. Let's knock out this mortgage. How cool would that be?

Take your wife on a date, dude.

Take her on a date. It's time. John can sense it's been a while since we've hit up an Olive Garden.

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Now the plan is built right in. You can track your progress, get personalized recommendations and coaching for your situation to help free up more money to work the plan even faster. You can start EveryDollar for free. You can get it in the App Store or Google Play. Lisa is in Buffalo, New York. What's going on, Lisa.

Thanks for taking my call today. I'm actually calling with a question relative to investing for my mom. She's recently gone from 4 sources of income now just to solely 1 source of income. She is— she too, like some of the earlier callers said, is a CD lover because she's scared of the stock market and doesn't want to invest in the stock market. Market. She's debt-free. She owns her home. She owns her car. She has a pretty decent nest egg, but I don't know how to get her to do something other than putting it in a CD. And now with CD rates being so low, she really needs to have her money work for her.

Has she lost a lot of money in the past, or does she just come come up from a generation where— no, he just does.

Yes, they just didn't know. Um, she's 80— she's 87. Um, she doesn't really, you know, want to put any money in the stock market. Uh, she does need that money to, um, help her through bills and such because she does own her own home, because, you know, life is expensive, right?

Yeah.

Do you know how much her bills are every month?

Um, I would say that she, she's more bills every month than her Social Security. So I know she does need to use—

and you don't know how much her Social Security is?

I do. I think her Social Security is about $1,800. All right. She has basically $520,000 in CDs.

Okay. And when do you know when those are going to mature?

That's what she's asking me last week. What am I going to do with my money?

Because they're coming Well, here's what you can do. I don't know, some people are logic people, some people are emotion people. I would try both in your shoes. You could show her what her money could have been had she been investing for the past 5 years instead of having it in the CD. Right. And she would see it would have been $1 million.

I know.

And that should scare her. There is actually more risk in her trying to play it safe than her being in the market. Market because inflation is eating away at her money every day.

Okay, she's barely keeping up. How do you— right, exactly.

That's what, that's what I see. And I don't know that she— I mean, I've, I've sat down with her and I, I mean, she does her own bills. I mean, she's amazing, right? At 87 years old, she does a great job. Yeah, but I just say she's got it. I said, Mom, you can't keep eating away at the 5/20 and expect to keep getting money. He said, "You've got to keep that principle so that you can make money." I mean, I don't know how to get— I mean, I guess I don't know who to turn to and try to find somebody that could help.

Well, will she even trust a third party? Because I know a lot of 87-year-olds are like, "I don't trust anybody." So if she met with a financial advisor and sat down, someone who can help her understand this, is it an actual knowledge thing where they could kind of go, "Hey, here's what we're going to do." We're not going to put your money on black on the roulette table. It's not disappearing into the abyss. We are buying tiny pieces of the most successful companies in America and the world, and here's their past returns. Show her. It's been -10%, then up 20%, then up 25%, then up 23%. Right.

And do you think that that could generate her monthly income off from that?

Yeah, and then at that point, she can withdraw, but at least then it's not dwindling down as fast. And the good news is, she's 87. There's good news and bad news here. She's not going to live to be Methuselah. We all have a certain time here on Earth. I hope she lives a good, long life and makes it to 100, but we don't need a 30-year retirement out of this $500,000, is what I'm trying to say.

The other thing you could do, Lisa, is— and by the way, I'm an over-emotional person. I don't know if you can tell. Like, comically dramatic. I, even the, sometimes if my mind is made up on a thing, even the most logical responses, I'm like, ooh, you must be crazy. It's gonna fall flat. You must be crazy too.

I don't try logic on John. No. Yeah, yeah. I gotta hit him where it hurts emotionally.

But I do think it would be worth doing this. If you know how much she draws from that $520 or $540 every month, do you know what that number is?

Yeah. Well, see, I'm not, I can't say that right off. I don't, I personally don't know. Okay. It's not that I don't wanna say it, but I'm, just let's be— let me say that I bet you she sometimes takes $2,000 to $3,000 of it.

So I would ask this, um, Mom, can I— can we work through a spreadsheet real quick? Or can we get out a yellow pad and work through something really quick? At $3,000 a month, right, $36,000 a year, this money is gone in this many— in this many years.

Right? I know.

And what my fear is, but, but I, I think taking the fear out and just putting it on paper and saying, we don't know what the next 5 years will look like. If you'd put this in there 5 years ago, it'd be a million bucks. I know.

And that's what I'm so sad about. I know. But she's been in the area that long. It's like, they just got her to put it in there.

I know. But listen, any— this is gonna sound— this is me now trying to be logical, even though I just said I'm dramatic. Any time you spend on what could have been is a waste of energy and time because you can't change it. I know. And so it's a matter of sitting with her and just saying, I love you, Mom. You do— this is your money. You do what you want to do. You'll be out of money by this date. And y'all may look at it and say, you know what, you can draw $2,000 a month, and if you, if you make it to 95, you've got enough, right? Or maybe you look at it, it's like, oh, you could go to 104th Like, you know what? I'm not even gonna have this conversation. I love you, mom. Um, don't take more than this out a month. Mm-hmm. And so it, right. Let me say it this way. If you're, if you wanna sit down and have this conversation because of the regret of the last 5 years, I'm saying this as nicely as I can, but that's a you problem. If you are, haven't sat down and said, okay, at a $3,000 a month, $36,000 a year draw, it's gonna be around for this many years.

Um, do I think mom, mom is gonna live to be 97? Because that'd be what, $360 grand? So if she lives to be 100, actually this money doesn't run out. If she, if she just withdraws straight principal and puts it in a high yield savings account.

Right. Yeah. If she just had under the mattress and just used the money. Yeah. So there's, there's a reality on both sides.

Yeah. And it might just be like, oh, I'm, I'm actually really sad that my mom's getting older and I'm trying to grasp at things I can, can control. And that's helping me avoid like, oh man, my mom's 87, I'm gonna lose her someday, right?

Oh, I know, I just— well, the reason why, the reason why she doesn't have those sources of income is because my dad died on December 23rd.

I'm so sorry. Yeah, and that's coming up this year, right?

Pardon me?

It's gonna be a different Christmas this year, right?

Yeah, well, it was a different Christmas.

Oh yeah, last year.

I just wanted to still be able to live and have fun because she worries about money, right?

Um, so the, the bet, as a guy who is, is prone to worry, the path through worry is writing it all down.

And as my friend Dr. John Delony once said, facts are your friends. Facts are your friends. So if she sits down with the advisor and he maps out, hey, if we put under the mattress, here's how long the money will go for, here's how much you can take out. If we invest it into this, maybe we do half in the stock market. Here's what could happen. That will at least give her a real picture of her options, and then she still gets to decide.

Yeah, well, I like that idea. You're saying take half of it, give it to them, and still let her keep $250,000. Exactly.

Because even just a little bit at a time, maybe we start with— I need my money. $10,000, $50,000.

I can't get it. And you can always—

and again, they'll show her, hey, you can get the money out. It's not stuck in there. It's not a vending machine that's going to eat your money. The longer you keep it in there, the better off you're going to be. All of that can help her with this. Part of this to think about is, what does she actually need to cover? You can help her with that of the budget. Like, "Hey, Mom. Here's the gap. We really just need $2,000 a month. Here's the math on what your nest egg is and what could be." Also, the reality of long-term care could be down the road. We don't know. That could be over $100,000 a year for in-home care, a nursing home, whatever it may be. And that is going to— that's a— there's a much higher chance of that depleting the nest egg than her trying to use it for her living, uh, cost of living and expenses. So I wish you the best. You're an amazing daughter. Facts are your friends.

Yeah, yeah.

You're a wonderful daughter for even thinking about this. You care a lot about your mom, and I think that tone's going to come across in all the conversations. Good luck. Hey, George Campbell here. Listen, if you're behind on debt payments and drowning in debt, I already know what you're thinking. I can't afford a lawyer to help. And honestly, that's exactly what creditors are counting on. But here's what most people don't know. Guardian Litigation Group doesn't work like a traditional law firm. Firm. There's no massive retainer, there's no hourly billing that costs more than the debt itself. Guardian is a law firm built specifically for people in default, behind on payments, or staring down bankruptcy, and their model is designed so people in that situation can actually access real legal protection. From day one, you're assigned an attorney. If a creditor sues you, you have someone who can actually represent you, not a call center that isn't built to defend you when things escalate. The best path out of debt is still doing it the the right way— budgeting, working the plan, changing the behavior. But if you've already hit a wall and you need real help, Guardian delivers.

Their attorneys have settled over $600 million in debt for more than 55,000 people. So go check it out for yourself. Guardianlit.com/Ramsey. That's Guardianlit.com/Ramsey. Attorney advertising. Results may vary and no specific outcome is guaranteed. Welcome back to The Ramsey Show. Hey guys, your feedback really helps us out, so please drop a comment, hit the subscribe button, share this episode with someone who could use it. You guys are the best marketing we have to get this debt-free message out there and help people build wealth. So thanks for doing it. Victoria is up next in Omaha, Nebraska.

What's going on, Victoria? Hey guys, um, so my biggest question is how do we begin cutting costs drastically and even begin savings? We have no money saved. Um, how do we do that without making our family feel constantly broke? We need help like setting boundaries with our 12 and 8-year-old. We want to involve them in our goals, but they just don't like fully understand, and that's okay, they're kids. But we are just so sick of living paycheck to paycheck. We need to replace our furnace and AC and start our savings. And we're just— we're nowhere close.

Yeah. How long have the kids been running the house?

I— we do kind of pride ourselves with our discipline. But I guess with that, like, I don't know, we don't really give them consequences where we just say like, hey, quit asking why. Like, the answer is no. Like, end of story. I guess we maybe don't follow through when it comes to money. Money. Let me give you a path, okay?

You ready? I want you—

um, are you married? Yes, 10 years.

Okay, I want you and your spouse and your kids, but I want you and your spouse to pregame this, okay? Okay. And I want y'all to create a set of family values together, okay? And if you want to put it on, go to Michaels or Crafts Etc. or something and buy Hobby Lobby and buy a like a canvas, if you wanna put on a piece of wood, some construction paper, and I want you to frame it and put up in your living room right above your dining room table. Awesome. And that way, here's the thing, when your kids say, but why, but why, you can point to that and say, cuz that's who we are. Yeah. And so in, in our house, of course, dude, I, I want my kids to want things. That's fine. That's developmentally appropriate, like you said, right? It's, it's normal. but my kids know, oh, dad doesn't borrow money. Mm-hmm. That, cuz that's who mom and dad are. That's just who we are. Right. And so it, it, it, it takes that, it, it's kind of like, why don't we kill that guy? Cuz we're not murderers. That's, you know, that's like who we are.

And so, yeah, the, the, and then George asked a, a good question. I gotta tell you. The greatest gift you can give your two kids right now is for them to see two united, like, ride-or-die, motivated parents doing a really hard thing together to set their family free over the next 2 or 3 years. And what you're going to create from that is two kids that know— like, my mom went back to college, and I mean, went to college for the first time in her 40s, and then got like this big fancy professor job in her 50s and got tenured in her 60s. You know what I can't say? The words, I can't, because I've watched a woman do it. And so when this job came up, when I was 40 years old, that I could quit my job I'd worked for for 20 years and go be a YouTuber, right? Like I was like, oh, I could change in the middle of my life. 'Cause I had a roadmap. 'Cause I watched my mom do it. Yeah.

And we always say more is caught than taught around here. Yeah. Yes. And so I promise you that it's not going to cause them trauma for them to watch you sacrifice.

Instead, it's going to create character, especially if they know this is who we are. We're anchored into this thing together. And then you and your husband have to suck it up and go do it together, right?

Yeah, we— my husband and I are both— well, especially my husband— kind of stuck in that mindset of just lack of. And like, the kids have never been on a vacation. The kids haven't been able to experience like sports and stuff because like we just We don't.

Where's the money going right now?

Um, how much do you guys bring in?

Hold on, before you get there, I want you to double-click on what you just said. It's not because y'all don't— y'all can't figure that out. Yeah, it's because y'all don't prioritize that, right?

Yeah, we don't.

So don't blame a bunch of other stuff for the fact that you and your husband have to look in the mirror and say, we've chosen to never allow them to play sports or to never make that a priority for us. Yeah, true. And that— yeah, the, the responsibility of those decisions rests solely on you and your husband, right? Right. And by the way, your 12 and 8-year-old, if y'all once a month set up a tent in the backyard and cut hot dogs over a Solo stove, they would remember. They would tell that story at your funeral.

They'd have a blast. That's true, right?

And so all this like smoke in our minds of our kids are gonna— our kids are gonna— dude, our kids take a lot of cues from almost of their cues from the, from the pulse and the temperature of their household, their parents. Yeah.

If they ever go to therapy, they're not gonna say, well, we never went to Disney, so that's why we're here. They're gonna say, we're here cuz I watched my parents live in scarcity mode their whole life.

Yeah. Dressed out. Now they may go to therapy and say, I always wanted to play soccer and mom and dad didn't prioritize that.

Uh-huh.

And that'll be a fair criticism, right?

Right. Right.

But if you want to live your life out of fear of a criticism your current 8-year-old might make in 25 years, that's gonna be a miserable life. Let me give you a line: your kids don't get a vote because they're kids. What they need is regulated, anchored parents.

And if they like sleeping in a warm house in the winter in Nebraska, we got to get this furnace fixed. So we have a priority here. And so right now it's 4 walls, beans and rice. We're going to cover for basic food, basic clothing, transportation, housing, utilities, and other than that, we've got to get out of this situation. We've got to get out of debt. So have you guys actually put this on paper? Have you done an EveryDollar budget to show, here's our income, here's where all of our expenses are?

Yeah, I mean, I've got the whole, what you guys call, just like a napkin, napkin math.

Okay, what does it reveal to you? Because you're saying paycheck to paycheck. Is it an income issue? Is your lifestyle inflated? Is it payments? Is it a car loan?

So it's— well, no, it's not. It's not an income thing because we bring in $7,000 a month, right? And then our average expenses are about $4,000. That includes obviously like mortgage, and we do have one car payment, but I can't sell it. I know you guys push it. I just can't because I use it for my LLC. I'm a house cleaner, so I just need a car that I can rely on.

How much is left on the car loan? —alone?

I want to say 15. Okay, cool. So that's 5 months, it's gone. 5 months?

Because you got $3,000 extra every month.

So if you said we bring in 7, we spend 4 on paper. On paper we spend 4. There should be $3,000 left over if we do this right. So 5 months, the car payment's gone. How much is that payment?

$350.

Boom, you just got a $350 a month raise.

How many houses would it take you to clean to get $350?

Um, maybe like 2 or 3.

Okay, so you just got a day of your— of every week back. Yeah, right. You see, like, this starts to change your life.

And now you can save up because you know how to save up $3,000 a month to throw towards the debt, plus this new $3,350. So now you got $3,350 saving up in an emergency fund. 3 months, you got $10,000.

That's a new furnace. Yeah. So just to clarify though, I— and I just need to hear it from you guys because I kind of just need a slap in the face just like we're cutting cold turkey, like end of story. Yes. Like we're not going to Five Below, we're not— no, any of that.

Like, but listen, it's not for 5 years. You do— we just showed you a plan to do all this within the next 12 months, right?

And by the way, your, uh, 8-year-old is responsible for the rice and your 10-year-old is going to make the beans. And you know what, they're going to love it. They're going to have a good time. Right?

Yeah. No, they complained at first. I said, we're having the Ramsey special and it's not Gordon. Different Ramsey. Different Ramsey. A different Ramsey special. Um, and thankfully, yeah, my daughter smiled and she's like, it's not so bad.

But let me tell you this, 3 of the top meals I've ever had in my life ever were with Dave Ramsey. You know why? Because he can live like no one else. And yeah, he also gives like no one else, which is why he paid for that meal, because I couldn't have afforded that meal. Yeah, you know what I'm saying? So there is another side to this thing once you get there.

Yeah, make it a party. Go like, hey, we're gonna do a competition. Each of you are going to make a meal. I get to be the judge. Yes. And then you can yell at them like Gordon Ramsay. It'll be really fun. You could smash the kitchen. Combine both Ramsays. But what we're saying is sacrifice doesn't have to mean we're all miserable.

Miserable. No, sacrifice can bring you together in a powerful way as a family, right?

So you get to decide, Victoria. You guys have the income to do this. There's not a lot of debt. This is a pretty solvable problem, but it takes all of you getting on the same page for the next 12 months going, we want a different life on the other side of this, for the next 12 years.

And it's mom and dad saying, this is our house, and as for our house, we're going to choose peace and freedom.

Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. I'm George Campbell here with Dr. John Delony. Andrew's up next in Kansas City. What's going on, Andrew.

Hey guys, thanks for taking my call. Sure. I'm looking for advice on just how to move forward. My grandpa passed away about a year ago and him and I had hung out 5 years prior to that, just traveling around the country. And during that 3 to 5 years, he would consistently tell me, hey, when I die, this truck is yours, you know? Repeatedly say that. And, um, when he— he did die a year ago. And when he— when it came time for the will, I reached out to his kids, my dad, my aunt and uncle, and I said, hey, um, you know, Grandpa said he wanted me to have the truck. Is there— is that in the will? Is that, um, just, you know— and they all told me no. And I, I was surprised because he's never never not followed through, but I just said okay, and I wanted to respect it and not contribute to any conflict. My aunt— I met with my aunt yesterday, and she told me that, um, my grandpa actually left a note attached to the will on a legal piece of paper, um, saying Zach gets my truck, and signed it.

And she told me that when it came time of reading will between my dad, my uncle, and my aunt, that my dad and my uncle said that they were not going to speak of this note and to never mention it. And they didn't, they didn't give me the truck. And so I was just looking at, I was looking for advice.

I mean, if what your aunt said is true, and it sounds like based on your time and relationship with your grandpa that, that sounds plausible. It sounds more than plausible. It sounds like that's probably true. I mean, the first thing I would be in your situation is absolutely heartbroken that my dad, my father, betrayed his own dad and betrayed his son in this way.

Yeah.

You know what I mean?

Did this go through probate court?

Court? Uh, no, he had a, he had a trust or a will, and so there was an executor and a, a lawyer. And as far as I'm aware, um, they executed all through that.

Have you, have you, do you live by your dad?

No.

Do you have a good relationship with him?

No. Um, my, my grandma passed away, and then my, my grandpa and I have always been best friends. My grandma passed away and my grandpa and I hung out almost every day, every week. When I grew close to my grandpa 5 years ago, my uncle, my dad started having conversations saying that I was only growing close to my grandpa for money reasons. And they started some— they just started talking in that way. Way.

I mean, they can talk all they want, but if it's noted in the will, it's a legal binding document.

But are you saying this was like a loose note attached? Yeah, it was like a sticky note, cuz I don't know that it's going to hold up in court.

Yeah, it was, it was written on a legal piece of paper that was sitting on top of the will, and it, it said Zach gets the truck, and it was signed. And my aunt said it was all in my grandpa's handwriting.

And I don't know your state laws, so I would talk to an attorney to figure out what your state law says about, does this count? Do you have a— do you— can you access this physical evidence, or did they get rid of it?

Um, I don't— where is that? No, the story that my aunt told me yesterday was that the, um, the lawyer that was with my aunt, uncle, my dad in that meeting said that legally they did not have to honor that note because it wasn't in the will. Like, you guys, it's not enforceable. Um, well, he— right, he said legally it's not enforceable because it's not inside of that will document. And so if they wanted to ignore it, um, or not honor it, then they were free to do that. And then my aunt said that my uncle, you know, said that, okay, let's all swear to never mention this and this never happened.

Man, there is so much dysfunction.

Yeah. I mean, like, that's one of those things that maybe is legally right. I don't think it's morally right. I think your dad and uncle did you, did you wrong. But here's the thing. I don't know what kind of recourse you have unless, I mean, you're, how old are you?

I'm 36. Yeah.

I mean, I, I would say, I am thinking of my 16-year-old son when I say this. I'm not trying to make some like masculinity statement. But I, I would have a man-to-man conversation with your dad and your uncle. And your aunt has to know that she's gonna be right in the middle of it, and it might end up being two brothers versus sister. Does she tell you to swear you'd never say anything? I mean, this sounds so dysfunctional, so middle school, you know what I mean?

Oh, absolutely. She said, she said you, you can't that she said, you know, I swore to them that I would never say anything, that no one would ever find out. So she said, you know, she didn't want them to ever find out.

So what she did was she did something that was morally, um, wrong, and then she has been carrying that cinder block around for a year, and then she just handed it off to you and said, you carry it and don't tell anybody, bro. It's heartbreaking. It is what it is. But legally, he's probably correct. And I think you— I mean, if I'm you, I have all I need to know about a dad who would dishonor his son and his father in this way. And you're 36, and I would make my way through the world with that insider information. I don't see any way you get this truck.

Are they using the truck right now?

Okay.

No, um, they just don't want you to ask. I, I question them a I'm sorry, like, is it collecting dust somewhere or are they actually driving it?

No, they liquidated it immediately. Yeah, it's gone.

They just sold it and took the cash.

Yeah, my dad— I asked about it a year ago. My dad said he drove to the dealership and sold it and liquidated it. Yeah, it's go—

I mean, yeah, it's gone. And I mean, you, you Uh, dude, I'm not a lawyer, so I don't know.

But I, I think your grandpa had every intent to give you this truck, but he didn't do a great job actually making it official, cuz this should have been in the will properly witnessed, you know, state-specific, all of that to your laws. And I, I don't think based on what the other attorney said that there's any recourse here.

But also relationships are over, right? But also like my dad has said, hey, there's a few things I want my daughter to have it. I want your brother to have this, and this is gonna be yours. And we're all moral adults. And so we're like, yeah, cool. It's not like when he dies, we're gonna be like, ha ha ha, he didn't write it down anywhere. You know what I mean? So I don't think your granddad's out to lunch. That's probably, I can see that being handled like that all over the place. You know what I mean? But your, your aunt lacks all moral courage. Your uncle and your dad are immoral. I mean, they're non-integrous people. And so, dude, my rule of thumb is I don't do business with folks like that. I don't do relationships.

I mean, they chose that money from the truck sale over the relationship with you.

And more importantly, like, their relationship, like, honoring their dad's wishes. So it is what it is. Um, but yeah, you especially are not gonna— I, I can't see a legal course. If you wanna go talk to an attorney, go for it, where you could go get the money for the truck. I mean, that's, that seems like it's way down the road. But, um, sorry, brother, I hate this for you.

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Welcome back to the Ramsey Show. I'm George here with Dr. John Delony. Now here's what some people don't realize about wills. They are not about your age or how much stuff you have. There is not a moment or a net worth where it makes sense to get a will. If you're an adult with people you love, with kids, with pets, with stuff, anything you want handled a certain way, you need a will. It gives your family clear direction when they need it most. So if you're ready to create one, and if you don't have one, that means you're ready. Go to mamabearlegal.com. And if you're not sure where to start, you can text the word quiz, Q-U-I-Z, to this number, 33789, and we'll help you figure out which option fits your situation. Jamie is in Sioux Falls up next. What's going on, Jamie?

Hey, good afternoon. Um, so I had a question, um, about home and equity and all that good stuff. So my fiancé and I are getting married in 2028, and we each currently own a home. So far away. So, well, okay, so I have two kids who I've raised. One's already out of the home living independently, and one leaves for college, um, in the fall of '27. So that's why we're waiting just a little bit longer.

God, you don't want to live with your child. You're like, "Let's just wait and swap the child for the fiancé." Exactly.

We're in two different towns, so I'll just let him finish high school here and then I'll move on with my life.

Cool. Sorry to derail. I'm always curious. No, no, no. We're good.

We're good. My main question is, I would love to be debt-free sooner than later. By the time we're married, I'll be 46. Um, he's a little bit younger than me, he'll be 38, but that's beside the point. Um, but with both of our houses, um, I'll be moving into his house, and what I'm questioning is when I sell my house, should I put the equity, um, that I receive into his loan to work towards that financial goal of becoming debt-free? But I didn't know like what the financial, you know, if there's if my name needs to be on his house, or if it would be considered a gift, or if I'd still have to pay taxes on my equity that I receive, things like that.

What is your house worth today?

I would say it's probably around $220,000. OK. And what did you pay for it? Um, $85,000.

OK. So you're not going to have any taxes with the capital gains exclusion. So you're good there. OK. So what I would do is, let's say, it's not going to be paid off by the time you move No, it won't.

I'll still owe probably a little bit.

OK, so whatever equity you get, let's call it $200,000. You could put that in a high-yield savings account. Are you immediately going to move in with him? Like, it's like, "I'm selling the house, we're getting married, and then immediately moving," or is there a gap in time?

No, I'll probably move in once we're married. When I sell my house, I don't know if it will be right away after or not, Not.

Okay, so there's not really any urgency. It's not like it's on fire, we need to throw all this at the mortgage immediately. But I would just park it in a high-yield savings account knowing that we want to earmark this for mortgage payoff if there's no other debt. Are both of you consumer debt-free?

Yeah, so he only has his house debt and I only have my house debt.

Great. What's left on his mortgage? $180,000. Oh, fantastic! That's a pretty cool start to this marriage. If you guys could be completely debt-free, house and everything.

That's what my goal is. Yeah, and he likes that idea too.

I would absolutely make sure your house is on the, on the deed as well. Oh yes, I think when you guys are married, that's very fair.

I'm a big fan of this. I, I think if you're married, unless you're in some super high income tax bracket and you're starting to move stuff around in different ways that don't apply to 99.9% of us, um, y'all's names need to be on everything.

Anything, both of y'all's names. A joint checking account, joint savings. Yep. And we're planning on—

I, I've talked him into doing that, and he's on board with that. Um, he better be.

You're about to make this guy debt-free. This is awesome.

I know, it— he feels bad, but I'm like, we're joining our lives together. It's going to be our money.

It's not nice, you know. There you go. And you guys are going to be building wealth together, hopefully for the rest of your lives. Right? Right. Exactly. So this is just one pretty big financial decision that marks that moment of saying, "This is who we are. We're a couple who combines everything because we're one team, one dream. We're going to build wealth together. My retirement is your retirement. There is no, 'Well, this is mine. This is what I brought into the marriage.'" Right. And that's hard. I mean, I'm really proud of you guys because a lot of couples that are older, in their 30s, 40s, 50s, whatever it is, a second marriage, they have a really hard time time letting go because of the past wounds and the baggage.

Sure, sure. Well, I've been on my own with my kids for 15 years, so you kind of, you move on pretty, you know, after eventually. Yeah. Wow, that's fantastic.

It's impressive. And I'll tell you, like, I— here's a thing I did, and it was all accidental. Um, I had bought a car, and I went down to the dealer and negotiated and bought the car, and then I surprised my wife and went down and I didn't have cash for it, so I took out payments, but I bought her a car. Wow. And she, one day when the registrations came, she said, hey, just saying this out loud, my name's not on anything, any of these cars. And it feels like you, I mean, it on paper legally, you own the, and I thought, I was like, oh gosh, I hadn't even occurred to me. And so adding her to both of the car, these are both our cars. Ours. I might drive one and she might drive one, but these are our cars, right? And so yeah, I like— I— any sort of asset like that, I like both couples' names on everything. Especially, especially, especially if you're walking in and dropping $200,000 on y'all's house, then y'all need to be on there.

And, and he's fine with adding my name. There's like no angst against that by any means. But do we have to refinance it to get my name on it? Because he has a really low interest rate. That's where it won't matter, kind of, because you're paying off. Okay, that's true.

Yeah, because if the house was paid off, you could still be added to the deed. I got nothing to refinance on my house, so you know what I mean? That's not— they're not inextricably tied together. But even if you—

let's say you have to, then in your situation, for me, that'd be a no-brainer. I'd refinance it and pay it off the next month.

Oh, that's true too.

Okay, because that's just for the mortgage. Your name doesn't need to be on the mortgage. No, because there won't be one.

This is just— so the deed is separate than mortgage? Yeah. Okay, cool.

Way to go. Congratulations. I would send you a wedding gift, but I don't know that I can wait 2 years.

I don't know how to get— let me tell you this, don't get excited and get married and then pay off this house and not put your name on there because you're— just don't do that. Put your name on it. Do it. Yeah.

Oh man, that's a, that's a good one, John. I don't know what it is, but it's funny that people who— and I, this is just This is just me just saying this out loud. This is what I've seen. Couples who are not married that are living together have no problem combining financial lives for some reason. And people who are adults getting married and then they move in together have a really hard time combining finances. What do you think is behind that?

That's a good question. I've never even thought about that, but you're right. My guess is—

'Cause we're always telling people, no, why'd you combine finances? You're not married. Then we can't convince the couples to combine finances married?

Yeah, that's a good question. I think when people get married, there's a sense that I wanna hang onto some, some of me. And so this is a way I, I can pretend to do that, that this is mine and that's yours, even though we are not doing the same. There's this desperation to hang onto my individualness, right? Whereas I think— but marriage is scarier.

It's a bigger step. And so you feel like I have to protect myself a little more.

Well, it's not even protection. I think it's just more, it's the illusion of identity. I'm losing myself and this is a way I can hang onto myself. This is my money. And it's like, you make 40 grand and it's like, that's mine. No, right? And then the other side of it is, I think a lot of couples move in together because they think they're gonna be able to pool everything and it will be easier for them. And so they just dump everything into a bucket and they think that's gonna solve all the problems. And yeah, it often creates more.

It's like, well, instead of Venmoing each other, let's just pay this outta one pot if we're gonna be roommates. Exactly. That's very interesting. I didn't think about it like that.

And then he buys, because, because I mean, I, I tried various stages of that with different college roommates. Roommates. Like, nah, dude, we're all just gonna—

you get the milk next time. That never works out. It always falls on one person. Yeah, who's then resentful of the rest of the roommates.

Or I'll buy the electric bill, you buy all the groceries. And then this dude's not buying great groceries.

But if you're wondering out there, what do you do if you're about to get married? I always recommend whoever has the checking account, just make it a joint checking account. Hey, you can add someone's name to it. That's what I did with my wife. Joint savings account. Join High Yield Savings Account. You can get it at fairwinds.org/ramsey. Get that all set up in minutes. It doesn't take a long time. It just takes you letting go of this illusion of control that I'm still going to be my own person. You are, and also you are one together.

Hey guys, Rachel Cruze here, and I love summer. There is more fun on the calendar, more time with your people, and way more chances to make memories. But you know what else there's more of? Spending. Oh, between the extra groceries and gas and camp fees and family trips, it all starts to add up so fast. And before you know it, money stress starts to steal the fun out of everything. And that is why I love the EveryDollar budget app, because it helps you plan your money, track your spending, and find more margin in your budget so that you can put extra cash towards the goals that matter most. Enjoy your summer without the money stress. Download the EveryDollar app in the App Store or Google Play and start for free today.

Ask Ramsey's are free AI tool built and trained on proven Ramsey principles, and we're going to break down one of the questions we got this week. I've recently gotten married and we are paying off $40,000 in student loan debt. Should we wait until we are debt-free to get a will? Here's your answer: Marriage is exactly the right trigger to get a will in place, and no, you should not wait until you're debt-free. A will will cost you a couple hundred bucks max, protects your spouse right now. If something happened to you today without a will, there is still a, a process in place. The state gets to decide what happens to your assets and who makes decisions for you. And that can be a long, painful process. And that's a risk you don't want to carry while grinding through the debt. And at Ramsey, we use Mama Bear Legal Forms for our wills. Our entire team uses it. It's what I got. Regardless of your financial situation, you need to have a will in place. And if you're unsure about what next step you need to take, Ask Ramsey's here to help. I love getting messages like this, John.

They asked me a question in the DMs. DMs. By the time I see it, they say, oh, never mind, I used Ask Ramsey, gave me a better answer. Like, I didn't— come on, man. I agree. They did say it sounded just like me, so I wonder if they trained Ask Ramsey in my voice.

That's a, that's a, that's a dark, snarky voice.

I would love for them to be able to choose your character. Like, you can choose the Deloney, and there's like a rabbit trail of like 7 minutes before it gets to the answer. Yeah, it's entertaining.

I can't breathe. Why are you sad?

We start with a breathing exercise, we're going to write a letter to our dads, we're going to hug our wives, and then we'll tell you to roll over the 401. Exactly. I love it. Brian is in Green Bay, Wisconsin up next. What's going on, Brian?

Hey guys, how you doing? What's up, man? Good to talk to you guys. Doing great. Good! My wife is a fan of Johns and I'm a fan of George, so we got you both covered. Something for everybody. Right. So I guess our question is, we're looking for strategies on helping our adult children combat this whole thought out there these days that capitalism is ruining their lives and there's nothing they can do about it and it's everyone else's fault but their own. Whoa.

Hmm. What's caused them to feel this way?

Uh, social media, I suppose.

Okay. Do they, do they work jobs? Yes. For Like public companies or what?

What do they do? Warehouse work.

Warehouse work. So I'm just wondering, at the heart of this is someone who's frustrated because they're not where they want to be.

Yes, and so our oldest child has never really been a big fan of effort.

Yeah, capitalism rewards effort, and so if you're not a fan of effort, you might like socialism a little bit better, right?

Although if you look throughout history, socialism ends up with a lot of people giving a lot of effort they didn't wanna give.

Yeah, and we've never been shy about, you know, explaining to our kids that we struggled a long time, you know, for years and years trying, working two jobs, both of us working opposite shifts when they were kids just to keep food on the table. There's no shortage of hours that either one of us put in, but our oldest is just like, "Well, that was you guys and it shouldn't have to be that way." and that, you know, it's so persuasive on YouTube.

And yeah, here's the, here's the thing, Brian. You and I both have to metabolize this as just guys who work, have worked a lot of jobs and take a lot of pride in taking care of our families. The, I, I can spend a lot of energy being angry at the message, right? That actually you should just wake up every day and have whatever you want handed to you. Right. And I also have to be honest and say that's an appealing message.

Oh, it is. Right.

And so I'm not gonna get mad at you for like an appealing message. You're right. That sounds, that would be incredible. It would be. And it's not reality. It's not real. Right. Right. And so it's less that and more, you're not, you're not gonna convince that message. The, the neuroscientists and the tech folks are more powerful than you. You and I. They just are. Yes, they are, right? And so what— the only tool you and I have in our, in our, in our toolkit for our kids is relationship and I love you and I'm not going to give you extra money but you're always welcome in my house. Like, it's, it's, it's good old-fashioned I love you relationship, right?

We've told them that, you know, if it comes down to it, he can move back if he, if, you know, if he absolutely has to, gets hurt on the job or he can't get a job, gets Lego for whatever reason, but it will come with conditions. Of course. You know, he has to use— live by our rules. We're not gonna just let him lay around and play Xbox all day kind of stuff.

Of course, of course.

I don't think people are inherently lazy. I think what he's just missing some mojo. He didn't know that like, oh, you can do something you enjoy that has some purpose and add value to society and people's lives.

Or you can do something that is adding value that you maybe you don't necessarily enjoy, but doing that gives you the life that you joy, right?

Yeah, yeah, that's what we try to coach him with, and all of our kids, you know, find something that you like. You don't have to be good at it, you can learn to be good at it, of course, you know, find something that you're passionate about or that you're interested in more than just a passing glance.

Yeah, yeah, I think, you know, John, John's on to something here. I would not try to argue them over to your side because it just becomes a political debate at that point. It's just a lot of emotion. Instead, I would get to the root of the, the pain points that they're feeling and go, oh, here's what's really going on. They spent their whole lives going to school, doing all this stuff. They're working a warehouse job they don't like. They're not making enough money to accomplish any of their dreams and goals, and now they're frustrated. And so they're looking at the system as the villain. And that's a great villain because there's so many things wrong with the system, isn't there? There is corruption.

And system is undefined, right? It's undefined. And it's a boogeyman for all of human history. If someone didn't like hard work, then there was a penalty for that. And now if you don't like hard work, you don't like the grind. And by the way, I don't love the grind, but like the grind has certain outcomes over time. Right. But now it's, it's become heroic. Right. The new thing, like the new heroism is something's happening to me instead of look what I scratch and clawed and made happen, or look at the benefits I received and how I maximize those benefits. That's not, that's not heroic anymore. That's manipulative. And that is taking advantage of people. Right? So you're, you're, you're trying to get in those debates is fighting a losing battle. I wouldn't even engage in it. I'd call my son and ask and tell him I love him. How you doing? Let's go get breakfast.

Say, hey, I'm done arguing about this.

Let's go We do. I don't—

we don't engage with him much anymore because I'm not on those subjects. You know, we do invite him over to, you know, sit at the fire with the rest of the family. There you go. Come over for dinner once in a while, whenever he has a chance. He's usually had— usually worked very odd shifts, like, you know, 10 to 5 AM or something. So it's real difficult. And he works odd days. So, you know, a lot of times it didn't match up, but We've always tried not to go into the, "Well, we can fix it for you" mode. Yeah. 'Cause he doesn't want to hear that. And so the few times we have let slip, he'll get mad and go away and then come back a few months or a few weeks later. What's the ages? The oldest is 26. Then we've got two 22-year-olds and a 17-year-old.

Okay. Yeah, that's a pretty normal phase in your 20s 'cause you're trying to figure out and everything you were told, you realize is kind of a little bit of a lie from well-meaning people. And so there, there's a sort of like a—

the light bill has to get paid every month. Like, I remember that. I remember, I remember that exact thought in my head. I have to do this every month for the rest of my life. And I was like, oh man.

So there, there's a reality to what they're facing. And I would lean into that empathy versus, hey, what you're experiencing is not real. Right. And the definition of capitalism, I don't think is gonna solve this even though they would go, "Oh yeah, I agree with that. Competition is good. Yeah, individuals should have the right to like own stuff. Yeah, supply and demand is actually a healthy economic model." I don't think we're gonna get to that level of logic.

No, no. I guess our main goal is to just get them to, you know, fully accept— they don't have to like it. I didn't like it when I was in my 20s— to accept that, you know, what they put in their life is basically what they're going to get out of it. And if they wait for life to happen to them, then it's not going to be fun.

Amen. I mean, I think we can all agree on that behind this desk. It's up to you. That's what capitalism says. And if you believe it's up to someone else, then that day will never come. And eventually you'll get frustrated enough, hopefully, to go, I'm going to do something about it because no one else has yet.

Hey guys, Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to ramseysolutions.com and try Ask Ramsey today. That's ramseysolutions.com. Our scripture of the day, Luke 16:10: Whoever can be trusted with very little can also be trusted with much, and whoever is dishonest with very little will also be dishonest with much. Will Ferrell said, before you marry a person, you should first make them use a computer with slow internet to see who they really are. Ain't that the truth. John is in Fayetteville, Arkansas. What's going on, John?

I am 3 months behind on my mortgage and I don't know what to do, and I was just calling to get some advice. Oh man, what happened? Um, well, I'm in construction and work slowed down and I fell behind, and then being able to get caught back up is— seems like it's impossible. What's your mortgage payment? Uh, $2,200 a month.

Wow. So you're $66,000 in the hole right now with this next month looming?

Yes. Is it just you?

Uh, as far as income, yes. My wife stays home with our— we have 4 kids and our youngest is autistic, so she stays home and homeschools him. Oh my goodness.

As construction has slowed down, it's going to sound like we're picking on you, and I'm not meaning that in any way, okay? Trying to— no, that's Fun. As construction has slowed down, have you taken 2 or 3 or 4 jobs? Like, because this whole, this whole house sits on your shoulders. Yeah.

Um, I like, I've looked for like other stuff, like, but like around here is like where I live is not The job market is, seems like it's not very good.

Is that in construction specifically? Yeah. In construction in general.

Yes.

No, I'm talking about, I'm talking about like you realize you wake up and you don't have a job that day. And so you're, you're driving Uber, you're delivering Amazon, you're over at Walmart throwing boxes.

Like I'm saying, you're working in a warehouse overnight.

That's what I mean. Oh no, I haven't even looked at any of that. Here's what I'm saying.

Cause you, you don't need more construction jobs. Underneath that, you need one thing, money, period, from anywhere, right? Yes. And so we're gonna take every possible job we can and we're gonna have to tell our wife and our 3, our 4 kids, um, I'm gonna have to be MIA for a few weeks because I, I mean, for a few months, I gotta go get us right-sized up. 'Cause the whole house is, you're about to lose your house, man. And, and I'm saying that again, I know you know that, but I just wanna say it out loud. Like this, this is, this is scary business. Now. Yeah.

Have you talked to the lender, me and my wife, or have they called you? We've talked, we've talked to them and they, they had us fill out some paperwork to like for assistance, and that was a month ago. And when we called them, they said that, well, we're on a waiting list, we're number 1,005 on the waiting list, they would get to us. Okay, as far as assistance, but I'm saying like, are they about to foreclose on your house No, we haven't got anything as far as foreclosure or them calling about foreclosure or anything like that.

Well, I would make sure you stay proactive. Yeah, you negotiate a repayment plan, a mitigation option, because I don't want them all of a sudden calling you saying, hey, you guys need to be out this week, we're foreclosing. Yeah. And so you need to stay on top of it with them to explain what's going on, explain that you need to get on a repayment plan, that you're working on getting current current.

Okay.

And get everything in writing. Don't rely on verbal promises from the guy you talk to on the phone. Now, are you using credit cards to fund the gap right now? What are you doing to stay afloat?

Um, no, me and my wife— so my wife is doing, um, like, she's sparking, doing like Walmart delivery in the evenings after whenever I am working, and that way I can watch the kids while she goes and does that, um, to try to, to try to help. But like, that's about it.

I know, but what are you doing on the days that you're not doing construction?

Um, trying to find, trying to find work in construction. I need to start looking to try to find something else, bro.

Yes. Are you handy? Can you put like a hammer at a nail? Oh yeah. Can you start a little handyman business and charge $60 an hour in your neighborhood? Neighborhood? Uh, probably, because I know I, I have paid these guys a lot of money and they tell me, I, I go to these really nice neighborhoods and old little old ladies, they can't get up to unscrew the light bulb to swap it. And so you can help a lot of people and make good money doing it just right there in your neighborhood.

But I want that to be option number 2. You've got to go get a job, dude. You get some stability and then add the side hustles on top of that, correct? Correct. And then start flying up your neighborhood or get on Nextdoor app and say, I'm a handyman and I'm incredible and I'm trustworthy and I got 4 young kids and I'm a man of my word and I'm good. Yes. And I'll come over on Saturday.

I'll come over on Saturday. On credit cards, we cut all those up. Good. We, we got them paid off and we said, we're not doing this again. We're tired of being broke. So we cut all them up and we're not even using credit cards.

Well, how much money do you guys have to your name right now?

Um, I've got like $2,400 in my bank account. Okay.

And do you guys have any debt outside of the mortgage?

Um, yes, we have, uh, we have two car payments. What are the cars worth? Um, one of them is worth $10,000 and the other one's worth about $14,000.

Okay. I would find— and what's the balances on them?

Um, the one that's worth $10,000, the balance is like $14,000 on it, and the one that's $14,000, the balance is, I think, $20,000 on that one. So underwater on both?

Yes. What's the payments on those?

Uh, $800 a month on both.

Are these cars about to get repoed?

Um, well, one of them, one of them is current and the other one is not. The other one is 2 months.

Man, I am scared for you.

Yeah, yeah, yeah.

I wouldn't lay slumber to my eyes. No, I would be out there working every— I'd be going, driving down the road, going to every single store and saying, you guys hiring? I can start tomorrow. I'll start right now. Yeah, whatever you need me to do. That's the kind of attitude you need instead of, well, I'm waiting on the construction market to pick back up. I would be calling every single person in my phone phone to say, hey, do you know of any work available doing anything?

John, I, I have a vivid memory of an executive at my church getting laid off when I was a young kid. And that following week, he was— he took over the janitorial role at the church. He was cleaning toilets. And then I remember thinking, oh, that's— that— not that he was at a fancy job and now he's not, but I remember as a young man thinking, oh, that's what honor looks like. You get what I'm saying?

Yeah. Yes.

Today is your day, brother. I don't want you to go to sleep and until you've gone and knocked on 4 different businesses this afternoon. Okay. Yeah. Go get applications this afternoon. Cuz here's the thing, you have a, nothing matters except for your house right now. You gotta get current. Yeah. And you've got to, got to get out of the shame spiral you're finding yourself in, right? Yes. The only way out of this is through action, brother. Okay? Yeah. You're a good man. You got, you got kicked, you got hit hard, and you fell down. Now your family and you need you to stand back up and go get after it. Okay? Yeah. All right. So we're on the same team, brother.

You call us back if you need anything. John. Okay, I hope we gave you enough homework to keep you busy. Yes. No, absolutely.

We, we probably just gave you more of a kick in the pants, but no more schemes, no more— it is time for one thing and one thing only, and that is to go get to work on top of work and on top of work. And you're good. You're gonna be so tired, you can't even see straight. You got 4 kids. I know you know fatigue at a level that most people don't. You're about to be triple that tired, but your family's gonna have a roof. Yeah. You and your wife are going to have cars and you're going to be able to sleep at night finally. Okay? Okay. Game on.

And you will get current on that mortgage, current on that car payment. You're going to get through this, cuz you, you're a guy who has the work ethic. You just been kicked. And so it's time to get back up and start fighting, man, cuz you got a lot of people relying on you, a lot of people that love you. And, uh, you're wor— you're worth this. And, and I'll—

George, I want to reiterate something you said, Often I, when I talk to folks in this very situation, it's, there's a fear to call the mortgage company. There's a fear to call the, the car loan folks. Often having that phone call and telling 'em, I know I'm working on a plan, is what they want to hear. It's the absence of any sort of information other than we're not getting paid. They're gonna start their automated processes, right? So get on the phone and be very proactive. If you find yourself behind like John is, and get on the horn and let people know, yes, I know I'm behind and I'm gonna be working on it.

That puts this hour of The Ramsey Show in the books. Remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.