Transcript of Stop Chasing Payments and Choose Freedom

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Normal is broke and common sense is weird. 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 Rachel Cruz, hosting this hour with Dr. John Deloney. We're answering your questions, so you can give us a call at 888-825-5225. First, we have Emma in Ohio kicking off the show. Hi, Emma. Welcome to the show. Hi. Thanks for having me. Yes, absolutely. How can we How does that help?

So basically, the car I'm currently driving, there's still $15,000 owed on it, and it's not in my name. My mom's ex-husband signed on it for me, and the divorce was messy, so he's been letting me pay it off while I'm still in college. But the payments are 420 a month, and it's just too high for my income right now. And I've tried to work with him to get it dealt with, and he's not very cooperative.

Well, he should be. His name's on it. If something happens to the car, it's all in his... That's his issue.

Are you on it at all? No, no. I'm not on it at all. Oh, then just drop it back off to him.

Yeah, well, that's what I'm planning on doing today. I'm actually driving home. Do you a half hours away. I'm driving home, and I have the opportunity to get a car for a thousand down from a family friend who owns a dealership, and he'll let me basically pay 200 a month on it. It's a $3,500 car. That's within my means, and it's a reliable car. I guess that's my question. Should I just drop it off and tell him? Because the only problem is he's threatening to sue my mom.

Well, what's his basis legally to do that? It's his car. I was going to say, there's not much he can do in a court system unless there was something in a divorce decree that states that this was an asset or something. I don't know if there was something in there about the car. Is there?

The only thing that I know that was in there was that he basically has the right to repossess it if it gets behind Yeah, which is exactly what he would- It's his car.

Just hand it to him. Just give it to him.

Yeah, which is what I'm trying to explain to her.

How old were you when you took this loan out from him?

I think I was virtually 19.

Okay.

And I'm 21 now.

Yeah. I mean, yeah.

I'm torn. And I'm talking to Rachel here on your behalf. I'm torn between... It's his car. He signed the note for it, and he gave it to a teenager.

Which is his issue.

It's his issue. Give it back. And also, if you were 17 or 16, this would be a no-brainer for me. Part of it is you were 19, and you shook hands and said, I'll pay this thing. And so there is... I mean...

You're We're going back on your word, is what John's saying.

But you can't afford it.

From a moral standpoint. Well, and if we're talking all morals, he should be able to say, Okay, great. If you can't pay it, then as the guy that puts you in this position, let me go ahead and just sell it. Here's your car, man. Yeah, Here's your car bag. And help you figure it out.

But please don't then go jump into another family loan situation.

That's what I was going to say. You're not going to like that part of my advice. Yeah, don't do that. Are you working or are you just a full-time student?

I work and go to school, yes.

Okay. Do you have any money saved?

I have 800 saved right now. I'm engaged in my future. My mother-in-law was going to loan me another 200. Okay.

No, don't do that.

We got to stop this whole borrowing money in general, let alone from people that we know. Again, you called the show. What I would do, number one, Drop off the car. It's in his name. It's his issue. And yes, are you going back on your word? Yes. But he also did this to an 18-year-old, so it is like, okay, or 19. I don't know. It is what it is. And so that's his issue he's going to have to figure out. And then for you, how much do you make? How much do you make a month? If you don't have this car payment, you're not paying 420, how much extra margin do you have on top of this 420 per month?

I would probably have 1,500 for the month.

A total or extra?

Extra would be an extra 500.

Probably 500. Okay. So honestly, what I would probably do, Emma, is I would work, and it's so inconvenient, I know it is, but the car you're talking about is what, $3,000 or something, and just say, Hey, you have $800 that you're starting with, which is great, and just say, Hey, this is going to take me a couple of months. I'm going to be inconvenienced. I'm You're all going to be asking people for rides here and there. It's going to be annoying for a few months, but that way you at least have cash saved up so you're not continuing this cycle. I know you may not do that, but that's probably what I would do, just to avoid any more debt, to avoid getting back into this payment cycle of cars.

You're going to owe money to your mother-in-law first, which means you're going to be in debt to her, not only financially. And she might be a great, wonderful person. If she called into the show, I would say, Just give you 200 bucks if that's what she wants to do.

Yeah, because what's $200 going to do? I don't get it.

What's going to get her the $1,000 as a down payment?

Oh, for the car? For the car?

Yeah. You have to borrow the down payment to them for the privilege of borrowing more money from yet another family member in the middle of a situation that you're dealing with, which is you borrowed money from a family member. It just creates so much internal chaos. Das.

Yeah. And it'll literally be three months, three months to pay cash for it. And the fact that it's a $3,000, $200, $3,200 car? Maybe you can talk them down to $3,000. Do you know what I'm saying?

Or $2,500 if I go get cash.

If I have cash, can I pay you this in 60 days? And I would figure a way out. Because what that's going to start, Emma, is this new way of not just looking at money, but acting out of a set of principles that is going to be good for you long term. And this is a really small step to do that. So in my head, I'm like, it's really encouraging. You know what I mean? That you have the opportunity to buy this car. It's not that much money. You're working hard. You're making some good money that you can set aside each month.

Here's exactly how I would have this conversation at 21 years old. I would call the family member who's going to sell this. Who's selling it to you?

My fiancé's family friend. Okay.

I would call that family friend and say the following, I am dealing with a relationship issue where I borrowed money from a family member, and it has cost me tons of grief. I've made a commitment to not put relationships, not put money between me and those that I love and care about. I really want that car. I don't have $3,200, and I've committed to not borrowing money, especially from friends and from family. And so please hold that car for three months, and I'm going to work really, really hard to save up that money. Either Either what's going to happen is they're going to say, Give me a thousand bucks and I'll just sell you this car because that's pretty awesome and noble. I want to be a part of supporting a young 21-year-old like that. Or I promise you there's going to be $3,000 cars that are all over the place coming up. So if they sell it, then so be it. You Ubering around and getting rides for three months will change your life because you will never, ever, ever, ever, ever borrow money again. And then you'll never find yourself in a situation where you owe your stepdad, and your stepdad's threatening to sue you.

And your ex-stepdad. Ex-stepdad, yeah. It's just like... Yeah.

Good grief. But yeah, great. I hate that you're in this situation. Totally honor the... I mean, I appreciate the call, but I don't think we would be doing our job if we told you, yes, get out of this bad situation where you borrowed money from a family member and go do it with two other people. I wouldn't sleep well knowing that we told you to go do that.

Yeah. So it's a little bit of a different reason why you called is how we ended it. But But yeah, I think it's going to give you more peace. And again, it's going to set you up for a way of making decisions with money that's going to just prosper you in the future instead of take away your income.

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Hey, thanks for having me.

Yes, absolutely. How can we help?

Yeah, so I have a performance review tomorrow, and I wanted to get some tips about how to ask for a raise.

Do you not have one built into that's Nothing triggered by performance?

Nothing triggered by performance, though. We typically get yearly cost of living increases and a firm performance bonus at the end of the year based on how well the whole company does.

Okay.

So how much are you slated to probably... What percentage will your income increase after tomorrow? And how much more are you wanting?

I'm thinking it's been going up about 4 % for cost of living. And then the last couple of years for bonuses have ranged from $4,000 to $8,000. Okay.

And what are you wanting? And all that. What are you thinking?

I don't know. I've been thinking about asking for a raise for a couple of years, and because of the economy and the things that are going on with COVID, I've just been sitting on it. And I feel like the time is right based on the increased workload that I've had over the past couple of years. And I'm really getting to the point where my kids are almost college age, and I'm I'm looking to cash flow college. And I don't want to use that as a reason to ask for the raise, because I feel like it should be based upon my effort and my performance. But that's really what's driving it. I'm in baby step seven, But I'm really trying to keep the kids staying out of debt.

Sure. Okay. So how much are you making a year right now?

I'd say 125 as the base.

Okay. And then If you go out marketplace value for your line of work and what you're doing with your experience, how much should you probably be making, considering your workload and everything?

I think it could range from starting there all the way up to maybe 150, 175. Okay.

Are you guessing, Chris, or have you done some research to know a lateral move at a different corporation or a different company would bump me up?

I've looked at a couple of things, but I feel like they're all going to be in that range.

Okay. So 150 isn't Isn't wild. How long have you been with the company?

Ten years.

Okay, so a good amount. Yeah. Well, we always say around Ramsey, the phrase is always that your raise is effective when you are. So when you are showing something that's going above and beyond, that you are actually doing a workload, that is more than what is traditionally in bounds for this specific salary. I would have specific examples of that. I mean, I would start with, obviously, a a level of humility and gratitude to your employer, but to say, Hey, here are the things that I'm seeing have increased over time. My salary has not kept pace with it. I have noticed that very similar positions in other companies are ranging more in this way? Can we just talk through this? Or what is a way, a pathway for me to be able to make more? Because that's my desire. It just opened the floor. Again, with more humility than ever, because I feel like from an employer's standpoint, a leader, they're going to be more apt to want to help you if you're wanting to help yourself versus going in with demanding anything, which you don't sound like a guy that's going to do that.

I love that question. When employees used to come at me and say, Hey, I want to raise, that would always put me on the defensive. When they came in and said, I want a path to $100,000, or I want a path to-150. 150, in your case, or I want a path to 175, is there a path to 175? Then what you do is, like Rachel said, it's an invitation, it's not an accusation. And that gives your supervisor the opportunity to say, Dude, I see how hard you work. Here's what's happening above me, and you are capped as high as you could go. Or it gives him or her the opportunity to say, Well, there's actually a leadership position opening up, or this role is capped here, but we've been thinking about you for another role. But it gives them an opportunity to talk through it. And then you are dead on, right? I would not bring up... You have extra costs coming on your horizon that your boss needs to solve for you because, man, no boss wants to be put in that position. And so I think you need to ask yourself, if they can't or if your boss says no, what is your or what statement?

Is your or what going to be, I actually like this job. I like making 125 base.

I may not be able to help my kids the I thought I was going to be able to. So they're going to have to stay in state, and they're going to have to- Right. So be it.

Or I'm going to get on the market and try to go get one of these 150, $175,000 jobs. But asking them, what is a path for me here to 150, $175? I think that's a great way to open up that conversation.

Actually, don't say, bring up... Because money doesn't typically come up in these reviews. So what would be the right phrase, maybe to It's starting with gratitude.

The last few years, I've made $125,000 with a $4,000 to $8,000 thing. This is amazing. I'm getting paid. I'm super grateful. What is a path that I could move my salary to $150,000 or $175,000 here doing this job that I'm doing or any other job in this company. And that's a, I want to partner with you, supervisor, not a, You haven't been paying me fairly, and I've caught you, which puts them on the defensive.

Yeah, I don't actually feel that way, but I am doing more than.

Yeah, and I would be okay, because I do think, Depending on how your company is structured in your relationship with your leader, they may not even know what you're doing, all the extra stuff. Do you know what I mean? So I think that's fair to be like, Hey, listen, here's what's been on my plate. And I want to talk through this because I feel like I am adding a lot of value value. So I do want to figure out how can I not just see that from a compensation standpoint, but also for the company. I love adding value. I want to continue add value. What's my pathway to do more so I can make more? I think all of that is appropriate.

Instead of saying, I want a raise of 25 $5,000 or $50,000 saying, I'm doing all... Here's my assignment, and here's what I'm doing extra. Here's the other roles I'm taking on. Is there a path for me to 150 or 175?

With all of this that I'm doing.

With all of this that I'm doing, Is there a path here? And again, you want your supervisor, your leader, to feel like you want to partner with him and continue to add value to the customers you're serving into the company, not making it a you versus me. You've been screwing me. I've been doing all this, and now I want this. Because at the end of the day, he or she's got hierarchy over you. They got power over you. So entering into a fist fight with somebody that is ahead of you is a losing proposition.

What's your position, Chris? What are you doing? I'm a Marketing Manager. Marketing. Okay. I was going to say, because sometimes those skills, whether it's writers, marketers, I mean, sometimes the outside world goes faster than a company is actually keeping up. If you don't have a good compensation plan as a company, those positions can outrun what you're paying. This sounds so ignorant, but I think it's true. I think some leaders, depending on how big the business is, look up and they're like, Oh, my gosh, we haven't kept up with market value in two years. And they may not even know. There could be a level of small ignorance. I don't know. I hope companies run a little bit more efficient than that, but I think that is the case a lot. Is it a small company or big company?

It's a big company.

Okay. Yeah. They may have tears in place that they keep up with it. But that's also always in the back of my mind, too, because I just know those positions, especially if they start to have a lot of value in the marketplace, they can outrun the average salary, and a company doesn't going to realize it.

But keep your or what question, your or what statement, if you will, to yourself. If he says or she says, No, absolutely not. You're paid fairly. This is all this is going to top out. Are you going to then think to yourself, Okay, I'm going to get some side hustle work as a marketer or social media marketer on the side to put my kids through college? Great. Tons of people do that. Or, I'm actually going to go hit the market, or I like this place. It's comfortable. I'm going to make some changes with my kids. You get to decide what you do next with that information. But I always like the partnership question.

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Up next, we We have Carlos in Miami.

Hi, Carlos. Welcome to the show.

Hi. Thank you for having me. Quick question. I have, since both of you have a PhD on the seven baby steps, and I only have barely a GED, I wanted to ask you a quick question. For one split second in 2020, my wife and I, I'm 54, she's 52. We make decent money. She makes about 170. I make about 115. We have three children. One of them is in college, two in high school. And for one split second, around this time in 2020, right in the middle of the pandemic, we were on baby step seven. We had everything. We had paid off the house, we did everything. But now we're like, okay, obviously we have step one. We have step four. We invest probably 25 % of our entire income into retirement.

Carlos, did you go back after you paid off everything, did you go back and borrow some more money?

Oh, yes.

Oh, no, Carlos. What did you do? You went backwards. We're supposed to go four words, like 1, 2, 3, 4, 5, six, seven, eight, nine, 10.

You won. It's like you crossed the marathon finish line. You're like, You know what? I'm going to go back to the starting line and start again.

What happened?

Well, like I said, we were ready to start step seven, and things started opening up after COVID, and we were like, We? We like to go here. We like to go there, and we like to get this Mercedes, and next thing you know, we are- Carlos.

Oh, no. You're living Miami.

You went full Miami.

You went full South Beach. Oh, okay.

Yes. So how bad is it? How much do you owe right now, brother?

Look, we have about $29,000 in zero interest credit card debt, where we're trying to pay off. And then we have one lease of a vehicle, and all the other vehicles are paid off. So we decided to buy a car for each one of our kids and pay it off. So our daughter's car is paid off. Our second son's car is a brand new car. We have about 17 grand. We're going to pay it off in exactly one year because we're sending three times the payments on a very low interest loan. My car is paid off. So 29,000 in credit card debt and- 17,000 in a car loan.

Hold on. And a car lease.

Hold on. You said your wife makes what? 170? And you make what?

One, fifteen.

One, fifteen.

Oh, 15. I put fifty in my mind.

Okay, so you guys make about 300K. You said at the beginning of the call, you all do pretty well. You all are doing incredibly well.

Okay, so Carlos. Okay, is that it? The credit cards, the lease car, And then the car payment. Is that it? That's it. Did you take out a second mortgage after the house was paid off?

Oh, hell no.

Okay. All right, good. Okay.

Well, at least we are on the same page there. Okay, I just need everyone to hear this because this doesn't always happen. We get people like Carlos every now and then, that they do the baby steps, and then they go backwards. So I just want to know from you, Carlos, did you have more peace in 2020, financially, or today?

Yes. In 2020, But then the whole world opened up again, and I was screwed.

Why were you? No, you weren't. You weren't screwed. You were perfect. No, you chose it.

You could have kept on going. Well, the whole world opened up.

No, no. Hey, listen, homie, you've got to take ownership of... It's like mom and dad went out of town, and you're in high school, and you didn't have to throw a huge kegger, and you're like, I'm going to.

Mom and dad, listen, I went out of town. What was I supposed to do?

We had to do it. There was five kegs. We had to go get them. We had to fill them all up. So listen, take ownership. You did it. But here's the thing, dude, 300 grand a year. You can have this paid off in three months if you'll just suck it up.

Yes.

Why are you waiting a year?

A year to pay off the car.

Pay off everything. Carlos, if you guys lived, you don't have a house payment, okay? So I know you have some car payments, but if you just lived on a hundred thousand, God forbid, you'll have A hundred thousand dollars. Extra.

To keep moving. And you put a quarter of your money away every month. Yes.

Stop for two months. You all have to be able to say no to yourself. You all's behavior has gotten completely out of control.

Yeah. Well, we like to travel. That's our. Okay, so do I. But I have to say, I can't go to Italy right now. I can't. You know what I mean? No, I know. It's definitely- I like yachts.

They look pretty on Google image, but I- No.

See, you're blaming. You're blaming Miami, you're blaming the pandemic.

You're the number one international port of the world.

It doesn't matter. Be a grown up.

The brand new Royal Caribbean ship is docking next month, and I'm like, Oh, we got to check that out.

Oh, my gosh, dude. All right. You're giving me hemroids, Carlos.

I don't know Carlos. I don't think you really want to be in trouble Carlos. I think you are fine with your life. That's how I feel.

What do you do for a living?

Well, that's the other thing. I'm not getting paid right now because I'm a federal employee, but my wife is not. But at least we have her check. But here's the thing, we've noticed that we can live off her check.

No way. You mean you're barely scratching claw on $170,000? Tell me more, Carlos. Yeah, we have a live studio audience out here, and they're all just sobbing for you. They're devastated for you.

I told my wife last night, I go, You know, I'm going to call the show because we've proven one thing with this government shutdown with me not getting paid for a month. We can live off your check and then use my check to pay off this stuff.

Sure. Kit God. If you all can scratch by... Hold on. You missed two humongous lessons, though. You missed the two bigger lessons, which is you all make a bunch of money right now and COVID happened. And then you all made a whole bunch more money. And then the leaders of our government decided to sit in a sandbox and throw crayons at each other. And so the thing you're missing here is, there's always a day after the party. And in between those days after the party, you live like this is the last party that's going to happen. And if you go back to 2020, if you had not have just gone bananas, if you had lived just a regular ridiculous life, you would have taken a whole bunch of vacations and gotten some nice cars. You wouldn't have bought your kids brand new ones that depreciated 20 % the day they drove them off the lot. But your kids would be fine. You all be fine. And you'd have 200 grand in cash in the bank.

I don't know. Are you kidding me?

Okay? I know. This is you. And listen, this government shutdown is going to happen, and then you're going to be like, Dude, we can live off my check. And you're going to pay all this off in three months, which is all it's going to take, or maybe two months for you guys. And then you're going to be like, Boats in the Harbor. And you're going to go down there, and you're going to start this whole thing over again. And then one of you all is going to get laid off, or one of you is going to get the call that, Hey, go to the hospital because one of your kids... You're going to get those calls. And So let this be the final time.

Yes, 100 %. I think it's a lot easier to sell to my wife if we can say we can live off one of our checks and take the other one- No, no, no, no.

There's a layer beneath that. You're not hearing me. The greatest thing you can give to your wife is to say, Hey, for the first time in our marriage, I want to act like grownups.

That's the hard thing for me, Carlos. I know we're joking around and having fun, because listen, I love a great trip. It's fine. The things you're saying, a nice car, a nice trip, those are not bad things. They're awesome things. But you're doing it out of order, and you're doing it in a level of impulse and a little bit of just immaturity. Yeah, I do. And so Dave always says that children do what feels good. Adults devise a plan and follow it. There's a level of growing up. And to say this, too, Carlos, you have two kids in the house. Are your kids still in the house?

All three kids are still in the house. The college one has a year left and the other two are in high school.

That's fine. Yeah, but I'm just saying, what are you setting for them? The example. I'd rather set an example of, Hey, we have a level of limits and boundaries because that's what money... We have to with money. That is part of the name of the game. We can always make more and all of it. That's great. It's not a scarcity mindset, But we have to live within our means because that creates a level of peace and stability. So when I get furloughed and I don't get a paycheck, we're totally fine. And guess what? We can still go on the Royal Crib because we have no debt and we're able to save up and we have a great income. But we're living with a level of reality. And there's a little bit that you guys are just like, Oh, that feels right. Let's just go, go, go. And what scares me is you both sound like that, you and your wife. Usually, there's one boring person in the marriage that doesn't want to spend or do the thing, and then you have the partier. But both of you... I mean, that's what it's going to take Carlos for you guys to buckle down and just say, Hey, we are going to live on less than we make significantly.

You can live off half of our check, by the way. Clean up this lease, clean up the car in the credit cards, cut up the credit cards, and we're going to live life differently. I don't know if you're going to do it, Carlos. I don't know.

I want peace for you. I just can't want it more than you want it for yourself.

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If you are wondering if you are on track with the Baby Steps, well, you can find out. You can take a quick quiz to check your progress and receive a personalized plan just for you. Just head to the show notes. If you are listening on YouTube or podcast, and you can click the link titled, Are You on Track with the Baby Steps? And complete the quiz. All right, let's go to Martha. She is in Florida. Hi, Martha. Welcome to the show.

Hi. Thank you for having me.

Yes, absolutely. How can we help?

Yes. I am just wondering if I should file for bankruptcy or not.

Oh, man. What's going on? What's happening?

We've overwhelmed ourselves, mine and my husband, and about 90 % of the debt is mine. Okay. And it's pretty bad.

What does that mean? Tell me what that means. What's the debt?

We have about, including His debt was mine. We have about $20,000 in credit card debt, about $12,000 in personal loans. I have about $15,000 in collections.

Is that credit card collections or medical debt?

That's medical.

Medical, okay.

I have about $15,000 in student loans, and I know that doesn't go away with bankruptcy, but we have $16,000 in car loans.

And- Are those two separate cars, Martha?

No, it's just one.

One car, okay.

We have one car that's paid off.

Okay, wonderful. Okay, keep going.

And then we have our mortgage, and our mortgage is about probably 70 % of our income.

Per your payment, your mortgage payment is taking 70 %? Yes. Okay. And for the house, how much is the house worth?

It's right about 285,000.

Okay. And how much do you have left on the mortgage of How much is that?

277,000.

Okay, so it's basically a wash. There's not much equity.

We haven't lived here, not even a year yet.

I got you. Okay, and how much- We were talking about selling in the house, but then we looked at our contract, and since it was a USDA loan, we can't sell the house until we lived here a year. Yeah, and when will a year hit? What month?

December.

Okay. Coming up.

You can put on the market right now and put a 30 or 60 day contingency. You can't afford a house if it's 70 %.

Yeah, I absolutely 100 % agree with you. And my husband is just completely not interested in selling the house. He wants to get rid of all of our other debt and then keep the house.

Okay. Those are two separate conversations. Yes, we need to get rid of the debt regardless of the house payment. But if your house payment for sure is more than 50 % of your income, but we even say 25 % of your income. So no, you have too much house. So your husband needs to understand the math. You can't live your life with 30 % of your income. That's what it ends up being. So no, you guys have too much house. You bought too much house. How much do you guys make a year?

I currently do DoorDash and Uber because I am a full-time student, but I am also starting a job in January. Okay.

How much will you be making a year in the job in January?

It really depends. It's a tipped worker's wage, so it It just depends. I worked there a few years ago, and I was making around 30,000 a year.

Okay. And how much does your husband make?

He makes 56,000, and he works two jobs.

Hold on. You're going to school. What are you studying?

I'm going for social work.

And so you're going to get a degree that you've paid a bunch of money for, but you're going to go back and make the same exact money you made two years ago without that degree?

No. I I don't have my degree yet, so I'm still going to school for it.

I know, but when you get this job- I graduated in May. Okay, so you're taking another job in January that's going to hold you over until May?

To make it, yeah.

Okay.

Okay. And then when you graduate in May, Martha, and you start a position, what on average do you think you'll probably make if you are using your degree and you're in it for social work?

The average in my state is about 50,000 a year. Yeah. Okay.

Well, You're not bankrupt. You guys have a massive mess on your hands. Do not file bankruptcy. No. It's going to take some significant sacrifice of time and energy for you guys to clean this up. So it is very doable. And so what I want to start with is there's a couple of highlights. If the car... Do you know if you Kelly Blue Book, the $16,000 car, how much you could sell it for? I have.

Kelly Blue Book says it's about $3,000.

It's $3,000.

Yeah.

When did you guys roll over bad equity from another car into this loan? I did not.

I bought it out. I had a clean slate when I bought the car about three years ago.

For how How much did you buy it for?

I got it for about $18,000. My interest rate is pretty high.

What is it?

I think it's about 18 %.

Did you buy it at one of those corner markets?

No, I bought it through CarMax.

Yeah. Okay. Martha, when you looked on Kelly, did you look at kellybluebook. Com? Yes. And did you do dealer trade-in, or did you do an individual selling to an individual?

I did individual.

There's no way it's depreciated.

I don't think it's $3,000. What car is it?

It's a 2013 Nissan Pathfinder, but it has a lot of miles on it, because when I bought it, it had about $80,000. And then in three years, we've gotten it up to 150. My husband, he works out of town, and he also- I just don't think it's $3,000. Delivered pizzas part-time.

I just don't think it's $3,000. Yeah, I don't know. Okay. Well, I would do some homework digging in there, because if you can do... Gosh, If you could sell it for even, I don't know, 8, 9. I mean, I don't know. It may be a wash. You may be stuck with it. The collections from the medical debt, have you contacted them at all?

I did contact them to get how much I owe, everything I owe, but I haven't set up any payment plans with them yet. But it's almost to the point where they are contacting me either.

Yeah, most bad debt, credit card debt For sure. Sometimes medical debt, you can actually talk them down significantly. Sometimes pennies on the dollar, depending on what it is. What's it through? Is it a collection agency that has it right now? Yes. Okay. I would tell them, Hey, I have no money. I cannot pay this $15,000. They may settle it with you, Martha, for $5,000. Usually, you have to have cash to do that. Yeah, you would. But I'm just saying, you want to be able to get to a position where that is at least the one That in the car were the ones I was trying to finagle for you to see what we could figure out to get out of this. But usually, debts and collections, you're able to negotiate. So remember that. So that $15,000, hopefully, can get significantly down. And if you actually get them to a place where they will take that payment and you've negotiated, get it in writing. But that's what I would do. So I would just start, honestly, Martha, with the baby steps. And you guys, your income isn't terrible. I mean, if you're making 30 starting in January, 86,000 But the house is a pain point.

You have, what John said, put it on the market. You have to. There's no way you guys can afford this house.

Martha, I've done this. I bought a house, and we had it sold within 10 months because I got into it. And that, plus my student loans, plus my car note, it was overwhelming. And it was a hard conversation. My wife cried when I said, We have to sell this house. I moved this into a residence hall apartment. And I was the associate dean of the university, and I was embarrassed for myself. But that's what we had to do because we had a math problem. And underneath your math problem, you have a relationship issue, which is you need to be able to tell your husband, I'm not safe here. I don't feel safe in this house. We owe too much money. I'm getting buried by this thing. And if he looks at you and says, I don't care, then you all need to address that issue, because it's going to take both of you all pulling in the same direction to get out of this mess.

Absolutely.

Yeah. So getting the household, which I know is a feat, that's going to be, hopefully, I think we're seeing on average, it's about 60 days on the market. But I'm praying for you guys by February. Hopefully, you have an offer on the house, you have a new job, and you guys are starting this process. And then Martha, I would just start working my way down the debt snowball, and I would be paying off the personal loan, the student loans, and then going to the car, then to the credit cards. But don't be digging yourself into a hole while trying to get out. You guys need to stop the debt. You You got to cut up the credit cards. You got to be done. But I would look into that car, and then I would be saving some cash to see if I can settle on the medical debt because I really think you can.

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Welcome back to The Ramsey Show in the Fairwinds Credit Union Studio. We are taking your calls at 888-825-518. Com. 2225. Up next, we have Christopher on the line, and Christopher is in Florida. Hi, Christopher. Welcome to the show.

Thank you for having me.

Absolutely. How can we help today?

My question is, I have $10,000 worth of credit card debt. I'm wondering if I should use money from an old retirement account, a 403(b), to pay off that credit card debt.

No. No. What have you done with that 403(b), the old one? Have you rolled it into another fund or an IRA, or is it still there with your old company?

It's still there with my old company, and I just moved in July, so I'm settling into the new company right now. Got you. But if I can explain, a year ago, I was at $32,000 in credit card debt.

Nice.

And I paid it all off. Yeah, I paid it all off before I moved in July. Okay. It basically came on because I had a car Repairs that I needed to make, $12,000 of disaster, anyway. Okay. But then I paid it all off. I took a second job. I paid it all off. I moved to Florida, and then I had $10,000 in repairs for my house. Okay. And I had to put that back on the credit card. Okay. Because I didn't have a savings. I didn't have a savings yet because I had just paid it off. Yeah. So I'm sick and tired of being sick and tired.

Yeah, going back. I hear you. Yeah, going back. I look at this money on the credit card. Totally, totally. How much money do you make a year?

I'm at 100 grand in salary.

Okay, perfect.

Okay. Can I challenge you on one thing, Chris? And this is going to be key to you getting through this. I want you to say the words not, I had to do this stuff with this house. I want you to use the words, I chose to.

Because that put- No, I had to. It was repairs, damage to a store. I could not do anything with the house, rent it out, sell it or anything unless I made this repair.

Right. But to John's point, you could have paused, taken on a second job, saved up $10,000 over 2-3 months, and then gone back and done the repair.

See what I'm saying?

You could have, though. I'm not beating me up. But just the point- I'm not beating me up.

In the moment, because it was sewage backing up, I was in a desperate situation.

Totally get that. I hear you.

I needed to get this.

I hear you. Totally get that. But the key to I think you and I both, we both and Rachel, we live in a culture that says everybody else has to come rescue us, and everybody else is the cause of our challenges. And I want us just to sit in the driver's seat of our own lives and say, I had an emergency. I didn't have any money. I chose to deal with this right away. I had sewage backing up in my house. And when they dug in, it was a wildly bigger deal than I thought. And I went and borrowed $10,000. It's not about blame. It's not about being evicted. It's none of that. It's just about you saying, I did these things instead of, These things happened to me, and so I had to go. It's just that tiny little shift, because then you're in the driver's seat of your own life about what you're going to do next. And if 80-year-old you... Would you go borrow $10,000 at 30 %, 35 % to pay off this credit card? No, I I wouldn't. Okay, so if you cash out this 403(b), you're borrowing that money at 20 % taxes, or 30 % taxes, plus the penalty, you're borrowing that money at 30 something %.

Okay. So in my mind, I was thinking, that money is making me 10 % return every year, and the credit card is at 15 %. So you're actually flipping it on me, which I'm grateful for, because I was thinking I'd be saving five % over the next however long it takes me to pay.

You'll be borrowing You'll be pulling that money. So how much is in that 403(b) account?

It's 42,000.

Okay, so you'll probably get what, 30? No, you wouldn't get that much. You get 25, 28? Probably, yes. And so Just do the math on how long it would take you to earn that back.

Yeah, so Chris- In the account. Yeah.

Yeah. So what I would do, I would meet with one of our smart investor pros in your area and figure out a way to get that 403(b) out because not keeping retirement. This is true for a 401(k). When you leave a job, you want to just roll it over to an IRA so that you have full control, and it's out of the company that it used to be at. I want you to roll that over, but to John's point, not touching it. It's not worth the taxes and the penalties. Then getting yourself in a position where you not only pay off this credit card debt, but then you bump up to that emergency fund as soon as possible. That urgency is what causes the second job. The urgency is what cuts the lifestyle and all of it. And not to belabor this point, Christopher, but it's just a good example, just to say out loud again, is we get so many calls on this show with exactly what you were saying at the beginning of I had to do this. And what we force people to do, and again, it's either, Well, my car broke down, I had to go get a car payment because I have to have a car, or I was going to college, I didn't have any money saved, so I had to take out a student loan.

Whatever the cause is that causes us to go into debt, we hear one line of thinking, meaning that there's no options. And when you feel like there's This is only one singular option. This is the only thing I can do. Debt is going to be the route that's just right there and available. And so what we want to push people to, not just you, Christopher, but people listening, is when you get backed in a corner of a situation and thinking, This is the only way I can do this, the The only way is with debt. That's it. That's the only way. I'm going to push you for options A, B, C, and D, because there's always other options. But when you feel like there's only one option, we usually don't make a great financial decision.

Can I just call this out, Chris? This is the worst. You busted it for a year to pay off 30 grand. And you got to be tired, right?

Yeah. You're so frustrated.

I was working in a Ministry job and then took a job waiting tables at night. Yeah.

Which, by the way, you shouldn't have to do that. You're serving people all day long, and to pay your bills, you got to go to another job. That stinks, man. We'll sit here with you on that.

Well, the good thing is, two of the good things is this change in job really boosted my income. Excellent. It made me move across the country. And then I do have a renter that's coming into the house the first of the month. And if It's actually one of those situations where I feel like I'm also helping her out, get on her feet. Cool. And so I know that everything is working out, but it's looking at the options of, do I go and find another serving job?

Yes. Do I go and- For three months.

Drive a ride share?

For three months, it's going to be miserable. And then just make a plan right now. We're talking to you right before Halloween weekend. Make a plan that February 1, you owe nobody anything ever again.

Yeah. Christopher, with your new job, How much? Are you single?

I'm single.

Okay.

And the job boosted my income.

I'm so glad. So have you done a written budget? I have. It happens much more. Okay. Have you done a budget? Yeah. Okay. How much extra do- I did a budget, and I have- Wonderful.

How And I did... I mean, I changed my lifestyle to... I shop at Aldi, I don't go out to eat.

No, it's perfect.

You're crushing it. So how much extra do you have per month with just your normal job? Just the new one.

2,800.

2,800. Okay. So that's what's crazy about the math, is I'm like, oh, my gosh. If you go and you make an extra, let's just say, 2,200 a month, you're at 5,000. You'll have this paid off in two months, which the holidays, which sucks. But maybe you get better tips because of me. But November, December, and then, like what John's saying, and then keep doing it for two more months, rack up another 10 grand to set aside for your emergency fund, and then you can actually start saying, okay, Now I feel good. Four months for the rest of your life. Now, I go back to my normal job, but I'm going to keep my income limited to get that three months back on, and then you just pick back up. But yes, within five months, Christopher, your life could look different.

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One of the best ways to spread the word about this show, to be able to help your friends and family and other people, even around the world, is just sharing it, whether it's on your social, maybe you subscribe, you comment, whatever you can do to help spread the word. That is so, so helpful. And even on some platforms, even like YouTube, if you are commenting or subscribing, it helps the algorithm to get the show in front of more people. And so you are our best way to spread the word, honestly. So we are so grateful for you all that listen and watch And we're praying that this show helps you. It's why we do it every single day, hoping to give somewhat good advice, right, John? Somewhat. We're trying. And to be able to help when it comes to your life and your relationships, your career. Just continue to help us do that by liking, subscribing, and sharing the show. We appreciate you. All right, let's go to Kristin in Arkansas. Hi, Kristin. Welcome to the show. Hey, how are you all? We're doing great. How can we help?

Yeah. So me and my husband have been working really hard to get some of our debt paid off. We work a bunch of side jobs. And I'm just trying to figure out what the best way it is to deal with our friends. If they get upset, if we're busy, or if we don't, say we're not going to spend the money on a weekend trip or something like that because we're too busy working to try and get out of debt.

Yeah. And when you say that they're upset, what does that mean? That they miss you guys and they're like, Oh, man, we hate that you can't come? Or is it like, Come on, you all. You all are being crazy?

A little bit of both, probably. It's like one of our friends has said, Hey, I'm just trying to figure out a free time again so that we can hang out. They get it, but they're also like... They're quality time people, and so they just want to also just spend time with us.

How old are you guys?

I'm 30, and my husband is 27.

Okay, so this is going to be the answer to the question beneath your question, and that is this. You're at an age, and it stinks. It's the worst, when the friendships that served you really well in your 20s start to thin out and really change. Yeah. And it comes, somebody's going to have a baby, and you're going to find out they're a weird Little League parent, or someone's going to get a doodle and call themselves a pet parent, or you're going to get You're going to be the weird cult people that start paying off your debts. It's just like when you just start... The values you have begin to emerge in a weird new way, and the people that were by your side in your 20s, there might be 10 of them, you'll suddenly look up at 35, there'll be two. And it just stinks. It's just hard. Because here's the deal. I had buddies when me and my wife started doing this, and they, A, of course, they made fun of me. That's what friends do. But they also were my chief supporters in whatever weird thing me and my wife wanted to do.

You know what I mean? And so if you find friends that are getting on to you because you want to have peace in your life and have freedom in your life, and they want to make your journey about them, then they may not be your friends down the road. Or if you just have some buddies that are like, Do we miss you? Can we come hang out? Here's what my buddies did. They would grab whatever was in their fridge, and we'd come over once a week, and we would just hang out at my house and have dinner. We didn't go out. They'd bring over a half bottle of wine they had left, a half-eaten casserole. We'd make tacos, and it cost no money, but it was just a way for us to all hang out because for a season, me and my wife couldn't go on vacations, and we couldn't do weekend stuff. Or we'd go camping. We did do some camping together because it was so inexpensive. But it's just about being honest about your values. And maybe they're saying with their actions, we might not be friends long term.

Yeah. And Kristin, this isn't forever either. I mean, how much longer do you guys have?

Oh, gosh. Probably a couple of years.

Okay. How much debt do you guys have?

Let's see. We have... Do you want a mortgage or just non-mortgage? No.

Non-mortgage.

162,000 non-mortgage.

Okay. Is that student loans? What is that?

That is credit cards, some medical debt, student loans. We have a rental property and a land loan.

Okay. How much do you guys make a year?

Our take home every month is 4,900.

Okay. Yeah. So when you guys map this out, what are you finding from a timeline perspective?

We've been working on side jobs, and we probably bring home an extra $3,000 to $4,000 a month doing that.

And so I'm hoping- You all are going to have to sell some stuff, I'm guessing.

What's the rental property? How much is that?

It's $40,000. It has probably about $5,000. It's been And we remodel, and it's probably got about $5,000 left to finish it.

And then we're either going to- Okay. How much- You're going to sell it? Okay, how much could you sell it for? Well, we're either going to rent it out- No, you need to sell it. You all can't afford it, Chris.

Yeah, you're not in a place to be a landlord.

Yeah, you don't need to be a landlord. So once it's finished, how much could you sell it for?

Probably 70, 80,000 maybe. Done. Is the hope.

Okay. Yeah. Yeah, because that's going to give you money then to turn around and throw at this debt, too. So no, I would get rid of that.

What about this land loan? Are you all living on this land, or do you all just buy your dream property?

I pretty much buy our dream property. We want to build on it eventually. Okay.

Sell that, too. You can't afford it. Okay. Sell that, too. You can't afford it. How much is that?

It is 75,000. It's a 15-year loan.

Okay. Yeah. You all need to unload some of this stuff. Yeah. Yeah.

If you sold 75,000 and then you sold 40,000, that's what? 110. Plus, you got another 40 from the equity in the home that you just fixed out.

Yeah. I mean- You're free. Yeah. We're hoping to have all of our cards paid off at the beginning of the year, and then start putting the extra to the rental house to get it finished, and either to get this sold and give us a lot more breathing rooms. And my husband's also to get an increase in pay.

That's great. What he finishes writing- What he finishes writing- You all have just done a couple of things out of order. The things you all have done are not necessarily bad. Buying a rental property, buying a piece of land, that's just out of order. You guys have student loans, you got medical debt, you're having to make extra jobs to keep all of this. It's not worth it. It's not worth it because you can do all of that again, Chris, and that's the other thing. Think about 10 years, when you're 40, you're still young and fun and great, and you can do those things. You know what I'm saying? It's not like it's a now or never thing. And so you guys in your late 20s, being 30, just get some margin financially. And that's what I would be chasing. As John always says. What do you say? I'm solving for peace. Solving for peace.

Listen, I want land. My quote made such a difference in Rachel's life. She couldn't even remember it. But I'm always solving for peace. Here's the thing. I want land so bad, so bad, not healthy bad, and I can't afford it right now. And we're saving bananas for it. But I don't have the money for it right now. And what I don't want to do is mortgage my anxiety. I don't want to mortgage my stress in my house. I don't want to mortgage my time away. I want to just exhale and say, I really want this thing, and I got a target for how much I want to save up, and I'm just going to keep doing that until I got it. And sometimes for you, it's a side hustle. For me, that's an extra speaking gig on the road, or it's me taking some more, whatever. But we're in the same boat. I really want this. I can afford it right this second. And that's okay. It's totally okay. But you need to hear, if you sold that land- That's what I'm trying to figure out.

Yes. You all are free.

You all are free. If you sell this land and sell this house, and you pay off these cars, you all are free.

Because your credit card debt is what? Four, five thousand?

It's $16,500.

$16,000. Okay. Yes. How much is the medical debt?

Like, $1,500. It's not much.

Okay. So that can be cleaned up. Yes. Technically, if you think about it, once this house sells and the land sells, you guys have $16,000 of credit card debt to clean up, and And then you could do that, golly, in six months or something.

No, you're making it 4,000 bucks a month. You can do it in four months, three months. That's the goal.

It's like with how much extra we're making with our jobs.

The goal is to have- I know, Kristenrishnan. But that was... Okay, let me I do want to... Just because I love you. So I'm like, it was not your goal because you guys were like, Well, we may rent it out. Oh, no. My husband, we bought our land. These weren't options at the beginning of the call. But John and I just freed you guys. Freed you up. So you have to make some decisions Or you're going to be doing this for so many years, and it's not worth it.

It's not worth it. You're going to wind up pregnant. One of you all is going to wind up needing to go back to the hospital. One of your parents is going to get... It's just life is going to happen.

Yes. So again, Again, these things are not bad.

I want you to have land. I really do. I just want it to be yours, not a bank's.

Yes, exactly. So get an emergency, find the place. You guys start investing after you pay this off, then start saving some money on the side, and find some land It may be five or six years, but that's okay. It's great. That's okay. But just do it slowly and with cash, Kristin. I know you called about your friends, but we're your friends, too, so we just gave you some advice.

Your friends are right on this one.

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All right. My husband and I are 45 and 43 years old. We've been married for one year, and following your suggestions, we combined our money together. This was uncomfortable at first because both of us had financial trauma in our previous relationships. Good for you guys. Not for having trauma, but for feeling that and then go and do the next right thing. It's amazing. However, we trust each other, and it's been great. We feel closer together because we are making shared decisions around money. Awesome. We make around 250 $1,000 a year combined, and we have over a million dollars in assets. Amazing. We own previous homes, which we are using as rental properties, and we have opened an investment account together. Our question is, we're both recovering from alcoholism seven years sober for me and eight for him, and we're both still active in AA. Should we do anything to protect ourselves if the other person relapses? It sounds like you all are doing those things right now, which we're talking about hard things, we're putting past traumas on the table, and we're acknowledging them, and then we're choosing to go do the next right thing.

You all are staying in AA, which means you have sponsors. You've got people that are walking in life with you. It sounds like you all are doing those things. And so if you were sitting, if this couple is sitting with me, Rachel, if Lindsay was sitting with me and her husband, I would ask, usually this question comes up when something's starting to feel wobbly. And so I'd want to know what's That's the basis behind this question. But as far as two people who have trauma in your past, who have struggled with substance abuse in the past, you all are doing all of the right things. I would hug both of them if they were sitting there and proud of them. Incredible. And so I guess the next question I would ask is, what are you trying to do to protect yourselves? The only other thing I could think of is if you have somebody that meets with you all every year that goes over your finances with you that would serve like a buddy or a financial advisor, starting to get some professionals in your corner, because now you all are stacking up some serious money.

And anytime somebody has been in recovery or someone's in recovery and you start getting this money, I always want-Yes, if the door opens. Make sure you got somebody else that's walking alongside you just because it gives you so much more resources to get yourself in trouble again. But it sounds like these guys are doing awesome.

Yeah, because there was a book I read, and they talked about this, how in recovery, specifically, if you get too comfortable, you start to feel like we're good, and money can do that. So to your point, you start to stack up a level of financial-It wallpapers over. Comfort, and you're like, Oh, we're good. I feel safe and good. And then you stop doing the things that got you to be in recovery.

But the fact that they're still in AA, this would have been my first recommendation. If you all said, We've been sober for seven or eight years, I would say, Start going back to meetings, right? And go together. Go together. And maybe share a sponsor or whatever. I don't think you can share sponsors. But Lindsay, I'm blown away. I'm impressed.

I know.

Well done, you all.

The work you all are doing. Well done, you all. Great. Good for you. All right, let's go to Justin in North Carolina. Hi, Justin. Welcome to the show. Hey, How are you all doing today? We're doing great. How can we help?

Long story short, I'm on baby step three. I think I'm about to hop right into baby step four.

Congratulations. Good.

So What I'm wanting to know is how aggressive should I be on paying off my mortgage versus investment towards retirement at this moment?

Oh, you hate that house payment now, don't you?

I do.

How big is it? How much do you owe?

Well, right now, I owe around $210.

Okay. How much do you make a year?

Okay, so I do have a salary, and I also make VA disability. So right around there, I'm around $90,000.

Okay. Perfect. Are you married, Justin? I'm married. You are. Okay. Does your wife work?

Right now, I've been able to drop her down to about two days a week to stay with the little one.

Yeah, great. Yeah. How many kids do you guys have?

Just one.

One little girl. Oh, sweet. Okay. Well, we always say when you're moving past Baby Step 3, you're going from one to three, which is intense. I mean, you are full on. I mean, it is sacrifice, going, going, going. And then Baby Steps 4, 5, and 6, we move into intentionality, meaning you want to fund 15 % of your income into retirement. So you guys start opening up two Roth IRAs, if you haven't already, if your work offers a 401k. So start some of that investing, 15% of the income. And then I would open up a 529 for the little one and put some money in. You don't have to be too aggressive with that right now because I know you guys want... You're filling this house payment. So Baby Step 6 is the house payment. And So I would get with your wife because my guess is she may not be as motivated to pay this off as quickly as you are.

Is she as gun-holing as you?

Do you agree?

Well, actually, I had this thought to her about a week ago, and I think she's on board.

Okay. Well, if she's on board, that's great. I mean, you guys are both adults, so you can make a decision to say, Yes, we're going to throw everything else at the house and we're still going to just go, go, go. We just don't want you to burn out because when you pay off your mortgage, that's a long game. Most consumer debt can be paid off 2-3 years, where the mortgage on average is anywhere from eight to nine years. So it's just a longer game. And we want you to be able to enjoy your life during that, too. You've worked hard. You are not being irresponsible by upgrading a car if you need to, going on a trip. So I do want you guys to enjoy this life. But again, you both together, if you both agree, Hey, we're still going to buckle down and throw this at the house, you can. I mean, George Campbell did that. John, I feel like you were that.

I would say if it's going to go beyond two years, if it's beyond possible... How old is your baby girl?

She'll be two in December.

Okay. Here's what I would hate. I would hate for you to wake up, and she's seven, and you've worked seven days a week, and you missed some of the magic moments. You missed all the magic moments.

Right.

And if you told me, Hey, between my salary and my wife's salary, we could have this house. If we just sucked it for 24 more months, and we could just blow through this thing, or 18 months, I would say, In my house, that's what we did. If you're telling me it's actually we could just go- Four to five years? Yeah, go full steam ahead. It's going to take five years. I would tell you, Man, slow down. You've done an amazing job. Amazing job. And enjoy a little bit of your life a little bit. And still, and be a little... Double up on your payments, or pay an extra two a year or an extra three a year and shave off big chunks of that mortgage. But man, there's something about- Enjoying life.

Yeah.

Dad's been there on Saturday mornings when they can at soccer games, stuff like that.

Yeah, and it's one thing when it's freaking credit cards and car loans and all of this. But your mortgage, it's your home. And it's obviously a much larger debt, usually. And so it is going to take that time. So I would say, just be realistic about where you guys are, because how much consumer debt did you all pay off in Baby Step 2?

Oh, Lord. You all have yelled at me about a year.

No, we wouldn't. No, dude. I promise it's That's not worth the most of us.

You would have yelled at me in a good way.

What is it? How much you pay off?

I pretty much lived it up in my 20s. I turned 30 this year. I've had boats, cambers, trucks, you name it.

Excellent.

And it just got to the point where it was fun.

Too much? Yeah. How much did you pay off? I realized I...

I'd say about 70 grand.

That's amazing. Good. See? I'm proud of you.

That's incredible, Justin. I'm proud of you. Yeah. So my point is that you guys have already done an incredible feat of paying off $70,000 of consumer debt. You have your baby step three. You have a fully-funded emergency fund. What you guys are doing is incredible beyond what the average American is doing. So if you've done those things, check that off. Be proud of yourselves. Be funding some retirement on the side. Be thinking about college, and then throw some extra at the house. That's great. But again, like John said, please don't go and work 80 hours a week just to to get this thing paid off. Just slow down. Be intentional. I want you guys to have a plan, and you could have more of an aggressive plan. And even the Mortgage Calculator, if you go to ramsey solutions. Com, plug in in some of those numbers. I'm like, You can see how quickly this can get paid off by just throwing a few extra payments a year. It's crazy how quickly it fast forward to the process. So do some math around it. Take a breath. Celebrate.

I want to celebrate you, brother. You did well. Enjoy.

Well done.

The all new Every Dollar is here, and it is way more than just the incredible budgeting app that it was. It is still a budgeting app, but now it has so many more advanced features to help you make progress with your money. The average person finds thousands of dollars in margin in just the first 15 minutes. So every dollar now, you guys, it's looking over your entire financial picture. There's recommendations, there's coaching involved. There's so much now in this to help you with your money journey. So get started today for free, and you can download it in the App Store or Google Play. Up next, we have Isabelle in Illinois. Hi, Isabelle. Welcome to the show.

Hi. Thank you so much for taking my call.

You're so welcome. How can we help today?

So my question is, how do I find a margin within my very small income with about six, $7,000 in debt? Which I know may not sound like a lot, but again, it's more so my very low income that I'm coming up.

Sure. Yeah. How much are you making a year?

I'm making about 27 to $30,000 a year.

Okay. And what are you doing?

I work for a small company. Roughly, paycheck-wise, I get about $2,066 is a month. And again, it's just paying down my debt to get to where I want to be financially, as well as to carrying a home down the line and everything of that sort.

So Isabel, you said you're working for a small company. What are you doing? Are you doing sales, admin? What's the position?

I'm basically a receptionist for a countertop company, which does okay, but again, it's not corporate money.

No, for sure. Are you married? Do you have kids?

I do. I'm not married, but I do have a partner. Okay.

No kids, though?

Yes, kids. I have a toddler and one on the way.

Okay. All congratulations.

Thank you.

And toddler goes to daycare? What does toddler do during the day? Yes. Okay. So that's probably a chunk, too. How much are you paying in that?

I'm paying roughly $800 a month for healthcare. Okay.

And how much is your rent?

That's another issue. Our rent went up significantly last year, going into this year. So we ended up, I I could not budget my income to the rent. Rent was about $1,900 a month for a one bedroom, and I did not find that feasible with my income plus my partner's income. So we ended up moving in with my parents to lower all of our costs down. So that's where it's at now. I do pay bills within my parents' household, which roughly around with my bills, roughly sums up to $800 a month in bills.

And is the partner paying as well?

Not at the moment. So what really took a toll on us financially regarding rent and why we had to move was because he has his own business. Unfortunately, with the business, he's a mechanic, but I'm really not sure. But more of a performance, he fixes engines, motors, transmissions, all of that stuff.

Is he making any money, Isabella?

No. So what had happened was- Hold on, hold on.

Let me stop. What you need right now, what happened is important, but not right this second. And so let me say it like this. You all two were in a boat, and the boat hit something, something broke, an old weld popped loose, somebody shot a hole in it. Right now, you all are drowning.

And you're the The only one with a bucket trying to save it.

And it doesn't matter what happened to that boat. What matters is you all need to swim to shore. Okay? So he had a business. Whatever happened, doesn't matter. He's got to get up today and go knock on doors. And every single mechanic shop I walk by has a sign outside that says, We're looking for ASC certified mechanics. Everybody, every single shop is looking for mechanics. He's got to go get a job. Two jobs.

He's pushing. Yes, he does do that. He has a part-time job right now, but most of that income is going to repay all of the loans that he got for the business itself, because we don't want to bring that into if we ended up buying, purchasing a home, getting married, all of that stuff. What happened with his business really did put a lot of financial burden on us.

Yeah, I bet. How much does he owe?

His business owes roughly $8,000, $9,000 from what we've been able to pay down. That completely drained our savings.

Okay, so he- To get him up for it. But he only owes $9,000. Is that right, Isabel? Right.

Okay, that's not a ton of money. He can go earn that.

He can go drive Uber Eats and make 2,000 to 3,000. Do you understand? He could have this cleaned up. So if I were you, and I don't want to paint this picture, but Isabel, if I had a toddler, went on the way, and the guy I'm doing life with had a major financial thing that wiped out, you said our savings, so I don't know if you put money towards it. So you gave him money. There's a lot of There's zero security. There's not a lot of safety in all of this. And so a part of me, you guys have co-mingled so much with kids living together and all of it and money. Isabel, just for you, and just to make this as clean as possible, I would be separating everything. And he needs to go and do door dash at night and be a mechanic during the day, to John's point. And I know that the business, that whole thing, I'm sure his self-esteem, I'm sure everything is just terrible. I bet he does feel a lot of guilt, shame, who knows? But he has to continue to provide for kids that he has. Do you know what I'm saying?

And a girlfriend, a fiance, whatever it is. So he needs to go do all of that. You then is about, Yeah, I would be for your sake in your debt. It's not a lot either. I know it probably feels very overwhelming, like what you're saying with your salary. I'm thankful that you have a place to land when you have family in town that's such a gift, having two kids, and you're doing this. So I would be looking, Isabel, from a salary perspective to up your salary because you're at the cusp with two kids on poverty level. So I would be looking for something like 36,000, something that you can do that's going to be bringing in more money. And ideally, it's a primary income position. And so I would be thinking through family, friends, people that you know, anything that you can start to do to open some doors. I'll send you Ken's book, Find the Work That You're Wired to Do, because he has a great assessment in there. And so Jenna will pick up, we'll send that copy to you. And I want you to really start dreaming and thinking through, Isabel, what do I want my life to look like?

Not just in the next nine months, but what do I want it to look like in the next nine years? What do I want to do with my life? And I'm hoping together, I mean, I pray that you guys get married and you guys flourish and do all the things because you guys have built a life together. But my hope is that you're in a position where you feel good about that.

Yeah, you're not going to feel good until he starts acting like somebody you can anchor into.

Right.

And here's what this looks like. Is this his baby on the way?

Yes. Both of them are his. Okay.

Then this is what this looks like right now. He got knocked down. His business fell out from under him. He wasn't good at it. Whatever. It doesn't matter. It looks like him waking up at 4: 00 AM every day and Ubering people to and from the airport until he starts work at eight o'clock. He is a mechanic from 8: 00 to 5: 00. Then he gets off and he has dinner with you and the young one. Then he goes back out into the world and does door cash until midnight. This is all of human history. Men have had to go work like crazy to provide for their family. $9,000, he can have that cleaned up in no time. But he's got to say, My two kids and my future wife are worth it. One year, two years of just working myself until I weigh nothing, I'm costing myself sleep, all that. He has a major priority. And like Rachel said, man, you also have to begin to visualize a world where he doesn't do that, which means you're going to have to go earn some more money, and you're going to have to put yourself out on the market, which is going to feel weird.

You got a baby coming. It's going to be hard. People are going to judge you. All that, who cares? None of that matters. You all have a real math problem, but underneath it, you all have a security problem.

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Welcome back to The Ramsey Show in the Fairwinds Credit Union Studio. I'm Richie Cruz with John Deloney, and we're answering your questions. So you can give us a call at 888-825-5225. Next in Wisconsin, we have Olivia. Hi, Olivia. Welcome to the show. Hi. Thanks for having me. Absolutely. How can we help?

So my question is, what is the best way to manage or organize a single 529 plan that would cover multiple children?

Yes. Okay. Was this passed down to you, or how did you receive it?

It was the 529 plan that my parents set up for me, and then I didn't use All of it. So they just said that they're using it towards grandkids when they're ready.

Nice. Okay. Very cool. Question. Do you remember how much you had left in it when you finished college? Like, Oh, I don't need that. And how much it is today?

Today, it's about $100,000, and the kids are 15 months, and the next one is due in January.

Oh, well, congratulations. How long have you been out of school?

About five years.

Five years, okay. How much was left in that 529? I guess it's only had five years of growth, so probably... How much was that?

I don't know exactly how much was when I got used to the rest of it.

Well, yeah. Well, that's one of the great benefits of the 529. It can be passed down through family for educational funds. What I would probably do, Olivia, is get hooked up with one of our smart Vesta pros in your area. You can't open a 529 until second baby is born. I probably would just wait so you could do it all in one meeting. You don't have to go back and do two meetings. But yeah, you can go and set two up under your both girls' names, and then that smart Vesta pro will be able to help you bring the funds down from your name, and you can disperse it within family members, so they'll be able to take that and fund it. You'll be able to see how much you may, obviously, probably put a little bit more in the first kid versus the second, because the second will have a few more years to be able to have some growth. But that should be plenty. Honestly, you could probably just check that off. Talk to your smart investor pro. We set with ours, and we do every January, and he ran out the calculations of tuition as it continues, and you're like, Oh, God.

Do some numbers, some projecting. But that's what's great about having an investment professional in your corner. They do all of that. They're able to look out and project, not even from a market perspective with average rates of return, but also what tuition is going to do to make sure that you guys have enough. But you have a massive head start, which is wonderful. So yeah, I would just get with an investment professional, and they can help transfer those funds. All right, let's go to Ashley in Key West, Florida. So nice. Hi, Ashley. Hello. Welcome to the show. How can we help?

My situation is unique. My husband is active duty military, and we have found ourselves in a very unique situation. We were up in Pensacola, the Panhandle of Florida. We owned a home there, and we got orders to come to Key West. And the cost of living down here is astronomical. Our house has been on the market since April, and we're now going into November.

The house and the panhandle?

Correct. We've had no movement at all on it. It's being shown three to four times a week, but we've had zero offers. We've lowered the price twice. We've done updates, incentives for buyers, and it's just nothing is happening. And between our mortgage and our rent here in Key West, we're paying out over eight grand a month. Oh my gosh. Between the two things. Because I'm still having to pay someone to maintain my pool on the home, the yard, the lights, and the water is still on. And then everything combined is actually like 79, 80 something.

What's your real estate professional telling you?

Well, he told us about a couple of months ago to put it up for rent also, so we did that. We've also had no movement on it being rented. We actually made our mortgage on the house is 3,000. Well, when we originally bought it, it was 2,100, and it went up to 29 because of property taxes in that area. We have not a very ideal rate because we bought it in 2023 when the rates were real high.

But the average time on market right now is two months, 60, 62 days. What is What's your real estate professional saying is the challenge? Because it sounds like it's- It's being shown. People are looking at it, and they're interested in it.

That's what's interesting. Have you run comps in the area to see is it overpriced?

It is actually lower than the comps in the area. It's just For whatever reason in that Pensacola area, no one is buying and no one is selling. But my other issue is we also have credit card debt, and we have two car payments, and we make good money.

She's going out on payments. Correct. Okay. How much do you guys bring in a month?

Oh, gosh. I didn't write down the monthly. I did it by year for you all.

Okay, you can go ahead.

Yeah, for a year. So together, we both make $135 a year.

Is that before tax?

That is before tax, yes. Okay.

And the apartment that you guys are in now, how much are you guys paying paying per month?

So we're actually on base. So it's taking my husband's basic housing allowance. It's like an allotment that comes out of his paycheck.

So you all are having to pay for rent right now? I thought you said that rent is astronomical.

It is. So our rent, so the Navy subcontracts out their property management. So they are taking $4,568 per month for us to live here on base.

$4,000 on base?

Yes, that's correct. $4,568. Gosh.

So could you- That is his- Could you move somewhere else? Or do you have to- Did you get a one bedroom apartment, take your loans?

So there are no apartment apartment complexes down here. That is the issue with Key West and service members coming down here. There are no barracks. There are no places for military members to live. I did actually Google this morning. I went on Zulu so that I could get some examples for you guys. An average three, two is between $6,500 to $8,000.

Yeah, that's a three, two. What's a one? What's a one bedroom?

Like a survival house.

Around four, $3,500 to $4,000.

For a one bedroom apartment?

Correct. Wow. I mean, this is- Yeah, totally.

No, I hear you. Okay, so the cars. Tell me about the cars. How much do you owe on each of those?

So on my Armada, I owe 20,000. My monthly payment is $5,50. Okay. My husband's F-150, he owes 18, and his payment is 575. Yeah.

I mean, that's over $1,000 going out in just that, in just car payments.

Then we have $30,000 worth of credit card debt. And then we actually, last week, as crazy as it sounds, had to take out a Coast Guard mutual assistance loan in the amount of 2,500 because my transmission, something failed on my transmission. Now, that loan is zero % interest because it comes from- Yeah.

I don't care about the interest. Actually, what I would say is I would look at seeing if you guys can sell these cars and get to $5,000 cars, even if you have to take a small loan for the difference, just to get this $1,000 freed up, because that's going to help you a ton. Cut up the credit cards, and you guys have to draw a hard line on the sand and say, No more debt, no more debt. It's going to take a little while to dig out, but I'd be working extra, doing what you can.

And get a new real estate professional. Go to ramsey solutions. Com/realestate.

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Hey, real quick. We were just talking about this off here, Rachel. If you went and bought a ton of house, not during the pandemic, but after the pandemic, right? Or if you went and followed your neighbor who does really well or followed somebody at your local church, whatever, and they bought a property like a beach house, like this last collar, or they bought a Lake house, whatever, in 2023, 2024, and you're like, Yeah, I want to do that, too. Somebody's going to pay the piper on that deal, man. Yes. And it's one of those things that we keep... I don't know, man. Dave has been beating this drum forever, and now we're picking up the drumsticks and beating it, too. But it's not a statement on the greater economy if a whole bunch of people went and bought two and three million dollar houses or bought this and then this, and then now they find themselves in a stuck position. My heart breaks for that last caller who got new orders, had to move, and now they can't sell the house. Sure. But people flocked these places, and they bought a second, and a third, and a fourth house, and they mortgaged it here.

Man, it's a mess people are finding themselves in.

Yes. Keeping your life financially simple, you guys. It's boring. It's not exciting, but it brings peace because you're not trying to play this game where you're juggling this, and then we're going to pull it out of here, and this, and this. We've just heard so many stories recently of that happening, and people are hitting the wall is what it feels like, where they're like, I can't keep up.

I'm heartbroken for this military family who just got moved, and that house won't sell. But everyone in the neighborhood bought their third house. I don't know. It's just... I hate it. It's a lot. Boring is not flashy, but boring is peaceful. Boring is peaceful.

And the same is true just with investing. When we talk about- It's boring. Invest 15% of your income into 401(k)s and Roth IRAs. Everyone's like, Boo. Boring. Let me go do something fun and exciting. Buy real estate with cash. Boring. Yeah. But, man, I'm telling you, yes, it takes some patience for sure in this. But you're doing it the right way. You're not building a house on sand, right? It is strong, and the structure is there because it's real money. You're being wise about it. So everyone, slow down and feel it out. All right. Well, everyone also needs insurance, and it can be hard trying to find pros- Great transition. Who aren't looking to make a buck and agents who know their stuff. And with Ramsey Trusted Insurance Pros, you will never find a sleazy business or slimy salespeople because they're all interviewed, they are vetted, and they are coached by our team to make sure they are market experts and have your best interest at heart. So go to ramsey solutions. Com/coverage to find the type of insurance that you are looking for and connect with a Ramsey trusted agent, or click the link in the description if you are listening on YouTube or podcast.

All right, up next, let's go to Susan in Florida. We've had a lot of Florida calls. Hi, Susan. Welcome to the show.

Thank you so much for taking my call.

You are so welcome. How can we help today?

I have been a caregiver for three handicapped family members for 28 years.

Wow. That's how soon.

I have dumped all my retirement into taking care of them, which was over a half a million dollars. And I need to know how I go about Be building my financial life as I have none right now. I have no credit. I owe no one anything, but I need to know how to build my stop pile of funds so I can have some retirement because I know I will have no one to take care of me.

Yikes. Are these three family members still living?

Yes, they're here now in the house with me. I have two mentally handicapped brothers, one who now is crippled, one who is going through prostate cancer, and I have my 90-year-old mom who has severe dementia.

Oh, wow, Susan.

That's a lot. Do you have support with SSI?

Yeah, and I had a wonderful life before this. I worked for one of the richest men in the world. I had my own corporate jet. I was making great money. My dad passed away, and I stepped in, and I had left home when I was 14.

You're a saint. Have you explored things like...

Excuse me. I haven't done anything truthfully yet.

How old are you, Susan?

I am 66.

You're 66. Okay.

I want you to explore SSI benefits for your brothers.

Yes, we do have benefits coming in. I have them on a program called CDC Plus. Okay. So I am now... They kept telling me I couldn't get paid as the caregiver because I was a family member. But I found this program through another woman who had a handicapped daughter. I'm getting paid, but I've only been getting paid now for seven years. Okay.

What about for your mom? Is she on Medicaid?

She's on Medicare only. They kicked her off of Medicaid for some reason. So that's where part of my money went to paying her medical bills as she got older.

Well, here's what I'm worried. I'm worried that because of your wild and amazing generosity, you're going to find yourself- In a hole. In a hole and unable to take care of yourself, much less take care of them.

Right. Because I'm going to say the truth. At this point, I'm at burn out mode. Correct. For sure. Everybody has always called me Superwoman, and they say, My God, you run on rocket fuel. I'm getting to the point where I not only can't do it, I don't want to do it. Yeah.

That's okay. I Rachel and I are right there with you. We get that. Totally get that. But the greatest thing you can do for them- It's extremely hard. The greatest thing you can do for them right now is make sure you've got a plan for yourself.

Right. You've heard this- I just hired a part-time caregiver to come in and help me.

Okay, good. Yes. Is there any income, Susan, from whether it's the caregiving position or anything else that you're doing that you're bringing in money?

I am making very good money. I have available to me $170,000 a year that I can take for myself. But at this point, like I said, I'm on burnout, and I need to hire people, and I'm paying $30 an hour for caregiver.

Okay. Yeah.

I do have money available to me, but- And is that $170, like a retirement package that will be ongoing, or What happens with that money? No, that's the money I get paid from the program to take care of them.

Okay, I hear you. Okay.

They take care of only two.

Okay.

Mom doesn't get anything, so I'm still paying all her costs.

Okay.

Well, 170 grand a year is a chunk of money if you have no bills.

Is your house paid off?

My what?

Your house.

No, it's not my house. It's in my mom's name, but I'm paying the mortgage, and I have $80,000 left on the mortgage.

Eighty-thousand, okay. Is it left to you in a will when she passes? Will it become yours? It's in trust.

She put it in a trust for the three of us.

Oh, for the three, you and the two brothers? Yes, because the lawyers said that maybe somebody to make financials. Okay. Well, the ones that are the mentally handicapped- Yes. Okay. Well, I would probably sit down with a lawyer because they're going to need even a special needs type of trust. I mean, there's some ways to go about this estate planning to make sure that because they're living with you, making sure, obviously, that I'm not trying to write them out of the estate or anything like that or her will, but to be wise about how to divvy all this up realistically. Do you see yourself ongoing, Susan, to be with your two brothers, or are you hoping maybe to find someone?

I will never, ever give up on them. Never.

Yes. So you're going to plan on living with them and then just maybe supplementing somehow throughout the day. Okay. I know. I honestly, Susan, would probably sit down with an attorney. Is your mom... I know you said she has cancer. She got dementia. She has dementia. Oh, it's your brother that has cancer. She can't make any decision. Yes. Okay. I hear.

The trust was made before she declined. Okay. So think up for that.

Yes, good, good, good. Do you have a good estate attorney? No, I've never been to an estate attorney. Okay. I may reach out to someone in your area, honestly, Susan, because I would have them look at not only the income that's coming in, but some things that you can do around to help your brothers. And there might be some way to shuffle some money that's actually going to be good for their best interests, that you are going to be able to help them. And then with the real estate and everything on top of that, what that looks like. Because if you can prove that you've been paying a certain level of mortgage. There might be something that you guys can do in that. I just want you to be set up like what you're saying really well. But 170,000 a year is wonderful. I would just budget really specifically how many hours a week you can supplement some help with that, the mortgage payment and all of it, to make sure you don't run out of that money.

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Com/smartvestor. In the lobby of Ramsey Solutions on the debt-free stage, we have Rebecca here. Hi, Rebecca. Hi. How are you doing?

It's so amazing to be here.

Oh, we're so glad that you're here. We love a debt-free We are so glad. Where are you from?

Wake Forest, North Carolina.

North Carolina, okay.

Beautiful part of the country.

It's amazing.

Amazing. Okay, how much debt have you paid off?

$207,000.

Oh, my gosh. Making what money?

$100 to $130.

Okay. And what was the... Or what amount of time? How fast did you do this?

91 months.

91 months?

I love it. Not that you counted exactly.

I love it. Wow. Okay, what was the $207,000? The house. Oh, my gosh. You did it. I did. You paid off the house. Congratulations.

Wait, did anyone else help you? No. But, hold on. I've been reading the news a lot, and single people can't do what you've done. So clearly, you've made all of this up, right?

No, never.

Single people can't work really hard and grind and scratch and claw and do this.

Oh, they can if they truly want it.

Golly, dude. Unbelievable.

Funruiner. Com. That's amazing.

Okay, so tell me this, how much is the house worth?

I think the last estimate I saw was like 390.

390? Yeah. Okay. Good for you. Okay, so what happened? Was that eight years-ish, right? Seven and a half. Seven and a half, yeah. I'll give you that. Tell me, what happened seven and a half years ago that you were like, I want to...

I was a first-time home buyer. So long-time listeners might remember that back in 2016, my siblings and I were at your old studio doing our debt-free screams all on the same day. Oh, my.

I do remember your family. I'm not kidding because you all did it.

So that was me. I was debt free at that point. And I followed the baby steps, did my three, my 3B. And by the time I was ready to start the qualifying process for my mortgage. And by the house, I wasn't quite at the FICO score, disappeared. So I was in this weird limbo of they wanted to pull it, but then stuff was falling off, so it didn't look good. So then they had to do the manual underwriting. And And I had saved up my 10% down payment and my emergency fund within 14 months. Oh my gosh. And by 16 months, I had signed the paperwork buying the house. Oh my gosh.

So it just started happening. Yes.

It just started happening. And then once I signed the paperwork for the house, I had done my budget before I even bought the house of what can I afford, how much extra could I put on it? The bank obviously qualifies you for way more than you really probably want or need or should have. And it was so great. I worked with an ELP that I had worked with previous realtors. I thought I had wanted a historic house because my grandmother had a Victorian. I thought that's what I wanted. There were two realtors that just completely shut me down. They didn't even want to show me historic homes. The realtor I work with who was an ELP-One of our Ramsey trusted pros. One of the Ramsey pros, Rob Parton. He was so great, and he showed me historic houses so that I could see what I was getting into to be like, maybe that's not what I want as my first home.

Yes. There's some work to be done.

There is some work to be done or what previous owners might have done to change the house that is not really then what you want because it's not what you were expecting.

Interesting. Yeah. It looks one way, and then you go in and you're like, Yeah, this isn't good.

I got him to understand that if you showed me the floor plan first, that might just shut it down right there. We don't even need to go see that. So finally, I got off. I didn't want the historic house anymore. He showed me the I ended up buying. And it's been amazing so far, but it is so important to have the emergency fund in place first because three years into the house, there was a mouse on the first floor, and I saw him come up through the floor vent from the HVAC system. Oh, no. So that led to me calling an HVAC person to go in the crawl space, and there was work that needed to be done on the HVAC. And then while he was down there, he's like, Hey, do you know your water heater's leaking?

And then you got to get that fixed. And then you got to get that fixed, too. And you're a homeowner, so you're paying for all this.

It's coming out of your pocket. You're the maintenance person. You have to pay for that. But I had the emergency fund in place, and I still had enough room in my budget that I was able to replace the emergency fund within the next few paychecks.

Oh, my gosh.

After those two things came up.

It's just so nice. It's such a good point because people want to rush into homeownership, which we want that a part of people's plan, obviously. It's wonderful. But when you have no money and you have payments and debt and everything, and then you go buy a house on top of that, it just magnifies so much. So you're doing the steps perfectly. You did exactly what it was supposed to do, where it's supposed to be more of an inconvenience when things come up than this total crisis.

When I first started, I was doing 12-hour night shifts. Are you a nerd?

What do you do?

At the time, I was working on the manufacturing floor for a pharmaceutical company. I was confusing some of my coworkers because they didn't know which rotation I was on because I was doing overtime. Okay. And then COVID happened, and that burnt me out because as an essential employee, you had to work no matter what. And then if other people were out because of the COVID protocol, other people had to fill in or there was extra work that you had to get done on your shift. And so finally, in 2022, I got off of night shift, and I got off of the floor. So now I'm an eight-hour Monday through Friday person, which I never thought I would like, but I do.

Yes. Good quality of life there. Yes.

And my salary I did drop a little bit when that happened because I lost the shift premium and the overtime and the built-in overtime that I could get. But it has been such a nice change.

Yes.

I'm so glad. And there were other compensations of My bonus compensation went up, my stock compensation went up. That was awesome. So good. That was one of the things I did was the company gave us stock as part of our compensation. Some of my coworkers would look at me like I was crazy every time I cashed it out when it invested. They're like, What are you doing? I I was like, I have other things I'd rather spend that money on than hope that it goes up.

There you go. Good for you, dude. Oh, my gosh. Okay, so what was the hardest part during these eight years? Because that's a long time.

It was a long time. I think the hardest part was learning the intensity versus intentional. Yes. Because coming out of Baby Step 2, doing the 3B, going into this, I was still on the intense. I was like, I don't need to start enjoying some of this and making it worth it. Then Finally, in 2023, 2024, I was like, Okay, I can see the light at the end of the tunnel. I can slow down a little bit. I was definitely a nerd and had my AM schedule in a spreadsheet.

I believe it. And I-And I've been talking to you for about two minutes. I'm like, Rebecca, she knows. Oh, look, there it is.

Oh, yeah. There it is. So I actually... That's the pretty cleaned up version of it. As I was doing it, I had it broken down by years of like, If I put this much extra on it, I would be done by this year, this year, this year, this year. That's amazing.

Okay, let me jump in. If there is a single person listening to the news, and here's the reality, buying homes is expensive. It is. It's hard. It's a mad house. What would you tell that person who just feels hopeless?

There is hope. You just have to want it bad enough, like I said, to find the way to make it work. Don't buy more than you can afford. Sometimes you have to go further out than you want to go for your commute. Sometimes you might need to in a smaller house than you might originally want and work your way up. I was lucky enough that this was back when the market was a little bit better, and I have a good salary that my starter house is actually the house I just want to stay in. I don't want to move, but there were other properties available that were smaller and more reasonable that I could have started as a starter home instead.

You're amazing. Incredible. This grind is impressive.

Rebecca, so proud of you. Good to see you again. After all these years, I bet your family is so proud. They are.

My dad kept saying, Has it been paid off yet? I need to brag. I need to brag. Has it been paid off? My dad was so great, too, that there were things that I wanted to do project-wise in the house. He's a mechanical engineer and very handy. He would come help with some sweat equity.

Okay, well, let's do it. Because it's well worth it. The scream is well worth it. Okay, so we have Rebecca from North Carolina paid off $207,000, which is the mortgage, making $100,000 to 130,000, and did this in seven and a half years. All right, girl, count it down.

Three, two, one.

I'm debt free.

It's amazing.

So good. So good. Rebecca, man, that's it. That's the story. That's what you do. That is part of me. And seven and a half years later, you got no payments in the world. Nothing. Well done, Rebecca. I know your Our clients are proud, and we're proud of you, too. Our scripture of the day comes from Philippians 3: 17. Join together in following my example, brothers and sisters, and just as you have us a model, keep your eyes on those who live as we do. Alice Cooper said, Drinking beer is easy. Trusting your hotel room is easy. But being a Christian, that's a tough call. That is rebellion. Yeah, James. Alice Cooper?

James, stop trashing hotel rooms. Act like a Christian. It's harder.

He was a metal... What did you say he was?

He's one of the legendary metal singers of all time.

Is he part of a group?

Alice Cooper. That was the name of the band. Oh. That's his name, too.

I listen to Taylor Swift.

Dude, Alice Cooper.

I'm sure I've heard his song.

He rules, dude. Same as Taylor Swift. Just same.

Just all in the same. In the same genre. I'll take it. All right, let's go to... I got all... People are just shaking their heads at me. It's fine.

I don't know what world you live in sometimes, and it's so... I think we live in the same world.

I have no music world.

We sit by each other.

I have no music, genuinely.

It's like Taylor Swift and Backstreet Boys.

That's it. I'm going back in February. What? Give me like, pop 2003, and I am in my prime. Give me that. Okay. All right. All right, let's go to Sarah in Washington, DC. Hi, Sarah. Welcome to the show.

Hi. I will try to cut to the chase. My ultimate question is, should we rent or buy? My husband's active duty army. We move a lot, but it's never been overseas. We just found out we have an opportunity, a sliver of a chance that we might need to go overseas. It would be in Belgium. It would be for NATO. So usually in that case, we would consider living on post, but there is no post there. We would have to live in the community. Okay. We have rented houses. We've been married since 2020. So about five years, we have moved eight times in that course of action.

Wow, that's a lot.

We've been spoofed a couple of times. The first house we rented, we were in Missouri. We were paying rent on time, never late. We got an eviction notice in the mailbox one day. The homeowner was not paying the mortgage. We were paying them rent, and we weren't paying the mortgage.

Oh, jeez.

That was the first time. Then we've moved a couple of times since then while we were in North Carolina. We liked the house we were in. I was pregnant with our daughter, our second child, and we signed the lease to stay in a house. Then two months later into the lease, the owner decided to sell.

So we are a little- Yeah, you've been burned. That's what it feels like.

We took a call earlier from a veteran's wife who they had bought a house, and they were settled in, and then they got transferred to another part of the state, and they've been sitting on that house for a month.

And paying rent. And paying two mortgages. A crazy rent and a mortgage. So as much as you all have been burned in the past, which I hate, it's still the better financial move for you guys, especially if you're going to be overseas and you're not going to be there long term, probably, right?

Yeah. He has seven years before he's up for retirement, so this one year mark.

And you guys still have been moving. It's a possibility, but- Multiple times. I mean, yeah. So I would not, Sarah, just because, and especially overseas, I would just rent because number one, you don't know when you guys would be transferred out. And also, you don't even know what part of the city-ish you would even want to be in? Because do you guys have kids, little kids?

Yeah, four and two. Okay, yeah.

So I would even want from a... And I would tell you this, if you're moving to a new city, let alone another country, to know, Okay, this is the area I want to be for grocery shopping and for the kids in school. I don't know, all the things that life is. You could get stuck in a really crappy situation, a crappy side of town that you're like, No, we do all of our life over here, and we moved over here. We didn't know. So from a location perspective, I wouldn't buy. Then also from the investment side because, again, it's so short term and you need at least 4-5 years for a house to be able to run its mark after all the closing costs, all the stuff that you pay, and whatever the market's doing at the time, just to actually gain some equity to make it somewhat smart financially. No, Sarah, if I were you, I would definitely rent. But thank you guys so much for your service. That is a dedication of how much you guys have been moving and sacrificing. So thank you to both of you.

I think it's an important thing. We talk a lot about how grateful we are for the servicemen and women who are enlisted, but for every service person who's enlisted, not for everyone, but for many of them, there's also a spouse that has to pack up and move, and there's little kids that have to pack up and move at a moment's notice, often at great cost, financial cost. And so it's an honor to talk to everybody. What I have found in this situation, when somebody is getting moved a lot, is the temptation to make a decision that feels like I'm putting roots in the ground of some sort. And like you mentioned, it wouldn't be wise to go buy a house and a country you don't know anything about, and you don't know how you're going to be there. And so what we want to do is to create, where can we create roots in an alternative way other than in a mortgage? And so coming up with concrete family rituals is often a thing you can do. We never deviate from Monday mornings or from Sunday nights or from an evening meal together, whatever. But we're going to create home in these regular practices that we never deviate from, and we can carry those to all these different rent houses and across the country.

This becomes home for us until we can anchor into a geographical location. But it's not as rooted as a home. This is our land, but it is something that gives you some anchor point.

Now, that's a good point. Just the consistency to have the normal, the normal scene. All right, let's go to Katie in Washington State. Hi, Katie. Welcome to the show.

Hi. Thank you.

Yes, absolutely. How can we help?

My husband She and I are in disagreement. We're in Baby Sup, too, and we have a daughter that just started college, and he thinks we should focus on getting out of debt ourselves before we help her. But I'm terrified for her to even touch debt at this point. So I don't want her to take out any student loans. I'd rather cash flow it, but I know that would slow down our debt-free journey.

So you're missing option three, and you're not going to like it. But can I tell it to you anyway? Of course. All right. Here's the umbrella principle. Whenever you feel like you're forced into an either or decision, that's when people make bad choices, or choices that, I don't want to say bad, but they're not helpful. It's when people get themselves in trouble. And so whenever I feel like I have an either or decision to make, then I always want to force myself into a practice of putting four or five imaginary variables on the table that prove to me that I don't have to do this one or this one. So you've backed yourself into a corner, which is either our daughter takes out debt and falls right in the same trap we're trying to get out of, or we continue treading water so that she can go to college. Option three is you all sit down and have a honest, direct, loving conversation that is, we are not in any way going to support you taking on debt. Look at us. We're living that reality right now, and we don't have the money. And so we're going to be in Washington State, and we're going to...

I'm making this up. I don't know if they got it, but you're going to participate, at least in your freshman year- Free community college. In the free community college. Or you've got to start right now applying for every single solitary scholarship possible.

And maybe, Katie, how much debt do you guys have left?

We have about 150,000.

Have consumer debt, or does that include the mortgage?

That's just Do more debt.

Okay, yeah. Well, I mean, I'm a little bit more on your husband's team that you guys clean this up. Yeah, totally on your husband's team. And for her sake, like you said, still talking to her and having that conversation. But where can she go to school that's really inexpensive, which may mean changing. She may be in the middle of a semester somewhere.

Is she in school or is she a senior?

She's currently in school. She's a freshman in college this year. We paid for her first semester, and we're getting ready to pay for the second one.

Got you. Okay. I worked We're in colleges for years. Every semester, parents had this hard conversation with their kids, which was, We can't afford this past this year, and we're sorry, and we're heartbroken. Here's the truth and reality.

We're going to change it, yes. That's some big-time decisions, and it takes a lot of maturity, but it's the wisest path, Katie. All right, John, great show. Always fun hosting with you. Everyone in the booth. Thank you. Remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.