Transcript of Stop Letting Others Call The Shots With Your Money

Brought to you by the EveryDollar app. Start budgeting for free today. Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network in the Fairwinds Credit Union studio, this is the Ramsey Show. I'm Dave Ramsey. Rachel Cruz, Ramsey personality, I'm Robert Leonard, number one best-selling author, co-host of the Smart Money Happy Hour. My daughter is my co-host today. Open phones at 888-825-5225. Sam is in Boise, Idaho. Hi, Sam, what's up?

Hi, I have a question, and it is how do I protect our financial future without my husband 100% on board, knowing I can't change him? What can I logistically do on a day-to-day basis?

Um, you can't.

Okay.

There's not a wall that you can put up that protects your family from goals and values that are not aligned.

Okay.

They have to become aligned.

So he's just like slower to get on board than I am. So he's like making progress.

He's probably slower at everything than you are.

Probably.

That might be— you might just be a wee bit enthusiastic. Is that what it is?

That's pretty valid.

Okay, let's have a little patience with the poor guy. No, I'm serious. I mean, no, you can't change him, and we certainly don't want to change him into you. I don't want to change my wife into me. My wife is way slower to make decisions than I am. My wife is always gonna default towards saving, not spending.

And Sam, I'd be in your boat. Winston would be like your husband. As one of our therapists said, "I'm very urgent." And I feel that from you too. So, maybe we're— I can relate.

I get it. So, I mean, is that what's going on? Or has he just dug his heels in and goes, "Hey, the whole idea of saving money and getting out of debt's stupid, and I'm gonna spend everything." He didn't really say that.

No, I think he gets caught up in the urgency of, oh no, we need a truck, or oh no, we need this, or oh, my friends have this. And then all the long-term goals get thrown aside. And so like we've gone through the baby steps.

No, then we just sit down and say, no, wait a minute, wait a minute. We have long-term goals and we agreed to those. And you're gonna keep your agreement with me.

Okay.

You know, because in the moment, when you're not all hot and bothered about buying a new truck, your brain is actually working. But when you get all hot and bothered about buying a new truck, your brain shuts down, quits working. I know, 'cause I do it. You do too, everybody does it, right?

Yeah.

And so, what you— but you've just gotta be called back to when we were sane, and we were sitting at the kitchen table, and the children were asleep, and there was a candle burning, and we were doing a budget, and we were thinking about what things were gonna be like when we're 65, and we're 30. 35, and yes, we can buy a truck, but we have to do it in line with the way we said we were gonna run our lives. That's right. And you just call back to that. You call back to that. And Sharon and I do that to this day, and we've been working this stuff for 45 years, but we'll have to sit down and go, "Now, how is that aligned with this?" And we may have an argument to make about it, or Maybe there's a slight adjustment or something, but you can't just go off the rails and go, "Yeah, we've been working for 3 years to get out of debt, and I'm gonna screw it all up by going and getting a truck payment." Yeah, where are you guys at, Sam, financially?

Do you guys have a lot of consumer debt?

No, so we've paid off our debt twice now, and we're almost paid off with the third round. So we have a truck loan for $10,000 and a mortgage for $107,000, and that's it.

So the third time you went back in debt is what you're talking about?

Was the truck.

You just keep going back?

Yeah, we can't make it through Baby Step 3.

Yeah. Because mostly, I mean, not to like point the finger, but mostly 'cause of his purchases?

Correct, yeah, motorcycles, side-by-sides, trucks, and we're trying really hard to—

And you went along with those?

Behind my back, some of them.

Okay, that— yeah, this is not a money problem. This is a marriage problem. Yeah, you can't do things behind your spouse's back because you're afraid of your spouse.

Trying to avoid conflict just absolutely took the whole thing up in fire.

And it creates conflict.

Yeah, yeah, for sure. It was, it was definitely like the— he knew I like was doing the numbers and the numbers weren't gonna add up to another monthly payment. And so he did it anyway, 'cause he wanted the cool shiny toy. And so then we've—

That's breaking his word to his wife. That's a serious problem. Right.

Yeah.

Right.

And there's not, and if he is willing to do that here, then that can also move into other areas that he's willing to break his word with.

Right.

And so this is not okay. It's not an okay pattern.

Yeah, it's more of a, trust issue, right, when you get to the core of it.

Yeah. Which is everything against what your marriage is. "We agreed on this, and you threw a 45-year-old hissy fit and went and bought an F-150." Correct. Yeah, that's just bullcrap. Okay, that's not— now, I'm not gonna take up for him, okay? Instead, I'm gonna throw him in the marriage counselor's office and let them wail on him a bit about breaking the word to his wife. You cannot build relationship with people you cannot trust. Trust is the foundation for relationships. Broken trust breaks relationships, period. It's a foundational issue. It's basic psychology, basic relational IQ.

Yeah, and that would, I mean, send most people, should send most wives—

Into orbit.

Yes, and into a place of, of questioning everything.

I'm like, "Oh my gosh, okay, if you're doing this—" You lied to me about that, what else you lied to me about?

What's happening? Yes, like, what is breaking down here? And so, it's either him having to grow up and not only face the conflict, but also tell himself no, 'cause he's functioning like a child. And if something doesn't get turned around, right, in not only in your marriage, but him, It's just like a kid on the—

4-year-old kid on the cereal aisle throwing a fit 'cause he wants Froot Loops.

It's gonna continue.

Yeah, only he's 45 years old and he's got $65,000 on an F-150.

Yeah, so I would be—

I don't know why I'm picking on Ford today, but it could have been a Silverado, but you know.

No, but Sam, you know, I have Dr. John Delony in my head, but you know, when he always talks about when you're approaching these conversations, making it not a you statement, even though he's been doing the action, it would be very easy to be like, "You've done this, you've done this." What's going on in you, Sam? What's happening? The fear? The second question is, though— "I don't think I can trust you." Yes, I mean, what is going on inside of you, as his wife, and bringing that to the table, and telling him, "We need to sit down with someone and figure this out, because this cannot continue to be a pattern, where this becomes normalized." Not only just for the money's sake, but again, we're going deeper than that. It's for your marriage, and for the health of your relationship. "I don't wanna be your mother, and walk around behind you, and clean up your poop." No, because what you want on the other end is, is complete freedom and honesty and vulnerability and be like, "Oh God, I'm really, I'm dying for a new truck. Let's talk about it. Let's see if we can make the numbers work," right?

And then you kind of get to this place and you're like, "We can't right now, but let's map out a way that we can get there," like two grown adults. And that's what you want at the end of the day of you guys having the same set of values, maybe wanting to use your money for different things, but you at least have a plan that you're both working towards. And so that would be the goal, Sam, for you guys. And it probably will take a third party I mean, honestly, a counselor to kind of start that direction, that road to healing and getting you guys in a new set of value systems. 'Cause this is a mess.

Mm-hmm.

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Doing good, how are you?

Better than I deserve. What's up?

All right, well, I have an issue with a solar company. I was scammed into making a long-term deal with them, and I was trying to find a way I can get out of it.

How were you scammed?

Well, the sales rep, um, made promises to me that made me— well, I can say made me, but lured me to make the, make the deal. Um, he promised that I would not have an electric bill because the company that— am I allowed to say company names?

Let me hear the story. It doesn't matter.

Well, the company— he said the company was going to pay my electric bill in trade that I pay them for the solar.

Mm-hmm.

Um, he showed it to me from his iPad that the company was going to pay it. Um, and also that another thing that was that I could walk away after 5 years if it didn't work in my favor. So those things were kind of the biggest things that lured me to going on with the deal.

Were those things in writing?

Um, he did not have anything in writing. He had the— he told me his contract that he had that for me to sign was on his iPad. So he showed that in writing on his iPad, just not in paper.

And you didn't get a copy of that?

Um, he said they don't give out paper copies.

Or an email. Did he email you the document like a DocuSign?

Uh, no, he did.

He did.

He did not.

He did not. Okay.

I'm curious, why did that at the time, why did that bullcrap line not concern you? I mean, he says, oh, you can't have a copy of the agreement you signed. That would concern me from the moment he said that, regardless of what it was.

I agree. I saw it on the iPad. He said, "This is the contract." So I read it myself and I was like, "Okay, cool." And how long ago was this, Paul?

Has it been the 5 years or less than?

No, it was last April.

Okay, and so the 2 things are, A, you could get out of it anytime up to 5 years if it didn't work, and B, that they would pay your electric bill, and they have done neither, I'm guessing.

I found out in June— no, July of last year that they have not done either. They didn't pay the electric bill, and that's when kind of everything started rolling.

Yeah. And so when you confronted them about that and said, I need a copy of the contract that the salesman told me this, what did they say?

Um, they sent a copy of it. Obviously it wasn't the same thing that, uh, the salesman showed me. And they just were like, we're not backing out of it. We got you. And this is where we want to be.

Are they still open?

Um, the company that the financier company is, the company that installed it and that the salesman I worked for is under bankruptcy.

Okay, there's a couple of those deals. You need to check federaltradecommission.gov, FTC.gov. There's a couple of those deals that they have shut the solar companies down or they've gone out of business and they are releasing people from the liability of the finance contract because of that. You need to see if this particular company is one of those. I don't remember the names of them, but there There's two of them that are floating around out there. One of them was real big with the Obama administration. The whole thing turned out to be a scam, and they ended up dumping the whole thing. It was very embarrassing for the Obama administration. So if it's one of those, then, you know, it may be that it's— you just have to contact an attorney or contact the Federal Trade Commission, either one. But first thing I would do is go on ftc.gov, if I were you, and do a little poking around about that particular name and see which of the solar companies are having the debt forgiven because they were scams. This sounds like it could be one of them. If it's not, and it's, you know, and yours is not in that bucket, then I would contact an attorney.

And, you know, we would subpoena the— we would find the salesman who doesn't work there anymore because they're now bankrupt, but I would find the salesman and put him on the stand and invalidate the contract. You could. Because he put you into a contract on a fraudulent basis, and I think you can be released from that. I'm not a lawyer, but probably gonna cost you some money to do this, but, you know, some attorney's fees probably to get this done, and you're gonna have to push really, really hard on it, but it's probably worth it, 'cause it's probably a lot of money. But I don't have a magic button that you can push that's gonna make this go away easy. I don't have that one. The closest thing would be if you're one of those companies that the FTC has shut down. And so FTC, federaltradecommission.gov, that's the one you want to check out. And then get on the phone with an attorney if you're not one of those. That's what you would do.

Sorry, Paul.

Yeah. Now when I do something that leaves me vulnerable or hurts me financially, I always look in the mirror and go, just like Paul was, Paul owned his part of it, and say, okay, I did something stupid here that left me open. And so when someone says, oh, we're gonna do this but I can't put it in writing, let me help you with that. That's code for they're not gonna do it.

Yeah.

If it's not in writing, it didn't happen. And if you don't have a copy of it in writing, it didn't happen. It's just mist. Okay? And so, you know, don't get so freakin' ginned up by a salesperson or by your need to own a product, like I'm gonna get solar, to the point that you leave yourself vulnerable for that. And I've done a lot of stupid stuff, and every time I do something stupid, and it costs me money— and Paul, this is gonna cost you money. It's gonna cost you attorney's fees, probably, before it's over. Every time it costs me money, I call that stupid tax, and I have paid so much stupid tax in my 65 years on this earth. My goal with stupid tax is to never pay the same tax twice. If I'm gonna do something stupid, it ought to be a new stupid thing, not one I did before. And so since I have a whole collection of stupid things that I don't do anymore, now people call me wise. Mm-hmm. And that's where wisdom comes from. It comes from all the stupid things you didn't do, that you don't do anymore, that you learn from.

So at least go back and say, "Okay, as soon as that little butt said, 'You can't have a copy of it, it's only on my iPad,'" you should have tossed him on his head out the front door. "Get off my property, scumburger." You know? Instantly.

Have you ever been scammed? This was like a sophisticated scam with like a salesman and everything.

No, that wasn't a scam, it was just a lying salesman.

A lying salesman, fair. Salesman lied.

Yeah, I've been lied to by salesmen.

Have you been scammed? Have you fallen for a scam?

No.

That's good. Good for you.

No, not that I can think of. I can't think of one.

Okay.

I probably have, but I just can't think of one.

You know who scammed me last year?

Who?

The USPS, so I thought.

Oh, the text.

Do you remember they texted me?

Yeah, I got a text yesterday from them.

I get them all the time now, and I say, "I will not be giving you my information." Because I gave it to him.

No way.

Yes, I had to get it. You did? Yes, because I was legitimately expecting a package and it said my package was lost. And so you have to like enter in all your debit card information to pay a fee. I know, I know. I was waiting on my package.

Oh, Rachel.

Winston was like, "Babe, did you check out, did you look at the website?" And I was like, I mean, I copy and paste. It was, y'all, it was terrible. Anyways, I won't do that again. Fair warning. And I've saved a lot of people. I told this on Smart Money Happy Hour, George and I's podcast. And I've saved a lot of people. People will DM me and be like, I got the USPS text and I didn't pay.

Your mother got that exact thing 2 weeks ago and sent it to me and said, hey, take care of this. We need to get this back.

Yeah, I know.

And I went, uh, no, I'm not gonna take care of nothing. This is a scam.

So any calls, any texts, I learned my lesson. I don't trust them.

I don't trust them. USPS does not have your text number.

No, no.

Hint, neither does the IRS. HINT. Neither does a Nigerian prince.

HINT.

HINT.

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Ramsey.com/ramsey. Insured by the NCUA. Kim is with us in Nashville. Hi, Kim, how are you?

I'm great. I saved up, Dave, $1.6 million in investments. I plan to use it for my retirement. I've also been using it as my emergency fund. My question to you is, do I leave my 6-month emergency fund in my investment account, or do I pull it out and put it in a bank, or do I put it under my mattress?

In the sock drawer. Old school.

So it's more psychological than it is mathematical.

Okay.

Okay.

Mathematically, you would be fine to just leave it sitting there. You've got so much money, you've done so good. Congratulations, way to go, you're a multimillionaire. You've got enough money that if you need money, if you need $10,000 to, I don't know, bury a relative that died broke in Seattle, okay, and whatever, right? I'm making this up, right? But you could just reach over to the mutual fund and do a withdrawal. Right? Wouldn't be a big deal. And so mathematically, that's okay. I personally would coach you though to set and label something as an emergency fund. And that's psychological. And the reason is, I don't know if it needs to be 6 months, it could only be 3, that's fine. And just put it in a high-yield savings account at Fairwinds Credit Union or something like that, okay? And—

Okay.

Just something simple. And the reason is, then when an emergency hits, you don't stop and think, "Okay, is this a good time to pull money out of my mutual fund?" Because it could hit the day that Trump bombs Iran and the market drops 3% that day. And Kim's like, "I'll just get a pocket knife to swipe it." And then you go, "I think I'll just put it on a credit card and pay it off after the bombing is over." You know? This is the kind of crap that goes through our minds if we're only doing math. And it's almost always the way life works, you know what I mean? That the emergency happens at exactly the wrong time. That's part of why they call it an emergency. And so I like having that money sitting over there in a stupid, underperforming, high-yield savings account.

High-yield, they're not stupid.

It's not doing nearly as good as my investments. That's what I mean by stupid, okay? But its purpose is not to invest. Its purpose is a buffer for me to keep my hands off my investments.

Gotcha.

So that's psychological, right?

Yep.

If 100% of the time we all knew we would dip into the S&P index fund and pull the money out for the emergency, no matter what the market was doing, but we just don't. We always play these mental gymnastics with ourselves. And so, I have to trick myself into being smart.

Yeah, well, and for me, there's just like an ease to having that high-yield savings account. And we do, we have Fairwinds, and it's on the app, and we have that, and then we have a whole other, you know, high-yield savings account that we have for other savings that we're doing. But just that emergency fund, it's stayed there, and we've— We'll beef it up still. Like, one side, we still have that. And there's just, there is for me where I'm like—

The reality is you probably, honestly, Tristan, in your situation, in your situation, my situation, you probably, we have an emergency, you probably got it in checking. You're probably not even gonna touch the emergency fund. But having it there, there's just this weird little thing. And 3 months is fine. You don't need 6 because you've got a bazillion months in good after-tax investments. And so you're fine. You're not gonna have a problem. It's just a matter of remembering that personal finance is 80% behavior, and I have to account for behaviors when I make these decisions. So, it's an excellent question, by the way. And again, congratulations. I'm so proud of you. You've done so well. Millions of dollars. Wow! Very cool. Mm-hmm. All right, Bianca is in Tampa. Hey Bianca, what's up?

Hi, thank you so much for taking my call.

Sure, akwaba.

So my husband and I, we're so thankful we got introduced to Financial Peace University through our church. And I would say over the last year and a half, we've paid off all of our debt.

Wow.

Credit cards, student loan, my husband's car payment. And I mean, we've been kind of working on this before, but we just really started focusing on it after we enrolled in Financial Peace University. At Syracuse University. And so, we're at this point where we have our emergency fund set up. We're invest— we're doing retirement, putting money away for our kids. But there's a caveat of I'm still leasing a car and we didn't pay that off because we had this belief of like, it's not really mine anyways because we've just been borrowing it, leasing it. And it has $10,000 left on the lease for about a year and a half. And I'm wondering if I should just pay— that off?

Yes.

Okay. Should I buy out the lease? Is there any benefit to buying out the lease when the car is done?

No, you're buying it out now. Okay, so you think I should just pay it off? Wait a minute, is $10,000 the remaining payments on the lease or the buyout?

That's the remaining payment for the lease. The buyout is $42,000.

Okay. Do you have $42,000?

Yes, but I—

Do you like the car that much?

If you want the car, pay your car off. If you don't, then you need to sell your car.

And so, I guess because I don't own it, it's a lease.

No, you own it. Okay, it's an alternative method of financing, and it's a horrible method of financing. You have a car payment. We need to get rid of your car payment.

Okay, okay. So just pay off the remaining lease balance, which is $10,000?

No, you need to pay off $42,000, or you need to get rid of the car.

Okay. Okay.

One of the two. So what's your household income?

Um, we're around $180,000 a year.

Okay. Well, you're doing really, really good, except you did some mental gymnastics on whether or not you actually own this car, trying to not deal with it.

It feels like you're renting it though, is what the lease, like, psychologically—

No, this is not hers. This is not hers. This is Lexus. Okay. And so yeah, pay it off or dump it. It's just like you have a car debt. Just pretend like you have a car payment and a car debt, because you do. You have a car payment and you have a $42,000 payoff, and you have $42,000 in the account. Look at the car. Do I like the car $42,000 worth? If I don't, it's time to sell the car. If I do like the car, then pay it off and keep it. You can do that making $180,000. You're doing really good. Everything else, like you told me, is on point.

Yeah.

You just managed to do an avoidance technique here, and I avoid— I just sidestep that thing and just let it drive on by, and nobody Pun intended. Yeah. And so, yeah, but no, it's still there. So folks, here's the thing, and let's go deeper into her position, I guess, on this. Car leasing is now 78% of the new cars that leave the lot. And a car lease, when you back out the numbers on it, And a closed-end lease works like this: you have a series of payments. At the end of the payments, you then pay a lump sum to own the car, or you turn the car in. Okay, and that's— you can run a financial— put those numbers, that stream of payments and a lump sum, into a financial calculator as opposed to the actual MSRP, the sticker price, and back out what the cost is of what's called cost of capital in a lease. Okay. And that is your interest rate. On average, it's 14.2% right now. So you borrowed money at 14% to buy your car on payments, and the car company knows that. That's why 78% of them leave the lot right now are leases.

They make more money on leases than they do putting you on payments.

So there's more leased cars than just having a car loan?

Yep, yep. And not included in the car debt that we're seeing increase. You know, we've noticed that a trillion— we hit the trillion mark the other day with car debt. That's not even in the leases because leases are not technically, as she pointed out, considered debt. However, it's exactly what they are. It's a contract to pay payments. That's debt. And it's at a 14% interest rate, cap— cost of capital. Okay? And so, and guess what? They don't disclose the interest rate. You know why? Federal Trade Commission disclosure regulations do not apply because it's not considered borrowed money. So they're sidestepping everything and screwing you people. Hello, Ford Motor Company. Hello, General Motors. Hello, Toyota. You're screwing people and you're getting away with it.

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Tristan is in Savannah. Hi, Tristan. How are you?

Hey, brother. How you doing?

Better than I deserve. What's up?

Hey, so my wife and I are getting married next month, and we're blessed to be in a good financial position. But my question to you is, if you're starting over, what principles would you follow to build a strong family and lasting wealth over time? Over the next few decades?

Wow. That's an 8-hour seminar. It's a really good question. There's a lot of layers to that.

I agree. And are you asking beyond money, Tristan?

Yeah, he said strong family.

Yeah, yeah, I agree. I agree it's beyond money. We're blessed to be in the position that we are financially, so money's not really an issue.

The way the Ramseys I would view this at my house is it would start with a foundation of faith. And so we would start with a spiritual foundation and say, "All right, God is in charge, and now let's learn what he would say about these things." And that's where a lot of the things we teach here on the air have come from, is from scripture. I mean, we present them in a non-scripture, non— Non-Christian way. In a weird way, but most of the time. But the, but you know, it comes down to, okay, how are we gonna do this? So an example of that would be, one of the things I learned when I started over was that I didn't ask my wife's opinion about anything. I just went and did whatever I wanted to do. And she was okay with that 'cause she was raising babies and I was running a business. And so she didn't really wanna go look at every piece of real estate I was buying. I was in the real estate business and I didn't ask her opinion. And so that's a huge mistake to not be constantly communicating about the items in our life.

And so, "Who can find a virtuous wife? For her worth is far above rubies. The heart of her husband safely trusts her, and he will have no lack of gain." And so once Sharon and I got aligned with, I don't make big I make big financial decisions, she doesn't make big financial decisions, and we're in agreement on a budget without the two of us knowing everything and being aligned on that. And so, you know, I had some 14-year-old Sea-Doos at the lake house, and so I bought new Sea-Doos the other day at the lake house to upgrade for the grandkids and everybody to ride on. But I didn't, you know, just call up the Sea-Doo dealership and go, "Bring me some Sea-Doos." Mm-hmm. I said, "Man, one of them's messed up. We're getting some work done on them. We talked through what the situation was. It looks like the stupid things are, you know, time to upgrade. And we got the money. Any issue with that?" No, none whatsoever. But she did not walk down on the dock and go, "Are those new?" That didn't happen that way. So we're in agreement, we're in alignment.

That's a big deal. And that has saved me. Like, we don't make large, generosity plays, philanthropy. We don't write large checks to ministries in support of them without us both talking about it and praying about it. So we make decisions together. That's principle number one.

Mm-hmm.

And that's a big deal. That's saved me a lot of angst in my marriage and my relationship, and it's also saved me a lot of money because it kept me from doing some stupid stuff I would have done probably on my own without her speaking into it. She might have done on her own without me speaking into it. So, I think that a spiritual foundation, and out of that comes things like, "I will have no lack of gain if I listen to my virtuous wife." Mm-hmm. And so, out of that comes, you know, "A godly man leaves an inheritance to his children's children." And so, I'm going to plan an estate that changes my family tree, and that includes the character of the people I'm leaving the money to. If they're of poor character and I leave them money, it ruins their life. Because you become more of what you are when you get more money. And so, and we started talking about that to Rachel Cruz when she was 3 years old, to her brother and her sister when they were 3 years old. So, you know, you have to be a worthy steward.

Mm-hmm. You know, and if you're faithful in the little things, you'll be given more to manage. This is a teaching for your children. So I'm gonna teach my children to give so that they don't think the whole world's about them. They're not gonna be entitled little brats, right? It's not about you.

Yeah.

You know, and so I'm gonna teach them to be givers. I'm gonna teach them to save, which is a sign that they have some discipline and they can delay pleasure, which is a sign of emotional maturity. I'm gonna teach them to spend and enjoy their lives. Because our heavenly Father, if we being evil know how to give good gifts to our kids, how much more so the blessings come from him. And so all of these things come out of that whole mindset. So Rachel, you kind of sat and experienced that, I guess, on the other side, being raised in that environment— imperfect, not perfect, but we had a— it was very intentional.

Yeah, very much so. And I think, you know, money can easily become an over-safety net, if you will.

Yep, yep.

And so, you have to be careful of this balance. And that's why the generosity piece, I think, is really big. I feel like it does— it keeps you in check. When you write a literal big check to something, there's something spirit— there's something that just happens in the character of who you are. So, that generosity piece, I think, is huge. And that plays into the character of you. You know, generous people, are usually pretty humble people. The definition of humility, I think it came from Rick Warren, but he said, "Humility is not thinking less of yourself, but it's thinking of yourself less." This way of servanthood and looking at others, right, and what's going on in them, and it's not all about you. 'Cause money can easily become the center point of your life, 'cause you have the ability to go do whatever you want, because you have the money, right? And so, that— it can easily become that your life is about you, that orbit. We put him back. Tristan, I was gonna ask you, is this— do you guys have kids? Is this your first marriage, or you got— where you—

This is our first marriage. We are both faith-based.

Good, good. How old are you guys?

I am 29, she is 25.

Okay. Yeah, that's great. And I'll just say, for Winston and I, I feel like one of the things we've learned, and we've been married 16 years, so there's a lot of people been married much longer than us, that probably have more thoughts on the marriage piece. But I have found the healthier we are as individuals, the better our marriage is. Like, when I find that Winston is like working on himself, and he's doing work over here, and if I'm doing that, learning and growing over here, like, there's something about that where I think for a little piece of me getting into this, I thought marriage is the missing link, and that's what's gonna like create this better person of who I am. And I think the more we've gotten into it, the more I'm like, "Wow, when Rachel takes care of herself, she's like, which is a better version of her, and same with Winston. And it's created a healthier marriage when that's been our perspective. And so, there's something great in that. And then, the thing that you told us, you told me early on in marriage, which I loved, was just serve each other.

I think I was so worried about the roles, and who's supposed to do what, and what marriage formula is supposed to look like. And I remember you said, "Dad, just serve each other." And there's something beautiful in that each of you has a voice, "Each of your opinions matter." And so, there's not— that hierarchy really wasn't— I didn't see that as much with you and mom. It was a very equal level playing field with each other as a son.

Yeah, by the time you were old enough to see it, that was there. That's how it's been around. It wasn't what I just described.

Exactly, yeah.

Before you were born, it wasn't.

But I think that's big. I think that is, for each of you to feel like you are heard and respected is big.

Yeah, "Submit yourselves one to another." says in Ephesians. Okay, that's serving each other. You know, and so, I'm gonna put your needs ahead of mine. I'm gonna put the needs of the—

Family.

Family unit ahead of my own little selfish desire for a new pair of shoes, or purse, or a gun, or a car, or a fill-in-the-blank thing. And there's nothing wrong with any of those things. By the way, Ramseys have all those things. Sharon this week, Dave this week, you know, every one of those things. But those are not ahead of the good of the family unit's goals. It's not ahead of— they're not gonna interrupt my generosity because I bought too many guns.

Right, right.

They're not gonna interrupt my generosity 'cause I bought some Sea-Doos.

Yeah, and another myth that I think we can kind of get into as well is that if I just have enough money, there's a level that problems, for the most part, kind of go away 'cause I can just fix them. You know what I mean?

No, the more crap you own, the more repairmen you have to know.

Well, that, but also, like, you're still human. People, you know what I mean? Like, it's still— life is still gonna happen. And so, it's not this over-safety net, like I was saying earlier. And there's something that I think, I don't know, we can kind of creep into. And then you're like, "Oh gosh, but it's not like I don't have anything." It's almost we're worshiping—

we're getting our— we see God is— you don't say, "God is my provider." You say, "My mutual fund is." Yeah, right, yeah. And that's a dangerous spiritual ground.

Yeah.

Yeah, I agree with you completely.

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Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. Kim is in Baltimore. Hi, Kim, how are you?

Well, I've been better. So I'm sort of in a crisis situation at the moment, and I really need some advice. I'm a 53-year-old stay-at-home mom. I've been married 23 years. About 3 years into our marriage, my husband asked me to quit my career to help open a business. So, I did so. I worked in the business with him for about 2 years.

Yeah.

And then, we got pregnant, started a family, had kids. So, I've been staying at home with the kids for the past 17 years. Since then, he's controlled everything. He doesn't let me have access to any kind of accounts. I know nothing. He doesn't let me have access to anything. I get an allowance on the credit card once a month. Month. Once that allowance cuts off, um, it's done for the month and I have to wait for the next month to have money again. That allowance is supposed to cover my gas, everything for the kids, food, stuff like that. Um, it's not a very generous amount. Um, he, um—

How long has that been going on?

Oh, that's been going on the better part of the 17 years, pretty much.

Why have you tolerated it for 17 years?

Because I'm an idiot. I was scared. I've been scared.

What are you scared of? Him?

I'm scared. Yeah. I'm scared of him. Yeah. And I'm scared like anytime I go up against him, he punishes me by like taking stuff away or making my life even harder. Um, and anyway, I have no access to anything. Um, and, um, he used to text message even with the credit card.

How long has he been hitting you?

He doesn't hit me. He's all verbal. He doesn't hit me at all. It's just verbal and financial.

Mm-hmm.

Where is your family?

They're all gone. I don't have anybody. And he has parents locally that will stop at nothing to help him.

Wait a minute. I'm not care— I don't care about him anymore. So your mom and dad are gone?

Yes, they've been gone for 20 years.

Your siblings are gone?

My sister, yes, she committed suicide. I have one sister, but she's basically not anyone that could give me any support. She's an alcoholic and not in a good place.

Do you have kids, Kim?

Yeah, I do. I have two kids, twins, boys.

Wow.

That's right, you got— yeah, they're 17. Um, but, but this gets worse. So anyway, um, I recently found out he's having an affair. Um, secretly behind my back. Yeah, right. Secretly behind my back, he's in the process of opening a second location of our business with her so she has somewhere to work. Um, he doesn't know that I know any of this information yet. Um, he recently went to the bank to get a new business loan to open this shop. Um, I don't know how that's going to play into like debt, you know, like is he opening this shop and making it look like he has more debt and, you know, wanting to divorce me? I did see that he had reached out about looking to get a divorce. With an attorney. His father is his accountant, and him and his father hide everything. Basically, they make it look like the business is a loss every year, but every single thing that he buys, right down to his ED medication, goes on a business card. So, he's paying for everything with business expenses, but then claiming that he doesn't make anything. And like I said, his dad and him hide all of this.

Okay. So right now I'm in the house with him. He doesn't know that I know that he's having the affair or starting a new business. Um, I don't know what to do. I don't have any funds to get an attorney. In fact, he's laughed at me before in the past when I brought up divorce and he laughed in my face and told me that I don't have access to money and then I could never fight him because I can't afford an attorney. Um, and he's right. So I don't know what to do right now. I don't, I have so many legal questions to ask.

Yeah.

I don't know. Let's first establish that he's full of crap, okay? You have access to all kinds of money once your attorney shuts him down and takes half of what is in the accounts. And then in Maryland, they'll do that fairly quickly. And so, you know, if you get half of everything that's in his accounts, you got plenty of money for an attorney to fight him for years. He's bluffing or he's an idiot and doesn't know what he's talking about, or both. But he's just got you buffaloed, is what we would call it, got you cowed, and you believe that he is stronger and smarter than he is, and he's not.

Great.

He's not that bright, he's not that smart, and he doesn't have the law on his side. So yeah, you do need an attorney, and you do need to leave. As soon as you possibly can, and you do need to load the kids up and take them with you. But we just gotta figure out where you're gonna go. Are you gonna go to a domestic violence shelter? Are you gonna call your church, talk to your pastor? And then you get on the phone once you get out of there and find some legal counsel that will take on this guy, because legal counsel can get paid. They just gotta get paid out of those accounts that he has control of, and it's very possible, very easy. Mm-hmm. Now, you can't give them a $10,000 deposit up front, because you don't have $10,000, okay? But you can explain to them what's going on here, and some good divorce attorney would kind of think this is going to be fun.

Right.

Mop, mop, mop the floor with him.

I know there's a good local attorney I've called. I have an appointment with her, but it's her first available appointment. It's not until August 18th.

Well, call her up and tell her you have a a toxic, abusive situation, and you need to move the attorney. You need to get an appointment sooner.

I've told them that. That's the first they have. I've tried a couple times. They did put me on a waiting list.

Well, then call another attorney. Call another attorney.

Okay.

You have to be done letting other people set the agenda in your life. An attorney that can't see me till August might not be my attorney. A guy who won't give me any money might not be my husband. A guy who has an affair, probably not going to be my husband. The accountant who's his father and is committing fraud to avoid taxes might go to jail.

Right.

I mean, by the way, tax fraud is criminal.

Right.

So what you were describing there not only doesn't survive an audit, but if the IRS proves it's intentional, then all players might go to jail, the accountant's father and the moron husband. And so, you know, maybe he— maybe a call to the IRS and say, hey, you've got some players over here y'all ought to check out.

Am I correct in my thought that he's not legally allowed to be putting all this stuff on business expense?

Like, I mean— That's what I'm talking about.

Everything.

That's what I'm talking about.

I mean, that's not legal, right?

No, it's not. And at a minimum, it doesn't survive an audit, and a maximum, it could be criminal.

And depending if, yeah, if they're hiding income and revenue from the company so they don't pay taxes, that—

Yeah, that's criminal.

Right.

There's tax avoidance and then there's tax fraud. There's two different things, okay? So anyway, but that's not, that's not the issue here. You know, that's just is one more notch in the belt that says this is a bad guy. It doesn't really affect you because you're not going to be there anymore.

Right, right.

So yeah, do you— are you involved in a church at all?

I am not.

Okay. All right, hang on. I'm gonna have Christian pick up and we're gonna hook you up with one of our financial coaches in the area and get you plugged in with a good church and get you plugged in with some good attorneys and see if we can't get you out of there pretty quick because this is— this is done.

Terrible. I'm so sorry.

Horrible situation.

What you've described is not something anyone should stay in. Mm-hmm.

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John is in Minneapolis. Hi, John, how are you?

I'm doing good, how about yourself?

Better than I deserve, what's up?

Well, I wanted to kind of pick your brain on my situation. So I am debating filing bankruptcy, getting a secured credit card to potentially buy my first house in 2 years. Right around COVID, I got myself into about $12,000 worth of debt. And I could pay $1,500, file Chapter 7, and start saving now. It is relevant to say that I got a better job since then. I now make anywhere between $10,000 and $25,000 a month. But I also have a girlfriend—

You make $10,000 to $25,000 a month and you're worried about $12,000 in debt?

Yeah.

You realize how lame that sounds?

I know, I know. Yeah, but I'm also taxed at a heavier rate because it's—

Whoopie! You make $25,000 a month. You could have lived on $12,000 and paid off $12,000 in one month.

So you don't think it's worth it to save the money?

Oh, I think it's asinine. You make so much money. Hey, go pay your bill, dude.

It's up and down, Dave.

Well, between $10,000 and $25,000, cry me a river.

$120,000.

To $250,000.

John, you got $12,000 of debt, that's it.

You didn't call me with $1.2 million in debt.

Right. I guess it does sound silly.

Yeah, okay, so let me back up, let me back up 3 steps, okay? This money, this income is very new, isn't it?

Yes.

Yeah, and that's why you haven't done the calculation I just did. Okay, so if you make $10,000 a month, that's $120,000 a year. If you make $25,000 a month, that's $300,000 a year. So you're making $150,000 to $300,000, somewhere in there in the coming months, but your brain has not caught up with that math yet because you've never made that before, and you certainly hadn't made it lately.

Right, and well, I'm also, so my girlfriend has good credit, and I'm trying to get mine back on track, but I have to take care of this debt first.

Well, the bankruptcy won't help that, John.

Bankruptcy puts you out of the house business for 2 to 3 years. And by the way, they're not gonna let you file Chapter 7. There's a means test when you go to file a Chapter 7, which wipes all the credit card debt out, and the means test says, looking at your income, do you have the ability to pay this back, and the judge is gonna say, is gonna go, "Uh-huh," and they're gonna throw you into a Chapter 13 for 5 years. So your plan's not gonna work even if I would go along with it, and I'm not gonna go along with it 'cause it's not good for you. So what would be much better— so you were making nothing before, hardly. I mean, you must have had no income, had a low income before, did you?

Like 6 to 8 grand a month, yeah, it wasn't that much.

Well, that's more than I was thinking.

Not bad, John. What's your lifestyle like? I don't understand.

What are you doing with all this money?

If you don't have a house, how much is your rent?

My rent is only $900. And I had a repossession of a vehicle, and I've since cleared off a lot of my debt, but I still have this chunk hanging. And I went down, I bought two used cheap cars that we got in on trade at the dealership, so I had good deals on. And so I haven't been able planned on— that's what I kind of do, is just plan on keep paying cash for vehicles. But my girlfriend, I want to upgrade her vehicle, and I'm also helping her wipe out her credit card.

You're talking about filing for bankruptcy and upgrading your girlfriend's vehicle in one sentence. Like, no, no, I think your priorities are all over the place. Do you feel that? Do you feel chaotic?

Do you sell cars for a living?

I'm a finance manager at a Ford dealership.

Okay, I thought so. Okay, all right, so let's slow down a little bit. All right, girlfriend has started to become, in this conversation, high maintenance. She wants a car, she wants a house, she gets—

She doesn't want a car, but she—

She gets nothing until you get your grown-up life straightened out, honey. You got to get your grown-up life straightened out, and you don't be buying cars for people you aren't married to and buying houses with people you're not married to, and you certainly And you certainly don't do that to make them happy, because they're not worth being married to if that's what makes them happy. So, warning, warning, warning, okay? So, now, so we're gonna set her aside and let her have her little life while we date her, and we're gonna look at John. Now, John makes $6,000 to $8,000 to $10,000 to $25,000 a year. Okay. $10,000 a month. So I want John to sit down and say, do the math. You know how to do math. You're a finance manager, for God's sakes. Sit down and do the math and say, "Okay, where is my $10,000 going? Where is my $12,000 going? Where is my $8,000 going?" And then make it behave. I want you to buy food, shelter, clothe— you have $900 rent. Very good. Made good, okay? Pay the cars off. Any car that is in your name needs to get paid off or sold, and you need to clear these debts.

Now, then, as you know, you're sitting in the chair looking at credit reports every day. Credit reports age out. Anything that is not a bankruptcy stays on 7 years, but approximately 3 to 4 years out, an old repo, an old defaulted credit card that has now been paid off and made good, an old repo that has been cleared up and made good, the debt deficit has been negotiated out, all of that that's 3 or 4 years old hardly counts against you anymore. It might bump your credit score, but you can go get a house. But you need to put these things all paid off, all cleared, so you can get the credit report clock ticking, because when they tick off 7 years, they will all disappear.

Right.

But Chapter 7 bankruptcy's 10 years though, my friend. It stays on there 10 years. And when you have them fill out an application in your office at Ford to get a Ford Motor Credit loan, it doesn't say if you filed bankruptcy, it doesn't show up on your credit report. It says, "Have you ever filed bankruptcy?" That's— and if you say— Right. And if you say no and you have, that's fraud. So the answer is—

Oh, yeah.

You've— for the rest of your life, you have to say, "I filed bankruptcy," while I was making $15,000 a month and I had $12,000 worth of debt. That would be stupid. You don't want to do that.

I'm at a loss for words. That doesn't—

Really?

I'm just confu— I just don't— I just can't get in his brain. I'm not sure. I don't understand his logic. Girlfriend. Girlfriend. No, uh, Maybe.

She wants a nice car, she wants a nice house, and he wants to impress her.

But that has nothing to do with him filing bankruptcy. I mean, like, I just don't know—

He thinks it's the shortest way to get there.

Of all of it, though, I don't— it just, yeah, it just makes no sense. So, yeah, John, I would make it a goal, live on $4,000 a month. It's plenty with your rent, lights, cell phone, insurance, and throw $6,000 this month at the debt, and the next month the same, you're completely debt-free. Get an emergency fund. And I would work on John. There's a lot of, "She need—" You said, "She wants a new car." He's like, "No, no, she doesn't want to. I want—" There's a lot of ego in all of this. I would do some work on John, if I were you, John. I would. I'd get to the bottom of what some of this that you're grasping at. You're grasping at a reality that's not there. And it's so interesting to hear you talk about it because I I don't know. I don't get it. I'm at a loss. I am at a loss.

Yeah.

And I think our audience is too. Everyone just, we all just kept looking at each other like, I don't get it. I don't know. I don't know.

Well, it's interesting.

And bankruptcy is the most extreme. I think that's it too. Bankruptcy is the most extreme. I think if he called and was like, I don't know, I'm thinking about doing debt collections and letting it go, you know, letting it go to be bad debt and be sold and try to negotiate it. Like even that, I'm like, okay, that's not a smart thing to do. Thing. But bankruptcy, I'm like, that's just the most— one of the most extreme things that you can do to yourself financially.

But somebody on TikTok told him that in 2 years, he can get a house if he has no debt starting today. And the best way to get rid of the debt is bankruptcy. And all of that, of course, was TikTok law, which doesn't— isn't real law and isn't how bankruptcy really works. There's a means test.

You were very empathetic with John.

When you go in, when you go in, I'm not, I'm not. I'm just trying to make sure he hears me. That's all.

John, we are for you. We are for you.

We want you to win.

Yeah, I don't want that to be shameful.

We're just confused by you.

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Today's question comes from Max in Ohio. "I am a 70-year-old retiree. My wife and I prepared well for retirement and have no debt, including our home. I would like to lease a car for 3 years and then give it back and repeat the process every 3 years. At our age, I don't want to worry about paying for car maintenance. Considering that we can easily afford this, this, is it okay for us to lease rather than buy a car?

Leasing a car does not get rid of maintenance. You're still responsible for the maintenance. You're thinking because you're driving a newer car, you're not going to have any—

Oh, he said paying for maintenance is the— I wonder if the warranty is—

Maintenance is not included in a lease.

If the warranty for—

Well, the warranty would be on the new car whether you bought it in cash or whether you leased it. And the quality of the car not needing as much maintenance might be what he's referring "I want to drive a nice car so I don't have to worry about—" Well, he just said, "Not worrying about paying for car maintenance." Paying for it, which is silly. Well, you do pay for car maintenance, but you don't have to pay for it if there's not much. Like a brand new car, you don't have a lot of maintenance on it.

Yeah, that's true.

So, that's what I'm thinking he's thinking about. "I want to drive a nice car that doesn't require a lot of maintenance." A lot of maintenance, yeah. Okay? If that's what you're saying, it's ridiculous to do it the way you're talking about. You should just buy the car and go buy a brand new car. It sounds like you're a multimillionaire. If you're a multimillionaire and you want to go buy a $100,000 car, go buy a car. Just write a check. And then 3 years later, if you feel like that car's getting old, then write another check, get you another one. And you're going to take a loss on that car, but you're going to take a bigger loss if you lease it. Because 100% of the loss in value is built into the lease. So whatever you would lose by buying a new car and trading it every 3 years— You're paying for in the lease. You're going to lose more than that by leasing because the lease cost covers at least that plus a profit, plus a cost of capital.

And the interest, yeah.

Yeah, so your theory breaks down. And if you think that leased cars have less maintenance than cars that are paid for that are the same exact car, they don't. And there is no lease maintenance program. Now you could rent one at Hertz, and Hertz will keep it, but that would be like super expensive, right? If you want to go over at Hertz or Dollar Rent-A-Car and rent you a car the whole time, they'll maintain their car, but you're gonna pay through the nose for that, obviously, and that's not what you're talking about. So I'm thinking that what he's talking about is that a nicer car doesn't require as much maintenance.

And if I get a new car every 3 years, I'm not gonna have as much to do.

Yeah, and I don't have to worry about it. And if you can afford to do that and you want to do that, I don't have a problem with that at all. It's just you're losing a lot of money. In the first 3 years is when a car loses its most value, because cars lose 70% of their value in the first 5 years. And so a $100,000 car becomes a $30,000 car in 5 years. And so that's burning cash. But if you got a lot of money, you can afford to do that, okay? I just bought a brand new Ford Bronco Raptor package, okay? But I can afford for the thing to be worth nothing in a few years. I can afford for that. It's not gonna affect my life. I've got enough margin. And if that's you, you got enough margin and you want to do this, I'm fine with that. You know, that's why you've worked. But don't— Lease it. Don't lease it. No. No, no, horrible, horrible, horrible, horrible. Did I mention that it's horrible? Rachel is in Huntsville. Hi, Rachel, what's up?

Hey, Dave. Okay, so I am newly married and we are in the process of blending a family of 5 and getting a mortgage, taking care of a rental property, getting it set up to be rented, and still on Baby Step 2. So right now my question is—

Wait a minute, rental property, one of you that had the house that's gonna become a rental property used to be your house?

Yes.

Why don't you just sell it?

So he, um, that could be a possibility.

Yeah, it is a possibility. Clear up all your debt.

So it's a tiny home and it probably wouldn't clear up all the debt. It might bring $130,000. And so the house that we're in, Now, um, it's, you know, it was a fully remodel, so I have to refinance it because I have a HELOC on it, a personal loan, and the original $60,000 mortgage. So I—

Yeah, but if you sell, how much other debt do y'all have other than what you just mentioned?

Um, I have it all out. So like $9,000 in credit cards, $7,000 in student loans. An $18,000 car.

Okay, and that's not— and then on the house, you've got a first mortgage. It's how much?

$170,000.

$170,000. And the HELOC is how much?

No, the first mortgage is $60,000.

I'm sorry, $60,000. And the HELOC is how much?

$88,000.

$88,000.

And a $15,000 personal loan. So $170,000 total is what I owe.

The personal loan is on the house?

Yeah, I was just in need extra that didn't want or didn't have it in the HELOC.

$75,000, $150,000, so $200,000. What's the house worth?

$235,000.

Woo! Okay, you maxed this thing out, didn't you? And the tiny house that's worth $130,000, what's owed on it?

Nothing.

Oh, perfect. Sell it. Clear up $97,000, $18,000, $15,000, and then refinance the $60,000 and the $88,000 on a 15-year fix.

Okay, I mean, my husband is really wanting the rental income. I already have someone—

That's stupid. We're gonna borrow on your home, your $235,000 house, to buy a tiny house for rental income. Gross. No.

Yeah.

And it's effectively what we're talking about.

My original question was, you know, like, right now with the mortgage, was I gonna do a 15 or a 30, and I want—

You're gonna do a 15 because you're gonna get rid of all this stinking debt.

Yeah.

When you only got 60 and 88, you know, you only got 60 and 88, and that's your only debts, and you refinance those on a 15-year fixed right now, you're talking about 5.5 or so.

Which is pretty wild, Rachel. Yeah.

5.75, you're gonna be in great shape. You're gonna have no payments anywhere. You paid off your car, your student loan, your credit card, your $15,000, and and woo, we're free. We don't trade a tiny house for anything.

Even though the tiny home may only bring $130,000?

I know, but you owe nothing on it, right?

Right.

Okay, so $130,000 in my hand will pay off $15,000, $9,000, $8,000, or let's see—

$9,000, $7,000, $8,000.

You can even pay off a bunch of the HELOC. Pay down the HELOC.

So don't even do a refi of a mortgage.

I think you could pay off the HELOC and everything else and only have your first mortgage.

Mortgage?

Yeah, with $60,000.

What's your— what's the interest rate on the $60,000?

Uh, 7.5%.

A little rough. Yeah.

And the new— the ones that I'm— the ones that I'm looking at right now to do the refi of the house, HELOC and personal loan, um, the 15-year is 6.625% and $1,700 a month.

Yeah, yeah. I wouldn't do that. I'd sell the tiny house and be debt-free with $60,000 owed on my home, and then the thing is 100% free. Get on a budget with your new husband, the two of you throw your incomes in together, and let's go get rich.

Yes. And then if you guys want to buy a tiny home and rent it out in a few years, you can do that. Well, if they want to. Some people want to. Dave doesn't want to. Rachel may want to. You, Rachel, you may want to.

Yeah.

Well, but if y'all do, just do it with cash. It like, this is your ticket out.

A tiny home has a tiny market. Nobody wants it.

Yep.

That's why they're— that's why they're— geez, it's just a fad. Yeah. No, no, no. I'm— if you get $130,000 ready for that thing and clean up all of this.

Yes, that's your ticket.

This is definitely what you want to do. And then you ask yourself, would I take a loan out on my home that has a $60,000 mortgage to buy a tiny home to rent? The answer would always be no. And effectively, if you don't sell it and do all this, it's the same thing. Let me tell you something I see happen way too often. People fall behind on their bills and they wait. They hope it will work itself out. It won't. That's why I recommend Guardian Litigation Group. Here's the deal. If you've missed payments, collectors are calling, or if you're getting letters threatening legal action, that's not something to ignore. That's the moment to deal with it. Because when you do nothing, it escalates. They can take you to court, and if you don't respond, they can win by default, and that gets expensive fast. Guardian Litigation isn't a call center. They're an actual law firm. From day one, you're assigned an attorney to represent you. So if things do escalate, you're not scrambling and you're not hit with surprise legal fees. Guardian Litigation only gets paid when the debt is negotiated and you accept accept the settlement offer.

This isn't about shortcuts. It's about dealing with the problem before it gets worse. Go to guardianlit.com/ramsey today. That's guardianlit.com/ramsey today. Attorney advertising. Results may vary and no specific outcome is guaranteed. All right, here's a technique that will help you— it's helped me a lot— make decisions like our last caller's facing. And it's one of the reasons you will hear me be so incredulous and so quick and harsh to judge on some of these things. Something because it's the technique I'm using. I'll just share it with you, inside baseball. Okay, here we go. It's called a sunk cost analysis. A sunk cost analysis is simply this: you don't make decisions based on how you got here. You make decisions— that's the sunk cost— you make decisions based on where we're going. Mm-hmm. So 5 years from today, what do you want your life to look like? Not 5 years ago, all these things happened. You don't do your analysis based on all the trauma or the bad decisions or the— what you thought was a good decision, but now that you're married, it's not a good decision anymore because you don't— wouldn't do that if you were married and all that kind of stuff.

So all that matters now is we're getting married. Married and we're moving forward together. She's got some kids. She has a house. I have a tiny house. Okay? That's all that matters. How we got here or what my little dream was prior to this doesn't matter anymore. The second— and the way you can determine the— okay, what's gonna put me in the best shape 5 years from today is to reverse engineer where you are. Okay, and you ask yourself the question, "If I, instead of that item, if I had that pile of money in the middle of my kitchen table, would I buy that item?" You can do that with anything.

Mm-hmm.

You can look up, like, you know, there's an old joke that says there's two great days of owning a boat, the day you buy it and the day you sell it, right? Which means that usually by the time people get rid of a boat, they're sick of their boat. Boat. Now, I'm a boat person. I've got a couple of boats, and I'm not sick of them at all. They're excellent boats. They're Mastercrafts, world's best ski boat. There's an advertisement for you. And, you know, so, but, um, but I'm not sick of them. And so, but I do know what they're worth. And if I look down on the dock at that boat and I say, that boat— That's not true. I won't make— I won't use real numbers, but let's just say that boat's worth $40,000. "Okay, and if I had $40,000 in the middle of the table, kitchen table, and I didn't own that boat, would I go buy that boat today?" If the answer is, "No way," then sell the boat, because you'd rather have the $40,000 than the boat. That's the reverse engineering of it. Yeah, yeah. Okay, so if you look up at her situation and you say, "I can rent out my tiny $130,000 tiny house," house for $500 a month.

Meanwhile, I can pay payments on $9,000 worth of credit card debt, $7,000 worth of student loans, $18,000 worth of car, $15,000 worth of personal loan, and $88,000 worth of HELOC. That's gonna— those payments are gonna be a lot more than the rent that that tiny house will bring in, and that tiny house being sold will clear up all of those payments. Okay. So the way you would reverse engineer that and say, if I didn't own this tiny house and the only way I could buy it would be to borrow $88,000 on a HELOC, $15,000 on a personal loan, $9,000 on a credit card, $7,000 on a student loan, and $18,000 on my car to go buy this tiny house, would I go buy this tiny house by doing it that way? And the answer is hell no.

Oh, God.

Not even close. You wouldn't even think about doing that. Than that, you know? Not even close. You know, no way would you trade a $500 rental income for getting rid of all those payments, ever. No way. Doesn't make sense. And so that's why it's instantaneous for me to give that answer, but all I did was I just reverse engineered it. Is if you didn't own it, and you had $130,000 sitting in the middle of the kitchen table, and you, you could either pay off all of this debt with it, or you could go buy a tiny house. Well, no one in their right mind would go buy the tiny house. It's a ludicrous mathematical equation. Not even close. And it doesn't matter how we got here, that's where we are. Mm-hmm. So you reverse engineer it and you ask yourself, would I do that? No, I would not do that. It'd be asinine to do that. I'm not doing We've done that. And so that's why we can answer her with such force so quickly. And you can do that for yourself anytime. You say, "Okay, I've got money in a stock. My grandpa gave me a stock." Well, I don't care.

I don't care who— I don't care where you got it. You have Exxon stock and you have $400,000 in Exxon stock. I don't know anything about Exxon. I've not looked at it lately. I don't know what the stock is. I'm not making a judgment about Exxon one way or one way or the other. But you just ask yourself, if I had $400,000 in the middle of the kitchen table, would I go buy Exxon stock? Probably not. Because you were not well diversified. But you just got it from your grandpa, and it's not like it's his family Bible. It's stock. It's not— it's not got an emotion tied to it. And so if you wouldn't go buy it again with that same amount of money, then don't keep keep it? And if you do that, if you practice that exercise, you can make decisions on whether to buy an investment, whether to keep an investment, whether to buy an item, whether to keep an item, instantaneously. It's the same part of your brain that says, "I'm gonna throw all this stuff away 'cause I'd rather have a clean closet." It's the exact same part of your brain that you're using.

It's the clutter out, yep.

It's a declutter. Clutter. It's a cleansing process. And you say, would I do it again if I hadn't already done it? No. Then undo it and sell the car, sell the boat, sell the Exxon stock, sell the tiny house, whatever it is. But if you go, oh no, I've— I think in the next 5 years the best possible investment on the planet is a tiny house bringing $500 in rent on a $130,000 investment, which by which, by the way, sucks as an ROI. But if you really believe that's the best thing, then you should keep it. But you can't possibly believe that, okay. Not, not, no. All right, Katie is with us in Portland, Oregon. Hey Katie, what's up?

Hi, thank you guys so much for taking my call.

Sure, how can we help?

So, okay, my husband and I this week just combined our finances. This week? We've been, yes, this week. It's brand new.

Okay. How long y'all been married?

Um, we've been married for 3 years.

How many?

3.

3 years. Okay, good. Okay.

Yes. Uh, we've been together for 8 and a half years. Um, and that entire time it was made very, very clear that we were never going to be combining finances. Um, the reason for that being he had a previous marriage and and through a bunch of different things, ended up having to go bankrupt and has a lot of trauma where finances are concerned. And so I never expected to be combining finances with him, even though it was something I really wanted. But because of our debt and just our situation, he did come to me and finally said, hey, okay, I guess this is something we can try.

Good for him. Good, that was hard for him.

It was incredibly hard for him, and it happened immediately after a big moment of conflict, and so I just think there was a lot of trust.

A lot of humility. Good for him.

He's a great man. I had been sending him videos of your guys' for a little while, so that may have helped. But yeah, so my question really just boils down to, we've been sitting down trying to figure figure out how to restructure, how to combine, how to do this smoothly.

Oh, it's messy, isn't it?

It is.

It's a very— and it brings up all the emotions every time you look at a number.

And every time I look at him, he looks like he's gonna puke, and I feel so bad.

Just give him a hug.

Um, I hug him all the time.

And remind him that you think he's a great man. Let me just tell you, this is a hard thing you're doing.

Okay.

But it's worth it. With it. If it is strenuous and it's causing your stomach to come up in your throat, both of you, that means you're good human beings. You're facing awkwardness to get a better future.

Well, we were gifted Financial Peace University by our neighbors who have become our very best friends. And they are the biggest fans of you guys and they believe so much in your product.

Let me tell you what. I'm big fans of you guys. You and your husband.

Thanks.

And I want, I think the way you've approached this conversation and his humility and what he's doing, but that is not gonna mean it's gonna be easy. I can only promise you that it will get easier. When we combined our finances, I almost puked every night because I was used to being in complete control and I no longer was. I was now accountable. Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. Andrew is with us in Philadelphia. Hi, Andrew. How are you?

Hey Dave, hey Rachel, it's so good to talk to you guys today.

You too, how can we help?

So I would like to pick your brain on this question I'm having with myself, and that is to, should I leave my current stable job to pursue going back to school for the, like a more fulfilling job?

Okay, what would you be going to school for?

So I would like to go back to school for, to become a marriage and family therapist.

Okay, so do you have your undergrad already done?

Yes.

So you'd have to finish your master's so that you can get licensed and do your practicums.

Yeah. How long is that? Is that a 2-year?

2-year.

Yeah, it's usually a 2-year program.

And it costs what?

It costs $34,000, and then I do have, I did a little bit of research kind of on it. Yeah. So I'm a veteran and I have 100% disability. And then I looked into the— they have a Vet Center Scholarship Program, which will pay for 100% of the tuition. I think they give you like a $1,300 a month—

Starting.

—living expense. Yeah. The only catch to it all is that I would have to, you know, basically at the whim of the VA for 6 years to go wherever they need me.

Oh no, I'm not doing that.

No?

No. Okay.

No, 'cause the VA's gonna pay you half a marketplace. A marriage and family therapist can make $100,000 to $150,000. You're not gonna make that at the VA. You're not gonna make $60,000 with the VA.

Okay.

So it's not worth that. $34,000 out of pocket, I'd rather do. So do you have any money saved?

So I'm on Baby Step 2 right now. I got about, I would say probably like $13,000 left to go. I have like $1,800 on a credit card and $11,000 in my original student loans.

Okay, so by marriage and family therapist, you mean you would be like opening a practice, charging people an hourly rate to sit down and help them with their issues?

That would be the end goal if I did that scholarship program.

Oh, I would not do the scholarship program. I've already established that.

What are you doing now?

The 6-year trade's not worth it.

What are you doing now and what are you making?

Right now I'm a utility locator for a construction company. I'm making about $35,000 to $45,000 a year.

Okay. Okay. So if you— but the military has a program that you don't have to go to work for the military. That's just part of your GI Bill. And they'll pay you a stipend plus a bunch of your tuition with no requirement to go to work for the VA.

VA? So I've used my GI Bill.

You already have used it?

Yeah, I've used the full 36 months.

Oh, okay.

Yeah.

What was that used on?

That was for my psychology undergrad. Your undergrad in psychology.

Okay, cool. So you've been pursuing this for a while. Okay.

Yeah, it's kind of been a big thing for me since I got out of the military myself.

And how much do you receive in disability What's your income?

Uh, it's about $3,900 a month.

So call that $4,000 a month, plus you make $30,000, right?

Yes.

Okay, so we're talking about about an $80,000 income.

Yeah, I would say about that.

Okay. All right. And you sound like the words you're using, you're single.

Uh, I have a girlfriend. I am divorced though, and I have two kids.

Okay. But I mean, you don't have two incomes and all that, so you got a girlfriend.

Okay. Yeah.

All right.

I'm wondering, Andrew, if you can do some of this while you work full-time and do night classes. I've known one or two people that have done that and seeing if you can work your way through. It may take you a little bit longer, but to keep the income going so you could somewhat cash flow it. It may not be next year 'cause we'd want you out of debt with an emergency fund before you jumped into all this, but—

Yeah. Okay, that's what kind of was my thought originally, 'cause I've been listening to you guys for a while and I know not to take out more loans or anything like that. For sure. Okay, but if I wanna do this, I gotta cash flow it. I kind of ran the numbers roughly and it's like, okay, I don't really make enough right now to do that potentially. So I have to get all my debt paid off.

Let me back up 2 steps. Number 1, the answer to your question is yes, you need to go do that. We do this. Then the only question remaining after we make that statement is how do we do that in the wisest possible way? I would rule out giving up 6 years of my income being in half and trade that for $34,000 plus living expenses. No thank you. I don't think that's a good trade. So I'm going to rule that one out if I'm you. So that means I have a $34,000 barrier and I make $80,000. If I can find a way to run an adult program, an adult master's program, and they're out there— I don't know what's available in I don't know if they're in the Philly area, but they're out there. If you could even an online thing and knock out half of your— one of your 2 years, and you know, during that time, finish up being debt-free, have your emergency fund, then start saving towards the $34,000, and cash flow while working and making $80,000, that sounds ideal to me.

Yeah.

Then the second part— the third possibility is some big move because your $3,900 goes with you wherever you are. So the bulk of your income is going to follow you no matter what because that's the disability income. So if you could go make $30,000 working weekends building decks and move to a city where you could have an inexpensive master's program and finish this thing up for $34,000 in 2 years, that's $17,000 a year. You could do that. Mm-hmm.

Okay.

What's the nature of your disability?

It's mostly, it's like, you know, mental health stuff, and then I have my knee got all jacked up in the military.

Okay, so maybe building decks is a bad example, okay, with a jacked up knee, right? But I mean, but you know, that's why I asked. But anyway, I don't care what you do. I mean, even if you're working the psych ward as an orderly or something, something to get your— to get some practical proximity to what you're going to be doing, but you're making $30,000 in there and you're working, you know, 3 12s or something like that, and then you got the rest of time off to go to school. So I mean, just build your life out to where you go do this. I think you do need to go do it. That's the answer to your question.

Okay.

I just want you to do it in a way that 3 years from from now you're sitting in a private practice and you're gonna make your first $100,000 and then you're gonna move towards $150,000, 'cause a high-quality private practitioner ought to be making $100,000 to $150,000.

Yeah, I feel like it takes a while to get established.

Yeah, yeah.

When you go to the private practice route. Yeah, it will, it will.

But that's the most lucrative route, and it's the route by which you control control what clientele you serve the most. If you're working for an institution of some kind, like say the VA, they're gonna have— they're gonna control who your client is. You're not. And that may take a lot of the fun out of this idea, or the reward out of this, the psychological reward.

Yeah, you being able to do what you want to do and see who you want to see is—

Yeah, I'm like working with people, and that I don't want to be working with, a group or whatever.

And for 6 years, that's a long time.

That's not, you don't want to sign up for that one, no. No, no, please don't do that one. But I do think you've thought this most of the way through. We've just got to get you there debt-free, cash flowing it, and finish up your Baby Step 2 and get you there without selling your soul to the company.

Let me store.

Hey guys, Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now, you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision,— or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to RamseySolutions.com and try Ask Ramsey today. That's RamseySolutions.com. Investing can be really confusing. 3 years ago, for the first time, we did an unusual investing virtual event called Investing Essentials, and it was me and George Campbell, and I basically we used, I opened up my personal playbook. What do, how do I do real estate investing? And I showed exactly how the returns work, the details, nerded out, right? And how do I do mutual fund investing? And I nerded out. And how do I view wealth spiritually? And nerded out. And all these different things, and we went through my playbook, and then George and I also talked about buckets of investing that we don't do and why. So we went into the details of what's broken about some of these theories that are floating around out there.

And we're going to do it again. This is only the third time we've ever done this. And we're going to add a little bit of new material to it. Reducing taxes, navigating wills, and building legacy. Going to add some stuff in on those things. Tickets start at $199. It's two nights. It's September 1st and 2nd. Okay. Investing Essentials virtual event, George Campbell, Dave Ramsey, me doing my playbook with George, my personal stuff. You wanna know how Dave Ramsey does real estate? That's what I'm gonna do. That's simple. All right, get yours today at ramseysolutions.com/events or click the link in the show notes and we'll get you set up. Elizabeth is in Huntsville. Hi Elizabeth, how are you?

Hi Dave and Rachel, how are you guys?

Better than we deserve. What's up?

My husband and I are a young married couple. We've always planned for me to be a stay-at-home mom when we have children. Since I won't have my own income for those years during raising our children, how will we make sure to invest adequately for our retirement?

Well, Elizabeth, I mean, funding 15% of your income into retirement's our Baby Step 4, and that's after you're out of debt with a fully funded emergency fund. Funds. And if you start young, you guys should be okay. How much are you guys making right now?

My husband makes $105,000 a year pre-tax.

Okay.

And I'm making $20,000 a year pre-tax.

Okay. Well, just for fun, how old are you?

I'm 20.

You're 20. Okay.

I am.

And do you guys have anything in, Anything in savings right now?

Yes, we have $15,000 in savings, which is 4 months of emergency fund for us.

Okay, anything invested?

We have invested about $30,000 in a Roth IRA on my husband's job. And he's getting, he's giving 10% per paycheck.

Okay.

Okay.

Well, just, yeah, I mean, if you guys from 20 right now to let's say 59, which is retirement age, age, and you contributed $1,100 a month, which will get you to about that 15%. And that's if your income never went up, Elizabeth, okay? Just on his, like if he never got another raise and you guys just did that, you'd have $10.6 million at retirement, just from that 15%.

Wow.

So I think you guys will be great.

You're gonna have to stay out of debt and keep your emergency fund in place and stay on a budget so that you put $15,000 out of $100,000 away every year, okay? Which is more like $1,200 a month, but $1,100 is what Rachel ran the number on, and that's fine.

So sorry, I missed my $100.

No, that's okay. That's okay. Go, but I mean, that's— go, go, you can go to RamseySolutions.com and look at the retirement calculator, and that's what Rachel was using. That's how she ran those numbers.

We are currently out of debt. We have our house mortgage, but that is all of our debt currently.

Yeah, so you continue to work to pay out, get the house paid off early while putting 15% away while paying cash for everything else you do. If you do that and he never gets a raise, you're gonna have millions and millions of dollars. That's the point. And of course, if you work for 35 years and you never get a raise, by definition, you're a loser. 'Cause, and your husband's not a loser. So the chance you've worked 35 years and never get a raise is zero, right?

He'll be doubling his income. I mean, you know, you guys will look up in your 30s and yeah, you guys will be great. You'll be great. And that—

He's probably at the lowest rung of his career field.

Yeah, totally. Yes. Yeah. You guys will be completely fine, Elizabeth.

You're gonna get—

If you do it.

Yeah, my point is, is that the calculation is conservative.

Mm-hmm.

Okay, so you're gonna be fine, but you have to do the budget and live on what you make. If you run up a bunch of stinking car payments and go on cruises you can't afford and buy couches you can't afford and spend $40,000 redoing the nursery on a credit card 'cause you had a baby and like run around being a normal American and then whine 'cause you're broke, then you're not gonna have any of that money because you're not gonna have the money to put money aside for retirement. Retirement. But you're not gonna do any of that.

No.

Okay.

We have 3 old cars that we love and don't plan on running them.

Well, I mean, you can even upgrade your cars. Just pay cash for them. That's the whole thing. There we go.

Well done, Elizabeth. And the beauty, honestly, for you guys, starting at 20. Those calculations look different if you're in your 40s and 50s.

Yeah. Wow, that's pretty amazing. All right, Crystal is in Boston. Austin. Hi, Crystal, how are you?

Hi, Dave and Rachel, I'm great. How are you?

Better than we deserve. How can we help?

Yeah, so I am single. I have enough saved up for a home, but I'm wondering if I should wait and see if I meet a partner and get married before buying a home.

No.

No.

You're not incomplete. You're awesome. You're awesome. You're not incomplete.

Well, thank you.

No, buy a house. Now, the thing we would all put immediately after the comma, right, after the exclamation point, would be you may change houses after you have someone come into your life. Okay?

Right, and that's what I'm concerned about.

That's okay, sell it. It's a house.

I could be online in 2 years. That's okay.

If you buy a house and you get married and you decide we don't want to live in that area, sell the house.

Okay.

Are you dating anyone right now, Crystal?

No, I just recently signed up for a dating matchmaker.

Okay, that's great. Well, I was gonna say, I mean, if you had a serious relationship and you guys were talking about marriage and all of that, I probably would pause and just make sure it's the city you wanna be in with this person, you know, if they're in the picture. But if they're not in the picture, no, I would keep running your race, girl. You're doing an amazing job.

Yeah, way to go.

Yes.

Excellent, excellent.

And there's more, yeah, there's studies coming out showing that there's more women homeowners than men right now. So, you will be part of a wonderful pool.

In their 20s, yeah, that's exactly right. And it's gonna make you pickier on who you date too. You're not gonna wanna date somebody that's gonna mess this plan up 'cause you're working a good plan. Now, you know, and— Yeah.

Yeah, I'm in my 40s, I'm divorced, no kids.

Okay, okay.

So I'm—

I always joke with the guys and say, but be ready to know that after you buy this house, once you find her, she's gonna tell you it was the wrong house. But that might not be the case with you. You might find somebody that just loves this house, you know.

And men usually have good taste in houses, I would say that, I think.

Yeah, I'm just saying, yeah.

No, Crystal, yep, keep moving forward with your financial plan.

Do not wait on some guy to come along to make it okay, no, no, no. No, no, no, no, you go be you, girl. And then the guy will show up when he's supposed to in this equation.

And yeah, and to your point, Crystal, she threw out like, "Yeah, but if it's not within 2 years," you know, all this. Listen, if the right person shows up, marriage and a life with someone, and he comes in 12 months and you guys choose to move cities, that's okay. Take the hit on the house. You're gonna be fine financially, right? I mean, like, don't let that be the thing that scares you into not doing it. It with what may happen. Because if that even happens, that's a great life.

Yeah, and to your point earlier, if someone else is listening, and you're in a relationship that's getting progressively serious, and that 2-year thing is real, then maybe you do pause then.

Yes, absolutely.

She's asking with no one on the hook, you know, no fish on the line, or right now. And so yeah, let her be. You're amazing, Crystal. Way to go. Well done.

Congratulations.

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

If you're working the Baby Steps, the best and fastest way to do it is EveryDollar, our budgeting app that helps you work the Ramsey Plan. It holds your hand and answers the questions the same as you'd hear on here on the air, and we're going to walk you right through the Baby Steps, the fastest way to get out of debt and into wealth. You track your progress, you get personalized recommendations, you get coaching for your situation. It's like having one one of us walking with you every day, showing you the next right step and holding you accountable. Start EveryDollar for free by downloading it in the App Store and Google Play. Brandon is in— whoa, what in the world? What did I do? Did I do that? All right, let me try again. Brandon, are you with me?

I'm with you, Dave.

Cool. How can we help?

So, um, a little bit of a quick backstory. Um, I grew up in a divorced household. Um, I had a relationship with my father at a young age, wasn't a good one. Um, in my adult age, um, I decided to not have a relationship with him, uh, especially after I started to have children, uh, due to the way that he lived his life. Um, he lives his life, um, for money, but in a bad way. Um, he is okay with doing things the wrong way, uh, maybe, uh, messing some people over to— in order to get there, alongside, um, just women and, um, just a whole plethora of issues.

Yeah, I got it. So you had to draw a boundary, and now where are we?

Sure. All right, so now, um, I have been told that— and I want to clarify, I do not want this money at all, but I have been told that he is putting his will for my two young children, one who's younger than one and one that is seven, to receive all of his inheritance. Cool.

How much is it?

I don't know because I don't trust anything he says.

Well, what do you think it is?

He says that it will be millions.

What do you think it is?

Mm, mm, one or two, maybe.

Okay, all right. So it's a lot of money, all right, good.

Yes, I would imagine that it is a lot of money.

Okay.

Regardless.

Okay.

My concern is, um, a young child who has never met their grandfather, um, getting a large sum of money from them. How can I help guide them? And who knows what age they will be when this happens.

—right. How old is your dad?

He's only 55 now, I believe.

So the kids will probably be grown.

Correct. Correct.

Like, unless he's in poor health now, you know, they'll probably be adults before they get this money.

Right. Okay.

Right. And a lot can happen between now and then too.

Right, right. I guess my question mainly is, is how do I How do I, or do I, mention to— I mean, obviously not now, they're way too young, but at what point would I bring this up to them and have this conversation with them, and what would that conversation look like?

Well, the problem is that there's a high probability this guy's a high roller, and he might have nothing.

Right.

He could lose everything. And so we don't want to overplay— that's an actual possibility, okay? So I don't want to overplay this. I certainly would not do it before teenage years, and I would not do it— and I would gage it based on if we have any rumors about his health. In other words, let's say you heard that he's got he's gotten a stage 4 cancer diagnosis, then yeah, we're going to have a different discussion than if we've heard that he's doing great. Right?

Right.

Because it's more imminent and we don't know what it is. I will tell you this: wealth does not ruin children. It exposes the fact that your children were already ruined. So you raise men of character, young boys into men of character— you said they're boys, right?

Right, correct.

Yeah, you raise them in to be men of character, men who know how to work, men who are generous, men who are honest, men who work a system and a plan. And then if they receive this money, it won't harm them. It will just accelerate them.

Right.

But if they receive the message that they don't have to work, work, and they're going to sit around and be a trust fund baby because someday when their grandpa dies, they're going to be rich, and they consequently become worthless, then the money has harmed them. But the money didn't actually harm them. It just exposed the fact that you didn't teach them how to work.

Right. Okay.

So you go build the men out of these boys that you were going to do anyway. And the further they are into that manhood, the more ready they are to receive and handle the wealth.

Right, okay.

And when those conversations happen, if they are recent, right? If you do hear of a health scare, you know, and they're in their early 20s, be honest with them. Like, "Hey, he's not doing good. And he said he's gonna leave you some money. I have no idea what that means." Yeah. But let's walk, we'll walk through it together and kind of figure out what's a good plan.

Here's what a wise young man does if he receives $1 million.

But also, Brandon, the character of your dad, honestly, some people, they don't last in wealth. So he may have that now today, and he may lose it. Yeah, who knows, right?

Right. So I guess partial of, of my concern was, is, um, you know, once upon a time it was going to supposedly be left to me, and I said— me and my wife had spoke and, and said that we didn't want the money, that we would just donate it. And that was just a personal thing to us because—

Where it came from.

I know that— I'm sorry, if the money—

I know, because it was dirty money. Yeah.

Right, exactly. Should I allow that to play into my children or just allow them to have the money?

No, I appreciate you all not wanting that because you've got a lot of emotion tied up in this relationship with your dad, but money is not dirty money. Dirty. Bricks are not dirty. You can take a brick and throw it through a window and be a vandal, or you can take a brick and build a hospital for children. The brick doesn't care, and who made the brick, a cocaine addict made the brick or a person of high moral character made the brick, it's still just a stinking brick. And, you know, so the money itself is technically not it's dirty.

But everything wrapped in it, in the story of it, feels gross to you, which is understandable.

You would feel icky every time you looked around it. But for your boys just to get a million bucks and to be able to do something with that and go change the family tree for your grandkids in a healthy way, because they're good young men, they have a spiritual walk, they're quality people that serve and love the community, they love their they do conflict well, you know, you've grown some men, right? You do that, this just becomes a blessing. And in the weirdest sort of way, from the weirdest possible source, but it does become a blessing. And so—

Yeah, they don't have the strings attached to it like you do.

Yeah, so folks, I'll pan back from Brandon a little bit. He was not asking this, but there's— around this is the idea, and I get this when I'm working with wealthy people a lot, a lot, how, you know, I've worked all my life to build some wealth, how do I not let it ruin my children? We get that question all the time, don't we? Mm-hmm. And especially in a panel discussion somewhere, where we're doing some generosity thing with multimillionaires. How do I not let this ruin my children? And our answer always is, money does not ruin your children, it just exposed the fact that you did. So raise good kids. Raise children in such a way that they become excellent adults. And the money is not going to do— the money exposes who you are. It exposes who they are. That's all it does. Money magnifies the good parts of your life and character and the bad parts of your life and character and that of your children.

Yeah, and the warnings, like even when you look through Scripture, lots of warnings around wealth that you can't ignore. Or, but that can ruin you, the person that made the money, and/or your children too, right? So there's the natural warnings of it.

You did not do something—

To your kids, it's not—

Spiritually wrong by becoming wealthy, and you did not do something spiritually wrong by leaving it in your family. As a matter of fact, there's lots of biblical indicators that that's what you should do. David didn't build the temple, Solomon did. With David's Money. You should not feel uncertain about investing. Investing, and you don't have to. That's why we created Investing Essentials, a 2-night virtual event where George Campbell and I walk you through my playbook for investing and wealth planning. We'll simplify everything from 401(k)s 401(k)s and mutual funds to passing on wealth so you can invest with confidence. Tickets start at $199. Get yours today at ramsaysolutions.com/investingessentials. Events, or click the link in the show notes.

Okay.

Our Scripture of the Day, 2 Corinthians 4:18, "So we fix our eyes not on not what is seen, but what is unseen, since what is seen is temporary, but what is unseen is eternal. Milton Friedman said, nothing is so permanent as a temporary government program. Okay, Ashlyn is in Knoxville. Hey Ashlyn, what's up?

Um, I'm good, how are you doing?

Better than I deserve. How can we help?

So, my question is, should I focus entirely on paying off my debt first, or try to increase increase my income first and how to do so.

What are you doing now for work?

So right now I am an hourly and commission-based hairstylist in Alcoa, Tennessee. I probably make about $900 a month, and I know my debt is a little bit higher than that. Not bad, but definitely higher than I would like it to be.

How many hours are you working?

With my company, I'm not allowed to go over 40, so it's usually anywhere from 36 to 38 hours a week, a week.

And you're making $900 a month?

Yes.

You're not getting paid well.

No, no, I'm not, but it's the only salon that contacted me and actually was able to hire me in the time period that I needed.

Okay, well, I would be looking for work that paid.

Yep.

You're living on $10,000 a year.

You can make more doing Uber.

You could make more working half the time you work at Target.

Yeah, I've been looking for other salons, but unfortunately living in Knoxville, it's so competitive.

No, it's not. There are not salons paying people $900 a month. No one stays in that situation. That's $10,000 a year. You can't exist on that. So I'm telling you, they don't have people standing around working 40 hours for $900. Now if you're working 10 hours for $900, maybe. Maybe. But you're not standing around there the whole time, 40 hours a week, making $900. Nobody's doing that in Knoxville. Knoxville's not that depressed, and neither is Alcoa, Tennessee, or Maryville, Tennessee.

It's one of the franchise locations of a SmartStyle, so it's similar to Great Clips.

Yeah, so get out of there.

Yeah, I would go find a nice salon. Yeah, they're there for sure, and not in Knoxville. Even if you're working as a, you know, front desk and you're booking appointments for the first little bit, just get your foot in the door, if that's what you want to do more long-term.

You're not making enough to exist. You need a job today. Okay.

Today.

Are you living at home, Ashlyn? Are you at home?

I am. I'm living with my parents.

So no rent?

No. I do pay for groceries for our family a lot though.

How much debt do you have?

How much debt do you have now? My debt is currently at $1,104.

Okay.

Most of that is from my credit card, another is from Jim Collections that's making me pay it.

And how old are you?

I can pay it off. I'm 21.

Okay, good. All right. So what you need to do is to set a goal and say, at Target, right there in Maryville, they'll pay you $20 an hour.

Okay?

Okay.

Just working in there as a clerk, all right? And so hair is obviously your, you know, hairstylist is obviously your goal, right? So now if I know I can make $20 an hour at Target, then I need to find a place where I can do my craft and make in excess of $20 an hour and start pursuing both.. And so you can work weekends and nights at Target or whatever, I don't care, making someplace making $20, okay? Up in West Knoxville somewhere, right, at a retail establishment. There's people around there paying that right now in Knoxville, Tennessee today, okay?

Okay.

And then also, if you can work 20 hours a week on your hairstylist and get started, get a chair somewhere to get up, start to build your clients retail. It takes a while to do that if that's what you're doing, but the problem is they're paying you nothing and you're on commission, and the only money you're making are walk-ins that aren't your clients.

Mm-hmm. Pretty much, yeah.

Because the type of organization you're in, it's just a retail walk-in. It's not, you know, a few people in there have clients that are repeats, but most of them are just walk-in and whoever's cutting, whatever chair is open, they jump in the chair.

Yeah, the other stylist that works with me is making a lot more than that. She's the only other stylist there, so I definitely need to be trying to find a salon. It's just been difficult recently because every time that I apply somewhere, I either don't hear back at all after going in person, calling, applying online, bringing in a physical application, or they answer and they say they're not looking for anybody at that moment.

Okay.

I've just been trying to find any other jobs in the area that will work either around my schedule or that the salon will work around the schedule for.

Yeah, but honestly, if you lost the job you got right now, you didn't lose much. You work 10, 15, 20 hours a week and maybe more than that someplace else, and while you figure out this salon thing and get your foot in the door somewhere— I don't know who that is or where that is, but I'm going to send you a book called The Proximity Principle written by Ken Coleman that talks about what Rachel is saying. Get your foot in the door. Get— even if you're just the receptionist and you get in, book an appointments. Then you get started and you get in the organization, you get around people that are doing what you want to do, and that's where jobs come from. It's not just from applications and follow-up. Okay? So this is harder than they told you at the school where you went to learn to be a hairstylist and you paid them. Mm-hmm. They told you this was going to be easy and they lied. This is not easy. Tony is in Jacksonville, Florida. Hi, Tony, how are you?

I'm good, Dave. How are you?

Better than I deserve. What's up, man?

I hear you say that all the time, man. I can't believe I'm talking to y'all. Um, like, I was in the Army for, uh, 19 years and I'm 100% disabled. Now. And I've got a lot of debt and I really don't know where to start. I did just land a job.

Mm-hmm.

I was out of the Army for like a year with dead-end jobs between here and there making, you know, $10 an hour and whatnot. But I got a job at Mars. We make all the combos that go out in the world and I actually got a lead position out there and I'm gonna be making around $95,000 a year.

Wow. Good for you.

I appreciate that. With that being said, you know, I thought it was a good time. Obviously me and my wife, we're not gonna pull our credit reports when we don't have money to make any debt, put anything towards our debts. So of course, when I accepted the job, we went on, we pulled our credit reports and we, you know, I made an Excel spreadsheet on how much debt we have and kind of like a payment plan. The only thing that sucks about this job is that it's an hour and a half away and we don't have the upfront money to relocate at the time. Um, but my main question is, I hear y'all talk about a lot of resources, uh, the Every Dollar and this book and that book. And really, I don't own a house. You know, I got a car note.

Good.

I got, yeah. And I got notes. I mean, debts.

How much debt have you got? How much debt have you got? How much debt have you got?

Uh, it's around $55,000.

On what?

Um, well, my truck, I still owe $21,000 on it. We have a camper I bought a couple years ago that had— I owe $11,000 on it, and then the rest is like credit cards.

Okay. All right. Well, I personally would sell the camper, might sell the truck, and as soon as you can scrape the money together to move and get out of that lease and move up closer to work, I would. That's gonna save you a bunch of money. And then I would get on the EveryDollar budget and start working these baby steps. List your debts smallest to largest and attack them in that order. We'll give you a copy of the book, "The Total Money Makeover," and give you the premium version of EveryDollar and get you started, okay?

Yeah, Tony, instead of that Excel sheet, do the EveryDollar budget, plug in those numbers that you found out, and you'll start to see pretty quickly, okay, here's what's going out to everything. And then the motivation starts of, if we sell the truck, how much does that free up per person —right, per month.

Sell the camper.

Sell the camper. What are we paying on that every month? That frees it up. You start selling some stuff and get this moving. And with your income, you guys are gonna do fantastic.

Yeah. And you got the disability coming in from the military. Thank you for your service. That puts this hour of The Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.