Transcript of Take The First Step Toward the Life You Want

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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. And I'm Rachel Cruze hosting this hour with Dr. John Delony, and we're answering your questions. Give us a call at 888-825-5225, and we're here to help you about your life and your money. All right, starting us off this hour, we have James in Toronto, Canada. Hi, James, welcome to the show.

Hi, Rachel, how are you?

Hi, we're doing great. How can we help?

Uh, just so I had a question for you guys. Um, I'm 26 and I'm proposing on Tuesday this coming week.

Yeah, dude, congratulations, James!

Way to do it.

You know what?

Good for you. I feel like we get so many calls of people and we're like, listen, are you gonna get engaged? You're gonna get married. You're doing it, James. We're proud of you.

Does she know it's coming?

Uh, no, but yes, it's not a complete surprise. Um, but yeah, so I— my question is, she comes from a, uh, quite well-to-do background, um, and honestly, so do I, but we're, we're going through a transition in the short future of being consumerist kids and moving into a more productive adult phase of life. And I've, in the last 2 years, started a business and been doing pretty well. And she, once again, comes from a good financial background, but makes about $20,000 a year and is living paycheck to paycheck from that end of things. So I'm more wondering how to be productive, as I know money can be a stressful issue for all people, let alone brand new couples, and how to be productive and move towards a, uh, a financial path together and successfully.

Are her parents giving her money, James? I'm just curious how she's living off $20,000.

Uh, absolutely. Yeah, no, that's like the lifestyle budget.

Okay.

Uh, okay, there's nothing productive of that.

What's the terms you guys have talked about once you get married? Are the parents still going to be giving you guys money as a married couple, or are they cutting her off once she gets married?

Great question. Actually, we haven't had that conversation. Her parents are very loving people. I'm sure there will always be a little bit of a tap from there, um, but both of us are on the same page about wanting our own financial future, not living off the backs of people before us.

Yeah, I think y'all should break up. I'm totally kidding. I'm kidding. I was like, wow, that is, that was not my advice. No, I'm totally playing, man. I think it's, dude, I think you have to, it's important for you to identify the thing beneath the thing beneath the thing for yourself. And it's important for you to communicate that in as compassionately and clearly as possible. And here's, here's an example. It's easy to talk about how much money she does or doesn't make. It's easy to talk about how much money her parents just send her every month. And it's easy to— you're, you're a very kind person. I can tell by how you talk about people when they're not in the room. And so the way you talk about her parents and your parents and her, that's all great. But beneath the thing, beneath the thing, beneath the thing is if you're feeling, I want you and me to be responsible for our future. And when you take money from your parents, sometimes it comes with strings or it comes with, and you're gonna come to our house for this holiday. And I want us to decide what we wanna do for holidays moving forward.

So it's you getting beneath the money, beneath the differences, and be honest with yourself about what you want as you co-create this new world with her. And then have that conversation, cuz otherwise it just becomes a fight about how much money they sent, spent, and how many hours are you working? And we don't need to do this, but the real issue is, "Look, I don't feel like we're, I feel like we have a partnership of three, me and you and your parents." Or, "I feel like I'm one of the decision makers along with your dad still," right? And so, it's getting to that honest sense inside your chest and being honest and telling her about it.

And I do think there's something really wise and pretty necessary, especially at the beginning of marriage, that you guys create your life, right? And from that's from a financial aspect, spiritual, emotional, like there is something true about, I'm leaving this family, I'm creating my own over here. And I would think, James, for you, you know, the sense of dignity to say, yes, this is our family, our nuclear family right here, me and her, and then maybe in the future, kids. And here's how we choose to live life and how we make decisions with money. And creating a baseline for you all, I think is really important just to give you guys the, the structure and the self-control to say, yeah, we can create a life together and we can have boundaries with money and limits with money versus it being endless. And there's something in that sacrifice and having to make those decisions of, okay, we have to either do this or this. We don't get to do both. Like, I don't know, in all of that, in a relationship like that, to me, that's the foundation of building something. And then later on, like we talk about on the show, changing your family tree, right?

And that can look a million different ways for different people. But I don't think there's, you know, if they wanna step in at certain points and you guys agree, you know, that that is okay. You know, I'm not completely like you can never tap that system ever, ever, ever. But there's something especially at the beginning of you guys creating a baseline for yourselves.

Yeah.

That I think is gonna be important.

James, let me play the devil's advocate here on the other side of this, okay? You being honest and having this conversation, It's probably very small, right?

Tiny.

But let's say she looks at you and says, oh no, no, no, my dad's— I'm always gonna ask my dad what's the best house we should buy. I'm always going to ask him.

I'm—

we're always going to my parents' house for Christmas. That's not a discussion. You need to know that before you propose. You need to know that before you get into a legally binding relationship.

I'm not ever cutting them off.

I'm not gonna tell my parents no.

Yeah.

They're gonna pay part of our bills. Like you, you need to know that wide-eyed too. And, and you get to choose, okay, I'm gonna have a marriage where at my kitchen table, at our kitchen table, there's gonna be always be two more seats there with her mom and dad lobbing in their opinions and voices and choices and whatever. So it's, it's, there is an importance to having that conversation. It's not one-sided. You're gonna say what you feel and what you want, and she's gonna say what she wants.

Right.

And so, and then y'all are gonna reverse engineer.

Okay.

What does that mean? In practicality. If mom and dad bomb us out of the blue with a big financial, here you go, we just thinking about y'all. Um, it's going to go in this account for future kids' college. It's going to go in this account for a future home purchase or something. But, um, it's y'all coming up with a game plan before the game starts.

Right.

Okay.

Well, you just said a lot of monologuing, James.

Yeah. Talk back to us.

What do you think?

No, no, no. That's, that's wonderful. I'm all just soaking it in. Um, For our side of things, I know all these things going into our future marriage, which is they're an Italian family. We're always gonna have them over for Christmas or be over at their place. We're completely on the same page for really a lot of things, and I think we're quite effective communicators. It's just, I know there's gonna be a lifestyle shrink like no other. Like, yeah, yeah, I can't compete and I don't try to compete. There's no point in it. But it's going to be a shock for her more than me. And I just want to not, not brace for it. I don't think it's going to be a negative experience, but it will come with its fair share of challenges.

Look at it.

Look at it as a new set of skills she has to learn and that you all have to learn together. Not as a moral failure or she's a loser or a brat or like, it's, she's never had to do this before. And so it's going to be bumpy and there's going to be some practice involved. It's going to take 3 to 6 months for y'all to dial in a budget and actually stick to it because it's brand new for both of you. Um, that's, that's being honest about that is part of building a great marriage together.

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Hi. Um, I'm How are you today?

Hi, we're doing great. How are you?

Um, I'm okay. Um, I'm calling because I have just lost a very substantial amount of child support, and I'm not really sure how to move forward with paying my bills because it puts me into a huge deficit.

What happened?

Um, well, their dad was having some addiction issues, and so when I took the kids away for their safety, um, it's resulted in very large legal fees, um, over the last year and a half. Those have obviously amplified during this court battle, um, and they've given him— suddenly given him his, um, his custody back when it was very unexpected to me because 2 months ago he wasn't allowed to drive with them in the car, and now they've suddenly given him all of his custody back, which took away all of the child support for me. And so I still have all these legal fees and all this debt from before, 'cause I was not able to really financially take care of them before. So I was constantly taking on debt. And so now I'm just like lost.

So it—

And I'm scared.

Yeah, totally. I, man, my heart breaks for you. I'm gonna speak kind of abruptly 'cause we have a shorter time to talk. Is that cool? If you and I were sitting down for an hour together, I would be much more eloquent in my speech, okay? Um, it sounds like this sudden withdrawal of child support is layered, right? There's emotional issues. You're scared for your kids' safety. You're blindsided. So let's— we're just going to talk about the dollars and cents, okay? It appears that what this really did was expose an already existing problem. And yes, this, this sounds crass, but at the end of the day what you've had for a long time is a math problem.

Yes, and I have been using the, the EveryDollar app for quite a— I don't know, quite a few months now, maybe half a year, maybe a little more. Um, and I know, and I listen to the books, and I'm doing everything I can.

But the EveryDollar app is amazing, but it— what it really is good at is get— helping you get a plan for your money. And it's also really great at exposing where we can cut expenses and where we need to add income. And I, I honestly, as heartbreaking as it sounds, I don't see another path forward for you other than you've gotta go get some jobs that make more money, especially in this, in the times when, when your kids are with their father now.

I've been trying for the last 3 years to get extra jobs.

Yeah.

Um, I've been trying to get a better job.

Sure.

Mm-hmm. Um, I'm a teacher.

Yeah.

I'm a full-time teacher. I teach art.

Okay.

Um, Danielle, and, um, let me ask you this. The legal fees, are those on credit cards? Did you take out a personal loan? How, how are those being funded?

Um, well, I've been paying them monthly. I've been paying $1,000 a month to a lawyer.

Um, okay.

So the payment plan is directly with, with them?

Yep.

Okay.

How much do you have left on that?

I'm not sure, cuz we just went to court again. And I'm not sure how much all that's going to be. I'm guessing at least $5,000.

Okay.

And then what other debt is there?

Um, I had the debt that I consolidated, um, but there's a lien on my car and then I have $80,000 in student loan debt and I have like $12,000 in credit card debt.

$12,000 in credit card.

Okay.

What, what the car lien or how far behind are you on the car?

Um, I owe $9,250 and it is worth like exactly that. Okay. And I—

are you behind on any payments?

No, I've never not paid a bill.

Okay, so you're current on— so what, what is, what is the $1,300? What is— what would you be doing with that if you had it? Because you have to be behind on something, I'm assuming. And I just want to make sure that their priorities are right.

Paying the lawyer.

Well, I mean, the child support should go to the care of the children, right?

Um, yeah, in theory, but I have to pay the lawyer, you know.

Sure.

So now my child— my child support was $2,050 and now it's going to be like $700.

Okay.

Um, So, in your situation, Danielle, I would remind you that your priorities and where your money's going is gonna be very, very important. So, always making sure that you have food, your mortgage is being paid or your rent, utilities stay on, and your transportation. I just don't want you to, in sometimes the overwhelmingness and what can feel like a hopelessness, you know, whatever feels urgent in the moment is where you end up paying and you end up, possibly making mistakes and putting yourself in a financial position that's dangerous, right? I don't want you getting behind on your rent or your mortgage or your car payment. So like, those are very important to stay current. The credit cards, we can worry about those later. And with the, so you're giving $1,000 to the lawyer. So in, if I'm correct, that will be done in about 5 months.

Yeah.

Or if the $700, the $700 coming in.

I don't know how much longer this, will go on. I don't know.

Okay. Well, when it comes— this can be a— and John, you're probably way more in this world than I am, but that the whole court system, and especially with divorce and custody battles, I mean, it just that it can be for— and not that I would never tell you not to fight and fight and fight, but I do want you to maybe at a point in time, stop. Re-evaluate, maybe even look at your legal counsel. I mean, if it's not getting done—

If it's not getting done and you can't afford it.

And you can't afford it, there may have to be a pause at some capacity for you to at least keep your head above water. And so, what I would encourage you to do is, I'm so glad you're doing the EveryDollar app, but I really do want you to make sure your priorities are in order. And then what John was saying at the beginning is true. There has to be a change in the math. From the income side. I'm assuming your expenses are already pretty limited to make sure that all of this gets paid.

Yeah, I have it down to, like, that's the budget without even buying toilet paper.

Yep, yep.

And again, all of this is the worst, okay? So there's no joy or glee from me or Rachel. Like, we're sitting in this with you, okay? When I was a high school teacher, I knew folks who got up really early and drove a bus for extra money before they were a teacher all day, and then who would go work in a grocery store stocking shelves in the evening, and they were paying off student loans, right? And so it looks like that may be— I mean, you got the school year coming up. I don't know what you've done this summer, but it may not be a career change at this point. If you've really been trying to get new careers and get new jobs and get promoted, if that's not happening, then we're going to deal with the reality that we have in front of us right this second, which is You got $700 coming in for child support. You have a $1,000 payment every month to an attorney. You at least have to make $300 over. So I'm gonna earn that. And if I have to sell my house and move to a one-bedroom apartment for a season and the kids all have to share a room, like we have to make some drastic changes, um, that nobody wants to make, but you're just staring at a really ugly math problem and you've tried to solve it in one way for 3 years.

Let's just stop trying to solve it that way for, for the moment, because you've got an, an emerging emergency on your hand and It's— you're gonna be, you're gonna be exhausted. You're gonna, you're gonna weep for your kids, for yourself, for— nobody plans to be in the situation you're in. And we're gonna scratch and claw our way through it. And what you'll find is, as you get in back in the driver's seat of your own life, you're going to find yourself walking a little taller, and you're going to find yourself being more confident in yourself. You're not going to feel like life is happening to you, like you're, you're starting to tap into your life. And that comes through in job interviews, that comes in through performance reviews. It begins to impact all of your, the rest of your life very positively.

Okay. Yeah.

But there's not a magic bullet here other than you've got a really ugly math problem ahead of you and you've gotta scratch and claw and be exhausted and add more money on the front end of this thing. And it's just gonna be that way for a season, especially till you get this attorney paid off.

Yeah.

I hate this for you, hun.

I know, Danielle. Call us back if you need us, but there is something about making that plan and it, John always says it, control what you can control. And even mapping out some of these debts and looking and say, okay, once these attorney fees are paid off, that's $1,000 freed up. I can get my car paid off in 8 months. You know, you start actually seeing the light at the end of the tunnel. And so creating that pathway for you is gonna be so important. And that the sacrifice of the extra job, it may be for, 2 to 3 years and then it's done, right? And then you get a clean slate and you get to start over. But again, give us a call back, Danielle, if you need anything else.

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All right, let's head to Sacramento, and we have Ruth on the line. Hi Ruth, welcome to the show.

Hey there, I've been enjoying listening to the show, and, uh, today's question, um, is on the lighter side, I think. Um, I just wanted to call and see what will the Ramsey opinion be for, um, financially cruising. Like, we, uh, have no debt other than our 15-year mortgage, and we live by our means, but I just feel like we're enjoying the good life and, uh, you know, we have no financial stress, but at the same time, it's not like we're really focusing on saving and saving and, you know, kind of squirreling away money like that. I feel like we pretty much do use our money up, um, outside of investing in a Roth each year, um, just on like lifestyle and, uh, obviously doing things with our kids and vacationing and property improvements and things like that. And I just was curious, like, what your take would be like, is this okay? We're 38, 39 years old and, uh, Like I said, we're having a lot of fun. And I just wonder if we're like, maybe we should be focusing more on saving that money.

What do you do for a living?

Well, I'm a stay-at-home mom. It's pretty fabulous. I do have a couple little side hustles. We live on a farm here in Northern California. My husband is the one who makes the money. He brings home the bacon. He makes about $200,000 a year and he does commercial HVAC. He's a foreman. Out of Sacramento.

So fast forward, just like pause life for a second, getting into the DeLorean, and let's go into the future together. And he is 58, and the arthritis is so bad in his fingers he can't turn the knob, and his back hurts, and so he can't be a foreman anymore. He's tried an office job and it's killing him. And you're 57 and y'all are on this farm and suddenly he gets word from his boss, dude, you, you're, you're, you gotta retire. What would the phone call sound like from 58-year-old you calling this exact same show?

We will be fine because the house is gonna be paid off in a few years and it's worth over a million dollars. And, uh, so we're good there. Uh, I could always go back into real estate. Another thing is, is with his line of work because he's a foreman. He's already doing a lot of computer stuff, and, uh, um, so he's really not doing quite as much service stuff. And he, he would be fine going into the office as well. He's kind of had opportunities there. So I, I mean, I think where there's a will, there's a way. But we shouldn't have a lot of debt by then. I'm just saying we're not doing like a ton. Like, some people are like uber-focused on saving for that retirement, and I'm like, I'm more of like the mindset, it's gonna work out. We're having such a fun life.

You are the, you are the glass half full woman I've talked to a long time. You're like, your husband, this is your job. Ruth's like, listen, he'll be great. We will be fine. It is going to be fine. Okay, here, here's what I see. Ruth, nothing is, nothing is on fire. Okay, you guys, you're crazy.

Ruth, everything you're saying is on fire.

Stop it. No, let me finish. Let me finish. Let me finish.

What I'm saying is—

Ruth, no, no, listen to me. I'm being honest. I don't think anything is necessarily on fire right now. You guys are, you are spending a lot, but you're, you're not going deeply in debt. You guys have a plan to pay off the home, all of But what I'm telling you is what is mediocre right now is any level of intentional planning with your money, which means you're going to get a mediocre retirement. Everything's going to be just mediocre. That's it. That's it. So what I would do is I would look to say, okay, we're funding— we're— you're putting probably $14,000, $15,000 into retirement. You said you're funding both of your Roths. So I would double that. I think you guys with your income, you need to be putting $30,000 away in retirement specifically. Okay. That's your goal. And if you guys do that, then here's something else, Ruth, to be thinking about is the generosity piece, right? With money, you can give it, you can save it, you can spend it. You guys are great spenders. You're mediocre savers at best. So you need to be saving for future, Ruth. You need, because when John asked you that question, the best answer would be, I mean, if he's 59 and a half and loses his job, we're fine, 'cause we're gonna have $3.2 million and we're, or whatever, right?

Like you're gonna be able to know because you've planned. You are intentional. You know what's happening. You don't right now, Ruth. You're just like, "I don't know. Not many goals. Just enjoying life," right? And not all of that is bad. It just has to be balanced with, in my opinion, more long-term planning and goals. You and your husband need to sit down and say, "What are we shooting for? What do we want? We wanna pay off the house in 7 years, not 15." Like, to get on a plan and actually execute some of this. And then the generosity piece too. But no, I don't— okay, so, John, tell her why she's on fire and her whole— she's gonna be broke and it's gonna be terrible.

I'll tell you real quick, just real quick. The house is actually gonna be paid off in 3 years.

Okay, great.

Worth over a million dollars.

Great.

Okay.

Good for you. I, I think you're doing great. I think you're doing great.

You two spenders just go on a cruise together.

I know.

And just, this is what it's like hanging out with Rachel.

Vacation Ruth. I bet it's super fun.

I bet Vacation Ruth is madhouse. I bet it's awesome. Here, here's what I'll tell you. I'll tell you the same thing. Um, back when I was seeing clients, what I would tell somebody who sat down and said, hey, I've been married for a long time, but I met this secretary and and we have this great connection, and we— and I think it's going to be awesome. And what I would always say is, I will be here right now while you're thinking about it, and I'll be here when you have the affair, and I'll be here when your marriage explodes, and I'll be with you through the divorce. Like, so I'm telling you right now, Ruth, go so dark.

I know.

Oh, she said we can't make this dark, and I was like, hold my beer, I'll make it dark. But here's the thing, I will be— I hope to, unless I get fired for some weird reason, um, I hope to be here when you're 59, and I will be here to take your call Cause, cause, cause think about this. You have a million dollar house. That's amazing. It's amazing. Okay. That's so good. Y'all paid it off. It's appreciated great on this beautiful farm in North, um, North California. It's, it's awesome. Everything is great. And if you think about that, you've put, it's like buying one single stock that's worth a million dollars today. Yeah.

Uh-huh.

Everything in your life is counting on this working. Everything in your life is counting on your husband not having, being in the trades. Not having an accident. Everything is hoping that in 20 years AI hasn't taken 99% of the IT jobs away. Everything is hoping that our kids' lives are as magical as our lives. And so you are like, on the scale of risk, you've put everything on one side and there's so many variables out there.

Can I, uh, Ruth, do you know what y'all have in retirement?

Zero.

No, she said they fund their Roth IRAs.

I thought you said you didn't have anything saved.

Yeah, we do have our Roths. We've been investing just the past few years, we've been maxing them. Um, but you know, my husband also has a retirement account.

How much do y'all have in retirement altogether? How much? What's the number?

I don't know. I don't know.

Okay, is it half a million dollars or is it $50,000?

We—

no, it's like $50,000 in our Roth, maybe $60,000 in our Roth, and I don't know what his retirement is. They don't match or anything. So, um, I— he said it's not real great. Great, but I, um, like monthly about— I don't remember what it is.

I feel like that's how y'all roll. It's either really great or not too great.

Where it's— y'all have— y'all, do y'all— I'm gonna assume this because I need, I need this on my side of the argument. You do have just cash sitting in an account for savings, like for an emergency fund? Stop, stop. Do you, Ruth?

Yes. Yeah.

How much? How much?

Good. We have $40,000.

Great. Oh, Ruth, I'm telling Y'all need to rein in the spending. You need to be investing more, Ruth.

You gotta be intentional.

You gotta be intentional. You gotta follow the Baby Steps, what you're doing, but you're almost on Baby Step 7. Their house is almost paid off in 3 years. You need to be funding more in retirement. You guys need to be more generous. Find something to give to and have some goals, a 5-year goal for your money and where it's going. And then enjoy your vacations, Ruth.

It's fine.

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Up next, we have Ryan in Phoenix, Arizona. Hi, Ryan. Welcome to the show.

Hello, thank you for taking my call. I appreciate it.

Absolutely. Thanks for calling in. How can we help?

So I have a question. Um, I read the Baby Steps Millionaires, um, but I've been having a hard time getting my wife to buy into reading the book and helping me, you know, go through those Baby Steps together. She does have a— we have an account together, right? We have the same account. Um, but I know that she has her own account where all of her earnings go to that account. And then she just transfers that, uh, certain amount every month to the joint account.

How long have y'all been married, man?

Uh, 14 years.

14 years.

How much does she make and how much do you make?

Uh, I make net income a month is like $6,200, me. And I don't know how much she makes. I just know that I receive— she deposits $1,000, uh, every, every 2 weeks into her account.

So sometimes people read and they hear about the Baby Steps, or they read Total Money Makeover or Baby Steps Millionaires, and they're inspired financially. Sometimes they read this and it's revealing. Oh, me and my wife have been sharing a home and a bed for 14 years, but we are on different planets when it comes to our life. I don't know how much money she makes. I don't know how much money she has. We are, we are running parallel tracks inside the same house, right? And yes, the challenge is often people try to solve that conversation with you need to budget better, or we need to share one account and you need to stop doing this. And the only way I've seen people be successful is in that situation, like what's happened to you is, is you reading this and you're like, oh, I, I want this outcome. I want to baby step my way to, financial freedom, right? Security for me and my family. But it's revealed a really big fissure in your marriage, a crack, like a, like a canyon in your marriage. The only way I've seen that conversation be successful is not talking dollars and cents.

It's you sitting down with your wife and maybe for the first time being honest about what's inside your chest. You saying, I, I, I, I feel like we're running parallel lives. I don't know how much you make. I want us to be united in our dreams together and our money together. And we're not connected here. And that's where, that's the meat of the conversation. That's a vulnerable conversation. Cause she could look at you and say, I'm not doing that. I don't want that. And then y'all are gonna have to deal with that. I mean, you're talking at a value point, right? It's the anchor. This is a foundational question. And the only way I've seen it be successful is if you go first and you say, hey, here's what I'm feeling here. We are not together in our life. We're running two different lives under the same roof, and I want us to be— I want us to start uniting ourselves, our marriage, or starting uniting our, our vision for our life. Does that make sense?

Yeah, it makes sense. It makes sense. I mean, so the other day I had to use my credit card to buy groceries, so it was a bad situation. I mean, it's in me very— it made me feel very sad. Yeah. And I know that she like it. I, I feel guilty asking her for money because I know she probably has money. And it just made me feel sad, you know.

I'm like, it breaks my heart for you that you, yeah, you have a marriage that you've built over 14 years, you've co-built for 14 years, where you feel shame for asking your wife for grocery money. Yeah, right. If you called me and told me she's your ex-wife and she lived down the street or in another town, then that what you just said would make sense to The fact that y'all, y'all have kids too?

Yes.

Yeah, y'all have created humans together. And the dynamic in your relationship is, it's worrying to me.

Have you felt this disconnect to her, Ryan, for a while? Or how kind of lopsided this is, that it's not really a marriage, it's more just like a partnership in a business feel?

That's how it feels.

Yeah.

Yes, sometimes.

Yeah.

Is she open to this, like, unity conversation, or does she just not give a crap with what's going on inside your heart and mind?

Yeah, I've been trying to— I've been trying to talk to her about that. I started with— I started with, hey, let's sit down, let's talk about, uh, doing things together. We need to start planning for the future. We don't have a college fund for our kids. We need to be ready for a financial emergency where, you know, maybe I lose my job, you lose your job. We need to be ready for those things. I didn't give a specific dollar amount. I just said, you know, we need to sit down. And her response was like, no, I don't want to talk about that.

Did you ask her why?

She's tired.

Why? Yeah, she's— she just told me it's because it's all about money with you.

And so if it— I would, I would attempt the conversation again, and I would change two things. Number one, I would tell her, I got a babysitter for the kids, and I got us, um, reservations at a restaurant, or I want to take us to this place. And I also want you to know, I have— I, I've, I've beat you down about money. I've just talked about money, money, money, money for 15 years, and I'm gonna own that. I'm sorry. I want to have a different conversation underneath money. About you and me, um, building a new marriage together. And that way you're acknowledging upfront her chief complaint. And you're— and if you've got other things, if you tell her, if you're a worrier, if you are an overspender, if you always have had a scheme for the last 14 years and this is just another scheme she thinks you're having, um, whatever it is, go ahead and lay that out on the table first when you invite her out to breakfast or you invite her out to dinner and put that on the table.

Yeah, because the—

That's a good idea.

Yeah, the money problems, they are the symptom of this marriage that is not really intact, right? A wife and a husband that are not connected. And then once that starts happening, then you realize, okay, working on the same team is much easier. And some people find it the opposite way, Ryan. They end up working on money together and it helps their marriage, right? So, it can be either door, but something has to start moving. And it's for the sake of you guys, right? You've committed yourselves to each other forever, and you're thinking, "Okay, I want more in this." And so, there is that vulnerable place to be, Ryan. And I think that, yep, having that conversation and framing it the way Jon just outlined, I think is great.

And sometimes people in a marriage, they try to exert power by saying, "This is my money and you can't see it. You can't talk to it. You can't tell me what to do with it." But sometimes people, that becomes the way, like marriage dynamics, like he's talking about happen over time because somebody feels like I have to.

Mm-hmm.

Um, you're always beating me down about money. You spend wildly and I'm gonna make sure me and the kids are gonna be okay. Yeah. And so who knows how this dynamic got here? The, that's helpful in a therapy session to go all the way back in time. But man, right now we have to solve today's problem. That today's problem is we are not connected and we gotta reimagine how we do life together.

Yes.

And I'm gonna go first and own to own what crap I've brought to this thing.

That's right. Well, and I would say too, just to have like a moment of like, okay, I'm not saying we have to do this, but can we just for a second put numbers out and just see what happens? Like, how much do you bring in? How much do I bring in? Let's put it, let's look at our bills. Let's look at our debt. Like, where could we be financially if we just went all in together and used both sources of income to get us where we wanna go financially, right? And not to like threaten her about it, but it's like, okay, I'm not saying we have to do this today, but let's just look and see what this picture, You can't even paint a picture, Ryan, from a financial perspective going forward, 'cause you don't even know how much you guys have to work with. And there's obviously something that's a little bit off because you couldn't even pay for food for yourself. And so wherever that $6,000 is being allotted, you need to be looking at that, looking at your expenses. And again, you guys together look and say, here's how we're gonna run our household.

Here's the money we have coming in for our household. Here are the bills, here are the expenses, here are the goals, here's what I'm scared about, here's what you're scared about, right? You get it all together. And when you can do that and her not feel cornered or shut off, 'cause she's feeling that way for some reason, we don't know why, but that's there.

And this conversation, let's be honest, does not always end well.

Yeah.

Like, she may say, "This is my job and this is my money. You're responsible for the house and for the bills and for the kids and for the food. This is mine." And then you got a choice to make. I'm 15 years in, this is the arrangement. I'm gonna be sad and heartbroken, but I'm gonna do the best I can with the marriage I got in front of me, or I'm gonna leave. But trying to always be banging your head against a pretty solid brick wall is just a recipe for— it's going to implode at some point. So I'm going to choose reality that I got in front of me, right? I don't like this situation, it is what it is. Or I'm gonna get outta this situation. And I hate to distill it down, but that's often where people find themselves.

100%. And sometimes, Ryan, if you do get in a situation with both of you and you keep hitting that wall, or you keep feeling like we can't move forward, bringing in a third party, seeing if there is a great counselor in your area, a therapist, just to sit down for a couple of sessions and kind of rehash some of this with a third party is also really wise. Hey, what's up guys? It's Jade Warshaw. Now I know a little something about saving money. While my husband and I were paying off over $460,000 in debt, we went over every expense in our budget to find ways to cut back. Nothing got a free pass, including our phones. And you need to be doing the same thing. And now with Boost Mobile, one of the easiest places for you to save money is your phone bill. Their unlimited plan is just $25 a month month, forever!

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Welcome back to The Ramsey Show in the Fairwinds Credit Union studio. I'm Rachel Cruz here with Dr. John Delony, and we are taking your calls at 888-825-5225. First up, we have William in Houston. Hi, William. Welcome to the show.

Hello, thanks for taking my call.

Absolutely, how can we help?

I was calling because I was recently, uh, laid off after 30 years with the company. So they did construction.

How many years?

30 years.

Oh my gosh, dude. Hey, can I just say I'm sorry? That's hard, man.

That's a lot. Yeah. Oh, it's like a marriage. Oh my gosh.

There's some psychology research about this. It's a lot— a job loss like impacts your body like the loss of a loved one?

Yes, I can, I can.

Yeah, that's a heavy betrayal, right? That sense of I got betrayed. Yeah, dude, I'm sorry, man.

Yeah, so my question is, uh, my wife, she wants me to— she said I should take off like 6 months and just relax and just get my head together before I go looking for something. And I was just wondering, do you think that's a good idea or not a good idea?

I think it's, uh, yeah, Rachel, you, you hop in. I, I think it's, I think I broadly speaking, no, it's not a great idea. And here's why. Um, you're gonna sit inside this grief and inside this betrayal and those stories will take hold inside of you. Right. Now, what I would say that she, where she's right is maybe for 6 months you don't jump back into a full-time, I'm gonna give my entire mind, body, soul, and spirit to a thing, and I hope this this is the next 30 years. Maybe you go get a, a job at a grocery store. Maybe you go like get a job at a coffee shop there in, in Houston or something.

Um, right.

But like, I'm going to, I'm gonna work. I'm gonna have to get up and go do a thing. I'm gonna have to shower every day. I'm gonna have to shave every day. I'm gonna get back into a routine where I'm providing value to a thing, to a, to a group, to a customer.

Um, mm-hmm.

But I'm gonna also not just throw my heart and soul back into a thing again.

Again, right?

I got you.

So if you call me— let's take it away from work— if you call me and said, my wife of 30 years just walked out on me, should I just take 6 months off and stay inside my house, draw the windows down, and just sit here for 6 months? I would say absolutely not. I would also tell you, right, don't just jump back into another relationship, right? So there's— it's a both-and.

Um, William, would you financially be okay not working for 6 Yeah, financially we'll be fine because my wife said that, um, um, I'm overly obsessed with the numbers because we, we had a high savings rate before, before I was laid off. So we have about between brokerage and retirement, we have about $2.4 million.

Well, yeah. Well, lead with that next time.

Yeah.

Take 6 months off.

So good, William.

Yeah.

I mean, I'm not playing, don't, don't take 6, but you know what I mean?

I'm, yeah, I'm with John. I'm like, I, I think being idle for too long is not good, just for you. But if you don't wanna go back 40 hours a week, but you got something that you go to, you know, 2 or 3 hours a week, and then maybe you're like, you know what, I'm gonna—

I'm gonna volunteer.

I'm gonna volunteer, or I'm gonna hike every day or work out or start going to therapy once a week. Like, right, like using your time wisely, I think is important. Now you're not having to rush to go make a paycheck, which is a gift. But again, I think sitting idle completely, And not doing anything long-term, I don't think is great. Now, if you want to take 2 or 3 weeks and just chill, that's fine. But I would have a goal at some point in the fall to say, okay, I'm going to get into something. And again, I don't feel like you have to rush into anything major. And like what John's saying too, like finding the next thing, I wouldn't feel pressure to have to do that right now, but I wouldn't just sit and do nothing.

How old are you, brother?

I'm 48. And that's what I was thinking because like, Now I feel like my whole day is like I'm kind of idle.

Yes.

I get up in the morning, I get up at 6:00 and I go on like a 2.5-mile— I mean, like a 2-hour hike every morning. Yep. I go hike for 2 hours. I come back home. Then I try to find some honeydews or something to do right now. But like I told my wife, I said, I don't like being idle. I know it's not financial. It's just like I feel like I'm not useful right now.

Yeah.

A, a person needs a purpose, right? And a person needs a purpose. They need somebody to go add value to their life. That's how we're wired. That's how we're built.

Mm-hmm.

And so it could be that you get up and go down to Impact and volunteer there in Houston, um, with the least of these in our communities. And you spend 8 hours a day doing that for a month. Mm-hmm. Right. Just to clear your cobwebs. Right. But, but yeah, having a thing to go to where you are actively helping somebody else's life better, uh, get better.

Right.

And that's, that's, that's who you are. That's who all of us, uh, That's who we are. And that itchiness you're feeling is important. Can I give you two things I would love for you to do? You don't have to do them, but I'd love for you to. I would love for you, when you have some space in your mind and spirit, go for your 2.5-hour walk, get a piece of paper and a pen, or 3 or 4 sheets of paper and a pen, and I want you to write a letter that you will, God help you, never send Write a letter to the leadership team. Put it to the name of the company.

Mm-hmm.

But I want you to write a letter that has 3 parts to it. One, here's how y'all broke my heart. I gave 30 years of my life. I was never late. I was always on time. I was a good leader. I was a good manager. I took care of customers. Like, I want you to be honest about your anger.

Right.

I also want you to be honest about the good times. Thank you. Thank you for what happened. Thank you for giving me this opportunity. Thank you for paying me really well when I was struggling, when my first kid was born. Like, be honest about the good stuff too.

Right?

Right.

The third thing is I want you to write in that letter, here's who I'm gonna go be now. Here's who I'm gonna go serve. Here's the kind of— I'm gonna— another company's gonna get my services for another 25 years. And this is the kind of a man I'm gonna be when I walk in that door.

For.

And that, that sort of, it helps metabolize grief, right? If you want to be really, if you want to take it to another level, read that letter to a couple of friends, to a couple of your, of your buddies, read it to your wife, share that with somebody. Because as Kessler says, grief demands a witness. I'm going to read this letter, this heartbreak, this here's who I'm gonna be now. And there's something very empowering about taking hold of that grief and acknowledging it and then being honest about what I'm going to do And here's the second thing. Please, please do something to help my Astros, man. William, what are we doing?

Go Astros, man!

I know, but they're not going very fast right now.

That could be your volunteer work. Go pep them up, William.

Yeah, listen, go be that guy that helps people like me find my seat.

Yeah.

And then while you're there, cheer real loud.

That's right. Yep. And William, think too, you know, you're 48. Whatever that second half is for you, the beautiful thing is that you've set your life up where you're not in an urgent rush to go find the next thing.

It can be whatever you want.

Yeah, you go make $60 grand to keep the lights on. Like, you have the gift of having margin with the time, and that's great. But yeah, that second half, what do you want life to be? What is this next chapter going to look like?

And so you and your wife sitting down and talking through ideas and dreaming, you know, maybe take her to Papacito's or take her to Christie's, that OG seafood restaurant out there off Westheimer. Take her out there. And y'all have a dreaming conversation. What do we want the back half of our life to feel like, to look like? And y'all dream together and then go find a job that'll fit that. 'Cause Rachel said you have done such an amazing job, probably a pathological job over saving the last 20, you know, 20, 30 years.

Yeah.

But you set yourself up for just this moment when you can do whatever y'all want to do together.

Yeah.

And there's something so empowering when you and they get to make the shots, right? Call the shots and say, okay, this is what I want. And so maybe it's starting something from the ground up. Maybe it's plugging into something else. I don't know what that looks like for you, but yeah, just kind of take some time and dream about that. But also don't stay idle, William. But I don't think you can. I don't, he doesn't sound like he sits still.

I love this dude.

I love William.

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

Hi, Mary. Welcome to the show.

Hi, thank you for taking my call.

Absolutely, how can we help?

So, um, I have a couple questions for you all. Um, I am 38 years old, I am a single mom, and I work in law enforcement. About 7 months ago, I transferred to the Bay Area to give my son better opportunities and a better future compared to where we were, where I was stationed last. And in the process of doing that, I spent tens of thousands of dollars in attorney fees over several years to make this move happen. Um, I do not receive child support. Uh, I kept my first house as a rental now because of the terms. It's a 2.99% mortgage on a 15-year loan. I think there's about 11 and a half years left, but between the legal fees, relocating, and rebuilding my life, I've accumulated a large amount of credit card debt and I have a second mortgage already. So my monthly take-home is about, um, $5,900 after everything, but my required debt payments alone are at least $6,900 a month. And so before I even buy groceries or gas, so that's why I keep ending up back on credit cards every single month. Um, so my question to you is, because I plan on keeping the 2.99% first mortgage, but I need to at some point replace my current second mortgage with a larger home equity loan to pay off that mortgage and then all of my high-interest credit card debt.

And I'm in the process of that research right now. But my— the second part to that question is because I'm trying to build, you know, a retirement plan for myself as well. I've been— feel like I've been doing everything for everybody else, but not really focusing on me, my mental health, my long-term, you know, plans and everything. So, I don't want to spend the next 20 to 30 years just trying to survive. And, um, I'm trying to build enough real estate income that I can retire early, possibly, to enjoy my life.

Um, so hold on, man.

After I restructure—

let me jump in here. Let me jump in here. How do I have your permission? I'm asking you this as an officer of the law. Do I have your permission to be super blunt with you? Is that cool?

Yeah, yeah, of course.

Okay, here's what you're describing to me and Rachel. You have a giant— and when I say giant, I mean a humongous hole in the middle of your front yard. And your plan for getting rid of this hole in your front yard is going about 30 yards past that hole and digging another hole that's even deeper and using that dirt to fill in this hole. And then on the side, what you want to do is dig 6 or 7 other little holes to fill up that one big hole. You see what I'm saying?

Yeah.

Like you have to acknowledge the plan you have in front of you is wholly unsustainable. And the plan you, and you, you've gotta deal with the giant hole first with new dirt. You can't just dig another hole in your front yard and try to refill it. And the plan you have down the road is I wanna have this income or whatever. That's all well and good, but you like, your life financially is on fire right in front of you. So let's deal with the fire first.

First.

You know what I'm saying?

It has been for a long time. A lot of sleepless nights.

Yeah, yeah, yeah, yeah. It's caused a lot of stress. And you know, you're trying to do 18 things at once as well. Pay off the debt, try to get the second mortgage paid off, then fund retirement. You know, there's so many directions that you're looking, which is understandable because of the situation you're in. And so, I think one goal for you, Mary, and hopefully in this call, we can help direct that, is to focus on one thing. And we call that focused intensity here at Ramsey. Like, I'm gonna be focused on one step at a time. And what that looks like is first getting $1,000. It's our Baby Steps. Do you have any cash available in savings?

I have my short-term rental savings at this point, and that's about it.

How much is in there?

It's about $12,000.

Okay.

Is that just retained earnings for fixing the air conditioner and ceiling fans and stuff?

It is, yeah. So that's just the, basically the income I've made, uh, the last 6 months on the rental so far.

And the rental is not near you, right? Because you moved.

No, no, I moved.

So you need to sell that house, Mary.

Yeah, sell the house.

You need to sell the house.

I know you got a good interest rate.

It doesn't matter.

You're, you're, you're drowning underwater and you're holding on to this thing called the interest rate and you're like, look how good I'm doing, but you're underwater.

And the interest rate is still, you know, because you're holding onto that, it's keep, it's, you're losing sleep in all these other areas of your money. And so we never recommend being a landlord long distance. So whenever you move, you or anybody else that calls, we would always recommend selling your home when you move cities. So for the sake of time, if you sold that home today, Mary, what kind of equity is in that home?

I have, um, probably about $275,000 in equity.

Okay, so if you sell that house, it completely clears you.

Is there a second mortgage on that home or your, or your per— or your primary home?

That, that— there's a second mortgage on that home.

Yeah, on that home. So after all is cleared out, everything, you would be left with $275,000 of equity around there?

Yeah, I mean, hopefully.

But how much my How much credit card debt is there?

Um, about $40,000.

$40,000. Okay. Is most of that attorney fees and then trying to keep your life afloat with bills?

Yeah. Okay. $30,000, about $30,000 was attorney fees, um, the last few years.

Perfect.

Moving and relocation.

Okay. Gorgeous. Gorgeous. I like this plan, Mary. We're, we're, we're making traction here. I don't know if you're gonna follow it, but this is what I would do. What other debt do you have?

Um, that's, that's just it. That's it. It's just the second, the first, and then the credit card debt.

Okay, okay, great.

Uh, the problem is, is my, my mindset has always been trying to provide for my son and leaving something for him, which— Mary, which was the house.

Yeah, I know, but here's the thing. What I want you to provide him right now is stability and a mom who feels safe in her own skin.

He does not You're spread so thin right now, right now, Mary, and you have something right in front of you that can solve all of that, that can solve it and move you forward. I mean, like, you could invest $100,000 of this as well and leave him half a million dollars in cash down the road. Oh my gosh, easily. Like, what can— what you can do for this money working for you versus working for everyone else and getting a HELOC and then getting this and getting— I mean, like, you are working hard for everybody else and not you. And so, really focusing in again and knowing that, yeah, this is a little bit of your get-out-of-free-jail card to start over, which is a beautiful thing. What's your— where are you guys living now? Are you renting or do you own a home now?

We're renting, but it's through my job, so it's really low rent.

Okay.

I was gonna say, you're an officer, which has somewhat of a capped kept salary, but you're in a really expensive place to live.

Yeah, we are.

Yeah, so part of that too, Mary, is you have to be thinking long-term that if you're not in that job long-term and you look up and you don't have any money to put down as a down payment on a home, eventually, like that's a goal. So that would be a goal for me is to clear out this debt, set aside 6 months of an emergency fund. I would normally say 3, probably in your situation, but I think all the stress you've been in, I think 6 gives you ultimate peace piece, open up a high-yield savings account with Fairwinds Credit Union and park some cash there, 6 months emergency fund. And then I would look ahead and say, okay, I need to put some of this in retirement. I'm gonna put some of this away in maybe a separate savings, high-yield savings account for possibly a down payment, maybe in the next 10 years. But I'm gonna be thinking about my housing, 'cause eventually the rubber's gonna meet the road with that. But there's all these, do you see what I'm saying? Like you take your money and you let it work for you and it's growing.

And you're making interest when you invest, your money's making money for you, not for all these other people living in this cycle of debt. And so, you really could go from sleepless nights, stressed, feeling like, "I can't even, I have to have credit cards to finish out the bills every single month," to having no payments, having an emergency fund, having a plan for your house, for your retirement, and your son's college. Like all of that can be completed, and a big jump start on that is selling this home.

Yeah, the, the cost here for you is grieving the pic— the loss of this picture you had where I'm going to hand my son this old house. I'm, I'm going to be sad about that, I'm going to be heartbroken about it, and then I'm going to be about changing my life.

Yes.

And for you, like most of the calls on the show, man, it's a 3, 5-year, 7-year slog. For you, it's literally 30 days, and everything can be different for you.

Hey guys, it's Rachel Cruze. If you're working the Baby Steps, every major expense deserves a second look. And healthcare is one of the biggest expenses in most families' budgets. And that is why I recommend that you check out Christian Healthcare Ministries. CHM isn't insurance. It's a health cost-sharing ministry. That means members help pay one another's medical bills. And they've been serving Christians since 1981. CHM programs start at just $115 a month. And here's why that matters. If you are paying more than you need to for healthcare, that money could be going toward paying off debt, building your emergency fund, or reaching your next financial goal. And your monthly cost isn't based on your medical history or where you live. Y'all, a lot of families find CHM gives them more room in the budget. That's why so many members say they're better with CHM. And right now, new members can receive a 50% credit toward towards their first month of membership. Go to chministries.org/budget and use promo code Ramsey. That's chministries.org/budget and promo code Ramsey. Next we have Anne in Grand Rapids. Hi Anne, welcome to the show.

Hello, I'm a little nervous, so bear with me. Sorry.

Oh, you're great, don't you worry, don't be nervous.

So I have a question. So I have a verbal promise for a position. They are ready to hire me and they have— they're just in waiting to place me in an office. I've been waiting a month and a and I'm just curious, how long should I wait? I'm doing like side gigs. I'm exhausted.

Have you, do you have a contact there?

I do. I do. I have someone in my network. They actually, she had actually asked me over the past couple of years to try to recruit me and it just wasn't the right time.

Um, no, but like, do you have somebody you've been like on board that you're going to be onboarding with that you've been back and forth? When's the last time you talked to them?

Yeah, um, you texted last week Wednesday. I emailed the recruiter and then I texted my contact, but I haven't heard anything back yet. But they're like, yes, we're still interested, we still want to have you. So it's all verbal, but I don't have anything in writing.

I'm like, dude, I'm gonna tell you, I— this is me, Rachel could have a different thing. I would, I would keep pressing, putting my feelers out for other, other things for two reasons. One, okay, um, Um, it's been my experience when somebody really wants you, you know it, they know it, everybody knows it. And the second thing is, is it's, it's kind of like after a first date and they're like, yeah, I'll call you tomorrow. And they call you 9 days later. They're kind of giving you an insight into who they are.

Mm-hmm.

Yeah.

And, and even if it takes a long time to find an office, it's confusing. We have to get a budget line filled, all that. That's business.

That happens.

That's life. The fact that they're not calling you and letting you know and keeping you apprised of here's what's going on.

Yes.

Here's this and here's the start date. Um, and we don't have an office for you, so you're gonna work from home until we get an office. Like the fact they're not communicating with you well, that would be an insight for me as to how they might do business once you get to be working there.

Yeah.

Well, I was warned too. They're like, well, you know, the company moves slow. They really, really move slow. So, you know, hang on. And I've, I've looked, you know, on the internet or whatever to say it can take 2 to 6 months to be placed and to be into an office. I'm like, good night.

But that's so, so bizarre that they would interview, post a job.

Is this a university position?

Accept it?

No, no, it's not. I mean, the process is very, very long. Um, it's been about 6 steps so far.

So, gotcha. So my interview process here was 18 months. It was long, long. But then when it came to Dave Ramsey said, you have 48 hours to make a call and here's the date. You know what I mean? Like, so then what, it took a long time and it, and it should, right? Dave's gonna deciding whether to put my name on the, on, on the, my face on the side of this building.

Right.

But once it was on, I mean, it was overwhelming. It was super on.

Right.

And so I, I don't know. I, I, yeah.

And I would ask for something in writing that employment for your own sake, starts by August 1st or August 15th. Like there's something in writing saying, "Yes, I am going to be employed here." And if they can't give you that, it's almost like an employment, you know, employee agreement. Like, I mean, that stuff is pretty standard when you're hiring.

That's job 101.

And so if they can't even provide that, Ann, I hate to say it, what a bummer. But yeah, I mean, and I might communicate that to them. Job.

Yeah, yeah, but it might be a dream job in a nightmare situation.

Right job, wrong company, maybe.

Yeah, maybe.

Yes, that's a great point. That's a great way of looking at it.

Oh man.

Yeah, I hate this for you.

I would say you don't have to like fully close the door, but I would be looking at other places. And if you get another job, you know, except, you know, someone hires you somewhere else, you withdraw from the process.

You withdraw.

Yeah.

Okay, that's kind of what I was leaning more wards. Um, but I just thought I'd get you guys' insight.

Yes.

Yeah, if I was in your exact shoes, I would leave that door wide open, but I would start the process of having conversations with, with other alternatives.

Yep. Oh, I'm so sorry.

I hate it for you.

So frustrating.

So frustrating.

Crazy. Okay, uh, let's go to St. Louis, and we have Ethan on the line. Hi, Ethan, welcome to the show.

Hi.

Hello.

I'm super excited to talk to you guys.

Oh, well, thanks for calling in. How can Help.

Um, so my wife and I are both 24. We have a soon-to-be 1-year-old girl, uh, and we're working on Baby Step 2, trying to pay off our remaining debt by July of 2027.

Oh good.

Uh, and have our emergency fund done by September 2027.

Nice.

Um, I'm a youth pastor and my wife is self-employed, uh, specifically a 1099., uh, NEC. And since I'm an ordained pastor, I'm also treated as a self-employed individual for tax purposes. So my question is, for future, um, when we get into Baby Step 4 and start investing again, should we open a traditional IRA for tax benefits now, or should we open a Roth IRA for the future tax benefit?

Almost always, like 99.9%, I always go for the Roth. There are small exceptions with high-income earners and what they'll be earning in retirement that you can kind of finagle the math. But I do a Roth IRA, my husband does a Roth IRA. We do not have a traditional because from, especially at your age, Ethan, the amount of money that's gonna be growth versus what you put in, is gonna be insane. Like it's most, it's gonna be, I mean, I don't have my calculator in front of me. I'm gonna say 80% growth. By the time you're 59 and a half, what you and your wife have put in is gonna be so small compared to the growth. And I would much rather pay taxes now and have that growth be tax-free. So when I retire, there's no taxes on millions, possibly millions of dollars right there. So that's, yeah, for sure the Roth IRA is the way to go. Does your church offer, any like 403Bs, anything, or you are—

Yeah, yeah. So I have a, I have a 403B through the church as well.

That's great.

Um, so, so tell me about this. You're ordained but you're self-employed? You're self-employed? I don't understand that. Are you a 1099 or they have you on a W-2?

No. So it's weird with, um, being an ordained pastor. So like, um, I get a W-2, um, but I have like a housing allowance, um, that is federal income tax free. Clergy, but I'm taxed at a self-employment rate for the rest of my income.

So I—

why that is, I mean, I don't know, but that is how my tax professional has explained it to me.

Does that mean that— is that— is that— I, I know about the, the housing allowance for clergy. I know about that. But is this because the church is not putting in their portion of your tax benefits, and so you're having to pay the full 32 or 33%?

Um, yeah, so the church doesn't, um, yeah, they don't pay for the taxes, so it's the— I have to pay the self-employment tax.

Why don't they pay the taxes for their employees?

Um, it's a small town church, so it's, um, I mean, I don't know if it's really feasible for them to do so while also, you know, being able to keep me full-time. Um, so it, you know, it would cost them extra to do that. Okay.

I think, yeah, it's usually the role of the employer, right? Unless you're a 1099 contract employee.

Yeah.

But you've got a good tax professional, so I'll let y'all work that out. It sounds like it.

Yeah. And I've never asked, I've never asked the church. I just kind So, you know, when I got hired, I just understood that that was what the deal was and, you know, just been okay with that.

How many people are on staff?

I guess I could ask them.

I'm just curious.

There are 3 of us right now.

So it's a tiny church. Yeah, probably not a lot of money. I don't know. Yeah, I don't know how they're setting up all of their employees and what it is.

Yeah.

But to answer your question originally, Ethan, yes, is I would. I would do two Roth IRAs. And if they have the 403 and there's a good, you know, matching situation there.

There's probably zero match. You're not even paying your taxes.

Yeah, that's probably true.

I mean, they're not paying their portion of employment tax or FICA tax or any of that stuff.

Yeah, yeah. Dang. So Roth IRA, Ethan, is what I would do. And also remember too, in these situations with people in ministry, if you ever want to go into the private sector or public sector, I guess, you know, and you leave your housing, you have to think through, okay, if I'm 34 and I'm gonna go and start my own business and do my own thing, you have to be thinking about the housing.

And so you may— I have to have a place to live.

Yes, you wanna put some money aside for possibly future Ethan and his family if you guys ever choose to leave that specific church and the other one doesn't have housing allowance and all the things. So have that in the back of your mind too, Ethan, maybe some extra savings there.

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All right, let's go to Michael in Minneapolis. Hi Michael, welcome to the show.

Hi, how are you?

Hi, we're doing great. How can we help?

Good. Um, I am 28 years old. I recently just bought my first house and it's overwhelmingly stressful for me. Um, there's been some problems that popped up and I just didn't expect to have this much stress, like, to the point where I can't sleep. The point where I had to go get medication from the doctor. And I'm just really considering selling the house and going back to apartment living where I was stress-free and to not have this weight of a house, you know, on me right now. Bro, I just don't know what to do.

You just walked through the first chapter of my anxiety book. I've been there, exact same spot. So help me, if you think about your fear and your anxiousness globally, distill it down for me. Be very specific. What are— give me 2 or 3 or 4 things that are keeping you up at night.

So there, when I first moved into the house, I noticed, or I got a— I noticed there was mold in the basement and other parts of the house.

Did you have the house inspected?

It was not inspected, no.

No.

Oh no.

Well, geez.

Okay.

Yeah, but there's some good news actually. Um, when I, so I noticed mold in the basement, it was pretty, pretty bad in the basement, but, um, I contacted the seller, um, who agreed to pay for the remediation of the basement actually. So that the basement is now cleaned and remediated and he paid for it fully. He didn't have to, but he, he did. Um, so I was really lucky with that. Yeah.

You don't hear that very often. That's still pretty great.

I just feel like there's still like, I just have this like thing in the back of my head where I think there's like mold everywhere and it's behind the walls and I'm just just not noticing it. And, um, I feel like I have a scratchy throat all the time, but maybe it's just because I'm so paranoid and stressed. Yeah.

Um, where else besides your house, where else are you, um, a generally anxious guy? What, what other things keep you up at night?

Um, in terms of the house?

Nope, not how— take house off the table.

Okay. Um, I'm a very indecisive person, so I stress about a lot of, like, any major decision. I wait till the last minute to make it, and then I feel like I regret it.

Okay, give me another one.

Um, I'm not really stressed out about my job at all, but, um, so that's good.

But what's the state of your relationships?

Um, I have good family, and parents are alive, healthy. Um, I just recently am in a relationship with someone that, you know, in the past month, so that's going well.

So who, when you hear the story in your head that you make bad choices, that you're gonna make a wrong choice, that you're gonna screw this up again, whose voice is that? 'Cause it didn't start in your head. Whose voice are you beginning to repeat in your own words?

I don't— I guess I don't know. I don't, I don't know what your question is actually.

So when you're indecisive, right? Should I do this or should I buy this car, the red car or the green car? Well, if I buy the green car, it's gonna have this many miles. And if it's got— if I buy this car, it's— the wheels may fall off. And if I— and then you buy the red car and you're like, man, I should have bought the green car. Underneath that narrative is is a story running through your veins that you don't make good choices, or that there's always going to be another shoe that drops, or you didn't plan right?

Yeah.

Whose voice is that?

Yeah.

Who told you that story?

I don't, I don't know. I guess to me it feels like it comes from me myself, that I'm just not— okay, you know, I don't make— I just, even if I make a decision, I regret the decision the and just super indecisive. But that's, so I've been knowing that about my, I've known that about myself for a while.

Okay. That's where I want you to sit down with a licensed mental health professional and walk through it and not sit down and say, I am anxious and indecisive and I wanna talk about it. I want you to sit down with a therapist and say, I've struggled with indecisiveness and with a, a meta narrative in my life that I'm probably gonna screw up the next thing. And I want to be free from that on the other side of it. And any licensed professional should be able to walk you through that. Cause there's some pretty simple action steps in a therapeutic setting to walk somebody through that. I've been there. I've been on the other side of it. Okay. And also when I found myself in your exact situation, we don't have mold as much in Texas, we had different stuff. Part of my panic that I had all the time, 24/7, was I had put my, my family in a really financially precarious situation because we had six figures of student loans, we had two car payments, we had credit cards, and we had this house on top of all of it.

Yeah. Michael, what's your financial situation?

So currently I make, um, like $75,000 a year in an IT job. I actually just got— because I was— I was a bit so stressed out the past month, so I actually just applied and I got a job, um, making like $100,000. So So I start that in like 3 weeks. So this, that kind of helps me a lot to—

Okay.

What kind of debt do you have?

About the financial situation? Um, I don't have any credit card debt. I have both my cars are paid off. I just have student loans, about $35,000 maybe.

Okay. Um, do you have cash in the bank?

Yeah, about $8,000 in the bank.

In the bank. Okay. And how much did this house cost?

$270,000.

Okay. How much did you put down?

I was a first-time homebuyer, so I put down the minimum, which was like 2.5%, I think.

Okay.

I did get a grant for $15K that covered pretty much all the closing costs and my— Sure.

So I think just a couple of learnings, Michael, going forward, that part of your stress is caused by you don't have a ton of cash in the bank that can help maybe mitigate if there was a massive mold problem, right? Or whatever it looks like. You still have student loan debt. You put down not a ton, right? We would say at least 5% if you're a first-time home buyer on our end. So you did even less than that. Everything is a little bit out of order. And then you didn't do an inspection, which now you've learned your lesson on that. Yeah, I did. Yeah, so there's just some lessons to be learned and it's been done and you're doing this a little out of order. A couple of things to do just to create, for today's sake, some peace is I would hire a company to come in, test areas of your house just so you know of, okay, is there mold everywhere? Is it just in my head, right? You can figure that out. And so go get some tests done, let them run the stuff in the vents. Like you can figure out kind of where is the state of my house?

My fear is this right here. I'm overthinking. I think I have a scratchy throat. I'm paranoid. Annoyed, get it taken care of, get the answer. And then from there, planning out, okay, if there is mold, I go down path A. If there's not, then there's plan B. But from a financial perspective, your number one goal is to get the student loan cleaned up. And I would do that within the next 9 months, especially with your new job, living on nothing. If the house does need repairs and things, like, put it in order and cash flow all of them, because you will be more stressed, Michael, if you go deeper in debt, or you go get a second mortgage, or you take out a HELOC, right? And you keep adding on to your debt to fix this house, that's going to cause more and more stress. So I would get all the facts I could down on paper, prioritize them, and just start knocking them out. And again, I, I probably would not jump the boat right now and sell the house. Sell the house. I probably wouldn't unless it's just absolutely fall in pro— I don't know, I don't know why you would, but I would stick in it a couple of years if you could.

But now I think it's one of these things like, that was stupid. That was so stupid that I did X, Y, and Z, right? And we call it stupid tax around here. And say it out loud and you learn from it. We've all done stupid stuff, made bad decisions, but I think clarifying those and seeing those is going to help you move forward. And I think some of this fear too, I mean, I'm not a therapist, but is in your head. And I think you can get some of those answers.

You get some of those answers.

Yeah.

So if you're financially precarious, your body's right to sound all your alarms. So don't try to silence those alarms. Like Rachel said, information will be your friend at this stage. So go get those facts, go sit down with a counselor, and yeah, if you can stick it out, stick it out, stick it out.

Welcome back to The Ramsey Show in the Fairwinds Credit Union studio. I'm Rachel Cruze, hosting this hour with Dr. John Delony, and we are answering your questions at 888-825-5737. 522-5255. All right, let's go to Chris in Tampa, Florida. Hi Chris, welcome to the show.

Hey Rachel and John, I'm a long-time listener, first-time caller, and Dr. John, I'm an OG 17.

Yeah dude, I'm glad to have you over on this boat.

Yes, hey, uh, my question today is about co-signing for student loans. So, uh, my father, he's elderly, and I've been helping him plan his estate and his will And in the process, I found out he co-signed for a student loan for my nephew. And as far as I know, my nephew, uh, I guess he deferred the payments, uh, and then he's on an income repayment plan. And I believe the balance on his student loan is about $200,000. So my question is, yes, yeah, he got a computer science degree and he's working at Best Buy, so not exactly the best investment of money.

Oh no.

But my question is, when my father passes, will his estate be liable for the balance of the loan? In other words, will the student loan lender come to my father's estate and ask for the balance? How does that work?

That's a great question. I don't know.

I want to say it's to the primary on the loan. It would be your nephew.

It would probably depend on if it's a federal student loan or if it's a private student loan too. If he got it through a bank or he got it through some off-book— not off-book, but some lender that's not a federal guarantee, that's not federally guaranteed, it may be different. That's a great question. I know if you, if you pass away with your student loans, they're, they're, they're gone, right? But I don't know about a cosign.

Was it a Parent PLUS loan?

I, I'm not sure. Um, I just found this out when I was helping him go through, uh, all of his expenses and accounts and so forth, and I saw that he was getting emails about the payments. So I don't know all the details. I don't think it's a Parent PLUS loan. If I had to guess, it's probably a private student loan.

Yeah.

It's been a minute since, I mean, it's been what, 6 years now since I was sitting in the middle of all that at a university. But for somebody to get a bachelor's degree and they're gonna hold $200,000 of debt, I don't, off top of my head, I don't remember a federal program shelling out that much money that you'd have to go somewhere else to get the money. But I may be wrong on that.

If it's private, they're probably gonna go after, they're gonna get their money. They're gonna get their money. Yeah, it's not gonna be.

'Cause they're gonna say, we would never have given this kid that money if this guy hadn't have backed it up with his wealth.

Yep.

Okay. Yeah, I better do some digging and find out exactly where, who has this loan.

Yeah, I would say for sure. Or if it's, yes, if it's government-issued versus a private through a company, then those are gonna be two totally different things. 'Cause even with a private student loan, if you die, that loan still, I wanna say, with a private company could still be put against your estate.

Really?

It's only federal student loans that are not bankruptable. Private student loans, that whole world is a totally different machine. I mean, you're dealing with banks and lenders at that point, not the government.

Surprised that there can be an income-based repayment plan with a cosigner too. That surprises me.

Yeah, I'm not sure. Like I said, I really don't know all the details, and I can only imagine with my nephew's situation, I can't imagine him making the full payments on that loan.

So I'm assuming he's on an income-based repayment plan, or he's just not paying anything. If your dad's starting to get emails as a cosigner, that means the bill— the loan's not being paid.

That's true.

Yeah, I think an income-based repayment plan, if there's somebody else who can foot the bill, who signed up to foot the bill, they're not going to give you anything. That would be my guess. I could be totally wrong here. Um, has your dad made any payments?

As far as I know, no.

What's the status of his estate? And meaning, can he absorb this $200,000?

Yes, he can. And the reason, uh, we're thinking about this is because his will is pretty straightforward. I mean, he's just going to split the estate between my sister and I 50/50. So the question is, okay, well, when that time comes, are we just going to split that if they come and say they want the balance paid off?

Or does it come out of your sister's half?

Exactly.

Is it her son?

Yes.

Does she know about this outstanding balance?

Uh, I'm sure she does.

Yeah, I wouldn't be so sure unless you've had a direct conversation with her?

Yeah, we haven't had a direct conversation, um, but I'm planning to, you know, since I found out this information. Yeah, yeah, need to know. So I just want to make sure when my father passes, there's no questions, there's no surprises. We all know what's happening. In fact, I'm, I'm probably going to have a conversation with my father and just ask him, what do you want? If— do you want to pay off this loan out of your estate, or how do you want to handle this?

Yeah, dude, sorry, this whole, this is such a mess. That's why we don't like co-signing, man, 'cause it just complicates family relationships in such a powerful way.

Yeah, so it, yeah, I think that's for sure the right path to take of everyone being on the same page completely before he passes, because you don't want this to rip apart your relationship with not only your nephew, but his mom, your sister, you know?

Yeah, your sister.

And all of that and what's fair, what's not fair.

Fair.

Um, that would be so hard. Why do I feel this like knee-jerk that I'm like, she should pay it?

I, I—

on her side, right?

I think so.

But if she didn't know about it and she's like, oh my gosh, my dad did— oh man.

Yeah, I mean, the— yeah, without talking to anybody else, my thought is if Hank set up an arrangement with my parents and they co-signed for $200 grand and I'm getting half and my sister's you're gonna have. That should, I mean, it feels like it's my kid. It should come out of my half.

Right, right.

Yeah, that's my impulse.

Oh man, yeah, you guys, this is the one-on-one on why not to co-sign. I mean, genuinely, it is, you entangle yourself in a situation, and the reason that you need a co-signer is because the person that is lending you the money, lending them the money, doesn't trust that they can pay it back. Because of whether it's their debt levels, whether it's income-to-debt ratios, whatever it looks like, the bank is looking and being like, eh. And this could be a $30,000 car loan, right? I mean, this is— that to a—

a cosigner makes a financial matter a relational matter every time. And it's just not worth— it's not worth my, my friendships. It's not worth my relationships with my parents or my kids.

Yeah, I was— we were doing a podcast this morning, um, recording one, and and the conversation got brought up about financial boundaries. Which financial boundaries do you wish you had set earlier? What financial boundaries do you have in the future? And it's sometimes, you know, it's, I think, a wise thing. I mean, I even was like, oh gosh, what would mine be? To have a forward thought towards your future, and then even looking back and being like, hey, that's where I messed up with money. I probably should have had a boundary there, right? You just have this awareness to go back through your money story and then planning for the future and thinking through relationships and money. What was healthy? What's not healthy? What does this look like? When is a good time? When is not a good time, you know, to help family or friends or whatever it may be. But just being aware of that, you guys, 'cause I think sometimes you get caught in the moment and you probably don't always make the right decision.

Absolutely.

'Cause it's so like emotional.

Or it'd be hard for a grandparent to talk to their nephew and say, I love you enough to not give you this loan.

Yes.

I cannot co-sign this. Oh my God.

$200,000 and working at Best Buy.

Yeah.

Man.

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All right, today's question comes from Sydney in Texas. Sydney writes, my boyfriend and I have had an on and off relationship for 5 years. He's always been the one to initiate a breakup because he doesn't think we share the same mindset on finances. Sydney, that's not why he's breaking up with you. Neither of us have any debt, but I would like to go to graduate school, which would be a $10,000 loan. We don't live together, we each have our own place and we pay our own bills. He thinks I have financial spending issues because I ask him to pay for my nails, hair, clothes, etc. if we go on dates. That's not a financial issue. He thinks you're too much. My job only covers my bills and groceries with nothing left for fun spending. Am I wrong for wanting to go to graduate school to increase my income, or is this a blowup waiting to happen?

It's not sounding great, Sydney, uh, not in the positive right direction. Yeah, if your boyfriend is funding your lifestyle and you can't sustain, uh, you have too much lifestyle, Sydney. So he probably wants some level of self-control from you.

Yeah, you're not disagreeing on finances, you're disagreeing on you don't live in reality.

Yeah, I mean, and then going into debt, if that is a value system of his, it's like, no, I don't want debt, and you're going to go take out $10,000 in student loans. Yeah, he probably is like, well, I don't know if we have a few— I don't know if this is going to work long term.

Yeah, where you don't have— you don't live in financial reality for yourself. So what's it going to look like when y'all combine a household? And yep.

So, um, so for your— for your sake, Sydney, regardless of boyfriend or or not, I think it would be good for you to go through a process of budgeting, a process of saying, hey, what are my values around money? I can't spend more than I make. No one else is funding my life. What I make is what I live on. What debt do I have? What's my next goals? Maybe it is graduate school. So no, it's not wrong to want to go and advance your degree to get a better high-paying job if that's all connected that's not a bad thing, but you just wanna do it in a wise way, which you, you wrote into us. So it would be a debt-free path to go and do that. And so what does that look like? Does that look like saving up? Does that look like having maybe 1 year saved and then you're working and saving the rest for the next year and you cash flowing as you go? Is it working at a company that helps pay for the school? Like getting creative and actually putting some effort into it to it, it's good for you, Sydney.

But also it's probably a very attractive quality to your boyfriend who's like, holy crap, you spend a lot and you're dependent upon me.

Like, that's— Well, and you say like, I don't have any financial problems, but my job only covers my bills and groceries. So I can't do anything with my hair, with my nails. I don't have any clothes. Like he's looking at you saying, you don't live in the real world. Like if you want that to be your life, you wanna get your hair done, you wanna get your nails done, you wanna have clothes to wear, work. All that stuff makes sense and it's great, but then maybe you need to make more money, and that just is about living in reality.

Yep. And it may not take a graduate degree to go get that, depending on what field you're in. You could just apply for another job or go get a side hustle. My gosh, go get—

I just imagining this poor guy just being like, we don't agree on, on finances. Listen, Sydney's boyfriend, you need to be honest with her about why you keep breaking up with her. It's not because you don't agree on finances, it's because because she lives in an alt universe and you like to live in reality. So just be honest about that.

Poor Sydney, we love you, cheering for you. Hope you can do it though.

Hope you can do it.

I love you.

I, I, I want y'all to be well and good.

Yes, we'll see.

This is not a— this is not a—

not looking good—

finance—

same mindset on finances. That's not really the root here.

Oh man. All right, let's go to Kayla in Atlanta, Georgia. Hi Kayla, welcome to the Hi, Rachel and John.

Thanks for taking my call.

Absolutely. How can we help?

Hi, um, I am 33 and $58,000 in debt. I came to Christ about 3 years ago, and I've just been learning so much about stewardship, and I want to do better in honoring the Lord with how I manage my finances. So I'm calling to get a specific strategy on how to tackle my debt and be done with this for good. I'm it. I want to build a future college fund for my daughter who's currently 5, stay safe for a home, and continue to contribute to my retirement. I also just want to prepare myself to be a future spouse and not have any debt.

Good for you, Kayla! So impressive. So many amazing goals that you have ahead, which I think are all great and all very doable. It's gonna take some time, but knocking each one of them out kind of one at a time, I think I think is the best way. And so starting with the debt, uh, what kind of debt do you have?

Um, I have $36,000 in student loans and $17,000 in consumer debt across 4 credit cards.

Okay, so 4 credit cards, that equals $17,000. Okay, and, um, how much money do you make?

I make, um, just a little over $125,000 a year.

Oh, good.

Dang, Gina, you're doing great.

That's great. What kind of work do you do?

I'm in commercial real estate. Yeah. Property marketing for commercial real estate. Good for you.

That's great. Well, what we teach when you pay off debt is the debt snowball, okay? So, this is where you're gonna list all of your debts, smallest to largest. So, even those 4 credit cards, break those out. And one may be $4,000, one may be $6,000, $3,000, $4,000. I don't know what they all are balance-wise, But you break out all 4 of those, and then your student loan, is it one large loan at $36,000, or are there multiple?

I think it's broken into 2.

Okay.

Like $20,000 and $10,000-something.

Perfect, so put that in there as well, right? So all the credit cards and student loans, you're gonna take all of that. Again, write 'em out smallest to largest regardless of the interest rate. Pay minimum payments on everything, and pay off the smallest debt first, okay?

Mm-hmm.

And what's wild about that is you could probably pay one credit card off off in a month. Like, I bet if you had a $3,000 credit card, I think with your income and you do nothing, you cut back on out to eat, you cut back on everything, and any margin that you have, you throw it at this debt. And what's beautiful is once that $3,000 credit card is paid off, there's no payment on that. So you take that payment, throw it at the second smallest debt with all that margin you have from your budget. And so you just keep that moving. And again, looking at the numbers, I'm like, there's a really good chance, Kayla, in the next, I mean, 14 months, you could have all of this cleared if you really, really buckled down and looked at it. Yes. And it may mean, I mean, I don't know what your situation is with childcare and all that. You know, you pick up a second job even a few nights a week. You know, you just throw as much income at this debt and you get it knocked out as quickly as possible.

How old's your daughter?

Uh, she'll be 5 in November.

Perfect.

You know what's going to be super fun for y'all? To cook meals together in the evening as part of a mother-daughter activity. And it's going to be the— it's gonna be the biggest pain in the butt of all time because it's going to take 8 times longer than if you just did it yourself. But it will be a cool experience y'all have. It will save a ton of money on just eating out, and y'all get to spend some really like, like connecting bonding time together. Um, and that'll be, that'll be, that'll be great stuff.

So may I ask a question? Because I, I think for me, again, the mental and spiritual click really locked in for me, but I recognize my own triggers, right? Like overspending, um, maybe instant gratification. And for me, I'm not like, you know, spending my bills on a Louis Vuitton purse or anything like that, but I definitely, if I wanna travel, I'm usually not, I think that's kind of where my, I use my credit card. And so I'm trying to just like go cash for everything.

Cut it out. Be done, be done.

Yeah.

You, if you have it in your wallet, you're gonna use it, so get rid of it.

Yeah. So there's definitely a moral conviction that you're gonna have, spiritual conviction of I'm not using debt anymore. 'Cause when you wanna talk about scripture, Kayla, every time debt is mentioned in scripture, it is in a negative fashion. Oppression. You're a slave to the lender. It's a burden on your family. It's not good for you. I mean, we don't go as far as say it's a sin that you like can't get to heaven if you have student loans, but it's not good. It's not good for you. And we see that from a psychological perspective. We see that from a financial perspective. Like it all lines up. It's not wise. When you don't have autonomy over your money, you know, and the stress is there. And so for you getting out of debt is gonna be your biggest step, and then building that emergency fund, and then you get to hit retirement, kids' college, you know, the house, everything. So if you hold on the line, Christian's gonna pick up and we're gonna send you Total Money Makeover, the book, to walk you through the Baby Steps.

Dave Ramsey here. For more than 30 years, I've been talking to folks on the air, and I can tell you that most people are broke, not because they don't make enough money, but because they don't have a plan. You need to give every dollar you earn a job, because when you do that, something changes. You stop guessing, you stop worrying, you stop stressing. Our EveryDollar budgeting app will show you how to find extra cash, pay off debt, and finally start winning with money. But most Most people won't do it. They'll keep living paycheck to paycheck, keep hoping things will change without making a change. It's time to say enough is enough. It's time to take control of your money. It's time to start your EveryDollar budget for free today. Go download it in the App Store or Google Play.

One of the most fun events that we do here at Ramsey Solutions—

My favorite!

—happens to involve me and John. These two!

It's the best. It's the best.

It is. So we have our Money and Marriage Weekend Getaway. It's coming up October 22nd through the 24th. Tickets start at $749 a couple. And you guys, this is one of the most incredible multi-day events that we have. And not only is it what I think, great content, good Q&As, like, I mean, we really get in there and do it.

It's the best marriage retreat you could ever go to.

It's so good, but also, we hear from couples that it's just nice to get away, like, not have kids and logistics and all the things, and you just come and you're stretched, you know, in the sense that we will challenge and talk about hard things. We're gonna laugh a lot. It's fun. Like, it's altogether an incredible weekend. So, make sure to get your tickets at ramsaysolutions.com. Com/events. Come hang out with me and John.

And I don't want to throw shade— I don't want those shade at the other events. I'll just say I don't want those shade, but we don't pull any punches at this, at this retreat. Oh, the most common thing we get back besides it was amazing, it was awesome, all the accolades, is we didn't expect you all to go there. Yes, we didn't realize you were going to talk about that, right? And so we cover everything at this retreat— money, sex, intimacy, friendship— and we give you a roadmap, like a step-by-step plan for when you get home, how to implement this stuff. And so, I'm proud of it. I love that our names are on it because it's good.

And we've done multiple of these and we always, we're in content meetings, you know, as we speak. Almost year-round. Yes, of creating new content. So, even if you've been at past ones, you know, every time you come, we refresh it and yeah, it's so fun. So, we wanna hang out with you guys. All right, let's go to Idaho Falls and Michael is on the line. Hi, Michael, welcome to the show. Show.

Hey guys, how are you? Hi, we're doing great.

How can we help?

Good. Quick question for you. I've been a Dave Ramsey guy since I can remember. I remember sitting in the car seat in the truck, my grandpa's truck, and listening to you guys on SiriusXM. It's awesome. Uh, but it's only been the past year that I've taken your guys' advice really seriously. Uh, I'm debt-free. I'm currently on Baby Step 5. I'm investing close to around 26 to 27% of my income right now, but I also just got married. I got married one month ago. Oh, congratulations! Thank you so much. I also married her student loans. Yes, you did. Her student loans are around $10,000 right now. Okay. My emergency fund— I'm a pretty frugal guy— is $10,000. I have $11,000 because I have another short emergency fund, $1,000. So my question is whether I should pay off all of her student loans right now and reset it Or since I'm in a sales position, I'm fully commissioned, should I start paying just little by little?

Y'all are now in Baby Step 2. Mm-hmm. So what does that mean?

Got it. Means I'm back to getting that debt free, so probably just get into that debt, right?

Write the check today and be done with it. Is she working?

We weren't living together before we got married, so she has to move towns now, so she's getting a new job now.

Okay, great. So yeah, so hopefully if she's not a 100% commission employee, then there'll be some stability there, right? Yeah. What will she be making? There'll be a floor there.

Yeah, she'll be a waitress, so it'll still be kind of fluctuating. What's her degree in? She's a cosmetologist. She's also working as a cosmetologist. Okay. She just got the job like a day ago.

Oh, perfect. Okay, great. How much will she be making doing that?

It's commission.

Oh, it is. Okay. Okay. So we'll throw out like what, like if she, does she know how many people she wants to see a week? Like what would be around? I don't, I don't even know. Know.

Yeah, that's the kind of the tricky part about the situation is she's not quite sure either. This is her first job after cosmetology school, so—

okay, so she's gonna have to just slowly build up her clientele? Correct. Okay, all right. So she renting a chair just at a place?

Uh, correct. Yeah, for that first little training it's commission, and then she's gonna be, uh, yeah, renting a chair.

Okay. Is it, um, is it hair? What, what specifically is she going to be doing?

Yeah, it's hair extensions, that sort of thing.

Okay, cool. You know what I would do if I were her? I would talk to a couple of people, 'cause that stuff is, that's expensive. I mean, it's like—

I was gonna say if it's—

You pay, you pay, you pay good money to get done what she's offering. So I would find people that she wouldn't compete with directly in your city, but if she can somehow get connected to someone that's like killing it and they live, you know, 3 hours away or something, like you're not gonna be direct competition with them, just ask some like questions of, hey, okay, how did you start? What did you have? Was the salon better to work here? Was it better to go on your own? Like what helped them? Social media presence? Like, I don't know what it is, but if she can find some of those people and she gets a rotation with women that want that done every 6 to 8 weeks, I think she could kill it. I mean, honestly, and I know it's her first job and it's probably a little intimidating and she'll need some hours under her belt to do it all. But I'm just saying, I think you guys have like an exciting kind of runway for something that she possibly is gonna love and hopefully will do really well at. So yeah, Michael, you guys are in Baby Step 2, like John said, y'all are.

So I'd pay it off and then you guys rebuild that emergency fund. And then whether you, you need to take your retirement down to 15% though, Michael, 'cause you're investing too much. We don't say that often on the show, show, but you're above that 15%. So some of that margin could go towards paying, saving up for a down payment on your first home or rebuilding your emergency fund. Yes, that's probably— yes, that first, first.

And let some— like, the moment you hit send on that $10,000, there's going to be a— like, let's be honest, there's gonna be some frustration, some annoyance, and there's going to be some nervousness because now you got $1,000 and that's it. Let that energy not go towards your wife. Let that energy go towards I'm gonna make an extra sale this month. Yeah. I'm gonna do, I'm gonna, I'm gonna lean in that much harder. I'm gonna use that angst and I'm gonna go that much more into a job that's essentially limitless, right? You're, you're full commission, so you can kind of go get it. Mm-hmm. Another thing I would tell you is I've had several buddies who got jobs at like chain barbershops and they did that for 2 or 3 years and then they, then they branched out and started their own. And it wasn't a matter of like stealing clients or anything, but they developed some relationships over time and enough relationship development over time. Then they were able to have some, a, a base of clients when they went and opened their own shop. And so maybe she just gets a job, not at a fancy salon, but just cutting hair and is able to slow, like stay in the industry, learn more about it.

You hear conversations about product and discounts and suppliers and all that. And so she's in the industry, but also building her own practice there on the side.

Okay, yeah, I love that. Hopefully next step we can save for that marriage retreat you guys were just talking about. That'd be awesome, man.

We'd love to have you.

I know, it was so fun. Well, congratulations, Michael. And, um, yeah, I think it— that's part of the combining finances, that like what you said, there's probably gonna be some emotion around it because he was like, I'm a frugal guy, I saved $10,000, you know, now it's, it's gone. It's gone in a blink of an eye. But I do think that those are the building blocks. Those are the small— I say small decisions, but decisions that you make early on in marriage that set you up so well. Like, you're like going all in. Like, all the chips are in the center.

There's something powerful about keeping your promises to yourself. We're doing it. This is who I am. This is who I am when things are good, and this is who I am when things are tough. This is who I am. I keep my promises to myself. I'm a guy that follows these Baby Steps. I'm a guy who isn't going to owe anybody any money ever, especially when it's tight. This is, this is I'm going to be. And there's something really rooting about I can trust myself, knowing who you are.

Yes. And this is the plan that I follow, and this is what I do.

And by the way, regardless of how— based on what my wife spends, what I know Rachel spends, your wife's gonna be rich, rich, homie.

Like, dude, listen, dude, you get in some of these niches in life, and I'm telling you, I'm like, man, people can do real well for themselves.

I'm telling you, what they—

if they know what they're doing. And I'm sure Michael's wife does.

Me and Winston have never had a conversation about it. But a couple of times we've— what's better than a conversation is we've just stared off into space and just, just two guys standing next to each other just looking at the horizon. Like, hey, does your, uh, does your wife get her hair done at such and such? Yeah. That's all we got to say.

That's all you gotta say.

Stare off at the horizon. And you know, it's like, I'm with you, brother.

I know.

Listen, but I'm sure, I'm sure my wife could stand next to and be like, so is your husband buying more hunting outfits this year?

Yeah, what are the bows like? What are all the— yeah, the wood that you're replanking a room, you know? That could be in Winston's office.

And y'all could just drop in this place too, so I've got my own, my own thing.

That'll be good.

I'm not against vacations. I'm against being broke. If you've paid off everything but the house. You've earned the right to celebrate. Come do that on the Live Like No One Else cruise. Hang out with me and the Ramsey personalities for 7 days in the Western Caribbean. Join the world's largest debt-free scream, hear exclusive Ramsey teachings, and more. The best cabins are filling up. Lock in yours with a $600 deposit at ramsaysolutions.com/events or click the link in the show notes.

Our Scripture of the Day comes from Psalm 127:1. "Unless the Lord builds a house, the work of the builders is wasted. Unless the Lord protects a city, guarding it with sentries will do no good." Tom Sewell. How do you say that? How would you say that name?

I'm just gonna let you do it.

Okay. People with their time on their hands will inevitably waste the time of people who have work to do. Thomas Sowell. Sowell. Sowell. I see well. Sowell. Sowell.

Thomas. It's actually Thomas. It's Thomas Sowell.

Sowell. Okay, people. I'm gonna read it again.

Rachel has a new Reading curriculum coming out in the fall too. People always say that to me.

I can't pronounce people's names very well. I'm just saying it out loud. It's fine. People with time on their hands will inevitably waste the time of people who have work to do. Oh, it's kind of sad. You think that's true? I don't know. All right, we're going to head to the phones now and in Santa Barbara.

I think we are the king and queen of compelling radio.

I think we are too. All right, we're gonna go to Shelley.

For those of y'all born, um, in the 2000s, radio is, is when they used to take podcasts and just put them on, on the air, and that's all you had.

The airwaves.

Yeah, yeah, yeah. Radio waves. Then they captured them.

All right, Shelley, we're here with you.

How are you doing? Hi, good.

How are you? We're doing good.

How can we help today? Okay, so my husband, he graduated from college about a year ago, and we ended up moving back to hometown because he got a really amazing job here. Um, and his job is very niche, so it's something that can't be done in most places, but it's also a very, very expensive area. And the job pays well, but also the area is so expensive. Um, and so when we moved, we ended up— we lived with my parents for a couple of months, and then we were going to rent a place, but rent was so expensive, and we had money for a down payment, so we ended up buying a home because the mortgage was going to be basically the same thing rent was for like a tiny little condo versus buying like a house. And we have kids and dogs and all the things, but we are spending over half of our income on our mortgage every month. So I guess my question is like, what are you supposed to do in a situation like that?

Um, well, how much is he making?

He brings home around $8,000 a month. Okay.

And how big of a house did you buy, like, uh, cost-wise? It's—

it was $730,000. Um, and so after a down payment and everything, um, we're paying— I mean, with like after property taxes and insurance and all that, it's like $4,300 a month.

Does he see a raise anytime soon? Is, is the trajectory of income—

I've already gotten one, which are actually— he's gotten two, so he's actually making a bit more than he was when he got hired. They really like him there, which is good.

And will that continue? Like, does he see his income continuing to grow?

We're hoping so. Yeah, it seems like he's actually— he has a job interview today, like, for the same company, for like a level-up position.

Perfect. So I probably would—

a lot of potential. Yeah, yeah.

So I, I would, because of that potential, and it sounds like for real, like there is a pattern of him moving up, right? Right? And so, if you guys can get to a place that you look up and it's, you know, 40%, 38%, right? And you start ticking towards that, what we would say is around that 25% range, that's gonna be ideal. The hard thing is, is it doesn't leave you much wiggle room financially to do other things. It's basically like your house is taken, right? Most of your income and you're feeling that. So if you guys get to, uh, him.

I mean, are you working? I'm not anymore.

I was doing hair while he was in school, so I was the one like supporting our family like at the time financially. Um, but when we moved here, we moved out of state and I don't have a clientele here. And we have, we have 1.5-year-old twins and a 3-year-old boy, so it's very hectic. And I also started getting a lot of like allergic reactions to the chemicals and stuff. It was a whole thing, but But as of now, I'm staying home full-time.

Okay. Yeah. So I would say, Shelley, if you guys can't— if he can't see himself bringing in, I'm going to say 12, 13 grand. Yeah, I was going to— yeah, something around there in the next probably 2 to 3 years, then you guys probably being recorded.

Sorry, don't— this call is no longer being recorded.

Sorry, my— you're fine.

We, we're recording the call too, Shelley. We have the— we We have it recorded. You can rewatch this too. Now you're fine. I didn't mean to.

No, my cheek hit it.

No, you're fine. You're fine. So yeah, I would say if you don't see a path towards that in the next couple of years, you probably, yeah, bought so much house. And I understand California real estate is so expensive and so is Southern Florida and so is Manhattan, all this. But math is math, right? So if you bring in $8,000, it doesn't matter where you live. You live, if half of your income is going to your mortgage over a long period of time, it's not gonna be great. You're not gonna have a ton of margin to invest in retirement and save for kids' college and X, Y, and Z, right? So, what are you supposed to do? Well, I probably would've said I would hold off and I probably would rent and find something maybe in an area that's not super close to family, 'cause that's a very expensive area, right? You would have to finagle the situation to make the math work. Work. And that's the hard part of, I think, all of this money stuff is that it doesn't really care about your feelings, you know? It's just, yeah, it's money. It's what it is.

And so you're either gonna choose to be stressed and strapped financially to have the house, or you're gonna be maybe sad and disappointed about where you live, but it's less house and not in a great, as great of an area, right? I don't, you have to kind of pick. Pick that side of it.

Let's call this out. You— what is his, his annual salary? About $125,000, probably?

It's like $140,000-ish.

Okay, but you live in a, if not the, one of the highest tax rate states too, right? So yeah, a big chunk of it goes away, and then Santa Barbara taxes are high. So like, yeah, all that to say is like $140,000 in a $700,000 house. Like, it, it feels crazy to you that we make $140 grand and we can't buy a house in the town where our job is. Yeah. Right. So understand that frustration is real. Mm-hmm. And because if you don't metabolize that frustration, it bleeds onto all— it makes everything feel emotional. Like, just pull that aside and say the story we got growing up is if you make 6 figures, you're a, you're a bajillionaire. You're good. Yeah. Yeah. And so the reality is in some towns, $140,000 is like a million bucks. If y'all lived in the Midwest, y'all be living, y'all be living high, right? Yeah. And, but where, where you live now, it's just, it's just purely a math problem. Yeah. And I, I, I'm, I'm nervous for you, but that's just me.

Yeah. Shelley, do you feel stressed? Do you guys feel it month to month?

Yeah, I'm not— I mean, okay, it's hard because before we were living in Texas and I was the one working, so I felt a lot more stressed just because he was in school and we were trying to like stay out of debt and all the things. And so here I feel like we have more breathing room, weirdly, just because we still have like a little bit to spend at the end. But yeah, how much did you make in Texas?

It's like, how much did you make?

Not very much. Well, because he got laid off, so he went back to school basically with the GI Bill, but I was making like $40,000. Okay, so we had already bought a house there and—

but let's play this out. Let's play this out. If you were making $40,000 and he found a job making $100,000, you're right back in Texas. And yeah, except your housing costs are half. Yeah. Right. And so sometimes it is having to sit down and say, we had this dream of being around family. We had this dream of you working in this really niche industry and it's only available in a few cities in America. Yeah. We had that dream. We had that dream of like living in one of the most beautiful places on planet Earth, Santa Barbara, which it is. Like, we had all these dreams and we— it's not going to come true and we're going to grieve that. Yeah, right. And that stinks, man.

I hate that for anything. Kind of with that though, his job is really niche. Like, it's not— he— when we were in Texas, our plan was to stay in Texas because it made more sense, and he was applying to jobs there that made way less and he wasn't getting anything. And then he got this job. Sure. And this job just doesn't really transfer. He works on rockets, which is like so niche, but like it just doesn't really like transfer to like— well, he couldn't get this amount of money anywhere else. Does that make sense?

Like, it doesn't— that is true, but also the, the cost of living that you guys are living is also higher than anywhere else too. So you got to factor both sides of the equation in. But yeah, I think as he's getting promotions, he's doing great, and I think it'll, it'll start to, it'll start to even out for you guys. All right, well, thanks to everyone in the booth. Thank Thank you everyone for listening. And remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.