Transcript of You Can Still Take Charge Of Your Financial Future

Brought to you by the Every Dollar app. Start budgeting for free today. Normal is broken, common sense is weird. So we're here to help you transform your life. From the Ramsey Network and the Fairwinds Credit Union Studio, this is the Ramsey Show. Ken Coleman, Ramsey personality, number one, best-selling author and host of the brand new Runaway hit Ramsey Network called Front Row Seat. He's my co-host today. Open phones at 888-825-5225. Elizabeth's in Philadelphia. Hi, Elizabeth. How are you? I'm good. How are you? Better than I deserve. What's up?

Wonderful. My husband and I... Sorry. That's okay. My husband and I are debt-free, and we were looking into investing. At the advice of a family member, our in-laws, they suggested to use a site that they had been using. When we tried to create an account, we found that my husband's Social Security number was already in use. We have been told not to look into that further. We can't create the account because his social security is in use. We found out essentially that investments in things are being made in his name, even though he's requested that they stop. They're sending us, quote, unquote, refund checks for the taxes that we pay on these investments. How can we get away from this situation, essentially, and be financially independent of our in-laws?

Wow.

Yeah, it's fun.

So your father-in-law is a con artist? I mean- Yeah, he's a criminal. This is Criminal freaking fraud.

Yeah.

Yeah. You need to own this emotionally. This guy's not only out of control, he's like, go to jail out of control. You're screwing around with the Securities and Exchange Commission with fraudulent transactions. All you all are messing up. You're messing up by allowing it to occur, and he's go to jail time if they can. Good God, people. Yeah. Wow. See the difference in how I reacted and how you all reacted? We've been told we're not to talk about this. Well, you by God better. You can talk about it from cell block C if you want.

Yeah. Have you measured your jumpsuits just to see how you look at them?

They'll probably be short.

Yeah, I'm just saying.

I don't know how you look in orange, but you should probably look into that.

This is what's known as a family that puts the fun and dysfunctional.

Mm-hmm.

When is your husband going to call his dad and mom and say, Guys, you need to shut all of these accounts down in the next 48 hours or I'm filing a police report?

We've done that. We just haven't filed the police report.

You told them that? Yes. And they did not shut them down?

We didn't tell them we were going to file a police report, but we've requested multiple times, very sternly, I'll say that in a polite way, to take the name off, get rid of it. We don't want anything to do with it. Cease and desist.

What was their reaction?

We're doing this for your future.

They kiss my butt.

You guys suck at poker as well. I'd love to play poker against you all.

You fold on everything. Yeah. They just push you around. This is nutto. Say, Hey, I got a plan for you. I don't want you in my future because my future looks like jail time right next to I don't need a future that involves you. I'm being really bold and weird and crazy and over dramatic here, but my point is that you guys have not been strong enough on this.

Okay.

Maybe not as crazy as I've been for the last few minutes, but seriously, you guys got to get up on this and say, Listen, we've talked to an attorney. What you're doing is illegal. You're harming us. I know you think you're doing something good, but you're not. You have 48 hours to send us proof that you've shut down all of these accounts or, Mom, I'm filing a police part on you and dad. Do you understand here? And this is your husband doing it, not you, because it's his freaking parents. Good.

Why are you on the phone with us and not him?

Well, he wasn't exactly a fan of this. When our last conversation that we all had around this, and after that ended, I said, I'm going to call the Ramsey show, and he just laughed. I guess he didn't think I was really going to do it.

Well, now you can play this back for the whole family if you want. I think you can send it to mom and dad.

Yeah, and I think you need to make sure you heard something.

Hey, mom and dad, if you happen to hear this, you suck. This is horrible what you're doing to your children. I know you think you're being smart, but you are way out of control. You've never met the word called boundaries, and we want to introduce it to you.

Here's the thing, you're complicit in this now. It's scary that you called the show, and you've said that you're complicit in it Because I think you've laughed, and I'm not trying to be a downer here. She's just nervous. Well, but it's not funny. There's actually nothing funny about this. I hope you hear the urgency. I don't think Dave was too extreme. I actually think that's what you should do because I don't even know. I'm no legal expert, and I haven't played one on TV, but I do think this thing is far more serious as to what you all know than you actually realize.

Yeah, there's probably other stuff going on. I'd be terrified. Usually, when you tip something like this over, a racoon runs out with the trash.

Yeah. And honestly, we suspected that recently just with how adamant they were, because since this account's in my husband's social, he could easily call the company and get detailed information. And it was like, Don't you dare. You don't need to be looking in there.

And he still hasn't. We need to run your husband down to Walmart and have him pick up a backbone on aisle 3. You all are going to have to deal with this, honey. It's a mess. You all are a mess. You all are a hot mess. Oh, my My gosh. The first time I ever ran into this was a long, long time ago. It was decades ago. We started hearing the word identity theft. I'd never heard the word before. It started coming up. The internet started having more prolification. When I started the show, there was no internet. That's how long the show has been on the air. But I started hearing that, and then I just got hillbilly mad because some guy calls in and goes, I'm 24, and my mom has seven credit cards that she opened in my name when I was 12 and 14 years old. I'm like, Your mother is a freaking criminal. She stole your identity. The problem is the victim is just like her husband. They're like, Well, it's just how our family does things. Your family is full of criminals. That's how your family does things. Your family has no idea how the legal system works in America today.

When you're doing investments, you're now involving the Securities and Exchange Commission. It's not simply banking laws. Banking laws are credit card theft, right? Identity theft with opening a credit card. You start open a dadgum mutual fund with a licensed broker, oh my God, you don't understand.

They love to make examples of people like this.

Especially stupid people.

They really do. The people that investigate this stuff are the most uptight investigators. They are purists. This is scary stuff. I just wonder what else is going on when the dad says, Don't look into this.

Don't look Don't look under the covers.

Dave, I'm serious here when I ask you this. I'm trying to put myself in a position. If this was me, I would call the company and prove to the company that I'm the actual person with the Social Security.

Find out the depth of what's going on. But there's only one company that you found so far.

I wouldn't threaten the parents. I just go ahead and handle this.

I would do both. I do it by nightfall. I mean, before the sun sets on the horizon. Just putting things off. Because the problem is there's a family script here that says, Don't look.

Which makes me worried about this.

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Sandra is in Chicago. Hey, Sandra, what's up?

Hi, Dave. I had a question, a financial question. I am in total, $628,000 in debt. I have a home that I purchased a little over a year ago for $335,000. I have student loan debt of $260,000, and I have credit card debt for $33,000. I had two jobs at one point. My second job, I no longer work as of six months ago, so now I'm just using my primary income. I was trying to figure out the quickest way to pay this debt down. Things are getting tough, which we pay the minimum amount of the credit card.

Two hundred and 60,000 dollars in student loan debt. Are you a doctor or a lawyer?

I'm in the legal profession, close to a lawyer, but not. I do legal research for lawyers.

What'd you spend $260,000 to become?

I have four degrees. In what? I have a associate's degree in biological science. I have a bachelor's degree in English. I I have a master's degree in library science, and I have a second master's in intellectual property law, which is a law degree. That's where all the debt came from.

Is that not a master's in jurisprudence? Can't you set for the bar?

Yes. I'm not sure. I haven't done that research on that.

It's like law school, right? I could check it. Law school is a master's. Yes.

You've got a degree in research Which I heard. You should probably look into that.

Yeah, I will. After a phone call, I will. Sorry.

Oh, that's nasty.

No, it's right there for me.

So what do you make?

Right now, I'm over six figures. And then the second job, I was making close to $25,000 a year.

Doing what?

I was I'm consulting in the library world, doing consulting work, helping them build their libraries back up, libraries that are having issues.

They either don't pay much or you weren't working much. 25 grand, huh?

Yeah, I I've been doing a whole lot, maybe about 15, 20 hours a week, if that.

Fifteen, 20 hours a week for 25 grand a year is not much. That's horrible per hour. Wow. Okay. Well, what is apparent is that you have a lot of education and a lot of upside potential, therefore, on your income. If we can figure out a way to apply that education in a way that makes you more money, which is what you need, is more money and not more degrees. You have plenty of those. It's an income issue, really. You don't go buy a $300,000 house when you have $300,000 in student loans. That was bassackwards. But The- Are you single?

Yes.

Okay. How old are you?

Single parent. 45.

Okay. What I would start asking myself is, what use of some of this education can I do in the marketplace to make the most money? And what combination of that? If library consulting only pays a dollar an hour, I don't really want to do that. But if I can get some serious money going for some of these different things that you know how to do that you're knowledgeable in, if Even if it's two things or three things, I don't care, but I want some serious money. You don't really have serious money coming from any of these, given your level of education. Making $100,000 or $120,000 or whatever with 14 degrees. This is not working. Do you need to sit for the bar and become an attorney and make $300,000, or do you need to apply your master's in library in the form of education and make an extra 100,000 as a professor on the side doing that? I don't know. I don't know what the answer to this is, but it appears to me, I don't think we can sell off enough stuff here to fix the underperformance of your education without fixing the... Now, if you get all those things going and you want to speed it up and sell the house, that'll be okay.

Okay.

How much equity do you have in the house?

I think about 15,000.

Yeah, that's not enough. Just bought it.

What is your actual income? You just said six figures. What's the actual number?

Around 115, 117.

Instead of consulting with libraries, which is a dead-end business, and I'm not trying to be unkind, there's just no growth there, there's no income there. What can you do in that additional 15 to 20 hours a week with the expertise and experience you have to make some real extra money in the law space, legal space, what can you do?

Intellectual property. I mean, that's a solid-And you don't have to answer it, but that's the homework assignment for you is, how do I make an additional 50 to 75,000 while I'm deciding what the the bar looks like.

That's what you've got to be thinking.

Sandra, I might be wrong, and I'll give you a 50% chance that I am. You don't have to take this directly on the chin unless it applies. But it sounds like you fell for the lie that if I get education, people will hand me money, and they're not, and you did. Then you went and got another piece of education, and then another piece of education. You've collected more degrees than a thermometer. You just keep collecting them. But people that do that, generally, are one of two things. They are trying to hide, and they want to stay in school, and they're trying to hide from reality. They're a professional student, or they fell for the lie. I think you're in the second one. I think you fell for the lie that if... I was just told by my mama, if you just get a college degree, that life is going to be great, and that's a lie. You've got to think about how the knowledge that you have gained, and you're a very knowledgeable person. We can poke fun at all the degrees, but you also have a breadth of knowledge. It's pretty impressive. You got to think about how I can actually, from a utilitarian perspective, take that knowledge and use it to make as much money as possible.

If that had been your goal from the start, you probably would have a different list of degrees and fewer. It's a mistake people make all the time. They think, If I just go to college, I get a four-year degree, that the degree is useless. The knowledge you get while you're getting the degree, ladies and gentlemen, now that knowledge is great power. Assuming it is power, assuming it is knowledge that the marketplace wants. To your point, not picking on libraries or anything, but we live in a digital age, and the Dewey decimal system is not exactly high on people's knowledge list right now or use usage.

Well, you got public libraries. The keyword there is public, and therefore it's government-funded, and libraries are way down the list of the politician's budget items. That's why that's really honestly a dead end. I'll just add one thing to what you said, Dave, because a lot of people listening want to expand this to a larger audience. Here's the voice of temptation you will hear if you find yourself in a situation like this. I'm not doing anything because I don't know what I want to do. I should probably do something I know if I don't know what I should be doing, I should be doing something valuable. And you quickly go, Oh, if I continue learning, at least that's valuable. And what happens is you exchange uncertainty and the fear that comes with that for uncertainty and what you think is the future for that. To Dave's point, that is not a good exchange. Accept uncertainty and know that I can at least get out and step out of the uncertain, and I can be active, and I can connect, and I can do some work while I'm figuring it out. But continuing to push uncertainty down the road ends up in this financial liability.

That's really the temptation. A lot of good people, smart people do this, and I'm telling you, avoid this. How to avoid that?

When we were doing the Documentary Borrowed Future, we had a lot of discussions with people like me that I was the first in my family, in my generation, in my immediate family, to get a four-year degree. And if you're the first, a lot of times you value the wrong things. What you should be valuing is the knowledge, not the actual degree, and the application of the knowledge in the marketplace. And that keeps you from signing up for too expensive a degree and the wrong degrees.

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The EveryDollar team is offering a free live budgeting workshop this month. In Budgeting 101 Budgeting 101. You learn how to make a budget with every dollar, get tips from our experts, and even ask questions in a live Q&A. Plus, you'll get a step-by-step walkthrough of every dollar's features, so you can use the app with confidence. Budgeting 101 gives you the support you need to stick to a budget and know you're doing it the right way. Sign up for Budgeting 101 for free at ramsey solutions. Com/workshops. John is in Atlanta. Hi, John. How are you?

I'm doing well. How are you?

Better than I deserve. How can I help?

Thanks. Hey, I just want to first say thank you for all you do. My question is, I've been following the baby steps. We've been knocking out some debt, and it's been going well. I'm down to my last debt, which is a car. I have 34,000 on it currently, and it's worth about 31, 32. My question is, should I go ahead and buy the negative equity, just pay that off, sell it, essentially pay the negative equity, and then buy a beater for the time being, or just try to pay off the car fast and just keep going with it, that snowball.

What's your household income?

Just north of 100K.

Okay. How fast do you pay the car off?

Currently, I could pay it off. I've got some extra cash I could pay towards it, so I could probably pay it off.

How much cash do you have?

I can put about 7,000 towards it.

Okay. And once you do that... No, that wasn't what I asked. What I Can you ask us how much cash you have? I got 7,000 to put. No, you said to put. I'm asking how much cash you have, not how much you have to put. How much money do you have? Just $10,000. Okay, all right. You determined the three left in the account was the proper amount. We think it's one. You have nine that you could put towards it. Do you have any other non-retirement investments?

No.

Are you married? Yes. What does she make?

She, that's included. They're just north of 100, including the household income.

Oh, that's household income. Good. Okay, good. Perfect. And no other assets anywhere except $10,000 in your name that aren't retirement assets?

That's correct. Yeah, we've been paying down pretty aggressively.

Good. Good for you. Okay, well done. All right. If I woke up in your shoes, I would put nine towards it and leave $1,000 in the account, be on a total every dollar budget, and you and your wife sit down, know where every dollar is going before the month begins. Make every dollar behave, you'll feel like you've gotten a raise. If you squeeze every dollar out of your life, how fast can you pay off $24,000?

Definitely, well, he did it less than 24 months, probably 18 months.

That's wussy. How about one year? All right. That's $2,000 a month. 24 from 100 plus or minus an extra job, plus or minus selling some stuff. We're talking no eating out, no going on vacation, beans and rice, rice and beans. Do you like this car that much enough to keep it to fight for it like that for a year?

Yeah, I think so. I think when you look at the used car market, what I've been looking at is I was looking at something real cheap, but my wife needs something reliable for the kids.

Oh, it's her car herself? Yes. What are you driving?

I have a paid four pickup truck.

That's how old?

It's six years old.

Okay, so 2019. Nice truck. Okay. Cool. Okay, yeah. I mean, if I woke up in your shoes and I like the car, I would be on beans and rice, and the car would be paid off in under a year. Under those circumstances, I would keep it. If you're going to drag it out two I would sell it.

That's fair. Too long.

Trying to swim with a boat anchor around your ankle. It's no fun. You get to end up drowned. It's not fun. You got to break the cycle here. Guys, I can help you all with some of this because some of you listen and listen, listen, listen, and then still walk in here in the bear's den.

And get called Wussy, by the way.

I didn't say he's a Wussy.

I said, That's Wussy. I know, but Wussy is a fun word.

That's Wussified.

I like that you brought that back.

It's a lack of intense sacrificial involvement. Okay. What Ken and I, what any of the Ramsey personalities and I, and what I've always done, and what I've always taught them to do, is we just do look at big numbers. 100 minus 24 leaves that family enough to live on. That's how I did it in a year. Then 24 divided by 12 is $2,000 a That's fairly easy. It's sixth-grade math done fairly quickly in my minor brain here. When you're looking at stuff, ask yourself, Okay, I make $175,000 a year, and I'm going to pay off $75,000, and I'm going to do it over four years. No, we're going to take 175 minus 75 and leave you whining about living on $100, and get it done in one year. Or maybe we did it in six months and lived on really beans and rice instead of acting like you're rich or something because you're broke. This is the mentality. But if you'll just take those big numbers and start shuffling, do big number math like that, you can know what we're going to tell you. It's going to come in pretty quick. Brooks is with us in Charlotte, North Carolina.

Hey, Brooks.

Hey, Dave and Ken. Hope you're both well.

We are, sir. How can we help?

Well, I'll try not to be a wussy on this question.

Atta boy.

It's T-ball, baby.

There we go.

So my question is, should my wife and I withdraw our funds from our non-retirement brokerage and savings account to pay off our home?

How much do you owe in your home? 273. And how much is in the brokerage?

202 and 83 in a Wells Fargo savings account.

So enough to knock it out and still have an emergency fund?

Yeah, that was my other question was, capital gains tax and emergency fund, what would your recommendations be?

An emergency fund and make sure you have the capital gains Banked. What's your household income?

I'm the only one that works.

My wife stays home with our daughter.

I make 110 before taxes with potential for another 100 in sales. Okay.

Well, 100% of what we're talking about is not taxable, but only the gain on it is taxable. The money markets probably got very little gain. If it does have gain, it's taxable not at capital gains, but at ordinary income. It's only the brokerage account itself. What did it start out at? What's your basis in that account?

From what I've been able to calculate, it would tax about $81,000 of it.

Okay, so 15% of $81,000? Yeah. Wow. So it's been sitting there a while.

Yeah.

Okay. So 12 grand, right? Give or take, yes, sir. You said we got $280 to work with. No, $80 and $2 what? The mortgage is $273 and roughly $285 to pay it off with.

Is Because you got 202 in the brokerage.

Okay. So you have 15,000 in your emergency fund, and you need to save 12,000 before tax time?

Yes.

I think you can do that, making 100 with no house payment. Yeah, the mortgage is 1870 right now. If you just took your house payment and put it up, you'd have enough for your capital gains tax when it comes to April 15th of 2026.

Would you consider waiting till January to wait for the 2027 tax season? Yeah.

Okay. I might. I might. Just to help your cash flow. Because this is a little tight. If you had zero money left and you had to pay off your house, you had no emergency fund left, I would not tell you to pay it off. Okay. I would tell you to wait till January. We're on the bubble on that. I mean, you got a little bit here. But yeah, because that kicks it out. It kicks it out almost 14, 15 months then by doing Yeah, that's a good... Okay. I do, man, but gosh, I mean, be ready. I'm talking like Papa Champagne Cork at New Year's and you write a check, right? For sure. I mean, don't hesitate here. Don't rethink this and over analyze it and all that stuff. But that's a valid question sitting here in late October. We're only talking about 60 days. I mean, think of a Christmas only 10 weeks away. Right. So that's not a... If we If you were earlier in the year, I probably wouldn't. But since we're right here on the threshold anyway. Yeah, that's a good... That's very non-wussified, Brooks. I'm proud of you.

I like. That's how we started to recall, wuss or no wuss.

To wuss or not to wuss. Yeah, there you go. Brooks, you're fun, man.

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Today's question My son comes from Jessica in Illinois. Before getting serious about following the baby steps, I cosigned a car loan for my 22-year-old daughter. I have two credit card balances to tackle besides her car, and I will be debt free. She owes 12,000 on the car, and I have 20,000 in credit card debt. Do I finish paying my personal debt and move on to Baby Step 3, or do I include her car note in my debt snowball? She has not missed a payment and has not asked for help paying, but I just really want to be done with it so it's not hanging over both of our heads. That being said, I'm also nervous about only having my starter emergency fund and savings and want to move on to Baby Step 3 as soon as possible. Tell her, Dave.

Well, we're going to pay off the car after you pay off your credit cards because the car is under control right now. It's not in panic. We'll put it at the back of the debt snowball and clear your credit cards and then clear the car and then work something out with your daughter so that she repays you since you're paying off her car early. Okay? Because there's several problems with this that lay in the future. If she gets laid off, gets in a car wreck, has a medical event, anything like that, this is going to come back on you. It's what we call a contingent liability, which means it's a liability, meaning they're going to come after you. By the way, they're going to come after you really fast, and they're going to skip over her because they never thought she was going to pay it in the first place. That's why they wanted to cosign They're going to come straight at you if something goes wrong. I'm not predicting horrible things happening to your daughter, but life just says things happen. That's why we never cosign. I have cosigned and I ended up paying it.

When I went bankrupt in my 20s, a friend of mine had cosigned for some stuff, and he ended up paying it. I went back and paid him back, even though the bankruptcy said I didn't have to, but I wasn't going to burn my buddy just because he was dumb enough to cosign, and I was dumb enough to let him. But let me just tell you, the most aggressively marketed product in the United States today is debt. Debt is sold as a product more aggressively, more sophistication, more money, more bandwidth is spent selling you folks debt because it's so profitable than any other product. I mean, you think you've seen a Chevy Silverado run through a mud puddle on every football program for the last 20 years, and you think Chevy spends money on that? It's nothing compared to what Visa, MasterCard, American Express, and your local bank spends to get you to cosign a car for your kid. They spend money convincing you, and they've convinced an entire culture, generationally, that the only way to prosper, the only way to get what I need is to go to the bank. The only way my daughter gets a car.

They've convinced you and brainwashed you of that so that you cosign because she couldn't get the car on her own. Now, if debt is so profitable that they will literally fire a teller if they don't get enough home equity loan applications in while you're making deposits. Victoria's Secret literally does not sell small underwear. It really sells credit cards. So much so that if you ask the ladies that work there, if they don't sell a certain number of credit cards per shift, they get fired. They make more money on credit than they do small underwear. Same at the car lot, same everywhere else. If this is the most aggressively-marked product, and if they want to sell debt more than they want to live, eat, and breathe, and they won't loan your daughter money, something's really wrong. Because they really want to loan her money. If those people, the sharks, will not loan her money, your sweet little daughter, your sweet little grandson who wants his pickup, your daughter who just went through a nasty divorce, if they won't loan her money, it's because she's not going to pay it back. So don't act like that you're doing somebody a favor by helping them buy something they can't afford.

That's what you do when you cosign. It's stupid. As a matter of fact, it says it in the Bible. Proverbs 17: 18 says, One lacking in sense cosigns for another. If you look up 17: 18 in the CEV, the Contemporary English Version, this is not a joke, this is a fact, look it up. It says, If you cosign for someone else, you're stupid. That's what it says. Because of what I just described. So poor Jessica, I'm not calling you stupid, but I'm calling you what you did, stupid. You were trying to help, you're sweet, you're trying to help your daughter, all that. But yeah, so what do we do with stupid? We get out of it as fast as we can because it's going to tackle you by the ankles later. If you're coming up from behind, look out, look over your shoulder. And folks, the next time you get ready to cosign for someone, just remember, it's stupid. I mean, straight up biblically stupid. Don't do If the most aggressively marketed product in the nation will not loan your friend, your daughter, your son, your grandson, whatever it is, whoever it is you're trying to, quote, help by getting them a car payment, God help you.

If they won't loan them money, it's because they can't pay it. They're not even looking to them. They're looking to you. That's what this is for. So please. I've done it. I'm not saying it. It's been decades ago, but I still remember how stupid I felt when I wrote those checks. I knew this. I knew this guy was a dead man. I knew the bank was right. The bank wouldn't loan him money, but I'm so smart. I'm going to help him. Then I get to pay the bill. You know what I wrote on the four column on the check, stupid tax. That's good. I paid some stupid tax, tax on your life when you're stupid. I paid plenty of stupid tax in my life, and some of you all have to. Try not to do it, though. I'm trying to help you with this.

The moral of the story is, don't do debt and don't buy small underwear. Is that right?

Ken, you're very precise on your listening.

I am locked in. I'm locked in, folks. I want to make sure you're catching the lesson.

I did not. That's not what he said. I did not say small underwear was off the menu. He did not. I just said financing it was. That's all I said.

Some guy in the audience got very excited. He elbowed his wife.

Kayla is in Kansas City. Hey, Kayla, what's up? Hi, how are you? Better than I deserve. How can I help?

I have a question. I have around $3,000 in credit card debt. I owe around $12,000 on my car that I bought during COVID. I got right before COVID, so I have a two % interest rate, and it's worth $22,000 to $25,000 right now. So I have equity in my vehicle. But then I have almost $17,000 in student loans. My student loans are all federal financial through federal financial aid. And through that, it's broken down into three loans.

Into how many?

I'm new to your program.

How many? Stop, stop, stop, stop, stop. How many loans in the 17,000 student loans? How many different loans? Two.

I'm sorry, three.

Three. Okay, I got you. All right, go ahead.

So working the baby steps, I'm going to, one, start with a credit card. Two, what I didn't know is if I should start with my car or if I should split the financial aid's actual loans up.

They're not financial aid. They're federal student loans that are failing, and we just need to get rid of them. And you have three of them. What are the amounts on those exactly? You said there's three- The first one is 3,553.

Second one is 6,490. And the third one is 6,645.

So credit cards to student loans car, the smallest to largest.

Got you.

After broken down.

I don't know if I should keep those high or break them on.

It doesn't matter mathematically much because you're going to do it in about the same time frame. What's your household income?

150 Okay.

Oh, good. Okay, so you're going to be done real fast. Right?

Mm-hmm. Good. I think so. I just didn't know if I- Yeah, just pay off the smallest first, because when you pay off the smallest...

And by the way, cut those credit cards up tonight. Time for a plastic surgery. A plasectomy. Chomp, chop, chop, chop. Get you a debit card. They don't accidentally run up debt. For airline miles, I've never made anyone rich.

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Protect yourself, protect your income, protect your family. Welcome back to The Ramsey Show in the Fairwinds Credit Union Studios. I'm Dave Ramsey. Ken Coleman, Ramsey personality, number one, best-selling author and host of Front Row Seed on the Ramsey Network as my co-host. Vanessa is in Corpus Christi, Texas. Hi, Vanessa. How are you?

Hi, I'm good. Thank you. Thank you for taking my call. Sure.

How can we help?

My parents and myself and my children consolidated households a few years back. My mom made the down payment on the house, and I've been making the payments, the utilities, everything else. So I've been maintaining the household. I'm getting ready to sell the house, and we're going to go to separate residences. My question is, should I give her what I get back out of the house to basically pay her back for the down payment? I think I should. My brothers think I shouldn't.

Okay. So is your dad Is your dad still alive?

My dad has just moved into a nursing home. Okay.

Where's your mom going?

I'm assuming an apartment or something. Yeah, I'll get her a little apartment. I have told her I'll pay $1,000 a month towards whatever rent or whatever she needs, and then she'll need to live on her Social Security from there. Okay.

So is this a relational breakup? Is that why you're selling the house?

It will be better for a relationship to sell the house. Yes, a relational breakup. Also, my youngest child is about to go to college, and with my dad moving into a nursing home, we do not need a house as large as we have.

Okay. How long have you been in the house?

Three years.

Okay. So there's not any written agreement?

No, sir. Okay.

Was it a gift or was it, I'm going to contribute to this collective living arrangement?

I I think it was more like, We're out of money. I'm going to give you what I have left and buy a house, and you're going to take care of me for the rest of my days.

Yeah, that's what it sounds like. Okay. How much did she give you at the time for the down payment on this house?

It was $84,000.

How much equity will you get out of the house when you sell it?

I think I'll get between 60 and 70-ish.

So you've lost money on the house?

I think so, yes, sir.

How?

It's just the market we bought at the very height when it was- The market in Corpus Christi, Texas has not crashed. Okay.

Where are you getting your numbers?

From my realtor.

The one that sold you the house?

No, sir.

So she says you over... Or he says you overpaid dramatically I'll leave for it at the time? Because I don't think house… What'd you pay for the house, total?

415.

Okay. So you're saying this house has lost 10% of its value in three years rather than going up in value? I don't think so.

Yeah. Okay. I'll buy that. I might be able to get a little more out of it. The neighborhood we're in, there's still new builds being built.

Why do your brothers think that your mom should not at least get her money back out of it? There's some logic here I'm missing.

Yes, sir. They think, one, that she won't be responsible with it, and two, that she owes me basically rent for paying for everything for the last three years.

Wow. Nobody in this family is happy with mom. Okay.

Not at the moment. We love mom, but we're not happy with mom.

I got that. I got it. She's difficult.

I'll make sure she's taken care of.

I didn't hear that. I'm not hearing you be a jerk. You're not being a jerk. It's just interesting. Matter of fact, you're being so subtle. I'm having trouble coming to conclusions. I'm sorry.

I'll be more direct. I'm not anti the brothers' point of view right out of the gate. I'm not saying I'm supportive, but I'm also like, you've been paying for everything since she's been in there.

Well, the problem is that you didn't have a clear deal.

That's correct. It was fuzzy.

There's not a clear deal. I mean, the clear deal was you stay there until she dies, and then it's your money.

Well, the clear deal, yeah. When they passed away, I would get basically the house.

Yeah, which was the down payment money. I mean, that's all it's worth. Okay.

Right. Now my dad is Alzheimer's incapacitated, can't make any decisions on the house. My mom has left. I don't think she's far behind him going in the nursing home, but we need to split residences.

Okay. And your mom thinks that she should get the money or does she say it?

My mom has not said a word. Okay, interesting.

I don't have a clear ethical or moral guide on this. The fact that your mom wouldn't take care of the money does not make it not hers. Agreed. Yeah. Stupids is not illegal. It doesn't mean you get your money taken from you just because you are incompetent. That's not how it works. It's not how private the property laws work. But I'm also not sure it's her money anymore. I don't know what to do. What would I do if I were in your shoes? Because I don't hear you bringing harm to her or revenge or vengeance. I don't hear any of that in your language or your voice. I just hear, Separation has to occur, and I love her, and she needs to be over there. I got it. You're being very kind. The The other thing is, if you put this money in her name and she goes straight into a nursing home, that's what it's going to get used for.

Right.

If you keep it in your name and she goes straight into a nursing home, you can work with the nursing home and negotiate with them and use the money to care for her as if it was for her, as if it was her money, but you kept control of it.

Is there a way I could put it in something that would- Nope. Take care of her until then?

Yeah, you can put it as long. But you put it in a mutual fund, and you could give her some monthly income out of the mutual fund. In other words, you're not personally taking use of the money, but you're keeping it in your name for her good. That's the same as giving it back to her, but maybe be better given the situation.

I think that's a great idea.

Yeah, and I'm listening to this, and I'm just going to say that you've already committed. You've told Dave and I that you're going to give her a thousand bucks a month to go towards her living expenses. She has to foot the bill from Social Security. I think in some ways this is a bit of semantics because you're already committing to give her $12,000 a year.

But you wouldn't have to do that if you use this $80,000 or $60,000 or whatever to create an income.

It's all the same thing. I don't know that I would give her the money.

No, I'm not giving it to her. I'm holding it for her good.

Yeah. If I'm managing her money, then I wouldn't give her $1,000 out of my income of mine.

Exactly. Of course.

But I'm saying it's a pot of money, and I just don't think the lump sum given to her to control is what I'm saying. I just wouldn't do it.

Yeah. I think that's the- Because there's not a moral imperative to do that because there's no deal. You're not breaking a deal. No.

The deal was- I'm not, but I wanted her to take care of.

Well, you're doing that. Exactly. And you're going to do it. Exactly. I think it's a great idea. The best way to do that is to keep the money earmarked for her. In other words, you're not going to take this money and use it for your next down payment. It's going to be sitting over here with an investment advisor earmarked an account named Mom, even though it's... But the legal owner of the account is Melody. Vanessa, I'm sorry, that makes more sense. It's good if you treat other people like you don't be treated. That's always a good rule. I think Jesus said that. Let's face it, health insurance today is more complicated than ever. The system isn't built to help the average person understand, and it leaves too many families unprotected. That's why you need my friends at Health Trust Financial. They aren't just brokers. They're trusted health insurance advisors who have been helping families like yours for over 20 years. You don't have to navigate it alone. The experts at Health Trust Financial listen to your needs, work to understand your family situation, and budget, then help you choose the health insurance plan that's right for you.

That's why they're Ramsey Trusted and why we've worked with them for two decades. Look, medical debt is the number one cause of bankruptcy in America today. One hospital visit can wipe out your savings and undo all your hard work. So health insurance isn't optional. It's part of your financial defense plan. Health Trust Financial knows their stuff, and they're the only health insurance provider I recommend. So get clear about health insurance plans and get the coverage that's right for you at healthtrustfinancial. Com. Susan is with us in Memphis. Hi, Susan. How are you? Hi. How are you? Better than I deserve. What's up?

I have a question. I am 72 years young and on baby step two, and I've jumped all in with both feet. I've got the book, the total money makeover book, the workbook, the every dollar app, the financial coach. I'm just wondering, am I too late to be doing all of this?

No. No, okay. It's harder to make the exact same progress. I mean, the power of compound interest, if you were 22, would work to your favor to build a million dollars a lot better. But it is the fast... What you're looking for at any age is first getting to sustain sustainability and then moving into wealth building. The fastest road to sustainability is to get rid of the consumer debt, get those payments out of your life, and build an emergency fund.

Exactly.

Then, of course, start building the nest egg. You're still working? No, I'm retired. Okay. What's your income? What are you living on?

67,000 a year.

Okay. How much debt How do you have not counting your home?

I'm embarrassed. My home is paid for 41,000.

Forty-one thousand? Yeah. Good. On what?

I'm sorry?

On what?

Credit cards. It's ridiculous credit cards.

Okay, that's okay. Have you analyzed for self-awareness yet where that debt came from? How did you get 41,000 dollars in credit card debt? What were you spending it on?

My The problem was I had two sons that both died within six months of each other.

Oh, my.

I just went to retail therapy. I thought that would make me feel better and cure the grief.

It's an understandable thing, and It's a clear analysis. The point is, it's not going to reoccur.

No, right.

That's the point of the self-awareness, right, Ken? Yeah.

See, when you're clear on the source of it, we go, All right, how do I guard against that. You walk through something that is unimaginable for a parent. You do have the knowledge now of this deep pain caused me to do this, so you can't get out of it. Here's my question. Can you, through the skill and experience you have up to this point in your life, can you pick up some work that would be just focused on knocking this 42,000 out as quick as possible?

What did you do? Okay.

I was administrative assistant for churches.

Perfect. That's easy.

I got to tell you.

Tool that up real fast.

Yeah. I know this isn't fun. I know this is a bitter pill.

But if you went to work for a year and it all be over, that'd be cool.

That's right.

Okay. That gives me something to think about then.

This is think about this as we're only working for the sole purpose of knocking out this pain. This is going to be extra special for you, not just to remove the burden of the debt, but what that debt is actually tied to, which is a lot of pain.

Okay, that makes sense.

I think you need a goal like that at 72, is my point. If you can visualize that to see why I'm doing this, there's really a two-fold victory.

I think it's huge. Do you have the 67,000, that's a retirement income, a pension?

It is. My husband's in the service, and he died from Agent Orange. I get a compensation from plus his army benefits.

So there's no nest egg?

No.

Okay. All right, cool.

How much is your house worth?

About 350.

Okay, good. I think you're fine. We get you out of debt. You're going to be fine. It'd be neat if you started building up some investments, but we don't have to panic about that part of it. But I do need you to have an emergency fund of $15,000 and be debt free. So you're $60,000 from your goal, so one year of work might be really cool.

Okay. All right. I'm sorry.

Go ahead. No, you're fine. Go ahead.

I was just going to ask along a different note, should I close my local bank accounts and go with Fairwinds? I've read a bunch about it.

Well, we're big fans of Fairwinds. We've all got Fairwinds accounts, but we've not closed our other accounts.

Oh, really? Okay.

We've got both. Okay. Yeah. And so, like Rachel opened up because she wanted that cool debit card. She was like the first one. She went running to do it. But no, for starters, you might end up with them 100%, but I would start with a 50/50. Oh, okay. Make the transition gradually at this stage because you got enough other things that you're burning calories on. It's your burning brain calories on. So, yeah, you're doing good. Susan, I got to tell you, just talking to you, the clarity in the language you're using and the way you're describing all of this, there's a lot of wisdom and a lot of self-awareness. I predict that you're going to do very, very, very well. I'm sorry you went through these tragedies and that it left you with this credit card stain as a part of that story. I'm with Ken on that. The sooner you get rid of that, the better and the more stable you get. And yes, the baby steps do apply regardless of age, regardless of income. But We're apt to adjust the income around here. We're not above saying, get a job. We do that sometimes, like almost every day.

And Melody's in Denver. Hey, Melody, what's up?

Hey, I'm so excited to talk to you guys. Thanks for taking my call.

Sure. How can we help?

I have about $4,000 in my card debt that I would really love to just knock out and get out of my life. I have $5,000 dollars in savings, but the problem that I keep running into and has me feeling stuck is my husband and I were both self-employed, and both of our jobs are very seasonal. And so winter is when we go into slow season. And that always puts us in like- You're doing what again with your drum?

It's seasonal. So in the winter- What do you do?

I'm a photo editor for wedding photographers, and then my husband does shed hauling.

Okay.

So we're about to go into slow season, and usually we have to be very, very, very frugal. And last year we had to dip into our savings.

Well, that's because you're not working.

Why don't you work? That's something that's not off on the season. I mean, if you're a photographer, get Santa Claus lined up. I'm not kidding. I'm not a photographer.

I'm a photo editor.

Yeah, but do something else then. Just because you're a photo editor full-time doesn't mean you can't go be- How about being a photo editor for something other than weddings?

Like Santa Claus pictures. I'm serious. Or something that's… I mean, offset your seasonal instead of saying, I have to sit on my butt.

Right. I've taken as many clients as I can possibly get.

Only in the seasonal area.

I'm also a stay-at-home mom. No, it's for worldwide. I can take clients all over the world.

But even if it's you, you said stay-at-home mom, so you're making excuses here. I get it, but your husband can at least be working. He could be stocking shelves, he can be driving trucks. He can be doing all kinds of things that you don't even have to touch the savings.

Right. Yeah. I mean, that would be the logical- No, no, no.

It's not that would be. No, no, no. Not would be, must be.

Is.

Must. I must work in our seasonal downtime.

Yeah. No, I agree 100%. The issue for him is that he has a bad record. So he did some stupid stuff when he was a teenager, and because of that-Darling, our stupid stuff didn't keep him from building sheds.

Yeah, and I would tell you, they're building homes. They're building all kinds of stuff in Denver.

There's all kinds of crap you can do in spite of having stupid stuff on your record. Sitting on your butt is only one of them.

That whole industry My country, by the way, is full of people who have people on their record. I worked in construction as a college kid, and I was the only one with a driver license. I had to run to 711, Dave.

You spent as much time getting jobs as you do making excuses, you'd have no money problem.

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Hello. Hi. Welcome, welcome. Where do you all live?

Anchorage, Alaska.

Fine. Welcome to Tennessee. It's beautiful here. We're glad to have you. How much debt have you two paid off?

$217,000.

Awesomeness. How long did that take? Three years. Three years. Good for you. And your range of income during that time?

Started around 100,000, ended at 172,000.

Wow. Nice jump in three years. What do you guys do for a living?

I'm an occupational therapist.

I work for Costco. Very cool.

Have you met George? George would love to meet you. What was responsible for that $72,000 jump? A couple of things. When we first started, he was on workman's comp, and we were currently living in Idaho, and then we moved to Alaska, which also alleged to an increase in income and get him back to work. Yeah, okay.

That's all that. Very cool. So what made you go on the Alaska adventure? I'm curious. Well, we just really felt God opening that door, and You didn't notice the cold air when he opened the door? We welcomed it when it came through the door.

The Arctic blast? Yeah. We were in a dark year. The year prior, my dad had passed away. He We had gone to workman's comp. We had made some dumb money decisions, and we needed to make some change. We had a lot of things happen all at once.

A change in scenery is not a bad idea. All kidding aside. The pay in Alaska is excellent. It is. How long do you have to be there before you get to participate in the gas stuff and all that?

It has to be one full calendar year starting in January. See, if you moved in after January, you have to wait until the following January to start all over.

Okay. You've not been there long enough yet? We just began. We just got it. Oh, no, you're three years. Yeah, you just got it? Yeah. Okay, cool. How much is that a year? It changes year to year, depending. About 10 or 12 grand, usually.

Oh, no. No. It's like $1,000. Oh, I thought it was serious.

Yeah, I think this year it was $1,000.

On behalf of everybody, what are we talking about? A PFD. It's from the oil fields that they have in contract with the Alaska government.

If you're an Alaska resident, you get to participate in the profits of the pipeline. Well, profit, Sherry.

Okay, that's nice to know.

Sorry, I'm just now caught up. I thought it was substantial. I didn't realize it was only a thousand bucks. Okay. All that discussion for not much. All right, anyway. Is this the house? Did you pay off that? No. No.

No. No. Student loans, car, credit cards, medical and tax.

Cool. How old are you? I'm 34. And 35. How long have you been married? Five years. Okay. So two years there, tragedy strikes, new scenery, moved to the... Where in this process you get tied into Ramsey stuff?

I started After I graduated from OT school in winter of 2019, and we were dating at the time, and I was telling Mitch about it, and he was not on board. He thought I was at MLM scheme. I wish.

I would have made more money.

Then when we got married, went a little more Dave-ish and didn't take things quite as seriously. Then when we had that hard, hard year, it's like, We really need to get- It brought everything in the focus.

Yeah. Yeah. So, Mitch, when the hard times hit, what made you say, Okay, we're going to do the Ramsey stuff now? I think for me, it was just seeing- Something's got to change. Something just had to change. Seeing how scared Sarah was and how hard she was working. She took on three jobs. With work comp, they don't really make ends meet. It was just all of that. It took a while for God to work on my heart for that. Yeah, fair enough. It's not that unusual, but I always love hearing the story. It's not just because other people are probably in exactly the same spot that are watching or listening to this. Yeah. Very cool. Good for you guys. What do you tell people the key to getting out of $200,000 worth of debt in three years? That's impressive. We didn't eat nothing but rice and beans.

A lot of Mexican food.

Yeah.

Being willing to sacrifice, especially for the short term, with the end goal in mind. Especially because we had a slight pregnancy scare in the middle of all that, and we realized we couldn't afford to even have daycare. We couldn't afford to have one of us step down. If we wanted to have a family, we need to make some sacrifices.

Something had to change. Keep doing the same thing over and over. Don't expect a different result. You got to change something. To change the recipe if you want a different cake. Good. Good for you all. Proud of you.

This is Herculean effort. When you look at those numbers, 217 in three years.

You haven't been bench pressing like 400 pounds. That's pretty incredible.

So here's what I want the audience to hear. How quickly in your journey did you begin to see momentum? Because you bought in and you went hard at this thing. How quickly before you went, Oh, we're making headwind and we can actually do this?

I don't know. As soon as we got to Alaska, We got there and I got back into full-time work. I got a raise. Sarah got her big raise, and it was just really quick.

At that point, you guys had already been all in, going hard.

What's the first day that got paid off? The car. Yeah, the car. Okay. What's the one that you paid off? They went, I hate you. I'm so glad you're gone. All of it. Yeah, all of it.

There wasn't none of it that was good. A lot of hate. A lot of hate.

That's good. That's a motivator. That's okay. Yeah. Good. Way to go, you guys. All right. What do you tell people the key to getting out of debt is? Man, for me, it was getting on the same page and getting on that budget and just being real with one another, communicating. That's a huge thing.

I would say know your why, know what your goal is, why.

What was yours?

A life of peace, a life of being able to do things that we want to without having to have that fear of I should be doing something else with my money, whether that is taking education for my career or going on vacation or even just buying- Or not having pregnancy and scared in the same sentence. Exactly. Having that peace. Yeah, peace.

It's not a scare anymore. No. Good. Very cool, you guys. Very cool. Who was cheering you on?

My family, for sure. My mom taught FPU when I was in grad school. All my siblings did FPU, and all of their families. Yeah, all of my family, siblings, parents.

We have a lot of friends in Alaska and Idaho that-We were very open and honest with them about what we were doing. They all cheer us on. That's good. So nobody dragging you down? No. No. No. Are they saying you're crazy? No.

There were some people that said they were crazy.

Okay, good. That was just for moving to Alaska. Those people motivate, too. I'm just saying, if that guy thinks I'm crazy, I'm right on track. You need that guy, the anti-mentor. I like it. Very cool.

I remember working years ago on a campaign in Alaska. I was probably 21, and I never forget this. We were out campaigning, knocking on doors, old school style, Dave, and it's probably seven o'clock at night, summertime. Gorgeous. I come off of somebody's front porch, and I look to turn to the next house, and I see a gigantic, I mean, full-blown adult moose chewing on flowers in a suburban neighborhood, and that blew my mind. They're everywhere.

We have them in our yard all the time.

Not a deer, a giant moose like it's a pet.

And that's scary stuff. It's pretty scary. It freaks me out. Nasty.

You're brave people in more than ways than that.

I love it. Well, congratulations, you guys. Thank you. Once again, the whole Ramsey Cruise proud of you. Thanks for making the trip down here to celebrate and to encourage others on the YouTube and the podcast. Everybody, let people know this can be done. Mitchell and Sara, Anchorage, Alaska. 217,000 paid off in three making 100 to 172. You know how they did it? They decided to. They got on the same page, decided to work together and know their why. Count it down. Let's hear a debt-free scream.

Three, two, one. We're debt-free. Yeah. Wow.

It's amazing the number of times we talk to someone that a change of scenery is not an option for them, and sometimes it's the most healthy possible thing. Yeah, it's absolutely right.

Lauren is with us in Toronto, Ontario. Hi, Lauren. How are you?

Hi. How are you doing?

Better than I deserve. What's up?

I'm trying to decide whether to buy or lease a car. My husband leases his car. I currently own mine, so I'm used to not having monthly car payments. My husband thinks I should lease because we can write it off through our business I would prefer to buy, but of course, it would take out of our savings that we have. So, yeah, I'm just trying to decide which route to go. Okay.

Well, it's quite often that I get to tell the wife that she is right and her husband is wrong because that happens a lot. And this is one of those wonderful cases. But let me give you the actual backup. Your husband is so wrong. It's unbelievable how wrong he is. He's not just a little bit wrong. He's really wrong, including when he did it. Let's walk through how our write-off works. What is your tax rate in Canada? I know you guys get taxed a lot more than we do, and we get killed.

Yeah, in the 40s, 40%.

So you pay 40%. I thought it was 65.

It's closer to where... Yeah, it's about 45.

Okay. All right. If you spend in your business a deductible expense, $10,000 as an expense, and it goes on your PnL as an expense, it reduces your income by $10,000. That is the tax write-off that people talk about. All right? Okay. What that saves you, let's say you didn't do that, and instead you had that $10,000 worth of income, the taxes on that $10,000 would be $4,500 on a 45% bracket, right?

Yeah.

Okay. When you spend $10,000 that you don't need to spend in order to call it sophisticated and do a write-off, you've traded a dollar for $0. 45. Okay. Bad trade.

Yeah.

Got it?

Okay.

It's like I gave an If I give an extra $10,000 to the church and I saved the... I can write that off as a charitable deduction, I assume in Canada, correct? Mm-hmm. Okay. If I give $10,000 extra to the church and I save the tax, I get to give the gift, which is good, and I save $4,500 on taxes. But it cost me 6,500 net in order to give that gift. I would never look at someone and go, Oh, I give to charity because I get the tax write off. Because that would be a stupid statement. Because you're trading $10,000 for $4,500, that's not sophisticated in any math. That's what your husband is saying when he says, Oh, no, we should lease the cars and piss the money away so that we can take the ride off and act like we're sophisticated. No, you're trading a dollar for $0. 45.

Right. Yeah. One of his arguments is that, well, you can lease a new car, so it's always within warranty, and then you don't have to worry about maintenance.

Yeah. Then the other argument would be new cars lose 60 to 70% of their value in the first four years. That's stupid.

Yeah.

Man, this guy, he's just losing all the way around. You're just killing him here. It's awful. Okay. No. The wise people do not spend money on in your business and trade a dollar for $0. 45 and call it sophisticated. Okay. The only time you would do that is when you're actually getting a return on the investment, not buying a depreciating asset or a super duper depreciating asset called a new car. Now, this is just dumb, dumb, dumb. It's rationalization because he likes the car. That's right. He just wanted to buy the car, and he tried to figure out some way to posture and act like it's smart. Then by the time you get through doing the math, you look not only not smart, you look just plain dumb. No, don't do it. Don't do it. Moral of the story, Lauren, is listen to Lauren. She's smart. You didn't even know the math. You just had a bad feeling about it. I don't want to be in debt. I don't want to be in debt. Just to call it a write-off. And don't go in debt just to call it a write-off because it's dumb. The math doesn't work.

They never give you 100 cents on your dollar, ever, in a tax write-off. There's no such thing. So no, we just don't do those deals. Not ever. Marissa is in Houston. Hey, Marissa, what's up?

Hi, Dave. Hi, Ken. Hey. My question for you all today is my husband and I are paying off our debts. We have about 85 $1,000 in debt, not including our mortgage. As we take the baby steps on, we're slowly paying off a Peloton as well as a mattress. They're both zero % interest. And then after that, we have- You got to just buy everything, don't you?

You financed your mattress and the thing you hang your clothes on, the Peloton. Oh, my gosh.

Hey, we use it. But anyway, the truck is a 2021 F 50, and we owe 26,000 on it. That is at a 2. 99 interest rate. But actually, I know we can pay those off slowly and snowball the payments. But my next question is, we actually have a Cee lock, worth about $47,000.

What's your household income?

We make, let's see, $15,000 a month.

Okay. Marissa, Please don't justify staying in debt by having low interest rates.

Yes, sir.

You've been giving me your interest rates as you went along like there were some bragging rights on a Peloton. No. Okay. Now, let's just say this consumer debt, including the truck and the heat lock, is stupid, and we need to clear it all up. Because the faster we clean all that up, the faster we're going to be in a position to really build serious wealth.

Well, and the main question we have is the house we're in now, we've lived in since 2017. It's a great house, but we have three boys, and we are quickly outgrowing it. So we know that we're not going to be in this home for the long term and plan on moving actually in the next 2-3 years.

You need to get out of debt for you, though.

Correct, of course. Okay. But where we're stuck is we're trying to figure out if once we pay off the truck and pay off the other two consumer debt, then are we going to then pay towards the heelock and get that completely paid off? Yes. Or should we start saving money to have a larger down payment on our next home?

When you sell your home with the heelock not on it, they're going to give you a check that's $40,000 larger because it doesn't have a heelock on it. Right. So you saving the money. It's just buried in your equity.

Right. Well, we just knew since we're going to be moving in the next 2-3 years- Did you not hear me?

No. You're going to get the money.

Yes, I understand.

Okay. So don't kick the can down the road and act like everything's No, just get rid of the stinking debt. Then when you sell the house, they're going to write you a check, and you got the same down payment you would have had as if you didn't pay off the heat lock and had the money in savings. Okay. Exact same down payment. Okay. Because it's the exact same $40,000. It still works that way both ways. But you do whatever you want, but that's what we would tell you to do, obviously. So, Ken, our rule of thumb on second mortgages is if they're less than half your annual income, and a $15,000 a month, this is definitely less than half their annual income. And 40,000 being the amount, then we put that in baby step two. If it's a huge heloq or whatever second mortgage we want to call it, then we put it over there in baby step six and pay it off with the mortgages, in which case we would have done what she said to do, which is wait until the house sells or refinance or whatever you're going to do and get rid of it.

By the way, these rates are coming down. We're sitting at five and a half right now on 15-year fix. If you're sitting on a 6% first mortgage and you've got a big second mortgage, it'd probably be a good time to refie and roll them together and get you a five and a half on the whole puppy. Now, if you're sitting on a 2% first mortgage, you're probably not going to want to roll that in and do a refi. But if you're sitting on a 2% mortgage, it's $20,000 and you have a $200,000 second mortgage at 10%, great time to refie and get rid of that. Start running your numbers at this five and a half number on your first and second. And does it make net sense to get a new first mortgage at a lower interest rate cumulative interest rate? A weighted average interest rate over the thing. It may for some of you that are sitting on that. So be watching, be awake, be aware.

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Welcome back to The Ramsey Show in the Fairwinds Credit Union studios. I'm Dave Ramsey, your host, Ken Coleman, Ramsey personality. Number one best-selling author is my co-host today. Steve is in Columbus, Ohio. Hi, Steve. How are you? Real good.

Thank you.

Good. How can we help? Sure. Okay. My wife and I are on Baby Step 7, and we have three children. Our 16-year-old is very eager to work, make money. But He looks at more of buying things online and then reselling as his job, and we keep pushing for him to get a job.

How else do we go about this to help him see the importance of actually going to a job? Or are we looking at it wrong?

Has he been able to actually do this with his own money, buy something and then flip it?

Yes.

Over the years, he's mowed. We pay well at home. He's stocked up a lot of money, but now he sees it as an online avenue is better for him to make money with his time. Is he actually proving out his theory? Does he make money with his time? Unfortunately, I don't feel he does. I might be just too overcasting on it, my wife and I, but we just don't see as… No. Okay, we talked to a 19-year-old the other day that had a million dollars.

No. We're talking Maybe $10 he might make off of a pair of shoes if he buys and resells them.

Maybe. But does he do that 15 times a month or one time a year?

It's like he goes in spurts.

Every month, he'll be in a spur. I would meet Both of you in this and say, number one, my job as your dad is to make sure that you have extreme work ethic because people that do not work do not succeed. Correct. That's my job as your dad, and I'm going to do my job even if it causes you great discomfort.

Yes.

This is the discussion I've had with mine when they were that age. Okay? Okay. The bad news is that. The good news is I'm going to help you. Now, if your job is being an entrepreneur and you're using your online skills that are native to you as a 16-year-old that the old man doesn't understand, that's fine. But you are running a business, and now let's talk about I'm going to coach you and how to run business. A business has a profit and loss statement. If you're running a business and you make a dollar an hour, your business is failing. Because you could have been working a JOB for somebody else and making $20 an hour. Yes. But if your business is making $100 an hour and you're working 40 hours, I'm going to get excited about your entrepreneurial spirit and your business acumen that we're building because we're going to run a PnL. We're going to see, do you actually make a profit on this crap? Or do you have an online hobby and you're substituting that for work?

Yes, I think that's where we're going.

Well, I don't care. In other words, I'm going to prove to him that this is not his job by the fact that he's not making any freaking money when I make him do a proper profit loss statement on this and start tracking his sales. Okay. Okay. So how many items did you sell this month and what did you pay for those items and what did the collective group sell for? And the difference is called your profit. You've cost a good sold in a business, my That's how entrepreneurship works.

Is it correct to tell him, When you do profit, put your actual money that you spent, keep that because you got to pay yourself back, and then keep his profits separate?

Yeah, you have to at least take your cost of goods sold and put it back in. Otherwise, you run out of inventory money.

Yes.

Let's say he sells $4,000 worth of items, and his cost in those items was $1,000. So he made $3,000 this month. I would call that very successful for a teenager. That is, yes. Okay. If he did that, we would take the thousand that he paid for those items out of the $4,000 and put it into next month's inventory. Or a little more, 1,500, because maybe we can grow this thing. But we're not going to just take the 4,000 and bank it or blow it and then have no inventory for next month. What I'm saying is, if part of me teaching you work ethic is to also teach you some business principles and encourage your entrepreneurial spirit, I'm willing to do that. I am not willing, and you are not, as a person that lives under my roof, going to kid yourself and burn a bunch of activity, make no money, and call that a job.

Yeah.

That's an illusion. I mean, adults that have not learned that, but you got the opportunity to have this young man under your wing and teach him some entrepreneurial skills.

Yeah, Steve, I want to make sure. Dave just gave you great advice. I want to give you some tactical things to do here. You've got to lean in with your kid, and you've got to push him to do what he's doing now better and see if he can make it bigger before you pooh-pooh this. I'm not getting on you, but your posture as you started the call, and by the way, I've been there, so I'm not getting on you, but make sure you hear what Dave said. Before you push him to something else, push him to do this really well, which means you got to know the numbers better, and you barely know because I think the whole concept of you is probably a bit foreign run, and you're a little irritated by it. I think you're going to get him, you're going to have more effect doing what Dave told you to do if you lean in first.

If I can teach my kids to be entrepreneurs successfully, They're going to do better than if I teach them to get a job.

I was just going to suggest something as you push him. Why don't you invest a little bit? Go, Hey, and I'm making this up. Do your homework, get in with the kid. Do some of your own homework on kids that are doing this well. But Let's use the shoe example. I'm not telling you to do this. This is an example. I might go, Hey, I'm going to give you X amount of dollars, and I'm going to invest in you because I want to see if you're serious about this. I'm your investor. I'm going to buy five pairs of shoes for you, and you're going to sell those. Based on what I've learned, what you're telling me, you should make this on the shoes. And walking through that like Dave was telling you, because now you're teaching him about investors, you're teaching him about a lot of things, and let's put some positive pressure on this instead of negative. That's the only thing I wanted to share, because I think you end up- That's amazing how you share that. I like that. Well, Dave's advice is genius, but I'm trying to give you something tactical where your kid goes, Oh, dad's not being dad.

He'll learn by you being so positive that we actually reveal if he is just scamming you, and he's just trying to come up with an excuse not to go pick up a shovel.

And under all of this is he's feeling your strength to force him into character-based decisions because that's how he becomes a man.

Thank you.

I appreciate that. What you don't want to do is say, Oh, all things that are online and entrepreneurial are bad. Had, because it always makes me laugh. I remember my grandmother. My grandpa worked for Alcool Aluminum for 38 years. He had a job because he went broke in the Great Depression and never wanted to be unstable again. My grandmother tied into that same emotion. Getting a job was a big deal for them. They were get-a-job people. I'm self-employed. The day I got the call from the publisher that I had sold my one-millionth book, the first book, Financial Peace, my grandmother called me and she said, I was praying for you this morning. I'm worried about you. I really think you need to think about getting a job. You don't want to be that. That's a cute story, but you don't even want to be that. I want to encourage this entrepreneurshipism, but only if it's not an illusion. I don't want to encourage delusional thought. Let's turn this into money, baby. You prove yourself, you prove your idea. If not, you'd be working a Chick-fil-A saying, It's my pleasure.

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Hi, I'm good. How are you?

Better than I deserve. What's up?

My husband and I are in Baby Step 2, and we are struggling with managing the cash flow of our budget. Maybe it's because a portion of his pay is irregular, but usually at some point in the beginning of the month, we have to pull from our Baby Step 1 to cover the bills so that they're not late. And then the next paycheck, we can replenish our savings. But I was just I'm wondering how we fix this so that we don't need to dig into our Baby Step One savings every month.

Probably a shortage of income. What is he making?

Well, I guess gross, our W2 for the month income is 7,800, and then gross BIF income for him, that irregular income, is about 2,200, but it varies. We don't really know.

So you can't make it on $10,000 a month?

Well, so our minimum to run the household is 8,000.

Why, pray tell.

So our mortgage is 2,400. And I guess the next biggest thing would be our son's school is 1,700. And then just utilities, food, transportation, all that adds up to 8,000.

No, it doesn't. Unless you have a $1,200 car payment.

Our car payments can buy... I have credit card debt, car payments, and school.

How much credit card debt do you have? 8,000. And how much do you owe on these cars?

$15,000 on the RAV, $4,000, $20,000 on a GMC terrain, and then $73,000 on student loans. Okay.

How many children do you have?

One.

Are you working outside the home?

Yes. I'm an accountant.

Okay. So your total household income is $10,000 a month?

Yes.

But you can't make it on $10,000 a month, even with what you've described to me.

Well, we can. I guess it's the timing of the bills that are a struggle. So I keep digging into the savings and then I'm punishing it.

I don't think you're doing a monthly budget, are you?

I have my Excel spreadsheet.

Yeah, that's what I thought. You need to go on the Every Dollar app and lay out a proper budget where Every dollar has an assignment before the month begins and you pre-plan the cash flow so that it doesn't get backwards on you. You say, Okay, what's going to wait on his bonus check at the end of the month? Then, of course, ultimately, you build margin into this and you flip it to where his bonus for this month is covering stuff for next month instead of last month. But that's going to be done by getting margin and under control. I also have… I mean, you all have done some ridiculous purchases. I can tell that you spend a lot. Are you guys staying out of restaurants? No, you're not. Okay. All right. I didn't think so. We're trying to get there. Yeah, you're not, though. You're not.

What are the combined car payments?

It's 15,000.

Yeah, but I'm just looking. What's the monthly bills right there on the two car payments every month?

A thousand.

That's insane.

Humanity. Yeah, but I think you could get them all paid off, but you're going to have to get the other side of this and create some margin, and you don't have margin in this budget. It's ridiculous that you don't on 120,000. That's where you've got to get to. You got to increase your income and decrease your outgo, and the spread is how you clean up the debt mess instead of spending every stinking dime you make every stinking month and spending your wheels. Because you start to lose hope because you feel like a rat in a wheel.

Yes, 100%.

Yeah, that's the problem. It's scary, I understand. I Yeah, I feel like I'm just always behind. I'm the nerve and I'm in the excels. Let me change the word. It's not I, it's we. The two of you sit down tonight and lay out an every dollar budget for the upcoming month. The Two of you sit down tonight and say, Okay, why can't we live on $10,000? And look at it together and start asking yourself the question, why does it be cut? Number one, you need to not go on vacation. Number two, you need to stay at a restaurant unless you're working there as your extra job to get your income up. That's it. Then we burn our lifestyle to the ground. If that doesn't work, we start selling cars and get rid of these debts because I've got to create $1,000 to $2,000 worth of margin in this to start reducing these debts rather than just spending our wheels. You're not going to do that, A, without a plan, and B, without cutting spending, and probably C, increasing your income somewhere. You probably could pick up some side gigs on accounting that you could do, quote, spare time, unquote, evenings after the baby's asleep, whatever.

It's tax time here right now. You got a bunch of filings and stuff going on right this second. Probably too late on that one, actually. But whatever you can do on Christmas, whatever he can do to pick up. If you Picked up a couple of grand a month and use that, let's get rid of the credit card debt, and then let's get rid of the car debt. Now we start to have some margin, and then we can knock off that student loan debt and work that debt snowball, smallest to largest in that order. But you can't even talk about doing that right now because you're just borrowing from Peter to pay Paul each month. I understand. But I think the first thing is you're going to cut your lifestyle and get on a detailed plan. Both of those things will make you feel like you got to raise, and that's going to flip this over. You're about 10 to 15% of intensity that you have to turn up. This is not an intellectual exercise. This is an emotional exercise. It's, I'm so pissed off. I'm sick and tired of being sick and tired. And that's what gets you out.

That's what gets you out. Orlando is in El Paso. Hi, Orlando. How are you?

Hey, Dave. I'm doing good. I'm breathing. My family's breathing.

I'm blessed. That's a good thing. How are you? It's a good start. How can we help?

Well, I've got a bit of a question. I just recently paid off my house. Good. Yes, sir. I'm thinking of I'm doing an equity loan or a HLAC on the property to build another house and sell it for profit. I don't know. I mean, it's scary.

Yeah, it should be. I'm wondering if that's a good idea or not. No, it's not a good idea. It should scare you to the point you don't do it. You just worked to get your house paid off. Now you're going to roll the dice on your personal home and hope you hit red? Hope you hit craps? No, I'm not doing that. Not a chance. I love the idea of flipping houses with cash, but not cash from your home. No, no, no. Please, please, please. You felt a different peace the day you paid it off. Now you're wanting to step back into the land of anxiety and right back into the bear trap. You said, I'm scared. You You recognize your body physically feels different when you pay off your house, and now you're going to want to put that tension back between your shoulder blades. No, please don't do that. Please, please, please get off that tic-tac site. That get-rich-quick real estate, whatever you're reading, get away from that. It's going to cause you pain, my man. We love you. We don't want that to happen to you. I'd love for you to do some house flips in the future with the money that you pile up since you don't have a house payment anymore and do it with cash, but not with borrowed money on your personal residence once you finally got it paid off.

That makes my head hurt. Oh, my gosh.

You spend hours researching before making a major purchase like a home or car, but it's also a good idea to put in the work searching for the right insurance coverage. To protect your biggest assets, I recommend using Ramsey Trusted pros. Whether you're looking for car, home, or any other type of insurance, Ramsey trusted providers have been coached and vetted to serve you like we would. Find what you need at ramseysolutions. Com/ramsysolutions. Com/ramsysolutions. Com. In the lobby of Ramsey Solutions on the debt-free stage, Brent and Pauley are with us. Hey, guys, how are you? Hey, Dave. Hi, Ken. Hi. You're welcome. Where do you guys live? I've been to Oregon. Fun. Well, welcome to Nashville. Thank you. A bit of a haul to get over here and do your debt-free scream. We're glad you're here. Just a little bit. It's beautiful. Thank you. We're honored to have you. How much debt did you guys pay off? 286,452, Dave. Way to go, guys. Excellent. How long does this take? Six years, six months. Good for you. I love it. And your range of income during that six years or six months?

108,000 up to 170,000. 170?

170. Oh, wow. Good. And what do you all do for a living?

I am a NDT radiographer, Dave. And I work in accounts receivable for a digital marketing tech company.

Very cool. Good for you guys. Well done. And the debt, the 286, what debt was?

56,452 was two cars, a boat, and our phones.

Oh, wow.

And then 230,000 was our house, Dave. Oh, boy.

Looking at weird people. I love it. Congratulations. It's finally done. Well done. How old are you two? I'm 41. Wow. I'm going to be 40 in May. You have a paid-for house. We do. Yes. Wow. That's so cool. What's the house worth?

Zillow tells us 550, but I know what we could get it for if we put it on the market. Probably right around six.

That sounds right. Sounds about right. We know Zillow is not accurate. Exactly. All right. Man, that's so cool. How much in your retirement net stakes? We're roughly probably right around 860,000. Wow. So you're 40-year-old Baby Steps Millionaires with a paid-for house? Yeah. Excuse me.

That's with the house? With, yes.

We're close. So you're heading to Baby Steps Millionaires? Yes. Almost, but not quite. By next year, Dave. Got it. Okay, yeah. Well, I mean, stock market shoots up there. There we'll be. There you go. Way to go, guys. How does it feel to be almost millionaires and 40 years old with a paid-for house?

Wild. It's surreal, Dave.

It's so hard to explain. You always looked at it, and I was so like...

I could think how I wanted it to feel.

Now that we're here, it's like John Deloney always says, it's like you have bricks in your backpack and you take them all out.

It's finally we've set all those bricks out of our backpack and down. It's just we're free.

Yeah.

Huge sigh. I love that. All right, so what was the catalytic moment, or was it a series of things that makes you guys go, Hey, we're doing this, and I don't want to be getting rid of the debt. We're going all the way and paying the house off. Right, exactly. For us, we thought about the answer to that question because we listen every day, and there was no aha moment, tragic life event. Nothing like that happened. It was actually more of a conversation that we just randomly had. I work from home, so I'm listening to the podcast all which is great. But he comes home one day and we start chatting about it, and we're both were very competitive people. You should see us play monopoly. We looked at each other and we're like, How quick do you think we could actually do this? Or is it even a thing do you think we could actually do? I am the nerd of the family, and so I immediately got into my spreadsheets and started color-coding, putting our paydates, putting how much margin we have. It was off to the races. It was truly at that point.

We were like, Let's see if we can do this.

So no big argument, really? No, we don't argue.

It was just- She's always right. Only at Monopoly. We don't argue.

She's always right.

No, he was ready. We were ready to roll.

How long had you been married at that point? Right at six and a half years.

Yeah.

So now you're 13 years? We're 13 years next month. Okay. Wow. Okay. Very cool. Good for you all. Wow. That's cool. It's very exciting. That's a good way to get at it, though. So it was more Begins almost with an intellectual curiosity spurred by the podcast. Yes. You said, I wonder if that works for us. 100%.

Well, and Dave and also, I look at... We made a fairly decent income starting off, and I looked at our paycheck every two weeks. At the end of the month, it's like, Man, we're making this much money. We were police people.

We enjoyed the new vehicles.

Totally were.

It's like, Why are we doing what we're doing?

We had, like I said, a great income.

It's just getting taken away and taken away to nothing.

To what? Just so you can show people you have a nice car? We got caught up in that, how much is the payment game that so many people, including people that we know very closely, it's, Oh, well, what's the payment? You can afford it. What's the payment? We got caught up in that. It was something that we were like, Why? Why are we doing this? Just for a piece of metal that's sitting in the driveway. We called it our yard, aren't it?

Yeah. Yeah.

Expensive ones. Yeah.

I love it. That's fun. Well, that is cool. Really, what happened is what you value changed. Yes. To a longer term vision that was less than the shallowness of just having a nice car.

Very much so. We wanted to wake up and just breathe and not work. At one point, like the other couple that was up here, I had three jobs. He was working nonstop over time. We were just like, Why? Why are we doing this with our precious little life we have.

Yeah, exactly. It goes fast and end up working your whole life for somebody else if you're not careful. It felt like we were working our whole life for the last six years. Yeah, we did. Off to work I go. Good for you guys. Who was cheering you on?

Definitely our parents. We have amazing sets of parents. His parents have a paid-off home and have been a huge inspiration for us. My parents have cheered us on. Amazing friends.

Friends, yeah. How did you find the podcast originally? Boredom, to be honest. If you type in Boredom, we come up.

No. That's what everybody wants to hear. I was bored, and I'm like, I honestly just truly was looking for something to listen to that was inspiring and came across it and binged it for, like I said, I got sent home to work from home during Corona years and just started binging it. And it was, to this day, it's the first thing I listen to right when I have my coffee until the show's over. Wow. Yeah. God God bless you for putting up with us. I know. David, one thing, the rest of us, I don't know how you do it. It's hard sometimes. Hey, not surprised. That's why I apologize. What's the key? What would you tell people the key to this whole thing is? Get your butt to work. Oh, I like that. My alarm would go off at 1: 00 AM every morning, and I'd start work anywhere between 1: 45, 2: 00, and then I didn't get off till 3: 30, 4: 00.

Good.

I would do that four days a week.

Then on Friday, I'd go in and work six hours. Then we had our side hustle that we would get furniture, and we would turn around and paint furniture and sell them. Anything on the side of the road was mine. If you look at some of our photos that we have, that's our garage. Oh, wow. At one time, we had 42 dressers in our garage. Furniture store in the kitchen, took it over, no room for anything. That's like our end result. This is going to inspire some people real fast. Give us one example of how much you paid for a piece of furniture and how much you flipped it for. She got one-off the side of the road, actually, for free. We put it on a trailer, took it home, and I think she ended up selling it for $750. Come on. It's a beautiful Drexel vintage. I mean, you know.

Wow. Yeah. Just cruising around the rich end of town, see who put something on the. Can I see it?

I'm like, Babe, get in the car. It was 6: 30 in the morning one morning. She jumps out off the couch with coffee, and she's like, We got to go. We got to go. There's a dresser on the street. We went and grabbed it. Somewhere in Ben, they're going, Oh, I put that out there for the furniture. Got to come by, pick it up, repair it. Exactly. You stole it. I'm kidding. No, no. Only legal for you. I know. Good job. Thanks.

Excellent work, you guys. Excellent work. Thank you, Dave. I'm proud of you guys. Thank you. Thankthank you for everything. Very cool. Good for you.

Work, work, work, work, work, What?

We're deaf friends.

Yeah. Wow.

You know, Ken, I knew we'd had a lot of listenership growth, but I had no idea that it was coming together, being unified, work, work, work, work, Because when you type in boredom, we come up.

Well, we'll take them however we can get them.

Our scripture of the day, James 1: 12, blessed is the one who perseveres under trial, because having stood the test, that person will receive the crown of life that the Lord has promised to those who love him. Joss Billings said, Be like a postage stamp, stick to one thing until you get there.

That's pretty good. Half our audience has no idea what a postage stamp is.

That's true. Top questions people have about online How do I know if I need a trust or a will? Well, if you've got a large estate, something north of a million dollars, you may need an actual attorney to do the will for you, and you might need a trust at that point. But it's certainly got to be north of a million, probably north of five million, before you even worry about that thing. When do I need to start my online will? Or what do I need? You need to know, like you do for any will, who do you want to get your stuff? Who do you want to take care of your children that are minors? Who do you want to make decisions for you if your health goes and you're incapacitated? The health care power of attorney is an online will, legally valid, of course. But you need to know that all wills are state law, not federal law. So when you leave one state and go to another to live, your old will is invalid. You need a will done according to your state's laws, and their proper signatures or notaries or whatever is needed, and the components of the will itself are different from state state.

It's very important to get one that's state-specific. Go to ramseysolutions. Com/willsquiz to find out if an online will is right for you. It's a free wills quiz, and we'll start to learn about this stuff and get that taken care of. It's what grownups do. Matthews in Salt Lake City, Utah. Hi, Matthew. How are you? Hi, there, Dave. Hey, Ken. How are you today, gentlemen? Better than we deserve. How can we help?

Awesome. Just have a quick question for you. I'm quite entrepreneurial in spirit, and One year ago, I unfortunately had to close a business and was advised to declare Chapter 7 personally just to protect myself from some of the dotted lines I have my name on.

Did you?

I did, yeah. In early December of 2024. Wow. That's hard. Yeah, it was definitely a fantastic learning experience for me. I have since pivoted and been saving as much money as I can and paying down some of the accounts that were associated with that business closer just out of a moral. And I am due a bonus quite soon at my current position, and I already have about 12 $1,000 in the savings. And I just wanted to see if you recommend that snowballing, some of the past due stuff associated with the business, or how do you associate non-personal debt? But if you're paying stuff off where there's a variance of different things.

Well, it was personal debt when it was in the business because they didn't loan your business money. You had personal signatures on all of it. That's why you filed Chapter VII. That's fair. That is correct. Now you don't have any debt, legally speaking. Correct. Yes. Okay. And you're saying that you want to go back and pay back the bankrupt debt.

Yeah, as much as I possibly can, just as a small business operator.

I know I owed some small businesses AP accounts and stuff like that.

I've never taken money from anyone.

How much is involved if we total all those accounts?

About 187.

Okay.

Is all of it associated with the business.

Okay. And you're making what money now?

A hundred and thirty.

Okay. Good for you. All right. Are you married?

No, sir. Okay. All right.

Well, here's the thing. You do not legally owe the money, and I would only tell you to go and pay it back if you feel like God I'm telling you to do that. In other words, this is a moral, spiritual tug on your heart. I do not think that is required to be ethical. Okay. I did do what you're doing on my bankruptcy 10 years Okay. But it was not because I felt like I morally owed the money, and it was not because I felt like I ethically owed the money, because I'm pretty sure I didn't. The laws of the United States allowed me to file bankruptcy on the debts. I had repaid already 90% of it before we went bankrupt anyway. I was forced out by craziness on the other side of the discussion. But I did wake up very, very clearly knowing one of the few times in my life I'm 100% sure God told me to do something. In my case, and it might be because I'm on the microphone doing this, but in my case, God told me to go back and pay everybody, not just the small ones, but everybody.

That was a trip. I got to tell you, it took about six months to convince people to take money that they had not thought about in a decade. It Particularly bankers, because it wasn't their money. It created work for them to put this on the books, and they didn't want to do their job and stuff. It was weird. But I did do it. I don't talk about it much. I don't brag about it because it's not relevant, because I'm not going to impune that on everyone else. I felt like that was a directive to Dave Ramsey. I'm not sure if that's a directive to Matthew, but I would tell you, if you felt that strongly from a spiritual perspective, you should go do it. I also would tell you there's no hurry. Okay. You don't have any money. You make 130,000. You don't have any money. You make 130,000. You're talking about 187,000. It's going to take a while.

Right.

By the time I got there, I had the money in one account to write a check and do it. It also took close to a decade to talk my wife into it, but she wasn't going to ever pay them back because she knew what they did to us. She knew how they treated us, and she's still mad 35 five years later. But don't make a hillbilly woman mad. I'm just saying that's the moral of the story. But anyway, again, I hesitate to tell that because I don't always want... I don't want other people to impune it as my actions are a principle of ethics or a principle, spiritually.

So if he decides, he was asking, does he debt snowball?

No, I would do it one debt at a time in full. Because the debt snowball is you pay minimum payments on everything. But the little one, you're not paying any payments on these. I just list them smallest to largest. When I had enough to knock out the little one, I'd call them up and go, Hey, feel like God told me to pay you? I'm going to run the check over for that $13,400 that I owe you, and here I'm going to drop it by. I did do some of that, and the reactions were very interesting.

I can imagine.

They were very weird in some cases. Some people are like, No, don't worry about it. I'm like, Yeah, well, I'm too late. I'm already worried about it. Then others are like, It's $13,422. 13. Are you going to include the interest. It's like people have all kinds of different reactions. Instead of like, I can't believe you're doing this 10 years later. But anyway, so list them smallest to largest and knock out one at a time in complete. In other cases, if someone was doing this and they had a bunch of debt that they were behind on, we'd be settling these one at a time. But these are settled, so we don't need to go ask for a discount on these. If you feel like you're supposed to pay it, I just go pay it and just do them one at a time. It's going to take you a little while, though.

You know what I loved about what he said is a lot of them were small businesses, and I love the sentiment there. I think God will honor that. I do think that. He doesn't have to, and I agree, but I think that spirit is really good.

Well, it's a... Yeah, it's hard. In things like that, it's hard to know exactly how to feel, but you can never go wrong leaning towards integrity or extreme integrity or weird fanatical integrity. No one's ever mad when you do that. Well, no one, but very few are. Very few are. It's a process. Yeah, very interesting. Very interesting. Matthew, you're a good man to at least be thinking about that. I would tell you, make sure you're taking care of your own household first. Make sure you got your emergency fund in place. You're avoiding personal new debt of any kind. Then as you have excess money, apply it to this program, not scrimping and saving. It's not that snowball like Gazelle Intensity. It's just as I've got some excess money, maybe I've even got some investing going on, and I'm going to put 50% towards investing and 50% towards this program of my excess money.

Also love that he went back to work for somebody else, swallowed his pride. He's being productive. He's not licking his wounds and trying another entrepreneurial venture. I love that. Great character.

That puts us hour The Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.