Transcript of You Can't Stumble Your Way Into Financial Freedom

Doing nothing with your Medicare plan could cost you hundreds or even thousands next year. Chapter can help you avoid that. Go to askchapter.org/ramsey. Brought to you by the EveryDollar app. Start budgeting for free today. Normal is broke and common sense is weird, so we're here to help you transform your life. From the Ramsey From the Ramsey Network and the Fairwinds Credit Union studio, this is The Ramsey Show. I'm Dave Ramsey. Rachel Cruze, Ramsey personality, number one bestselling author, co-host of the Smart Money Happy Hour on the Ramsey Networks, and my daughter is my co-host today. Open phones at 888-825-5225. Hernan is with us in Tampa. Hi, Hernan, how are you?

Hey, Dave, how are you?

Better than I deserve. What's up?

Amazing. I'm 25. I just moved to Tampa, Florida. I'm making, uh, $2,000 a month across 3 jobs, and I want to build an online coaching business. I had, uh, $3K in savings, and, uh, I don't know if I should just be saving first or investing everything into building my business right now.

Okay. Um, Tell me about the coaching. What are you, uh, what are you coaching people to do?

Fitness hybrid training, where it's just running and lifting weights at the same time. Okay.

And, um, brand differentiate yourself for me, meaning if I'm your customer, which I'm probably not, um, Rachel might be, but the, uh, uh, if I'm your customer, why am I talking to you on the online rather than the 8,000 other people on YouTube.

100%. Yeah. Well, I'm 25 years old and I've struggled a lot with being consistent, consistent in the gym and started a 75 Hard journey, which has sparked my passion again for it. I know the struggles of being on and off with the gym and being able to get back into it and not overwhelm yourself with everything because it is an overwhelming journey of getting into shape.

So you have a story of starting and stopping and failure that other people can empathize with, and you're gonna use that to connect to them and help them on their journey. Did I get that right?

Yes.

Good.

I like that. Let me tell you what's beautiful about this. You articulated a brand position fabulously. It didn't take you a second. You didn't have to think about it. You spit it out. You have spent time thinking about this, and you've— and it has paid off. So really well done.

Is part of the 2,000-year mission making every month doing this in person, this kind of training, or is it just like odd jobs that you're doing just to pay bills?

No, it's just odd jobs to pay bills.

Okay, so you're not making any money on this yet?

No, this is starting fresh.

Okay, so how will you acquire your customers?

Through— my idea is through Instagram. Through posting content online, giving them value, and hopefully getting my first 2 to 3 clients just to get some testimonials out of them to have proof.

Mm-hmm.

Okay, so is there— I mean, in my mind, you working out and creating content for Instagram, if you have a phone, is free. You don't need to spend money to do that until you get customers. And when you get customers, they give you money. Then there may be a couple of things you could do to push some of those reels or enhance some of those reels or something to get people to see them that aren't seeing them yet.

Yeah. How much is the online— the, the online coaching?

How much are you charging?

I don't have a price yet, honestly. Uh, it's starting to build in now, but it honestly ranges around, uh, $1,000 to $2,000, I believe, depending on how long, uh, how long you want to coach them for or they want you to coach them.

Okay, and, and why are you not working in a gym as a personal trainer?

Honestly, Dave, uh, did it— tried to go to the gym once and didn't get a callback, and that's just honestly the truth. I haven't gone back to doing it.

Yeah, it's gonna— you're gonna have more than one rejection with customers the rest of your life. So I, I think it's a good base of operation for you to be around people doing the stuff you're doing all day long, and it also gives you a place to, um, you know, to shoot some of your Instagram stuff and show some examples rather than just in your garage. And by the way, you need a job because you're not making any money, and it's going to be a while before this actually monetizes. So I want you to go do this. I don't think it's going to cost you much money. I don't think investing money into the business is the answer. I think getting, getting an income while you grow this side hustle into a business.

Yeah, and just be cautious because there's a lot of chatter on social media about, you know, buy my course on how to build a course and courses. It's all this, you know, a lot of courses and some people make great money doing it, but don't fall for something that feels too good to be true as well because there's a lot of effort and work that goes into it. So move at the speed of cash, Hernan. Don't go into debt for any of this. And if you can, before you purchase someone else helping you in any level of investment in the business, I would do my due diligence to make sure that what I am buying or purchasing is going to help me and has helped other people, 'cause I think there's a formula, there's a smart formula to digital marketing.

I really wouldn't do any of that until you're making a bunch of money. And right now what you have is some really good theories. You have a great brand position, I told you that, but you've made no money yet. You have no proof that this is anything but a theory. So you're at the next stage, and when we're launching a product at Ramsey, whether it's a coaching product, a text, a digital product, or whatever, we want to see some social proof. And social proof is people tell you they will do all kinds of things, but when you actually ask them for their money, that's when you find out if you got something or not, because they're not going to give you their money until you have proven value to them. People trade money for time and value. It's all they trade it for. And so, you know, when you start actually getting money on your theory, now it's not a theory anymore, it's a business. But you haven't got a business yet. Right now you've got a theory. And I think you might have one.

Yeah.

And I want you to go do it. But while you're doing all this, to give yourself some patience, you need to be making some money at a full-time job. And I love having a full-time job in the vicinity of what you're gonna be doing, rather than I'm gonna go work at Costco and I'm working on my other thing, my, my personal trainer coaching thing on the side.

Mm-hmm.

No, I want you to be in the training business. Be around trainers. Be around talking to people about this. Be all up in this industry. Be learning from people that are doing it wrong. Find you some anti-mentors. Find you some mentors. And so, yeah, you need to go to work at a gym and you need to keep— there's a bazillion gyms in Tampa, Florida. Somebody will hire you as a personal trainer if you tell them your story. You know, you may learn some techniques of teaching while you're working there that will help you further this theory of yours into an actual business. So that's what I would tell you to do. But no, I would not spend any money growing this business, to Rachel's point, right now, because you don't have a business yet. You have a theory, and I don't want to pay somebody to take my theory to market. You take your theory to market.

Yeah.

That's your job, and you can do it. I really believe in you because I The thing about you was you could actually articulate with no hesitation what it is you're trying to do, and that is very unusual. I have people come in that work on our team and they go, you know, we got this need out there and I think we could do this or this, and they're not nearly as dialed in as you were just then.

Yeah, and the testimonials, I think specifically with, I would say, I mean, physical fitness, I mean, probably any service, but especially with that is, One of the promises that you said, or one of the motivations is that it's so hard to start and stay with it and stay consistent. So if you can find a few clients and over the course of 6 months be like, over 6 months they've stayed with me because of this tactic.

And here's your before and after shot.

Yeah, a level of testimonial too, I think is gonna give you credibility. 'Cause I think that's probably what you need starting out.

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Nathan is in Houston. Hey Nathan, how are you?

Hey Dave. Hey Rachel. Thanks for taking the call.

Sure.

I'm calling today to ask the question about should we drain our, or take our emergency fund down to a level, uh, to pay off the mortgage? We've been following the baby steps and doing that for a long time. Um, our kids will be in Ramsey Babies effectively, and they'll be the beneficiary of all this.

Wonderful.

And so it's, it's truly just a question for my wife. We've done this for so long, so budgeted, and all these things are happening. And now we've got to, you know, take that final step to pay off a whatever, 2% mortgage or something.

So what's the balance? What's the balance on the mortgage?

$280,000.

Okay. And where do you have $280,000?

Uh, we have, we've sold some projects. We started a business a few years ago and we have some projects that were acquired by a major public company. And so we have some earnouts that, uh, we've already received, um, 3 out of the 4 payments and we have one final payment coming.

And so we've been accumulating that and then separately, Why are you not already chunking that on the mortgage?

Just, it's all happened so quickly.

Okay, so it's very recent.

It's only happened—

How much do you have saved, Nathan?

How much do you have in the account today, in those accounts?

In total, we have $190,000, and then we have about $136,000, $156,000 maybe, in non-retirement brokerage accounts.

Okay, so that is, um, what, $340,000, right? Yeah, $346,000, and you need $280,000. So why would your emergency fund disappear?

Well, it wouldn't. It's just when I talked to my wife and we laid it out, we were discussing, you know, what, what level of emergency fund should be 3 to 6 months of expenses.

In what world is $66,000 not that amount?

It 100% is way more than that, but it's more just the, uh, the reality of the decision.

The reality is not— the reality is you're not touching your emergency fund, which is how you asked the question.

Yeah, but seeing that—

accurate—

but seeing that amount of money in the bank, that's different than—

that's different than do I take my emergency fund down to pay off my house? That's not an accurate question.

That's, that's correct.

It's more the emotions of draining an account that has a lot of money in it, and you're thinking, do we really?

I'm fine with it. But my wife is, you know, she's more hesitant, you know, in your mom and your wife's phrase, her feelings are, you know, she's— Feels good.

Yeah, there's safety.

Well, here's a couple things to think about. And yes, I would write a check out of the $346,000 and pay off $280,000 and have $66,000 still sitting there by nightfall. No question about the answer to the question. But then let's talk about, you know, the actual feelings that go with that and the sense of all of those things. 2 things come to mind. One is, it is a valid thing, and we're seeing it more and more, we're understanding it more and more, that it's weird the way your brain works. When you pay off a mortgage, it does not feel the same as when you have that same amount in a pile. Like, you're diminishing this pile—

Right.

And putting it over on the house, and it feels like it's gone.

Yeah, because you're kind of like losing that.

It feels like it's gone.

It's not gone.

It's not gone. You just moved it into equity. But so math-wise, it's really not gone. You just changed it from a brokerage account to a paid-off house. That's all it is. So now we have real estate instead of the other. So, and, and, you know, the mathematics don't tell you that, but the feeling is I'm diminishing one thing and I don't feel like I'm getting as much on the other side. That's thing one. Thing 2 is when you pay off your house, On the positive side of the ledger of this discussion, you're going to feel different. She's going to feel different because you've never been there. And I've talked to literally tens of thousands of people over the last 40 years that say, it's like I could breathe again, like somebody was standing on my chest and they got off and I didn't even know it. I got so used to it.

I feel a little bit that way now of I can, I can see that I'm about to be able to take a deep breath. Yeah, I can still feel that call from the guy that had to pay restitution for being a bank robber. I can feel it. I mean, we've done this through business school. So many things.

Yep, exactly. Now then the other one is the, you know, and this is for your wife, is I have told tens of millions of people, tens of thousands in person, but millions indirectly to pay off their house. And I get criticized for almost everything I do from the time I wake up till the time I go to bed, but no one has ever called me ever and said, I hate you. I hate the fact that I paid off my house because of you. I've never had that one. No one is ever mad at me for that.

Right.

They all talk about it as before they do it. It's like, oh, why would I get rid of 2%? Dave, you're stupid and you're wrong and you're crazy and all this. And it's like, but when they actually do it, no one ever regrets it. And so, and the joke is, if you pay off your house And you hate it, Nathan, you can go get another mortgage.

Right, that's what I've shared. I think, I know it's gonna be a little different.

It'd be at 6%, but you know.

The interest is gonna be a little different.

But you know, so I would just say, honey, we have $66,000 left in the bank and we don't owe anything else on our house. We've got to do this. Everything else that Ramsey has told us to do, we went and did and it worked, and they're not steering us wrong here.

Yeah, and you're probably not gonna like this, but I'm like, even if you wanted to slow step and be like, let's throw $100,000 tonight at it, Throw $100 grand and let's wake up tomorrow and see how we feel. You know what I mean? Like, nothing's on fire right now. You guys need to pay it off because you would have no mortgage next month, which is crazy. I know you would disagree.

No, I get your logic. But the problem is you don't get the feeling of reducing it that you do of paying it off.

No, I know, but I—

There's no relief.

No, it's not relief. But I think it is another step to show confidence of like, okay, we are okay. Okay, I'm okay. Because it's the amount that's being diminished in the bank that is scary looking.

Yeah, if you had $66,000 If you had $1 million in the bank and a paid-for house, would you go borrow money on your house so that you have more money in the bank?

No.

No.

And this is the same thing in reverse. It's exactly the same thing. Every day you don't pay this off, it's like you're borrowing on your house to put money in savings. It's exactly the effect. And so, needs to be paid off tonight. But, um, but we've got to get her on board, and I appreciate that. And we'll be empathetic and Gentle and persuasive.

Nice.

All those things. And yes, do it.

Yeah.

Well, and run the calculations of how quickly you can build that $66,000 back to— on top of when you don't have a mortgage payment.

Like, you haven't even gotten all your payments from your business sale yet.

Yes.

You still got more money coming.

Yep. Yep.

So, I mean, it's not— you're nowhere near the edge.

Yes. And well done, Nathan. That's a lot. That's That's a lot of work on your part to get to this place, you and your wife. So you're there.

It's interesting. It's a study listening. So out of the abundance of the heart, the mouth speaks, right? The Bible says that. So the words we use tell us where our heart is. And it took a minute for us to figure out that he actually was asking the wrong question. Because his heart feels like he's actually getting into the emergency fund. And once we got into it, he's not. Or maybe she feels that way, and he was recasting what she was saying. I don't know. He may have been asking the question on her behalf. But it's interesting that the feeling is that they're getting into the emergency fund, and they're nowhere near it.

Yep, yep.

And yet, it's touching that same place. It's this feeling of security from a pile of money. instead of security from debt-free. And once you've been 100% debt-free, you won't trade that for a pile of money. I mean, the stuff that I own that I could go borrow money on and make a pile of money, I could do it by the end of the day and have a big old pile of money and have all the debt to go with it over on the stuff I borrowed on. But I wouldn't trade that peace—

Yep.

For any pile of money. The peace, the peace. I always feel like I'm up in the mountains and it's a cool morning and the sun's coming up and you get that deep breath and it's calm cold air into your lungs. It's like 46 degrees. I love that. That's how it feels to me when you pay off your house. And nobody hardly has that feeling. When you do have it, you won't trade it.

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Howdy, Mr. Ramsey, how are you?

Better than I deserve. What's up?

Um, I have a couple questions. I'm getting married in about a week. Um, we're 100% debt-free. I'm on Baby Step number 3, and I'm debating leaving a stable job with good benefits to go risk an entrepreneurial opportunity in another state to do window sales as a window representative to potentially make a lot more money.

What are you doing now?

I'm an HVAC technician. I'm 4 months into the trade and I'm bringing in $3,800 a month.

Okay.

Where did you hear about the window opportunity?

My cousin is a manager down there in another state, in Idaho. He's running a window company and he's making considerably more than I am. And he has reached out— well, I kind of reached out to him.

Dave's pondering.

Yeah. Okay. So what I want for your first year of marriage, for your relationship, is stability and predictability. And this sounds like a wild adventure. And I don't— I do want— I do like wild adventures. I don't want to do those on my first year of marriage. Uh, because I want you guys to invest in each other, not in a wild adventure. Um, where is— you are in St. Louis. Where is she?

She's out here. We're living separately right now. She's, she's living in a hotel, working for a hotel, and, and then we'll get married and be living here.

So if you go to Idaho, she has to get a job too, right?

Yes.

Have you talked about that?

We did. We have. And she, she's okay looking at any job, Costco or, or just something random, hopefully to get medical insurance, especially if kids come along.

Because this job doesn't offer benefits, because you threw in benefits with your current job, right?

Current job has awesome benefits and the sales rep doesn't. Um, but for higher—

How long has your cousin been doing it?

Um, he's been— he was on and off with other companies, and I think he's been with this company for 2 years now.

And he doesn't own it. He's working. He's a manager there.

He's working for the company.

How big— how big of a company is it?

It's growing. It's not a huge sales company, but it's— it seems really stable.

He—

his first year there, he, he brought in $198,000 in the year, and then doing better and better each year. Um, now as, as his client management and, uh, and has extended offers to me to come out and work with him because he thinks I can do well in sales. But it's just nerve-wracking.

Mm-hmm.

Yeah.

So are you, are you, are you trained as an HVAC tech? You, you know what you're doing? So if this thing goes sideways, you could go to work for an HVAC company there?

I'm getting trained. I, I feel pretty well-versed, but I'm not 100%.

You don't have a set of credentials to walk into another HVAC company and get a job?

No, I soon will though. I'll be getting my certification in a couple weeks.

Okay, then you would.

Okay.

Yeah, yeah. Well, obviously complete the certification. Um, okay. The only— I don't know why I just have this like hesitation, Thomas, just a little bit of when things feel too good to be true, sometimes they are, not always, sometimes they are though. And so I appreciate your patience on making the decision that you wouldn't just hear $198,000 and just be like, let's just jump ship and go. So yeah, there, I mean, there's a part of me that I'm like, I mean, yeah, you can go try it because you have the backup of the licensing. Here's the other question.

Yeah.

To be able to plug into another trade, which is awesome.

Finish up your certification for sure. So the thing that's bothering me, the thing I keep hesitating— I never want to tell people to not go make more money if you can. I think that's a wonderful thing. I don't think it solves all problems, but it solves some of them. And so if you can go from making $40,000 a year to making $140,000 a year, it does change your life. Um, that, that's the temporary thing. And that, that's— but what it doesn't do is it doesn't give you a 15 or a 20-year track to run on because you're not— you're very likely, you know, you said you're what, 20? How old?

21.

21. It's very unlikely that you will be selling windows at 31, right? Even if you're making $198,000. It's very unlikely that you'll still be doing that a decade later.

No.

For sure, 2 decades later. So at 41, for sure. So the question I'm always asking is, where is this taking me? And it could be, maybe we need to rethink it, I don't know. I'm a big fan of people learning how to sell, because salespeople are some of the best paid people on the planet, and more people in marketing and sales end up as CEOs than any other trade. It's the fastest track into the C-suite, into running a business, running your own business, running someone's business, because you're developing people skills and persuasion, the ability to persuade, and not the ability to talk apparently, but the ability to persuade. That's a great point though.

Where is it taking you? Not just making more money.

I don't want to just go make more money and end up being something I hate. in a place I hate because my cousin called me. That's a dumb reason to do a career. I hate that. I like my cousin, but I'm not going to do something because he said do it. I mean, there's nothing he's going to—

no.

So no. But I mean, I'm not saying he's a bad guy. I mean, that's just— but this just sounds like somebody dangled a carrot and now you're the horse jumping after the carrot. So I want to think through where this is taking me. Who do I want to be at 35 years old, and how does this help me get there? And if the answer is, I'm gonna go over there and make $200,000 a year for 4 years, and then I'm gonna move to X that I've always wanted to do, or we're gonna open a business doing Y that I've always dreamed of, and I'm gonna use that $600,000 swing to do that, that's an okay answer.

Right.

That's an okay answer. You're going to pick up a load of fuel, and the fuel's gonna take you to your dream. And that's okay if that's what you're doing, but I want this conversation to go beyond, I'm taking a new job 'cause my cousin called me.

Well, and because of the money. Like, there's a lot of people that they get a big bump in salary and they go work for a company and they're miserable, and they're just like, oh my gosh, I liked this other company. I wasn't getting paid as much, but it was a better fit. You know, that happens.

Not always, but you just, if money's the only motivation, I love the idea of stacking a basement full of cash and learning a skill called sales, and that's gonna take me on my journey this way and define this way. Define where you're going with it. That's a better way of doing it than I'm just randomly going over there to make more money in another place, and I just got married. Oh, this sounds like stress. Sounds like tough times on the— the new bride's gonna leave her job at the hotel and work at Costco. Oh, wow.

Yeah, I'd have a plan B to Thomas, and also a timeline that, hey, we're gonna give it one full calendar year. And if this isn't picking up to X, Y, and Z that we thought, you know, if I were her, I probably would want some level of— because it's so new, is there an out? Or are we gonna be stuck in this dream from the cousin forever and ever, even if it's not working? So, there's always kind of a— I like having multiple options.

Yeah.

So even with that, even if you choose to do this, here's kind of the parameters around that to go do something else if we need to.

But if you're out there and you're 18 or 19 or 21 and you want to learn sales as a skill, I'm gonna encourage you to do that before you do a whole lot of other things, like studying and getting a degree in left-handed puppetry. You know, you know, let's learn something that's actually usable in the marketplace.

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Today's question comes from Hope in North Dakota. My husband wants to retire next year and we're trying to get out of debt so we don't have any financial worries in the future. We are less than $50,000 away from paying off our mortgage. Plus, we have 2 car loans and 3 credit cards. The house and the cars don't trouble me too much, but the cards have a 25% interest rate, so we're not making much headway on getting them paid down, even with extra payments. Should we take out a home equity loan and pay off the cards, then throw everything at the loan and pay it off as quickly as possible? We have no intention in keeping any credit cards going forward and have agreed to just pay cash from here on out? No, Hope, I would not do that. Because the problem is you're just moving your debt from other debts. And so, there's no real progress happening. Yeah, you can play the interest rate game. But the truth is, if you focused all of your energy, didn't pay more on the house, didn't pay extra on the cars, you throw everything at that smallest credit card, and you work your way down, honestly, by the end of it, You didn't say how much specific credit card debt you guys are in.

But ideally, it'll be less than a year when all that's paid off. So the interest isn't really what matters at that point. It really is the focus intensity that's gonna get you guys far, and then possibly selling these cars and setting yourself up. Because, yeah, going into retirement with 2 car loans, 3 credit cards, not too much on the mortgage. You got $50,000. So, I mean, you guys are getting close on that, but—

You're not ready for retirement.

It's not a retirement retirement year next year for your husband. Hope you guys need to get this cleaned up.

Your husband's not gonna get to retire next year. You're not ready. You're broke. You have 2 stinking car payments and credit cards coming out your ears that you can't figure out a way to pay off. You don't get to retire while you're doing that and make less money. You need to make more money. So he needs to double, triple his hours, and you guys need to quit spending like you're in Congress. This is out of control. So the deal is this: you, you presented 2 things in the email that are juxtaposed with each other. We're trying to get out of debt so we won't have financial worries in the future, but the cars and the credit cards don't worry me so much. Well, they ought to worry you. They ought to worry you so much that you sell them, because it's keeping your husband from retiring. So the problem is you're not worried.

That's what—

that's why you shouldn't do this. You need to get worried. You need to get fired up and wired up. You need to get pissed off that you're this old and still in debt. Well, why? Because you keep buying cars on payments. That's why. Sell them. Get you a couple hoopties and let your husband retire. Ooh, now I got personal. See, but yeah, when you need to get worried— that's the problem with this email. You're not bothered.

No, what bothers her is a 25% interest rate, not the fact of debt.

But she acts like that's the reason she's in debt. No, she's in debt because they keep spending Yep. And keep buying crap they can't afford with money they don't have. That's called debt. That's where that comes from. And so when you got— you got to get upset about this stuff and go, Citibank has been screwing me. Ford Motor Company has been screwing me. I'm tired of getting screwed. I'm gonna do something about this. I'm gonna take control of my life away from these stupid bankers. And until you get that kind of thing going, you're not gonna get out of debt. Because you're not going to cut deep enough, sell enough, work enough to clean up the mess because it's all okay. It doesn't bother me that much. Well, of course it doesn't bother you. You're going to stay right there then. You know, it doesn't bother me much. Well, then you're going to keep it. That's, that's the thing. Until it bothers you, you're not going to fix it. John's in Macon. Hey John, how are you?

I'm good, Mr. Dave. How about yourself?

Better than I deserve. What's up?

I had a question for you. Um, so I just completed a college internship. I'm 21 years old and they have offered me a full-time role in sales and ag sales. But the caveat is I have to move off for a year before I can come back home to kind of get me out my comfort zone. And I understand that. But my question is, should I rent while I'm gone or should I buy a large-size camper? And that way I'm putting money into something I own besides renting.

You should rent.

You should rent.

Okay. Yeah.

See, listen, if you're going to go out and make sales calls and you slept in a bed in an apartment, you're going to look different than if you slept in a camper.

That's right. And see, it's not—

I was going with, it's going to go down in value.

It's—

you're not going to have the money to pay, you know, to buy it outright. Rent so you don't have to, you know— well, yeah, Dave's is your, your, your sleep score, John. That's what Dave's is.

No, it's your rumpled clothing. Yeah, no ironing board fits in the camper. Okay, so the—

You would look fine, John. I would think you would look fine.

John, why did you take this job? What does it pay?

I interned with them this past summer.

I know, but why? I mean, you took an internship, but they're running you out of town and putting you in an uncomfortable, bad position. Are they paying you to make up for all this? How much are you gonna be making?

I'm making $70 grand.

Okay. And your degree is in what?

Ag?

You got a degree in agriculture?

Yes, sir.

And you're going to come back there and sell for them after a year in your hometown?

Yes, sir. That's right.

Okay.

This may be a naive question. Is that a normal process?

I've never heard of it, but—

It's not a— it's a company process. And they were very upfront with me about this. I mean, I accepted this role and it's just, it's designed to get me out my comfort zone because I have a lot of connections back home. And I guess this is not just me.

This is everybody.

But they want to see what I can do.

Where you don't know anybody.

Yeah, that's right.

Yes, sir. They want you to get your knuckles raw from knocking doors. I'm up for that. I like that.

But yeah, rent. Just rent an apartment, John. Don't go get a camper because you're gonna get a loan on it. You're gonna be paying interest. It's gonna go down in value. It's—

yeah, it won't be—

Bad idea. This is— you don't need a used camper when you come home. That's not a plan. No. It's a— I appreciate your thinking about it and looking at other options, but just get you an inexpensive apartment and work all the time. And, you know, stay—

Live like you're still in college.

Stay away from happy hour and work all the time. And get you a couple roommates and keep your expenses down and go make your $70 grand. And this is boot camp. I got this, my 1-year trial by fire. And then I get to come home and have a great life and make good money with the commissions I make off my connections and my family. you know, the people I've grown up with and all that. So, and you're gonna get the advantage of a family network and so forth in a small town, which is wonderful. Good for you. Sounds interesting. Okay, but yeah, no camper, yes apartment, 1 year, no big deal.

Good sleep score, John.

Yeah, good job. Good sleep scores. What? We're worried about the sleep score?

We were talking about him sleeping well.

No, I'm just— yeah, in a sense, yeah, that's— I guess—

I hear, I know you're talking about appearance.

Scott's in Minneapolis.

Hey Scott, how are you?

Good. How are you doing, Dave and Rachel?

Better than we deserve. How can we help?

Well, first off, I just want to thank you. You guys have been a real inspiration to my family. Um, we've learned a lot and I think that's very important now. Thank you. Because of listening to your guys', uh, steps and ways of doing things. Um, so long story short, we have a daughter that's in high school. She's in her senior year. She got accepted to a private school. Um, out of Minneapolis. We, um, both contribute a full, uh, 20% into our Roth or our 401s with each of my wife's work and my own. We also contribute, uh, the max to our Roth 401 or Roth IRAs.

Cool. Before I run out of time on this hour, what can I help you with?

So what we're looking to do is she has a— we did the math on this and it looks like she's going to have a about $17,000 left over after a 4-year degree, which is something we can wash out. We've got about $60,000 in our emergency fund right now. We own our vehicles.

What's your question?

The question is, should we have her go to this school with that balance? Or— I know, I know you guys have always talked about possibly not having a balance when you're done with school, but that—

Oh, so she'll be $17,000 in the hole. With tuition is what you're saying?

Yes, that would be the leftover that we've done the math on.

Okay.

You can't cover that.

Yes, we can.

Oh, okay.

We don't want her to know that.

Okay, if you want to pay for college and that's a college everyone's in agreement with and you want to pay for it, go wherever you want to go. Yeah, but if you feel like it's a stupid idea because it's too expensive for what you're getting and you want to just say this is a stupid idea, it's too expensive for what you're getting, It's not getting to the $17,000. Y'all have done well enough $17,000 in your problem, but we need to actually speak into, is this a good education decision? Sounds like you don't think it is. It sounds like between the lines. Let me tell you what I get asked all the time. When should I get term life insurance? How much do I need? Is it affordable? Those are the right questions to be asking. So let's take a quick review. The fact is, term life isn't a baby step. So if anyone is dependent on your income, you need to have 10 to 12 times your income in life insurance now. And most people are surprised by how affordable term life really is, even if you're not in perfect health. Look, I understand that hesitation since most insurance companies make it more of a hassle than it needs to be.

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I'm good. Thank you for taking my call.

Sure, what's up?

Well, my husband and I are getting closer to retirement age, and we have $735,000 in combined IRA and 401 accounts. Way to go! Yeah, that's— that is a positive for sure. We do have $150,000 in cash that's in the bank. That's obviously a waste. And I just started to panic thinking, oh my gosh, we've got to, we got to get, get things rolling here and invest that excess cash. And I'm just not sure where to do that. We were not contributing to our IRA and one other 401 that were separated from service from that employer, but that we've never rolled that over to IRA. So we do have—

Sounds like, it sounds like you've kind of got some cleanup to do.

Yes.

Like, pull all these things together and point them towards a single strategy.

Exactly.

Yeah, I would just jump on, jump on ramseysolutions.com and hit the SmartVester Pros in your area. The, the brokers, the financial advisors that we endorse all have to have the heart of a teacher or we don't put our name beside them. In other words, they're going to sit down and not tell you what to do, they're going to teach you what they would do in your situation and explain to you why, and then you will decide if you want to do that or not. That's the proper way to go at this. So it sounds like that some of those things just all need to be rolled into good growth stock type mutual funds. In general, I spread my portfolio, and Rachel and Winston have spread theirs across 4 types of mutual funds: growth, growth and income, aggressive growth, and international. We put about a fourth in each. We want to move as much toward Roth as we can move because it's growing tax-free and we don't have mandatory withdrawals at 73 called RMDs, required minimum distributions. Okay, so that's a couple of things you may want to kind of target, but they'll teach you all of that when you sit down with them because they're going to give you advice that's consistent with what you'd hear on the air also, or we wouldn't put our name beside them.

Are those other accounts, Sherry, that you mentioned with old employers, was that included in the 735 number that you gave?

That's included. Okay, okay.

So that's just the total.

Yeah. And how old did you say you were again? How old?

50? Uh, I'm 53 and my husband's 57.

Oh, you guys are gonna have so much money.

Oh gosh, I hope so.

Oh no, you will. So let me kind of give you a rule of thumb just to prove it to you. It's very interesting. If you take a number and divide it into 72, it tells you how long it takes a lump sum to double. So if you made 10%, it takes 7.2 years. For it to double. So if you're in a decent growth stock mutual fund portfolio, your $735,000 is $1.5 million when you're 60. It's $3 million when you're 67, and it's $6 million when you're 74. Oh, if you do nothing else. So I'm not kidding when I say you're gonna have a lot of money. You're doing really well. But you need to get all of this stuff. You can't be sitting in cash.

You'll be using some of that in retirement.

You got to— maybe, Maybe, depending on what's going on.

What else are they gonna—

Well, you may be drawing down on some of it at some point. I don't know. But that's also, you probably will be adding to it between now and retirement too. So those numbers aren't gonna be that far off for that reason. So anyway, let's get the cash working. Let's make sure that those old junky leftovers from the other jobs are all pointed in good mutual funds. Everything's dialed in on Roth as much as it can be within reason. And we've got a good portfolio of long track record, high-product-producing mutual funds that you feel really, really good about. And then you can really just, you know, watch this thing cruise and you're going to do great.

Okay. Well, with that being said, I've been— our goal is to have our house paid off when we do retire.

Good.

And I've been paying extra towards that every month.

Good. Saying that we're going to be okay financially, should I be putting this extra money into the house or should I be using No, you need to get the house paid off because there's 2 things that causes people to get their first $1 to $5 million of net worth. One is a juicy retirement program, which you have, and 2 is a paid-off house.

Okay.

We find the average millionaire that we find that becomes a millionaire, say they got a $1.7 million net worth, we find, you know, $800,000 on the house and they got another $600,000 or $700,000, $800,000 in their 401s. And that's, that's the typical first $2 million that somebody builds.

Yes, but you are investing 15% of your income until then.

Yes.

In retirement.

Yes, but no more. Okay, everything else goes on the house, and we're gonna get this all working. What's your household income?

Um, we make $242,000 combined.

Yeah, so you got, you got enough.

How much is left on the house?

$230,000. I mean, $330,000. And I've been paying $1,000 extra a month, but according to the mortgage calculator, if that's accurate, if I paid If I paid $2,400 extra a month, which would be an extra $1,400, which I could do, we'd have it paid off in 7 years.

I would do that.

So that's not too aggressive?

No. There's no such thing as too aggressive. Get it paid off. Unless you're not having fun in life because you're aggressive. But I still want you to go on a cruise. I mean, you're making a quarter million dollars a year, so enjoy your life. But put 15% of your income away and throw as much at the house as you can. Get the house paid off as soon as possible. And then, with the house paid off, and you've got, by then, several million dollars saved, You know, you're in a really, really good spot at like 60 years old here.

Okay, well, that is a relief. I was starting to panic.

So there's no reason to panic, but I do believe in tuning up things. You know, this is a good piano. Let's get it tuned up so it plays a good song. Okay, you're doing a good job. Let's just do a little bit better. Excellent job. So, and, and And that'll also give you the comfort, the emotional peace, because you've got your hands around the neck of this thing making it behave. Right now, it feels like it's a little bit drifting, and that's bothering you as much as the actual numbers.

Yep.

So, when you're on top of it and you're telling your money what to do, there's a sense of power. When things are drifting away, there's a sense of powerlessness.

That's right.

And anxiety that goes with that.

Because yeah, by 60, I mean, a paid-off Paid-off house. And then if they're investing 15% over the next 7-ish years—

And they would have $2 million.

Yeah, it'd be close to $2 million.

Plus the house, they'd be worth probably $3 million.

Yeah.

You know, I don't know what the house is worth, but, you know, guessing a million. So, um, yeah, that's— she's in great shape. You've done a wonderful job, by the way. Just, this is, this is what you aim at. I took a call earlier in the week from a 64-year-old that had $40,000. He didn't know what he was going to do. He's a security guard. He's worried about eating. So that's the other side. I mean, so, you know, that's a cautionary tale for the rest of us to get ready. You know, get ready. It's coming. Christmas is in December. Retirement's in your 60s, 70s, whatever. I mean, it's coming. The other option's death. So you probably ought to plan, you know. I mean, this is— This is what you need to do. So this is the thing, and it's amazing how fast it comes at you, all of this.

Yeah, you feel like you have forever when you're in your 30s.

Yeah, I was just a daddy yesterday, and now I'm a grandpa. Who knew? You know, it's just like that. And now I'm a grandpa of a 13-year-old. How does that happen?

Of teenagers.

Now I'm thinking about being a great-grandpa, you know? Oh my gosh.

Stay alive, Dave. Stay strong.

I'm working on it. I'm working on it.

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I'm doing well, Dave. How are you?

Better than I deserve. What's up?

Yeah, so I want some advice on if I should buy a car if I'm already in debt. I am about $69,644 in student debt. I just finished my master's degree. I drive a 1994 F-150 and drive about 30 minutes to work. So I, I'm thinking I need a new car. I just started a new job and I make $65,000 a year.

Cool. What's your master's in?

Landscape architecture. Hmm. Good for you. Okay. Thank you.

How long you been driving the F-150?

For about 2 years.

Drive it for 2 more.

Okay.

You're broke.

Do you have any money saved, Andrea?

I do, yes. I have about $19,600 and some change.

Okay. And nothing's wrong with the truck, it's just old?

It's just old. I have had some issues with it. And, you know, that uncertainty of driving 30 minutes every day and not being sure if something's gonna happen to the truck, it's just—

But nothing, I mean, it's not like there's one specific thing that you're like, it's about to go down. It's just the idea that something might, right?

Right, exactly.

Okay, yeah, I'd keep driving.

Things have happened, but I, you know, just keep repairing it.

And throw $18,000 at this debt too.

Yeah, we teach you to pay everything down to $1,000. Don't borrow anymore. Live on beans and rice and attack your debt and clear your debt. You believed in investing in this master's degree, and so far you've gotten a $65,000 job as a result of it. Hopefully that's going on up from there to make your theory of investing in this education correct. So I want to see you making $100,000 because of this master's, and I want to get some of the master's paid off. as soon as possible. This is not a pet, it's a student loan.

Kill it. Right, exactly. And that's how I feel. The cars that I'm looking at are all within the $37,000 range.

$37,000? You have $19,000. You're gonna go in debt while you're trying to get out of debt?

And so that's why I was like, I don't think that this is the right decision for me to make right now. No, it's not.

$3,700 isn't the right decision. $37,000 is 10x a bad decision. No, no, no, right?

No. Yeah, well, well, that was my question. You know, I feel like I knew the answer to it.

Yeah, here's the thing. If you will get in the business, if you'll set your head to say my number one wealth-building tool is my income, and as long as I'm giving that away in car payments and student loans, I'm gonna be what's known as a middle-class broke person.

Mm-hmm.

But you can make $65,000, $75,000, $85,000, $95,000 as your career expands here and become a millionaire if you'll stay out— get out of debt and stay out of debt, because you're not giving all your money away to other people every month.

Right. And with my $19,000, you guys are saying, you know, pay everything but $1,000.

Yes.

I do have my company that matches $5,000 in 401. No, I'm not worried.

You do not need to be putting money into a retirement plan. You're broke.

Okay, gotcha.

Get the debt cleared up as fast as you can.

Yeah, Andrea, when you walk the steps, we call them the Baby Steps. So, it is that $1,000 emergency fund. Baby Step 2 is paying off all of your consumer debt. So, that'll be your next goal. And hopefully, you can do that in 2 years. And then you want to save up a 3- to 6-month emergency fund. And by that point, you're probably going to be simultaneously saving up—

For a car.

For a car.

That you pay cash for.

Yes, and that emergency fund. And then after that's done and that emergency fund is in place. And if you're single and you have a great job, you could do a 3-month emergency fund. It doesn't have to be 6 months. And then from there, you start investing. So yeah, you'll be, you will not be investing probably for the next 3, 3 and a half years, but that's okay. Because when you start investing, we tell you to put 15% of your income into retirement. So that is that 5% match and also a Roth IRA. So you will have plenty to catch up on. So just because you're not getting that 5% match in the next 3 years, you're gonna more than be okay because you're gonna be funding 15% of your income into retirement because you have that margin. So those are the baby steps, really, we walk people through.

Hey, Andrea, if I give you a book that shows you how to do all this, will you promise to read it?

Yes.

All right, I'm gonna give you The Total Money Makeover. It shows you how to do all those baby steps.

Let's give her EveryDollar for a year.

And we'll set you up on our budgeting app Rachel's talking about.

And it helps you watch the baby steps too on that.

Yeah, it's gonna guide you through the baby steps as well. as well, and reinforce this idea that with no payments, you have money to invest. With no payments, you have money to invest. See, what we've done is we all make— most Americans make pretty good money. They just give it all to a bank. They give it all to Ford Motor Company, $37,000 car. They give it all to Sallie Mae, you know, $69,000 in student loan debt. And we give all our money away, and then we wonder why they have tall buildings and we're And they have Samuel L. Jackson saying, what's in your wallet? Well, apparently my money is in your wallet. That's what apparently we can go with there if you're using that stupid Citibank card, right? So that, and whoever it is— what's the other guy? Bradley Cooper? Is that the one that lives in the lobby or something? I don't know. Saw that one the other day, though. The Citibank guy that lives in the— Citibank man lives in the lobby?

I don't know.

I think it's Bradley Cooper, maybe.

Oh no, no, they didn't get Bradley.

I don't know, it's some actor anyway.

Oh man.

these actors are now all bankers.

Jennifer Garner, I know.

Yeah, Jennifer's for sure, which is real disappointing because I was a fan.

Oh, stop. You can still like Jennifer Garner.

I know, but I can't stand the— you know, this— anyway, these companies are screwing you guys. That's what it amounts to.

Yes.

And they're paying a— they're paying a pretty person to tell you to do it, and regardless of who it is. And so I don't know if Samuel L. Jackson is pretty, but—

Oh, it was— no, it was Dan Levy. Is what I'm seeing. City Bank commercial where he's, where he's in the lobby of the hotel. Is this what you're talking about?

No, no, different, different one, I think. No, this guy lives in the lobby of the bank.

Capital One.

Oh, wrong one. Not Citibank, Capital One. Okay, thank you. We'll figure it out in a minute. All right, Will is in Atlanta. Hey, Will, who is it we're mad at? What's up?

Hey there, Dave, how are you doing?

Better than I deserve. How can I help?

Hey, well, thank you. Uh, first off, thank you for taking my call.

My—

even when I was a kid, my dad was watching your Fox Business show, you know, back in 2009 when all that was going on. And I took a financial literacy course that they had set out for you in high school. So, wow, I've always really respected your work and—

Thank you.

Everything. So that's why— yeah, no fun. That's why I wanted to talk to you today. Um, I'm 25 years old and I've Been married for 2 and a half years and we're doing okay financially. But there's 2 things I wanted to really get your advice on. And that's, we have a $17,000 car loan left from a car we purchased 2 years ago. And on the flip side, we want to know how we can maximize our cash and income we already have in the bank and that we do make.

How much do you have in the bank now?

Uh, currently, but between me and my wife's savings, we have almost, uh, $13,000 in our joint. I have $85,000 in a money market.

Pay off your car today. Pay off your car today.

Well, do you remember the class you took?

I mean, I will say I wasn't that smart in high school.

No, it's fine.

No, you can say it was boring and you ignored it.

It's fine.

I didn't really like you, Dave, but I thought I would start out being nice on the call anyway. Now pay off your car right now. You have $85,000 and a $17,000 car loan. Pay off your car today. You understand?

Okay.

Instantly. Instantly.

No, and we had a— she had an old car at the time, and in retrospect, it did have a few problems here and there.

I don't really want to hear your excuses. Just pay off your stinking car, man. Pay off your car and never borrow money on a car again, ever, ever, if you want to be rich. If you want to be poor, keep a car payment. No car payment. Poor people drive big old cars with big old payments on them and walk around with stress. They don't have financial peace. 2 words that don't go together like airline service. So, I mean, you gotta think different, man. Break the cycle. Break the cycle. Break the cycle. No car payments. I don't care what's going on. Don't get a car payment. I'll ride a bicycle before I'll get a car payment.

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Well, we wish we could get to every call and every question here, but we can't. Over 100,000, 150,000 of you are asking Ask Ramsey every month. It's full of Ramsey answers from 3 or 4 years on this show. We dumped it into the AI. Into the dataset. We dumped all the books we wrote into the dataset. We dumped all the articles, several thousand of them that are on our website, into the dataset. So when you ask Ramsey, you're getting a Ramsey answer. There's no Reddit trash stirred in. There's no sewage from TikTok stirred in. It's just Ramsey, straight up. If you don't want a Ramsey answer, you shouldn't ask Ramsey. If you do, you should ask Ramsey. It's completely free. You can do it at ramseysolutions.com or click the link in the description if you're on podcast or YouTube. Ask Ramsey. Jocelyn is in San Diego. Hey, Jocelyn, how are you?

Hey, I'm doing well. How are you guys? Thanks for having me on.

Sure, how can we help?

Well, I am just trying to figure out how to get my husband on board with, one, paying off our debt and just really like getting that gazelle intensity. I don't think we've really had that. It just doesn't feel like he's really there and he's the moneymaker right now. And I'm doing the best I can, but I kind of want to control things. Human nature.

So what's the pace look like? What are you wanting to do? What is he pushing back against? What's the—

I think he says he's on board. But our biggest expense is eating out. I mean, it's a lot. And so it's like, I'm like, could we not eat out? You know, yeah, yeah, I'm down to bring it down. But like, he's not really— it's not really happening. I just did our first budget last month, so we did have expenses. We didn't really exactly hit everything, but he's not unwilling. I just feel like he doesn't participate that much.

Okay, you've made a mistake that is unusual for ladies to make. Usually the man makes the mistake you're making. You— because you're hard-driving, and I love you. I think you're awesome. But what you did is you started talking about what we're gonna do and what we're gonna do this, we're gonna do that, what we're gonna do instead of why.

Yeah.

And so I want to sit down tonight and turn off the television, put the kids to bed, and And let's have a dream date.

Okay.

I have a dream.

Why?

Because the debt scares me to death. The idea of having no retirement scares me to death. The idea of having a car payment the rest of my life scares me to death. And I want us to dream about what it would feel like to have no payments and have a big old stack of money to be able to travel and to be able to do the things that you want to do. Honey, what would you do if we had a big stack of money? stack of money and him dream with you. And then we've got a why, a reason to not go out to eat.

That's true.

And it changes the motivation. What would it be for you, Jocelyn? What's the reason you want to get out of debt?

I mean, we don't have much, honestly, like on the scale of things, but I want to be able to save up for a house. And right now, I honestly don't know, even if I go back to work, like I'm a nurse, but right now I'm at home our 1.5-year-old son. Like, I can make a decent amount, but from what I'm understanding with numbers, I'm like, we don't have a down payment. And homes here, you could get a tent for probably more than we could afford.

Right, right. How much debt do you guys have?

Honestly, we've got— oh my gosh, I just spaced. We've got just a personal loan with my parents because they bought our truck off of us. We were in over our heads with it. Like, we owed more on it than it was worth. Um, so we've only got $8,700.

Okay, and that's it?

That's your only debt?

Yeah. Yeah, well, I just got him to pay off the credit card. I was like, please, let's pay off the credit card.

Okay, so that's paid off. How much do you guys make a year? How much does he make?

Uh, right now he's bringing home $7,500 a month.

Good.

Oh, great.

It's not bad at all. Okay, so I think you just sit down and you say, okay, let's talk about What it feels like in the future to have a stack of money and own our own home.

And not owe my parents.

And not owe my parents any money. When we don't owe your parents, don't owe anyone anything, and we're stacking money for a down payment on a home, we're building a life for this 1-and-a-half-year-old that's going to change his whole life. And I want us to have a home. I want us to be able to do this or that. Well, you know, I mean, would you join me in this dream and then let us sacrifice to hit the dream?

Yes, it sounds nice.

Yeah, I want to dream in high definition.

Yes.

Let's start talking about— I remember we were in a rental house and Rachel was 8, and no, yeah, Rachel was 8. Rachel was 7 or 8 years old, and we were in a rental house because we sold our house to get the rest of our debt after the bankruptcy cleaned up. And my wife hated that rental house, and she said, we have to get a house. Life is too short, and I'm going to pray for a white kitchen and a 3-car garage for our 2 cars and our boat. And I'm going to pray that we can do that. And the school system over here where the kids are going to school already, And I'm gonna pray for that. And, you know, we were on this little weekend trip and I got an email from a real estate friend of mine. And it was in the early days that they actually started putting pictures on the internet of a house. That's how long ago it was. And the dadgum thing had a 3-car garage and a white kitchen.

That's crazy.

Because we had dreamed in high definition with great detail, and we were both agreed that's what we were pointing at.

You had a goal.

And we had pulled the money together to do that. And when we came home from that little weekend trip, we didn't even go home. We drove straight to that house to view it with the real estate agent. And then we went home. And we bought that house, by the way. It's the house that Rachel grew up in. And so, that's the kind of stuff, but you're together joining—

Well, it makes it feel real.

To a detailed thing. It's not this vague thing of, I just want to have a pile of money.

No, no, no.

That's not good enough. That's not good enough.

It's a life. What's the life that you want?

Because that's what money is. What does the money buy you?

Yes. The money is the tool to create the life that you want. What is that? What does that look like for you? Is it the white kitchen? Is it the, you know, the certain school district? Whatever it is. But I think, and John Delony talks about this too, you do really do, as detailed as you can create that, it just makes it tangible that it's not vague and it's not out of reach. But it's like, no, no, no, this is the type of house that realistically, 'cause you guys were being real. You weren't like, we need need $4 million.

Or we're gonna have to buy a house we have the money for.

Yes, that's right. So, it's like, it's realistic in there, but to pinpoint it and to have those details. And I would say too, Jocelyn, I always love a timeline. Like, map it out. And you guys be like, hey, let's have a goal to be out of debt in 3 months. What do we gotta do to make that happen? Okay, from there, building up that emergency fund. How are we gonna prove it? Yes. And you actually start painting it and looking ahead and be like, oh my gosh, in 5 years, He's gonna be starting kindergarten. We may have another baby. What does life look like in 5 years? How much money do we think realistically we'd have saved up? What type of house could we buy?

And just really start— And I'm gonna go to nursing then to hit that next goal.

Yeah, totally. Go back to work for a little bit.

Or I'm gonna take ER weekends now to hit the goal of buying a house.

Yes, or there was a mom in the lobby earlier, and she was saying, for 22 years, she stayed home, and that was her number one goal. And because they did the Baby Steps, that was her goal. That was their goal, to stay home.

That was the dream. That was the high-definition dream. That's a good dream.

So, uh, exactly. Yeah, whatever it looks like.

But, and too, Justin, you know, if you're super broke— I remember a dream we had. We were super, super broke, and we had been so scared for so long. Sharon's dream at one point was, I want to have enough money to go to the grocery store and fill up the buggy.

And just the buggy. And not Southern— Southern— Southern—

fill up the shopping cart.

Shopping carts.

The shopping cart.

The buggy.

The buggy.

Yeah. And not have to look at prices.

I want to fill the whole thing with food and not feel like I broke the family.

Yep.

That, that doesn't sound like a big goal, but that's a lot of money. You can mortgage a house for that today.

But today, yeah, yeah. But oh my gosh, it's more that feeling of freedom.

Well, it's clear.

I want to get to this place.

I can see it.

Yes.

It's very clear. It's not a dollar amount, it's what the dollars do.

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Holly is in Austin, Texas. Hey Holly, how are you?

I'm pretty good. How are you?

Better than I deserve. What's up?

I'm just wondering how you would approach— how can I better encourage my fiancé to try to continue to better our income without him feeling like I'm telling him he's not making enough money?

Hmm. Where's this feeling coming from, Holly? Do you feel like he's not making enough money?

Oh, he's making plenty of money. So, Um, about a year ago, we started getting really serious about paying off our debt, um, following the Baby Steps, um, trying to get set up to where we can start saving to build a house. Right now we're living on his—

You're not married?

No, we get married. Um, our marriage date is, uh, exactly a year from now.

Well, you don't buy a house or pay off each other's debt until you're married.

Um, our debts combined right now, it's been combined for about a year and a half.

That's really dumb. You're gonna have a nightmare on your hands. That's really— no, no, no, no, no, no, no. Please do not do that with somebody you're not married to. Yeah, if you want to get married this weekend, you can start acting like you're married, but you're not married. This is a disaster.

What's the combined debt, Holly?

Um, yeah, so it was 2 vehicles and then, um, a credit card and then a car hauling trailer.

Okay.

And, and are these both in both of your names?

Yes.

Oh, please have a celebration 1 year from now and get married this weekend. You are so vulnerable that your goose is cooked if something happens here. This is so scary. You have no idea the mess you have potentially made. This is really, really dangerous for you.

How much do you make, Holly?

Um, I make about $40,000 a year, $45,000, and then he makes about— this is all take-home— and then he makes about $75,000 a year take-home.

And what is it you want him to do better about when he makes twice what you Not necessarily doing better.

He was told about, I would say, 4 to 6 months ago that he is making the best he can make at his shop right now. And he goes in on the weekends, he works late during the week, and I've kind of tried to encourage him to possibly seek a different shop or a higher position at his job currently. And he feels like I'm not being appreciative. And I was just wondering how you would go about encouraging, kind of like, when is the end of the road of trying to increase your income? Yeah.

I'm trying to figure out, is he enjoying his job?

He does.

He's a body tech, body shop technician. He does enjoy his job. He's had a couple of problems just with coworkers and stuff.

How old are you guys?

He is 25 and I am 22. Hmm.

Yeah, I probably, honestly, Holly, I would focus in more on not only figuring out what to do with your $40,000 and start paying off some of these debts and start working your journey separate than him, because you guys are not married. married. And it's one thing to tell him, you know, that he— you see potential in him and what he's doing. But he may be very content with where he is right now. And he's not making a bad living, you know.

No, not at all.

Yeah. So I'm just curious how those conversations go because he's not feeling appreciated apparently.

Yeah, it's kind of back and forth. Sometimes he has a lot of feelings towards him wanting to better himself, wanting to become a shop manager potentially or starting his own business as far as that goes. And then other times he's kind of down in the dumps about it. I do think that when they told him he was making the most he can in his shop, he was not very happy about it and he really wanted to move and then he kind of changed his Yeah.

Well, I don't think there's much that you're going to be able to do.

I think the only thing you can do as a fiancée— no, as a fiancée, you can't do anything. As a wife, the only thing you could do would be to— you don't have the leverage from the fiancée position to lift or to do anything. Because you're still in the negotiation phase, believe it or So you're barking up the wrong tree. But once you're a wife, then the thing you could do is just say, honey, I think—

What I see in you.

I see that you could run your own business, and you'd have to learn some skills that you don't know yet about running a business, because being a body shop tech is different than running a body shop. It's a different set of skills. You have to learn the business parts of it, the marketing and the accounting.

Sometimes being 25, doing what he's doing, and really It's not a bad thing. It's not bad.

But if we started planning and said, okay, 5 years from today we have a goal of you opening something, let's start saving towards that, and you start reading books about business and learning about business, I think you could be— I think you can make 3 times what you're making and own your own shop and have guys like you working for you. And I think we can get there, and I think you can get there. And as your wife, I would love to help you do that. I honestly think you're doing it from the wrong position and you're not listening to me. So that's okay. You go do what you wanna do. But I'm telling you from having sat in this seat for almost 40 years that you guys are, you are playing with fire. And if you don't get burned in this, I'll be shocked. And so please do not buy a house with someone you're not married to. You are doing what we call in legal terms a general partnership. And if he dies and there is no will, You will own a house with his mother. This is the kind of crap you're playing with that you don't even know about.

And you think I'm just being mean and telling you to get married, but you are really walking across the lake of fire and asking to fall in it and get your butt burned. You are playing with about 4 different things there that are gonna take off your head if you guys aren't lucky. You might luck your way through this. this, but you might not too. And so please, if you're going to own cars together and buy houses together, get married first and do your celebration a year from now. But you're not listening, so you're not going to do it. No, I can tell. Really, I've been doing this a while.

You never know, Holly.

So I, I, uh, I think you can encourage him from that position to go do something with his life. But, you know, yeah, I don't know. Something wrong in the air. Something wrong.

No, they're just 22 and 25.

No, there's something wrong in the air.

No, I think they're young. And sorry, not that sounds demeaning, Holly, but you're young. And what you— what she doesn't see either is that, you know, engagement, there's zero legal protection for either of you. And he or you You, in 4 months, could be like, I think I'm done, you know? And you walk out, and that's it. And then, for the rest—

And now, you own a trailer that tows cars.

For the next 3 years, as you're trying to get out of debt, and date, and all of this, you got the ex. And I mean, it's just— it is not worth it. It's not worth the risk. Keep your money separate. And that's for other people listening, right? I mean, Holly, they're in it. But like, when you are dating, keep it separate. Do not combine finances. And then, once you are married, even in engagement, But once you are married, yes, combine. It is so funny to me on the show. I don't know why it is like this. There's so many couples like that, that are dating, engaged, and everything's combined. And then, we talk to married couples, and they refuse to combine. I'm always like, how is this? How is that?

How is this happening? How is this happening? It's so bass-ackwards. I know.

But yeah, there's just— it's the protection side. There's just something There's not any. And the worst is the co-signing. And then we get the call and they're like, I co-signed with my ex-girlfriend and she's not paying anymore. You know what I mean?

And I can't find her or the car.

Yeah. And I mean, it's just like, there's so much life that can happen. And when you're not legally married, you get to just walk out. You get to just leave. At least with a divorce, you're having to go through a court system and, you know, the judge will make you pay. Yep, but, um, there's a lot up in the air, Holly, so I'd, I'd lock it down if I were you. Go ahead and get married.

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Churchill. Know your numbers, and then when you find the perfect house, you're ready. Go to churchillmortgage.com/ramseyoffer for a special offer only for Ramsey fans. That's churchillmortgage.com/ramseyoffer, or click the link in the description. Welcome back to The Ramsey Show in the Fairwinds Credit Union studio. Rachel Cruze, Ramsey Personality, my daughter, is my co-host today. Erin is in Charlotte, North Carolina. Hi, Erin, how are you?

Hey guys, how are you?

Better than we deserve. What's up?

Uh, first of all, I just want to tell you, you've changed our lives. Like, we're in Baby Step 2, and I mean, You guys have— our marriage, everything is just on such a trajectory that I never could have thought that a few years ago we'd be there. So thank you to you guys.

Thank you. We're proud of you.

Way to go.

I'm gonna cry. No. Um, so, okay, so currently we're in Baby Step 2. Um, we have paid about $76,000 down in the last 2 years or so.

Um, and we have about—

thank you. We have about $33,000 to go. Now, our question is, we have a mortgage on the house now. Our plan is once we get everything paid, get our emergency fund, we want to take a couple of years. Our plan is to buy a house, a new house in a different location. We kind of want to move out in the country a little bit. And our plan is to save. We want to save, take about 2 or 3 years, save hopefully up to about $150,000, $200,000, depending on life and situations. So to use on a down payment on the house and plus the equity in our house now.

Yeah. How much equity do you think you'll get out of that house at the time you move?

You know, unfortunately I made a lot of stupid tax decisions, as you would say. We refinanced the house way too many times and the last time right before we started the Baby Steps. So unfortunately, the mortgage we have now, it's only a few years old.

It'll be 2 or 3 years from now, you said?

Right. Yeah. Yeah, true.

So it's going up in value in Charlotte, North Carolina, isn't it?

I, you know what, I don't know. I guess we could see what it's going to be like then, but right now we owe $243,000 on the house. Um, and the last time we had it appraised about 3 years ago, it was at about $310,000.

So, um, it's probably worth $400,000 today anyway.

Yeah. Well, hopefully, fingers crossed.

Um, but my question by then, it's going up like 2%. And that— what?

Okay.

Yeah.

Okay. Well, that's good. So my question is, um, the money that we're saving, um, in the next few years, should that go into a high-yield savings account, or should we be putting that money on the principal of our mortgage since we're going to sell anyway and use that on the down payment of the house?

I put it on the principal of your mortgage.

All of it?

Yep.

Really?

Okay.

Above your emergency fund.

Yes. You wouldn't save any cash for like, um, you know, not for the move. Not for the move. Okay. Um, okay. Yeah, that's kind of what I was thinking. But then I know sometimes they say you should have, you know, a certain amount of cash.

What's your— well, for closing costs, I mean, I mean, you may want to have a little bit for the actual mover and the closing, some closing costs or something like that. But you're going to get all the money out of this house when you sell it. It's not like you're giving the money away or spending it. It's going to be there. It's just stored where you can't get to it. And what's your mortgage interest rate?

It's 4.99%.

Okay, which is more than your high-yield savings is paying.

True.

So reducing that—

It's almost like a forced savings account, Aaron.

Yeah. Yeah.

As you're putting it in, you're like, we'll get it out. Yes, in equity, but it's not sitting there for a beach vacation to grab, or you know what I mean? Like you really, it makes you, it forces you into that goal.

And if your plans turn left and you end up staying there and paying off the house, then you didn't lose any ground.

True. Yes, that's a good point too.

Yeah, I don't know that that's gonna happen. I think you probably will live your dream because you've been executing on the other part of it beautifully. So I think you're probably gonna play through. So I think 2 years from now, 3 years from now, you sell this house, it's gonna be $450,000, $500,000, somewhere in there. And probably based on the numbers you're giving me anyway, and you will have reduced the principal dramatically during that time. So you're gonna walk out with this big fat check to buy this house in the country. with. That's gonna be beautiful, and you will have been making 4.99% on your money. Not bad, really, for that situation. And you won't accidentally go buy a bass boat with it. So, not that you would, because I don't think you would, but, um, he might. I don't know. You wouldn't, I can tell. Hi, Race, how are you?

Living the dream. How you doing?

Better than I deserve. What's up?

So I just graduated from law school this past May and took the bar, and I have some law I have a lot of student loan debt that I need to pay off, and I'm planning on paying it off as fast as possible.

Good.

And I was wondering, would it be worth it to refinance the loans I have to get a better interest rate, or does that even matter since I'm just planning on paying it off as soon as I can?

What's the balance?

Um, $104,000.

When do you think you'll pay it off? How fast?

Um, we've got it calculated out to, I think, I think 2.5 to 3 years. Okay.

And what's your current interest rate?

So it's separated in between 6 loans. The highest rate is just a little over 9%, at 9.2%, I believe. And when I did something through SoFi today, um, it said they could give me a rate of just under 6%, if I remember correctly.

But I'm not sure your aggregate is not 6% already. Do you not have loans that are below 6%?

No.

None?

Okay. No, none of my loans are below— the lowest is 7%.

I don't trust SoFi any further than I can throw their stadium. So I want you to get— I want you to get some other people to look at it. All right?

Okay.

And, um, so they didn't pay for that stadium by giving you the best deal. So, uh, their stadium sponsor.

So, um, But student loans at Rice are the one area that we would consider refinancing.

You get one shot. These are federally insured, right?

Yeah.

Yeah, you get one shot. So shop around and check on it and try to find a company. What's the company we used to endorse that's gone? They were a good little company. I can't think of their name off the top of my head, but we had one on here for a while that was doing that, and they were dependable. But here's the thing. Let's pretend that you can go from 6% to 9% on the entire—

You're not thinking Yrefi?

Yrefi? No, Yrefi doesn't do it. That's private student loans.

Yeah, it's private.

It's private only.

Question of the day.

Yeah, thanks.

For your private student loans though, if they're in default, check out Yrefi. But Race, that's not your problem.

So if you can move the entire portfolio is not at 9%, what do you think the aggregate of the portfolio is, the average through the whole Probably 8 or a little under 8. Okay, let's call it 8, and let's say you could refinance it to 6. That saves you 2% on $100,000 paid off over 2 years, means at the end of the first year you would have paid off $50,000 of it. And so your average balance that you're saving 2% on is $50,000. And so that is $1,000 you're gonna Mm-hmm. Through this whole exercise.

Okay.

And you don't have a $1,000— if you want to do it, it's okay, but you don't have a $1,000 problem. You have a $104,000 problem.

Correct.

Meaning that if you're paying this off in 2 years, to your point earlier, the way you asked the question was correct, Race, was does it really even matter because I'm paying it off so fast? And the answer is it matters about $1,000.

Okay.

Assuming you you can't beat SoFi's number, and you might not be able to.

Yeah.

But, um, if you wanna do it, it's okay. You get one shot at it. But the important thing is to find the other $103,000 during the 2 years by living on nothing, not going out to eat, and starting your law career on beans and rice, rice and beans, and get this mess cleaned up. That's the important part. That's 98% of the equation. Hey guys, Dave Ramsey here. Every day on this show, we help people work through Real money problems and figure out what to do next. Now, you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to ramsaysolutions.com and try Ask Ramsey today.

That's RamseySolutions.com.

Kat is in Des Moines, Iowa. Hi, Kat.

How are Hi, I'm doing well. How are you guys?

Better than I deserve. What's up?

Uh, my husband and I are wondering if we should move forward on an opportunity for financial freedom. Um, it involves—

Of course you should. What kind of a question is that?

Now, what—

tell me about it. What's the opportunity?

Um, so my mother-in-law would like to sell us her home and about 10 acres of land for what she has left on her mortgage. She wants to help us. She knows we've been through a lot in the last few years, and she is ready to move on from that property. She's tired of maintaining it when she doesn't even live there.

How does taking on a mortgage equal financial freedom?

Well, really, it's the opposite. Right. But we would be selling our home in a different area of the state. And if we sold it even for what we paid for it 4 years ago, which it sounds like we would get more for it after talking to a realtor, we would be able to buy the land and property outright. Okay.

So you currently have a home that you owe how much on?

We owe $177,700.

And it's worth what?

Well, when we bought it—

I mean, the realtor told you the other day, you think you can sell it for what?

He said that what we bought it for would be easy, but he's anticipating we'd get a little bit more. He didn't give me an exact number.

So what do you think the number's going to be in real life when you put it on the market? What's it going to sound like?

Probably around $230,000. Um, it wouldn't be much more because we did—

Okay, $230,000. And so that's only $50,000, okay, minus some expenses. So probably gonna walk away with $40,000. And her mortgage on this land is only $40,000?

She said $30,000. Yeah.

Okay. And what's the land and house worth?

Probably more than what our house is. It looked like from what—

So she's going to give you a $200,000 Yes, yes, we—

yeah, it would be a huge gift for us.

Nice gift. And what does your husband do for a living?

He is a machinist.

And he will be moving, being a machinist there?

Yes. Um, so there are opportunities there, but it is a lower income area, which is kind of where we're— we're— this is just a—

The whole area is lower income?

Uh, I'm sorry, what was your question?

The whole area that you'd be moving to is lower income?

Lower income than where we're at, yeah. It's not— there are opportunities, um, but they're harder to come by.

Do you like the house?

Yeah.

Would you guys have moved there if the, if the opportunity— if this whole deal wasn't happening, would you guys willingly want to move there just for your own Yeah, I would say so.

My husband has been on third shift— sorry— for a while. And I don't know, it's just been really hard for our family. We've been through a lot in the last year.

What have you been through?

He had emergency surgery in December of last year.

I—

we had another baby, which is wonderful and amazing, but I broke my ankle. So he's had to take less pay because his job doesn't pay FMLA. So he's had to take some unpaid time off because I was recovering from a broken ankle while heavily pregnant. And on top of that, with him being on third shift, It's been really hard on our family. We have 5 kids and I homeschool, and I've just watched my husband change. It feels like he's barely surviving.

Okay, so moving to this land, you go with you, right? You've still got 5 kids and you still have a husband that's a machinist.

Right.

But you're thinking he won't have to work third shift. Is that kind of the straw that—

Yes, that's the hope.

And he has to work third shift in order for you guys to live where you are today?

He has not been able to get a job with similar pay that is not third shift.

So even through his job—

What does he make?

He brings home $1,200 a week when he's not working overtime, and he usually works overtime. So usually it's about $1,600 a He's making about $60,000 a year.

Yeah. And the place that you're moving— okay, um, so here, here's the problem. I, I'm a little bit afraid that you think you're going to run away from all of these problems when most of them are moving with you. You've still got a broken ankle, or had one. He's still going to be a machinist.

I know.

He's still gonna be a machinist, and now you're gonna be in an area that's not as economically viable, and it might even be harder for him to make this kind of money. So I love the beautiful generosity of your mother-in-law, and that's all wonderful. So I mean, there's other options, okay? Option 1, stay where you are. Option 2 is take the deal. And the only way you would take the deal is if he first has a job. You cannot move over there if he didn't have a job first.

Right.

Okay, so he's got to go find a job, and then we can say yes to mother-in-law. That's option 2. Option 3 is she sells the property and gives you the money, and you pay off your house, and your husband finds a better job in the area where you are.

Okay.

It's the same thing.

Yeah, I don't think she wants to do that though. I think—

Well, there's still—

it's the same thing. She still gave up the money. Why does she care where the money goes? Is it—

it's the property sentimental to her?

Yeah. Um, her—

So what happens when you want to sell it?

You're stuck. I don't know.

Yeah, I don't do that. Okay, if you have to buy a property, if you have to take on a property that you can never sell or never do anything with, no thank you. I'll Okay. If she— but so only— I mean, I would— I think it might be better for your husband to get a better job that's not, you know, in the area where you currently are and everything's already set up and just pay off your house with the proceeds of the sale of the farm. But it sounds like there's all kinds of emotional complications there that are going to be emotionally complicated. So you're jumping from one fire into a frying pan because now you've got mother-in-law breathing down your neck about everything you did with the house she gave you, because it comes with strings attached.

Yeah.

Ropes attached, hangman's noose attached.

Oh gosh, don't say that.

No, I mean really, it's bad. You cannot get rid of it. You're stuck in it. And, well, I gave you that house, and, and now you're stuck in the country and your husband can't find a job. He loses that job when he finds it. Yeah, you got 5 kids. You think you got problems now? Uh, it might not. That might be a trap.

You need to be careful. On the front end, it sounds great. But if they're, I mean, and honestly, Kat, I would assume you guys are going to be leaving friends and possibly a community of people of where you guys are. And it's just a lot to think through where the knee-jerk is, oh wow, we basically get a house that's paid off. But then when you start untangling that—

You've written this narrative in your mind that it changes your life and it really doesn't. It might change it negatively. And that somehow that this, you know, no mortgage is gonna make everything okay and make all the things that are causing you to cry go away. And all the things that are causing you to cry are going with you. 5 kids and a husband that's a machinist. I mean, that—

And he's probably exhausted. I mean, I, I can hear you in this.

He's probably just tired.

Very, very.

You're probably just tired. All of it.

So I'm just wondering, is, is there a career difference You know, a different decision in that. And that clears all this versus a house.

And a house that you cannot sell.

That you can't sell.

Yeah. Yeah. Yeah. So I'm gonna approach her and say, I think we would love to have the proceeds from it. How about that, Mom? And that's not for you to do. That's for her son to do, by the way, known as your husband. You do not make that phone call.

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/insurance. Well, one of our favorite things to do is have a Debt-Free Scream on the Debt-Free Stage here in the lobby of Ramsey Solutions. We do this show, if you didn't know, on the glass in our lobby from 1 to 4 every Monday through Friday. And so folks stop in and have a free homemade chocolate chip cookie and some free coffee. and hang out and watch the show happen. And occasionally there's a debt-free scream happening as well. The only thing that we like more than that is when it's one of our own Ramsey team members doing a debt-free scream. And in this case, one of the most popular guys in the building. Yeah, look up, look who's here, Rachel.

Oh no, Risley. Risley, one of my faves.

Risley, thank you, thank you. Oh my gosh, actually, Matt Not Risley, but we call him Risley. And Madeline, right?

Madeline, welcome, Madeline.

I know, good to have you. And we've got like 100 of your team members out here not working and watching you do your debt-free scream. Sorry about that. Productivity in the building has gone down caused by you.

Congratulations.

Well done, well done. Hey, congratulations, you two. We're very proud of you.

Well done.

So how much debt have you two paid off?

It $188,000.

Oh my gosh.

How long did this take?

5 and a half years.

Wow.

And we don't ask incomes because all your friends and coworkers are standing around. That would be a little strange and weird. Yeah. So, um, and awkward. So, uh, what kind of debt was the $188,000?

Well, you're looking at weird people. It was our house.

Yeah! And what's your house worth?

It's about $400,000.

Boom!

Boom!

Look at Risley. Way to go, guys. Oh my gosh, you guys. Look at you, man. So proud of you. How's it feel to have a paid-for house?

Amazing.

True freedom.

Now, he's the senior director, folks, of media distribution at the Ramsey Network. And so a lot of you that see things happen with this show somewhere on the internet, it's all his fault. And so he works really, really hard. hard going through every single episode and making sure it's distributed with all nerd probabilities and analytics and everything out there and does a great job. And so a lot of you have found this show because of the work of this man, and so we really do appreciate him. So, house and everything, you've been here, what, 7 years?

Yep, a little over 7 years.

Working here. And, and how long have you been on this journey?

Yeah, this journey started about 15 years ago. To condense that 15-year story into something really quick, I was a baby Christian. I was really skeptical of the whole Christianity thing, and I decided, hey, I've got something important in my life. Let's see if this prayer thing works. So, I remember praying at the time, hey, do I go, Lord, to an in-state school and accrue no debt, or do I go out of state with some friends and accrue debt? And the next day I went to a men's event, and Dave, you were on the screen at Willow Creek basically yelling at me to not go into debt.

I can't imagine me doing that.

And so it was a double whammy. You know, I realized prayer works, and also I became a rabid fan from that day forward. And I— every week I'm listening to the show.

And then you come to work here.

Yeah, it was a dream come true.

Totally get dunked on. You're dunked in it.

Yeah.

Well, and then you gotta watch the show every day. You're totally dunked in it.

Yeah.

I have to analyze how this segment does.

That's right, that's right. You're gonna be looking at yourself. Hey, how long have you guys been married?

8 years.

8 years, okay.

So you've been working, Madeline, all this time with this guy who went Ramsay crazy.

Oh yes.

To the point he comes to work here.

Yes.

And has he been hard to live with during this time?

No, not at all.

Not really.

with the money mindset, so. So you guys were all debt paid?

Yeah.

Did you guys have consumer debt before this, or was the whole thing was just the house? Yeah, just the house.

Okay, so you moved here, took the job, and then later bought a house, and then took 5 and a half years to knock it out?

Yeah.

Okay, way to go, dude.

Yeah. Amazing.

Way to go, man.

Okay, so we talk about when you're paying off the house, we always say that's kind of like the intentional step, right? That you wanna enjoy life and all of it, but the extra goes on the house. And some people go crazier, and they just stay intense. Where were you guys on that scale, would you say?

We were on the intense side.

You were?

We weren't gazelle intense. We went out to eat once a month.

Okay. But—

Once a month?

Yeah.

You splurge, you.

But there was a peace that left us, 'cause this is the only debt that we've ever had. And so, we were very intentional together. We would talk about money every week, almost every day. Hey, what's our goal? What are we going towards? And we really wanted to pay off this house so that we could live and give like no one else.

So, you're saying when you bought the house, took on the mortgage, the peace left and you wanted it back?

That's right.

Okay, I'm making sure I understood that.

So good.

Very cool.

So, what were things that you guys— you mentioned the out-to-eat thing, but what did you say no to? Honestly, a lot of trips and vacations. Both of our parents are in New Jersey, so we didn't go home often.

Was it worth it?

I'd say so for sure.

Yeah. Yeah. Now that you're free, how's it feel?

It feels amazing. We honestly can drop of a hat go take a trip, and that feels freeing.

Yeah, you can do anything you want to. You don't have any payments. I mean, you can do anything you want to do. It's pretty incredible. So, man, talk to the person out there who's thinking about this. They're going, I don't know if it's worth it or not.

Is it worth It's so worth it. And, um, there's nothing flashy about our story. Um, there was no big paycheck or payoff. Um, I didn't inherit anything. And so, it was a daily choice to do something hard. Uh, and if you're seeing this or listening to this right now, you have a choice before you to do something hard and take that next incremental step because it gets easier over time.

Mmhmm.

And so, when So when we had a tough decision, it was relatively easy 'cause we were just on the same page about everything. And so I just encourage you guys to take the next right step when it comes to your money journey, and that snowballs into the rest of your life.

Yeah, have you run out the numbers of if you just invested the mortgage payment and where it takes you?

How many millions that's gonna be?

Oh yeah, yeah. I'm old school, I have a time value Oh my gosh, yeah, an HP-12C or something.

Yeah, okay, good. I like it. Very cool. Yeah, so you can run that out. You don't even need the Ramsey calculator on the website, and you can figure out that this is millions and millions and millions of dollars.

Because how old are you guys?

Well, we're 33— oh, I'm 33.

32. Okay, so early 30s, paid-off house.

Yeah, and we had a $400,000 house.

Unbelievable.

And we're kind of— I'm a loser. I had a goal of paying it off at 30, but, you know, I missed that goal. But I don't know, I have a paid-for house at 33.

I think you're gonna be okay. The extra restaurants were worth it.

That one restaurant a month, that's what did it. No, that's not— you guys are impressive. I'm so proud of y'all. Very, very well done. And we certainly love the work that you've been doing here. And the team loves working with you, as is obvious with them all standing out here to cheer you on today. That's very cool. So pretty, pretty stinking cool. What was the driver? What was the motivation under this for you two?

Yeah, we have a very clear goal of where we want to be long-term. Early on, it's really fun, I'm seeing the guy next next to me. We wanted to support missionaries long-term, and I'm looking at the guy who was in China doing missions work, and he came here to work here. I brought him.

Yeah.

But when he came over, I said, man, it would be great if we can house missionaries when they're in between things, or they're getting ready to go out to missions, or they're coming back. And so, someday we'd love to own a big plot of land, put some houses on it so that we can And serve the kingdom that way.

Well, you're gonna be able to. That's a no-brainer with the math the way it is in your situation. Just a matter of when, that's all. It's not gonna be next week, but you'll be there. You're gonna be there before you know it. Well, congratulations, you two.

That's awesome.

Thank you. Very, very well done.

Incredible.

Okay, now you got no payments in the world. What's the first thing you're gonna do for you two to celebrate? Big, something big.

We're gonna get Madeline a newer car. Yes, yes.

New Dodge car. Good. Madeline needs a better car. I don't even know what you got, but you need a better car. Yeah, great. Good job.

Awesome, you guys.

All right, Risley and Madeline— no, it's actually Matt Risley and his wife Madeline. Let's make sure we get that right. $188,000 paid off, house and everything, at 33 years old. Count it down. Let's hear a debt-free scream!

3, 2, 1.

We're debt-free!

Yay!

Amazing.

And little Liliana in there.

Oh my gosh, precious.

Beautiful.

Precious.

Dave Ramsey here. For more than 30 years, I've been talking to folks on the air, and I can tell you that most people are broke, not because they don't make enough money, but because they don't have a plan. You need to give every dollar you earn a job, because when you do that, something changes. You stop guessing, you stop worrying, you stop stressing. Our EveryDollar budgeting app will show you You how to find extra cash, pay off debt, and finally start winning with money. But most people won't do it. They'll keep living paycheck to paycheck, keep hoping things will change without making a change. It's time to say enough is enough. It's time to take control of your money. It's time to start your EveryDollar budget for free today. Go download it in the App Store or Google Play. Our scripture of the day is Luke 6:37. Do not judge and you will not be judged. Do not condemn and you will not be condemned. Forgive and you will be forgiven. Robert Louis Stevenson said, don't judge each day by the harvest you reap, but by the seeds you plant. If you're buying or you're selling a home, it's super expensive and you wanna make sure you do it right.

And if you make a mistake, it's always with too many zeros. So you need to get a pro in your corner that does a lot of real estate transactions, that knows what they're doing. Ramsey Trusted connects you with vetted real estate agents who have high performance and the experience experience to guide you step by step to make the right Ramsey-type smart decision. No expensive mistakes. Connecting is easy. Compare the agent profiles, interview your top choices, pick the right one for you. Find a local Ramsey Trusted Agent who has your best interest at heart for free at ramseysolutions.com/agent, or click the link, link in the description, the show notes for YouTube and podcast. Marshall's in Baltimore. Hey, Marshall, how Doing well, Dave.

How about yourself?

Better than I deserve. What's up?

So I've got a quick question. I got to give you a little bit of background. I'm, uh, 29. I'm married. I'm living in an apartment. Uh, my wife is out of a job right now. And basically to my question, should I liquidate my brokerage account to pay off my truck?

What do you make?

I make $71,000. A year. Are you—

what does your wife— what did your wife make when she was working?

She was at $75,000 a year.

Are you able to live on yours?

We're doing all right.

Will she get a job? Will she go back to work, do you think, soon?

We've been looking. There's a potential opportunity, but we haven't heard too much more about it.

Okay.

How much do you owe on the truck?

I owe just about $26,000.

How much is in the brokerage?

$28,000.

Okay, if you guys are not in the middle of an emergency, and it sounds like it's kind of medium, I would write a check today and pay off the truck. There's no reason I'd borrow on my truck to have a brokerage account, and that's basically what you've done.

The, the down—

you know, you may want to wait 2 weeks and get her a job, and that would make it much more comfortable to do that. But it sounds like you guys are gonna make it okay until she gets a job, so it's not like you're gonna need this money, right?

Right.

How much is her car worth?

Oh, it's a 2009 Nissan, so maybe $500 if we're lucky.

Okay, okay. I was just seeing—

How long you been married?

It'll be a year in October.

You should give her your car.

Marshall, I have to give you the— I have to give you the unfair, uh, information that it's federal law, wife gets the good car.

Okay.

So yeah, uh, but yeah, we're gonna have to move her up in car quickly as soon as, uh, you guys— that's your only debt, right?

That is the only debt.

Yeah, I want to move her up in car with cash after she gets— lands a new job. You gotta save up some money and let's get the emergency fund of 3 to 6 months expenses.

Do you have other I have a Roth IRA and the 401 and then a little bit of cash in my savings account.

How much cash in your savings account?

$4,000.

Okay.

Okay, well, that's a good little buffer too. So you'll have $6,000 that you could get to if you needed it after you pay off this truck.

Yeah, pay off the truck though too, into the savings. And you— we're building an emergency fund of 3 to 6 months of expenses. As soon as she lands a job. Let's save quickly and move her up in car so that way you get to keep your truck and don't have to give it to her.

That's it.

But I want her to land a position pretty quick to bounce back emotionally from the job loss because she's got this huge potential. I mean, y'all's household income doubles when she lands that back. And so I don't want to jump into something bad, and I don't want to take something for less. So let's continue to work the network. work and find that next position as soon as possible. But as soon as you're comfortable with it, I would pay that off. And if you're comfortable today living on your income, then I'd pay it off today for sure. Steven is in St. Louis. Hi Steven, how are you?

Doing better than I deserve. I appreciate it. How are you?

Better than I deserve.

What's up? So I've been listening to you guys for a few months now, and I really appreciate all of the the really practical, emotional, and moral clarity that you have with all of your decision-making processes.

Thank you.

So I was curious about a car, as a lot of people on here are curious about. Um, my wife and I kind of live in 2 very unique financial realities. Um, I am a trust fund kid, but I, I have not used it really apart from education.

Okay.

So, a little bit about my wife and I's combined income is probably about $75,000 a year. And we just had a new little kid. He is doing great now, but at about 2 weeks of life, he had to have a pretty major heart surgery.

Sorry.

Something. And yeah, no, I appreciate that. Luckily insurance is covering the vast majority of it, but I went a little bit more into dad mode and wanted to get more protective about things, particularly about just wanting to make sure that we have the best, safest car for him. So currently my wife primarily drives a 2015 Ford Flex. It's been pretty through the wringer in its own career. It has about 120,000 miles on it. I would personally be very pro into upgrading her into a newer car, something that is either pre-owned, certainly newer, certainly has like the newest safety specs, all of that sort of good stuff, just to make sure that her and the kids are best taken care of.

Okay.

What do you make?

So I make $72,000 a year.

But you said that was the household income.

Yeah, yeah. So my, my wife used to work. Um, we moved to Missouri a couple years ago.

Okay.

Um, and when we moved, she left her finance job where she was making probably close to a quarter of a million dollars.

Oh wow.

Um, yeah, yeah. So we were doing well. We saved up a lot of money then. Um, a lot of it is still primarily in like retirement funds. So we heavily funded the Roth IRA and the 401s.

But you have no cash just on the side?

No, no. So we, we have some cash also. Bought a new house when we moved to Missouri. Luckily, luckily we are debt-free from all of that. When my grandpa, who was—

So how much is in the trust?

Uh, so in my trust it's about $2.8 million.

And what is your draw on that?

Um, I don't touch it. I've never touched it.

Um, but you have access to it?

Um, if I were to ask my parents, they would give me access to it.

So your parents are the trustee and it's at their discretion, right?

Yeah, correct.

And you're how old?

Um, young 30s.

And you're thinking about buying a car that's how much?

Probably no— if we were to get a new car, probably no more than like $50,000 or $60,000.

Okay.

We tell folks not to buy a car that is more— not to have vehicles that total add up to more than half their annual income. So no, I would not do that.

Okay.

But you do have— I'm sorry, wait a minute, wait a minute. We tell people not to buy new cars unless they have a net worth of over $1 million. And I guess you do, because I guess your net worth is $2.8 million.

Okay.

And so pay cash for it.

Is your fear like lifestyle creep that you're gonna start tapping into this and spend it, Dave? Is that— is that your— okay, that's your hesitation, Steve. Are you scared to touch it? Are you just like, oh my gosh, this is so—

She's driving a $3,000 car. Why don't we go halfway and buy a $30,000 used car?

No, so that's, that's one of the other options and considerations.

Yeah, I think, I think that's what I would do. And I would do that more as an exercise in restraint than I would as an actual mathematical guideline, because you've been really restrained about dipping into the—

I mean, you're showing You're showing good discipline in that.

I mean, you're not a trust fund kid in the sense of like stereotype. I don't think you're gonna destroy anything if you bought the $60,000, but I just like the restraint of, I'm gonna buy used, and it's half my annual income, and I'm gonna stay with that, and it's still enough to take care of this. I'm not being emotional about the kid. That puts this hour of The Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately There's absolutely only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.