Transcript of You Can’t Win With Money When Your Relationships Are Messy

This episode is filled with some of our best calls and advice. But unless you take what you hear and put it to work in your own life, you'll be stuck with the same money stress in 2026. So make a change and download EveryDollar today. Normal is broken, common sense is weird. So we're here to help you Transform your Life from the Ramsey Network in the Fairwinds Credit Union Studio. This is the Ramsey Show. I'm Rachael Cruz, hosting this hour with Jade Warshaw. We're answering your questions. Give us a call at 888-825-5225. We'll be talking about your life, your money, career, relationships, anything and everything. We are here for you. So let's start off in Boston with Miguel. Hi. Welcome to the show.

Hey, how's it going?

We're doing well. How can we help today?

So today I wanted to ask, so I have a business and I'm contemplating on what I should be next because I'm also 147,000 in debt, and that's including credit cards, student loans, and a car payment. Okay. So I wanted to know if I should sell a business for what I think I'd get value for, and then start fresh and use that lump sum of money to attack the debt.

What business Where are you in?

It's a printing business, so merchandise.

What would cause you to sell the business versus using profit from the business to pay down the debt?

I think it's just because I'll collect a lump of money and the business right now is fluctuating. It's up and down, and I'm also alone in it. So it's a lot of my time where I feel like if I could change the- If you didn't have debt, Miguel, would you stay in this business, or would you still want out?

Yeah.

You would stay in? Yeah, I'll potentially stay in the business. Yeah.

Okay. Yeah, because I look at this as... Well, how much would you sell it for? How much could you get out of it? Minus all of your liabilities and everything.

About 30 grand.

How much are you making off of it every year? How much are you bringing home?

This is actually my first year in it. I'd know at the end of the year, but roughly after everything, about 1,500 bucks a month.

1,500 a month. Is this what you do full-time or is this a side business?

It's full-time.

Well, I don't know that I would sell it, but I would not have this being my full-time job right now because of what it's generating.

It feels like it's- How are you guys living? Is your wife work?

No, I'm single.

You're single. How are you living off of $1,500 a month?

Just making it happen, honestly.

But what's your rent, though? Like, real numbers.

I paid Studio. It's about 850.

What else?

Car?

Car, yeah. 450. And then- Oh, 450.

Okay.

Yeah.

And then utilities, I guess that's put in with the rent, and then just you're scrapping on food, no insurance. Yeah. Do you have insurance?

Health insurance? My car, no. No, no, no, no, no health insurance.

Yeah. So you're not on a living wage right now. And so while I think it's cool to have a printing business, it eats like a part-time side hustle when we look at the income that it's bringing. So I would be looking, as you're working this, I'd be looking for a full-time What are your skills? What have you done in the past before you did this business?

I technically just hopped off school and then saved money and then started this business. Yeah.

How many hours a week? I've never really How many hours a week are you putting into this?

A lot. It's probably like 50, 60.

Yeah, yeah, yeah. Okay, so if you did, do you have a buyer out there? When you say sell the business, I mean, What's that? Have you looked into that option? Is there a realistic option?

Yeah, I have a few options. When I mean the business, I just mean the equipment and everything.

Oh, I hear what you're saying. Not necessarily. Okay, yes.

Because that's where the debt is, right? What did you invest in to do this business? What equipment do you have?

I have a DTG printer, heat presses, and a couple of other machines, desktops, and stuff like that.

I'll tell you, you haven't been doing the business long, so I don't want to say that there's no future in it. But how much of this debt is business debt? How much of it came from the business?

About eight grand.

Okay, that's not bad. Of the 147, that's only eight. I'm inclined for you to continue. What I want to know is what's the minimal amount of hours that you can put in it to keep the 1,500 so that you can search for something else? Is there any feasible way to do that?

Yeah, it's possible. That's also another plan I've been thinking of because I have a location in a premier, like downtown area. So I was thinking of just getting rid of the space, trying to find something smaller, and then just work on based on orders I get, not so much like being in there.

Do you have consistent clients that you're printing for? Or is it a one and done?

For the most part. A little bit of both, but I do have... I've picked up a few clients that are picking up amongst them.

Yeah. And is most of the hours, when you're saying, I'm working 50 hours on this, is it most of it in the actual physical printing that you're having to do, or is it trying to find new clients and marketing and thinking of creative ways to get your name out there?

A little bit of both, but mainly the printing process, printing and being in there.

Okay.

Yeah. So I'm with Jade. I mean, Miguel, if you have all the equipment and it is bringing in 1,500, obviously, that's not sustainable long term for you to live like that. Obviously, you know that, or you probably wouldn't be calling this show. So it's November. However, a part of me would give it another six months while doing something else. You need to go wait tables. I mean, you could make more money doing that. I mean, something, right? You need to go be doing something. And if you can keep this on the side and actually get some clientele, you could, I don't know. And if you Yes, grow it, and then maybe that be your full-time, or you just have these clients and you start making 3,000 a month while also still working to get out of all the debt that you talked about at the beginning of this call. So I almost would be tempted just to Hold tight for maybe six months. Give yourself a time period, though, to say, Okay, don't go into any more debt in it. But to say, Can I pick up any more steam in this business in the next 6-9 months?

And if you can't, It's then sure, sell the equipment, and then that will give you some money. But we just see this, Jade and I both, I think, as a great side hustle for right now while you go get a full-time job somewhere else.

The fact that you've started generating money so quickly from it, I think, is good. And you have made an investment in some equipment, and it feels like worth it to try to play that out a little longer. But I like what Rachel said on putting a timeline on it.

I would do that, Miguel, or just throwing this out there. The other side of the coin is if you hate it and you're not enjoying it, but I think you are liking it in some degree because you said you'd still stay in if you didn't have debt, is to find something just full-time, sell the stuff, and you start a whole new life where you're not feeling like you have to carry a business, right? Because it's a lot of strain and mental calories to do that. So I don't know, two different options. But either way, you got to get a second job.

Either way. Agree. I hope that helps. I know that sometimes when we just tell people, Cut your expenses and get a job, I know. It feels tough, but truly, that is the remedy. You don't have expenses to cut your bare bones as it is. So the next line of defense is getting more income. That's how it works. Yeah.

And Ken Coleman has a book, Find the Work You're Wired to Do. And we'll send that to you because there's a great... It's not a quiz. Assessment at the back. Assessment. Yeah. To figure out. Maybe this will help narrow some possible career paths for you, too, Miguel, that you can just brainstorm and think. So hold on the line. Christian is going to pick up. We all want peace. Peace with our money, our homes, our schedules. Tools, but having peace online is important too. Most of the time when you sign up for a coupon, enter a giveaway, or click yes to another email list, your personal info, like your name, your phone number, your address, gets collected and sold by data brokers. And before you know it, your inbox is overflowing, your phone's full of spam calls, and your data's floating around who knows where. That is why I love what DeleteMe does. Their team of privacy experts finds your personal info on those creepy data broker sites, gets it removed, and keeps it off. It is simple, it's safe, and it gives you more peace of mind. That means fewer spam calls, fewer scams, and way less digital chaos.

You have worked so hard to find peace with your money. Now it's time to find peace with your digital life. Start protecting your privacy and your peace today. Go to joindelateme. Com/ramsey for 20% off an annual plan. That's joindelateme. Com/ramsey. With the last caller, we're talking about real estate and what that looks like to start saving up towards a home. And you guys, when it comes to buying and selling your home, there's a lot of decisions. It can feel very overwhelming buying, but you don't have to go through that process alone. We created Ramsey's Real Estate Homebase. So this is a place with so many resources and tools like calculators, start to finish guides, how-to articles, a podcast, a book, video course, everything around the subject of real estate. Because, again, buying and selling, it can be an overwhelming process. And the more information you have that you understand and you know, the more clarity you're going to have walking into that, which is huge. You want to be armed with so much information before you go and buy or sell your home. So make sure to check it out at ramsey solutions. Com/realestate, or click the link in the description if you're watching on YouTube or listening on podcast.

Because if you need some next steps towards your home buying or home selling process, make sure to check it out. One of my favorite things on it is the dashboard. They have the US housing market trends, and they keep it updated. And it's just constantly a pulse of what's going on with interest rates, median home prices in America, total days on the market, how many homes are for sale around the country. I mean, it just gives you the snapshot picture of the real estate market. So again, you can go to ramsey solutions. Com/realestates. All right, we're going to the phones, and we're going to Andrew in Cheyenne, Wyoming. One of my favorite country songs. Hey, Andrew. Welcome to the show.

Hey, thanks for having me.

Absolutely. How can we help?

Hey, so my wife and I were on Baby Step, too, and it took us a little bit to get there, mostly because we've been pretty sick, both of us, for the past few years. We're seeking some medical treatment to hopefully get this in the bud, hopefully in a few short months. But the medical treatment that we're looking at, that was recommended by our doctor, is experimental, and it's not covered by insurance. The treatment is going to be between $10,000 to $30,000. We're in a position where we- Are you there?

Are you there, Andrew? Oh, no. Oh, man. Andrew, we'll give you one more second. Oh, yeah, that's a bad line, I think. We're going- Is it better? Oh, there you are. You're back. Yes.

Sorry.

You're good.

My phone's a little weird. I don't know if my wife and I should actually take out a loan or not. We really don't want to, especially since we're- Can I ask Andrew-we've been getting out of debt.

Can I ask Andrew I would have- And share as much as you feel comfortable, but what's going on health-wise?

We got pretty sick from the home that we were living in. Like mold? Yeah. So it's just been a lot of stuff that's been going on where a lot of the treatments have been not either FDA-approved or treatments that have been getting us better. We are better, but it's just been a really long process. The last time we talked with our doctor, he said that we should try and do a hyperbaric treatment, which seems great. He's had really great success with it, but the only problem is that the payment has to be upfront. That's the only insurance.

And insurance, this is obviously something more like in a natural bent, I'm assuming. So insurance isn't going to cover it.

No, insurance won't cover it.

Tell me, just health-wise, are you able to work? Are you able to function? How are you guys? You said you're doing better. I'm just trying to get a gage about how urgent this is for you guys.

We are better, and we are both working right now. We make about, I want to say, It's close to $70,000 or $80,000 right now a year.

Okay.

The only problem with this is that the longer we put it off, the worst it'll get.

Sure.

What's your margin every month?

What are you right now putting towards debt and baby step two that you could put potentially towards saving up for this or doing one at a time?

Yeah, we're able to put close to $600 or so a month into debt.

How much debt do you guys have?

Right now, we have, I want to say, about $20,000 in student loan debt, and then about $50,000 in a business loan.

Okay. Man, this is so hard because I do feel like they're just from not my own experience, but people within my close circles of friends and family, even, that I know. When you get something, it's like autoimmune or mold or whatever, that it can end up feeling, Andrew, like there's always something else we have. There's a long line of things that are continual. What I always just think about and caution is I would, number one, maybe get a second opinion. I'm sure you know your doctor well and trust them. But we're talking about $10,000 to $30,000. If it was $2,000, that's one thing. But you're talking five figures going in with treatments. And so is that a piece or all in?

That would be for us combined. And is this ongoing or is it a one-time? Lord willing, it'd be just a one time, one to two months worth of treatment. So it'd be 20 sessions is about $1,000 on the high end. Okay. We hope to be done in about a month.

Okay. So What I would probably do, because, again, I feel like this can sometimes feel like a never-ending cycle. Because it's not a, and I know you guys are saying, I don't want to downplay at all the sickness because I'm sure it's just miserable—but it's not a life or death. Like, Okay, I have to save my child right now because it's not an urgency, but it is something for the betterment of your health you want. What I would probably strive to do is whatever I could to get, because 10 to 30 is a big Change. I would get as close to that 10, and I would negotiate doctors bill. I mean, I would do whatever I could to get it down to that 10. I would work to save a thousand a month. I would be okay right now because it is a health issue, maybe to pause the debt snowball, stay current on your bills. But I would bump that 600 a month up to a thousand and say for 10 months. Then starting October, November, Andrew, start this treatment. Then hopefully by this time next year, you're through it, you're done, and then press play on the baby steps.

Maybe one of you goes at a time to see if it's helpful. Oh, that's a good point. I know you're two different bodies with two different sets of... But that might be a good way to say, Listen, I did it. It did nothing for me, or I did it, and it really, really helped. That might give you some confidence going into the next treatment. That's a good point, too. It's just a thought. I don't know what you're facing. I don't know if it's headaches or every time you eat, whatever it is. If it's something that's truly debilitating, but if it's just... And again, I don't want to downplay it either, but if it's something that's more of an annoyance that you're learning to live through, there's a little bit more timeline there to get this done.

For sure. And the sense, too, that you don't want to prolong it too long because of what you're saying, it can come back and get worse unless you have this treatment. So getting to it, a level of urgency, but it's also not like, We have to do this next month. The only option is a loan, and we're done. If you can, and it's not debilitating because you guys are working and all that, I would find something, and I would cash flow it. The other thing, Andrew, that's interesting is when you are working with cash, even when we're talking health situations. It does force you, this is why I like cash, forces you to look at other options, other decisions. Sell something. There's just other parts of your brain of problem solving versus with debt. It's like, Here's a chunk of money. This is all we're going to do. We don't really have to put the brainpower to think through other things. It's just here. But when you're paying with cash and you're working and saving hard, I don't know, it forces other things to come to the surface of other options and choices. That's also true.

But, yeah. Again, I'm so sorry. That's very tough. That's stuff that is like... And that has been... I don't know. I don't know if you've... I've just had people, and it's like, you go to the next thing, and then it flares up again. It just feels like it's like whack-amole a little bit sometimes with different things. So I do want you guys to get that treatment. But because it's not life or death right in this moment, I would calm down. I would pause a little bit and save up for it.

That's difficult. I remember when Sam and I were getting out of debt This was before the days of Obamacare, and you had to have insurance or else you were penalized. We didn't have insurance. And one day, he was pulling our luggage out of the back of the Jeep, and it got caught on his finger, and he broke his finger. And we didn't have insurance. I was like, Listen, head over to Walgreens. Tape it up. Tape it up. It's crooked to this day. And he plays instruments. It wasn't good.

Take care of yourself, people. Take care of yourselves. Is that insurance? This is The Ramsey Show.

The holidays are supposed to be joyful, but they can also be expensive. Between gifts, travel, and about a thousand limited time offers, your budget can start feeling anything but merry. And that's why I love this. Boost Mobile helps you treat yourself and your wallet. Right now, you'll pay just $10 a month for your first two months. Then, only $25 a month for unlimited talk, text, and data.

Forever.

No price hikes, no contracts, no nonsense.

Just reliable service that keeps your phone bill low and your holiday spirits high.

So stop stressing over your budget and start saving instead. Go to boostmobile.

Com/ramsey and unwrap the savings today.

That's boostmobile. Com/ramsey. Restrictions apply. See boostmobil. Com/ramsey for details.

Welcome back to The Ramsey Show. Up next in Boone, North Carolina, we have Cierra on the line. Hi, Cierra. Welcome to the show.

Hi. Thank you.

Absolutely. How can we help?

So my husband and I are living paycheck to paycheck, and I was introduced to Dave Ramsey from my grandmother. Now, I have been trying for the past six months, and I'm stuck on baby step one, and we're not getting anywhere. We had half of baby step one, and then everything It happened with the hurricane, and we're back to zero. Oh, man.

Were you guys hit hard? Were you one of the towns?

Yeah, we were.

I'm so sorry.

It's okay. It happens. But I feel like we can't catch a break, and living paycheck to paycheck is so hard for us. I am a full-time student, college student. I'm 29, and my husband works full-time, sometimes even over overtime shifts just so that we can get by. I don't know what to do anymore.

What's he bringing in income-wise?

About 49 to 50,000 a year.

When do you graduate?

I have about five semesters left, so I'll be finishing up in 2027.

Are you working at all, Cierra?

I'm not, but I pick up pet sitting shifts to try and bring some money. I tried a full-time job in full-time college, and it destroyed me.

Okay. What are you getting your degree in?

Biology.

And what's the goal with that? What do you want to do?

I went to go work on the Coast as a marine biologist.

Wow. Okay.

Okay. So he's bringing in 49,000. You're doing pet sitting. How much do you guys see a month? Like, after taxes, after everything, what does that look like monthly for you?

It's about 3,500.

Okay. How are you guys living? Are you renting? What are you paying for rent?

We are renting. We pay a thousand a month for rent. Okay.

Yeah, this is tough. The solution that you're looking for... I mean, people live paycheck to paycheck for different reasons. Sometimes it's our spending is out of control and we've got to rein the budget in and the spending in. Sometimes it really is an income issue. In this case, I think you're creeping up on an income issue. I'm just wondering, what is your husband doing for work? What work does he do?

He makes fiber optic cables.

Okay. You said he had a side hustle, too. What's that?

He door-dashes.

Okay. I'm wondering if both of you need to sit down and figure out, Okay, what do we both need to do in order to make this work? Because to your own words, it's not sustainable. Are you guys going into debt? How are you covering the overages?

We are door Cashing every chance that we can get, just so I can get to class and we can get food. Sometimes his mom helps us out.

Okay. You're covering the overage then? Mm-hmm. There's part of this, and there may be more that you can do income-wise, but there is part of this where you've said, Okay, I'm going to go to school for the next three years, and I'm going to become a marine biologist. And by me doing that, here's what we've decided. My income is limited, and he's in his career right now. And so there's part of this that you guys have decided by choosing this path. And I'm not saying it's a bad thing. It's just we've both understood that for the next three years, it's going to be extremely tight. But there's a light at the end of that tunnel because you're going to be a marine biologist. What's a marine biologist make?

It depends. I'm trying to get a state job, and that can range anywhere from 50,000 to 70,000.

Okay. That's great. How are you paying for school?

Right now, I am pretty set with financial aid and scholarships. I've already finished my associate's and- Good for you.

Very good.

Went through that with the honors, so I've been doing pretty well with That's great.

So no debt, no loans.

Do you guys have any other debt or any debt at all?

Yes. I have three credit cards, but it only adds up to about a thousand, maybe 1,500. And I have a car.

How much is that?

The total on it's 28,000, and I pay 668 dollars a month.

There's some money. Oh, there's some money. There's some problem, You got to sell that car.

You got to sell it. I'm trying to figure out how to sell it, but I'm not sure because I'm $13,000 split on this car.

Oh, wow.

So you owe 28,000, and How much? You're saying you really can't sell it except for 15,000 is what it's worth?

When I had it, because I went and had it appraised at a dealership, and they said they can only give me $6,000 for it.

Okay, so don't Don't do the dealership route because they will always give you a much lower rate than what you could actually sell at private sale for. So go on kellybluebook. Com, put in all the info, and just see on the high end what you could get for it, okay? So the dealership told you how much would they pay for it?

6,000.

Oh, my gosh.

Wait, $6,000, and you owe $28,000? What car is it?

It's a 2017 Jeep Cherokee, and I have 162,000 miles on it.

Okay. What does your husband drive? What's his deal?

He has a motorcycle that's paid for. Got you. And we call it a hoopie. And it's just a really old beater that's also paid for.

What about the motorcycle? What's it worth?

About $4,000.

Okay. I would be selling this car, Sierra, for sure. Even if it's Even if you can only get $16,000 for it, I would rather have a $16,000 loan than a $28,000 loan. Does that make sense? That's going to change your numbers a whole lot. If I were you guys, do you guys have kids?

We have a two-year-old.

You have a two-year-old, okay.

I might sell the motorcycle and take the 4,000 and get a Beater car for you.

And then sell your car.

Yeah.

Honestly, because you can always go back and get a motorcycle But you guys, to your point- It's going to cut that payment down when she gets a loan for whatever it is by half. Oh, almost half, possibly. I mean, you guys would have an extra $300 a month coming in. Yeah. There's decisions here, and I think Jade set it up really well. It's a hard pill to swallow in life, but it's understanding that as adults, we make decisions around our life. And not all of them- It's not bad. Yeah, not all of them are right or wrong. It's not this, Oh, gosh, you shouldn't be in school right now. It's not that at all. It is, though, we have decided to do this route, and because of that, we're not going to have a lot of money. We're going to feel broke for three years until I get through school and until I get a job and all that, and in three years, it's going to look different. But in the meantime, what can we do? What other decisions can we make that are going to be adult-like decisions that may hurt and they're not fun, but it's things like getting the extra job like you guys are doing.

It's selling stuff to see what you can free up. It's getting out of debt and freeing up income.

Cutting up those credit cards.

Cutting up credit cards. Yeah. I mean, it's doing a couple of these, making some of these decisions within the big decision of the lifestyle you guys have made just to make it easier, Cierra. And that's the thing is we want peace. We talk about financial peace is what we want for everyone. And that peace is going to look different depending on everyone's situation and the way they view life and all of it. It's a little bit of subjective to a degree, but you don't have peace right now. And so what I would fight so hard for is in these three years, how can we get some peace? And being able to free up some money would bring some of that. And how do we do that? Well, I just listed out a couple of options from jobs and selling stuff and all of it. That's what I would do.

One of them is a long term that you've committed to. Once she starts working, she's got a great pathway to make $70,000. Yeah.

Then together with your husband, yeah, you all be making $130,000 before taxes. That's great. Before taxes. That's amazing. The light is coming, but it's getting to the light that I think is really key, and what decisions can we make in between. And these are hard, Cierra. I understand. These aren't fun. It's not always fun, but it's getting you to a goal that you guys want together. And part of that is you still being in school. So I commend you for having a two-year-old and doing this. And I'm so sorry about the devastation in your area. We think about you guys so much, so we're praying for you. Thanks for the call.

I love entrepreneurs. Don't forget, guys, I started my company on a card table myself, so I know what it's like to have people counting on you, your team, your family, not to mention your customers. When you're the one signing the paycheck, you can't afford to fly blind. But I'll be honest, early on, one thing that nearly sunk us was wasting time with spreadsheets that didn't add up because business units didn't talk to each other. I finally told my team, Just fix it. And they did. We got NetSuite. That was years ago, and we've never looked back. See, NetSuite isn't just for tech giants. It's built for growing businesses like yours. Over 43,000 businesses already run on NetSuite, including a lot that started just like you. Now with built-in AI, NetSuite is helping them even more. It's one system connected to every part of your business for real-time time insights, not guesswork. Netsuite AI flags inventory issues, cash flow risks, even supplier delays before they become problems. So you can trust the data. Stop wasting time and make the right decisions faster. Take a free product tour today at netsuite. Com/ramsey. That's netsuite. Com/ramsey.

You're listening to The Ramsey Show. We help people with your life, your money, your relationships. If that's you, you want to get in on the action, you can call us up. It's a live show. The number is 888-825-5225, and we'll get you on the line. Today's Ramsey Show Question of the Day is sponsored by YreFi. When you're trapped in a maze of defaulted private student loan debt, it's hard to find find your way out. But YreFi can offer you a lifeline with custom refinancing based on your ability to pay and a lump sum payoff option that you could qualify for after 24 months. So go to yrefi. Com remsci. Com/ramsci. That's the letter Y-R-E-F-Y. Com/ramsci. Remember, it may not be available in all states.

Today's question comes from Lauren in New Mexico. I currently own three rental properties and have 30-year mortgage mortgages on two of them. You say to have 15-year mortgages because you pay it off faster. If I am putting my profits from my rental toward my principal on a 30-year mortgage and can pay it off in 15 years, is there a need to switch it to a 15-year mortgage? What's the reasoning behind the 15-year mortgage? I make more profits with a lower monthly payment, which puts more money towards the principal. Well, Lauren, for starters, we would say not to even have rental property if you're not able to pay cash for it. Technically speaking, if you could pay it off quickly, I would probably just sell one and throw some of the equity at the other and make that a goal to sell it. But having three rentals that have mortgages on them. Yeah, not the best idea, not really the Ramsey way to do it. But for your primary home, we do say a 15, even though people... This is one of those that I feel like is a slippery slope because a lot of people We'll still do the 30 and whatever it is.

Yeah, of course. But the thing to remember is your intentions don't always line up with reality. So if you have the intention of paying a 30 like a 15, stuff happens, and you're like, Oh, Yeah. Well, we won't pay extra this month. We'll make sure to catch up next month, and then something else happens, and you end up usually not paying it truly like a 30. You don't. Now, when you're paying off your house in the baby steps, we do find that people are paying their houses off in 9-11 years, which is amazing. I think that 15-year fixed rate mortgage that we talk about, it just locks you in to a plan to get you out of debt faster with the guarantee that you will get it paid off in 15 years.

It makes you accountable. Let's call a spade a spade. The truth is, if you go with a 30-year, you're not paying as much, so you get more house. Yes. I think, truthfully, when people want that, they want more house and not When you're locked into 15, though, it's like, okay, maybe suddenly I can't afford what I thought I could get. Look at the root of the- It puts it, yeah.

That's the thing. That's what's always interesting with houses is that you're going to qualify for a lot more house- Absolutely. And what they will give you than what you necessarily need or even what's good for you financially. So we always talk about having at least 5% to put down for a down payment, your payment being no more than 25% of your take home pay on a 15-year fixed rate, which I always say we understand that is a very conservative formula when it comes to the housing situation. But just like our last call, you guys, you see people get into housing situations and it takes half their income, or maybe one spouse chooses to stay home, but you can't because you've built your life around having a dual income. It just starts to limit your choices. The deeper you go into debt, the longer you're in debt, it just limits your life choices on what you can and can't do because it's telling you basically what to do. That's it, Lauren. All right.

That's really good advice. Let's to Greg. He's in Biloxi, Mississippi. What's going on, Greg?

Hey, Jade and Rachel. It's so good to be talking to you all and fan girling a little bit right now.

Glad you're here.

I have been listening I was waiting for a little over a year, but the month before I started listening, I cosigned on a truck for my now ex-fiance.

Oh, Greg. I'm sorry.

Yeah. Yeah, rough situation. We had agreed once things ended that, Hey, we can keep the loan as it is for a year because we needed to wait for the maturity date.

Okay.

It's coming up on that. Just in talking to her on occasion, she most likely is not in a position to refinance it on her She has said that her parents or anyone else won't help her.

Good for them.

Yeah, definitely. Just from my perspective, I'm not quite sure how I can get myself out of this.

Have you tried persuading her to sell it and start over fresh on her own?

I have. She is not completely opposed to the idea, but I don't think I can really rely on her actually following that through.

Can I ask a question? I promise it does relate to this. Who broke up with who? No, you're good.

I ended things with her.

Okay.

That makes it a little stickier.

It makes it stickier because this is a tie to you. This is a way for you to still be in her life.

Are you getting pulled over, Greg?

No, there's an alarm going off somewhere here.

I'm not sure where it is. Okay. I was like, Oh, no. Are you driving?

Are you getting pulled over. But my point is, this is a tie to you. If things were different, I'd say you could make the argument of like, Hey, you broke things off, and I want a clean break, and I need to be free from this. You could make that argument, but in this case, it doesn't make it a little tough. How much is the loan for?

There's about 27 left on it.

Okay. How much is it worth? Do you know?

I actually did look up the Kelly Blue Book a couple of weeks ago, and it said that private party sale was tops like 23.

Oh, gosh. And it's upside down. Yeah. I think this is only going to get worse. I would really encourage her to sell it, and I'd be strong on that. I'd say, Listen, there's a reason that you can't... The math is, the logical reason is, there's a reason you can't refinance this, and the reason is the bank has looked at your financial situation and said, It's not stable. You cannot afford this on your own, which means they expect you to default, which means I'm here for when you default. That's what that means. The hard part is, I don't know if your relationship is there for you to even talk to her like that anymore, but that's the truth of the matter.

I know, because if You can't make her do anything. No. You really are at the mercy of her. I'm like, you can't go in and take your name off the loan in secret. Right? I mean, like, yeah. You're in a tough position, Greg, and it's one of those... I'm sorry that you're going to have to be one of the sad examples that we'll probably use this week to say when someone calls. My girlfriend wants me to cosign, we're going to say, talk to Greg in Biloxi. Greg would tell you, don't do this because this is what happens.

My family agrees that this is the dumbest decision I've made in my life.

Oh, Greg.

Oh, man. I mean, unless you can just convince her because you're a great salesman, but coming from ex-fiance, she's probably not going to want to listen to your advice. No. You broke her heart. Sorry, Greg. And now you're- Yeah. I mean, there's nothing you can do. So I think it's one of those stupid text. And I'm praying she doesn't default Me, too. And she just pays this and gets out of it. She has been very consistent on the payment.

I will give her that. What is the payment?

Oh, gosh. It's almost seven.

Oh, gosh. I mean, listen, the most practical thing you What she can do to be ready for this storm is- Is if she defaults. Is if she defaults. And to be ready, if you have some money packed away on the side, because if she doesn't pay it, it reflects on you. And when it's time for you to buy a house or when it's time for you to do some of the things that you want to do, if you still have a credit score laying around, which you will because of this, it will make it bad. As we've talked about on the show, having a bad credit score is very difficult. We talk about having a zero credit score, which is wonderful, but this will keep you from having that, even if you pay off all of your other debts. So if I were in your shoes, which this is the game we like to play, I would be... Which, by the way, we don't know much about your financial situation. Do you have debt?

The truck, technically, and then I have about $22,000 in student loans I'm working on. I've already gotten rid of the credit card debt and the- I'd go gung-ho on your debt.

I'd work the baby steps on that. And then when I was through, I would be mindful of keeping some money stacked up.

For your emergency be fun knowing this is something you may have to dig into. Exactly. I would tell her, too, Greg, you don't want to emotionally be attached anymore, right? Yeah. It keeps you guys somewhat together in a weird state for the future, so I'm sorry.

I hate that that's happening to you. All right, that does it for this hour of the show. Stick around. We'll be right back with you before you know it.

Don't let big grocery bills spoil your holiday plans. Shop at Aldi first. They've got USDA choice meats like beef, pork, and even your turkey, along with fresh produce, holiday desserts, and more. You'll find all of them at the lowest prices of any national grocery store. A family of four can save up to $4,000 a year by shopping at Aldi. You don't need a membership or some loyalty app either. So stop overpaying this holiday season. Go to Aldi. Us to find a store near you. That's Aldi. Us.

Savings based on regional analysis of Aldi versus select competitors. Prices may vary by location, product availability, and the market.

Welcome back to The Ramsey Show in the Fairwinds Credit Union studio. I'm I'm Richelle Cruz, and we are going to the phones. First up, we have Donna in San Antonio. Hi, Donna. Welcome to the show.

Hi. Thanks for taking my question. I appreciate it.

Yes, absolutely.

Okay, so My husband has a student loan that is currently in deferment. It's been in deferment over 10 years. Prior to that, it was in default. It balloonned from 65,000 to 340,000. What? We got- Donna. Yeah, pretty scary. I know. There was some fraud involved. We tried to take care of it with some attorneys. We were not able to get anywhere. We're stuck with it. We got married four years ago. His situation is he's 66, close to retirement. He doesn't really have any assets, no savings. I'm 57, probably going to work for another five years. I've got about 1. 4 million in investment assets, which are owned free and clear. We both have a joint account with Charles Schwab, which has about 200,000 in it, but it's fully funded by me. Then we have two other properties in both of our names. Couple of questions. How can I navigate negotiating this balance down for him. I'm willing to pay up to $100,000 for it. How do I protect myself?

Are they private loans or federal loans?

They're federal loans. Gosh. They were. Well, I believe they're federal loans. See, I've had trouble with this. They were federal loans, and then they were consolidated. From what I understand, I've been to so many different places, and I keep hitting a brick wall. It's like, nobody can really give me the right answers. I've been told I can't negotiate.

I've been told I have to- If they're federal, you can't negotiate. If they're private, you can. But if the whole lump of them, if that whole lump is federal, you owe EO.

So what's his best route? Does he just keep deferring it? No. He will never be able to pay these off. He'll never be able to pay it.

Tell me about the properties, because I'll tell you what Rachel and I are going to do, and then we'll explain it. We're going to approach this as any married couple would who has dedicated their lives to each other and has decided that they're one, meaning that they're one in life, in money, and all of those things. And then we We can go back and trace it back if we need to. But let's talk about these properties, because what I think is somewhere in the assets between the two of you is the money to pay this off. I'm just- Yeah, there's definitely money.

I built this. I mean, we I've only been married four years. All of those assets are mine. I mean, I've done what I needed to do, and I've built this before.

How many marriages have you guys had in the past, Donna?

He's been married once before, and so have I.

Okay, so it's both second marriages. Okay. Did you do a prenup Did you sign a prenup at all?

No. We have our wills, but we didn't do a prenup. Okay.

Can I ask a little bit about that? Sure. I'm hearing you talk, and it sounds like you very much want to protect the wealth that you built, but you didn't sign a prenup, which makes me wonder about that. How did you view that?

I didn't realize how... I don't know. What can I say? We're soulmates.

Okay, listen, that's good to know.

We're soulmates, and he's a wonderful man, and I'm not concerned about really protecting my assets from him. I'm more concerned about protecting my assets against somebody coming in and swooping in a lender coming in and taking it.

Got it. In that case, I loved hearing you say that because it sounded at first like when you said, Oh, I'm only willing to put 100,000 towards this, it sounded like you were trying to keep your assets from him. Him, right? You didn't want to spend too much on his debt. That's the way it sounded at first. But now it sounds like that's not the issue. If that's the case, can you tell us about these properties? Because the money might be there to get free and clear of this.

It's all real estate Basically. And again, they're all owned free and clear. Right.

How much are you into the properties?

How much am I into the properties? Probably five or $600,000. Tell us- Probably around five or Tell us Property One.

What's Property One worth?

I've got a condo, which is probably worth around 200,000. I've got another house, which is around 250. I've got another condo, which is probably also around 200,000.

Are they all owned free and clear?

Yes.

Okay. Yes, they are. Good for you. Yeah. Way to go. You've done great, Donna. Did you know about His debt going into the marriage?

I knew he... What happened is his wife, his previous wife, handled all the finances. She was a stay at home. She did some funky stuff with their finances, and he thought his student loans were paid off. He didn't realize until suddenly he didn't get a tax refund one year that he was in default. He didn't even know. Got it. So it really was like a big shock. And then he just Sometimes men just ignore things. I think it was too emotionally overwhelming for him, and he pretty much just put it to the side. So I knew there was something. I didn't realize.

How many years did he put it to the side?

Probably about 13 years total.

Okay. Holy smokes. So there's enough that the shock has worn off, and then we can address reality that he chose not to, though. Yeah. Right.

That's got to bother you, right? Does that bother you?

Sure, of course it does. Okay. Of course it does. Yeah, sure. But right now, I'm committed to the relationship. I'm committed to my husband, and I want to figure out what's the best waiting.

That's great. Yeah, good. And you guys are in your what? Did you say you're- 37 and 66?

Yeah. Yeah, he's 66. I'm 57. Okay.

And why does he have no... What's he been doing? Like with retirement and all that?

He pretty much gave everything to her in the divorce. They didn't have- Sort of one of those situations.

It was like no contest, just give her what she wants?

Give her what she wants, yeah.

Is he working?

He works for me. Actually, I have a business, so he does work for me.

Okay. How much is he making?

We just have him making something like around 50,000. So we've been keeping it low. We do W2.

Is real estate your business? Is that your business?

Yeah. Okay.

I hear two things going on here. I think you're committed to this guy. Great. I think that you need to reach over and probably sell one of these condos and then go into the joint funds and pay this thing off. That's probably the choice that I would make. I think you guys... I'm worried that, and I'm going I'm going to say this ever so delicately, there's a balance of power here that feels off. I think that if you don't address certain things, it's going to cause issues down the line. I think you need to sit with I don't understand what you're saying. Do you see what I'm saying? I understand that completely. You need to sit with somebody and work through this because it almost feels like you're just taking care of this guy. It shouldn't feel like that. You should feel like you're in a marriage where equal people are really contributing. Whatever it is, they're going to contribute, but you should feel good about it.

Hey, it's Dave Ramsey. You've heard me talk about the importance of giving, and I love that Xander Insurance lives that out. This month, Xander is donating 25% of all ID theft protection sales to Team Rubicon, a veteran-led disaster response organization that deploys wherever disaster strikes, boots on the ground, helping families rebuild, and offering real hope for communities in crisis. Xander has been supporting causes like Team Rubicon for over a decade, donating over half a million dollars That track record shows I can trust them, not just with my money, but helping protect my identity, too. Xander's ID theft protection plan is the only one I recommend because let's face it, identity theft is out of control. In today's online world, it's not a matter of if but when. Xander's plan is comprehensive, affordable, and you can even give it as a gift. So protect your family and support a powerful mission this Christmas. Go to zander. Com or call 800-356-4282. That's zander. Com.

Welcome back to The Ramsey Show. Up next, we have Brent in Cincinnati, Ohio. Hey, Brent. Welcome to the show.

Hi, Rachel.

Hello. How can we help?

So I'm wondering if I'm able to purchase a car for my wife. We've been leasing to own for the three years and upcoming December, we can purchase it for 19,000. The same car is valued at 23,000.

Okay. So you've been leasing it for three years, what was it worth when you started? I'm just wondering how much it's depreciated.

How much? No, how much was it worth? 28,000.

Okay. Okay. And now it's worth 19, but you're saying you've seen it other places for 23? Is that what you're telling me?

Yes, with the same mileage, the same year. It looks like a good deal.

Yeah. Do you have the money, and do you like the car?

We like the car, but we don't have the money, so we'd be getting a loan through my credit union.

Oh. And what's the alternative? You just give it up?

Yes. Do you have any- My wife's very attached to the vehicle and doesn't really want to consider any cheaper options.

Yeah. Listen, I can understand that.

Go ahead. Well, yeah. Why is she attached to it? She just likes it a lot?

She likes it a lot.

Well, the fact that she's not going to be able to consider... Is she sitting there with you, Brent? Tell her hi for us. What's her name?

Elizabeth.

Hey, Elizabeth.

Hi, Elizabeth. Hello. When you put yourself in a position when you purchase something and say, Well, I don't want to look at anything cheaper, you've already made your decision. I mean, if you guys don't have the money and you don't look at anything cheaper, I guess the only thing that you guys have decided at that point is, yeah, you're going to take a loan out and buy the car. We would advise you differently. You called the show, so we'll give you our advice. I don't know if you're going to want to take it, because What you'd realize is you've been basically renting this car for three years.

In the most expensive way possible.

In the most expensive way, yeah. I know you can't really tell the interest rate on a leased car, but when people actually ratio it out, it's high. It's usually more expensive than if you went and got a traditional car loan. Then you're going to take a $19,000 loan, pay interest on that, and then we're going to look up in 4-5 years, and this $19,000 car is going to go down to probably $10,000 or $12,000 in value. When it comes to cars, it is one of the places that, financially speaking, it's one of the dumbest debts you can get into from a financial perspective, because, again, you're borrowing money and paying more on that borrowed money because of interest on an asset that's going down in value, versus a house, a mortgage. You take out a mortgage, you do pay interest on that loan, but the value of that home is going up at the same time. So the car itself is not a wise purchase to make when you don't have cash for it. So my next question to you guys would be, do you have any cash available to you?

No, we don't. We're still trying to get over some credit card debt.

Okay, good. How much debt do you guys have?

We have 4,000 on the credit card, and then we have a few monthly payments. What are those? We're paying off our wedding rings Which we have 7,000 left over. Okay. And then we have a personal loan we're paying back my parents, which we owe about 2,500 left Okay. And I'm doing 500 every paycheck. So towards the end of January, the 500 a month will clear up.

Okay. How much you guys make a year?

Close to 40,000 a year.

Combined? Combined. Yes.

Are you both working?

My wife is looking at getting a new job that could make more money soon, but we just don't have the money yet. And I don't want to make decisions on, We'll have more money later. Yeah, that's right. I want to make the decision on what we have now. For sure.

Absolutely, which is very wise. Very, very wise. So, yeah, a $40,000 income. There's no way I would take a $19,000 loan for a car. No. You can't afford it.

Do you guys have kids yet?

No, not yet.

Listen, I'm going to throw something wild out here and roll it over in your minds and in your hearts tonight. But she's not working yet. You don't have children. When it comes time for this lease, you let it go. But if you have to be a one-car family for a couple of months while you save up, what's the harm in that? Just a thought.

Yeah.

I suggest that my husband and I did that while we were trying to get out of debt. We got rid of one of our vehicles, and we were upside down, but we got a small loan for it to get out of it. Then we had just our single car, we paid it off. Then we actually found that it was doable for us for quite a while, and we stayed that way. Then when it was ready time for us to have a second car, we bought it in cash. For you guys in this season of your life, that actually might work out better for you than a lot of other couples because she's not really working yet.

I'm going to say this, Brent, and I'm going to be as kind and fun as Rachel is as this comes through. But what the life you guys just described to us from a financial perspective only is so normal. You have a personal loan to the parents for I'm not sure why. You got wedding rings. You didn't have the money, so you guys took out a loan. You have some credit card debt. You have a car lease. You all are the normal Americans out there. But the problem is, Brett, normal is broke. Normal is 78% of Americans today are living paycheck to paycheck, meaning if you miss a paycheck, you don't have enough to cover your bills. If you guys decide that you want to continue to live normally, then what you guys have so far decided is that. Normal would be to go just keep the $19,000 car because you like it. That is normal, and you will have normal results because of it. But what we encourage people is to flip all of that onto their head and actually say, what is the weirdest thing we can do? Because if I get the results of normal, which is paycheck to paycheck living and not being able to build wealth and not be able to invest or save for the future or have any amount of money in savings, I don't want to be normal.

That's not where I want to be. If you guys look at each other tonight and say, We don't want to be that. We want to be people that have no debt. We have an emergency fund. We're actually funding some retirement for the future. We have a house that we can afford. It doesn't stress us out. We have margin in our budget. This life that can be created, Brett, is possible, totally possible. But you can't get there if you keep doing normal things. So what Jade's saying is a one car family for a couple that doesn't have kids. Is that inconvenient? Yeah. Is that weird? Yeah. But you know what? You don't have a car payment because that car payment on the $19,000 car, it's going to be $600 that you guys don't have. You have to make different decisions if you want different results, Brett. And that's going to mean not taking out a loan for a car For you guys, the reality is a one car family. It's saying goodbye to my emotions, saying goodbye to what I want and what I love and all the things that got me to this place. You put all that to side, and you guys are like, We're adults.

We're adults, and we're going to make adult-like decisions, and we don't have the money. We can't afford this car. You can't afford this car, Brett. At $40,000, you can't afford half of your annual income going to the value of a car. It's not good. That's not wise. I would be working like crazy to get your income up. I would start working to get out of debt. I mean, you guys could get all this paid off. Your debt's not crazy. No. It's 2,500, 4,000. You guys can get this cleaned up really fast. If you just say, We're going to be weird and we're going to work 60 hours a week because we don't have kids, and we're going to take side hustles. We're going to drive Uber, right?

I mean, like- Here's, Brent. Let me put this in perspective. Here's a couple of interesting statistics about cars, because I want you to never go and have car payment again. Number one, Rachel just said 78% of the people living paycheck to paycheck, 85% of people who get a car take out a loan or a lease to get it. I think that's a very interesting correlation.

Almost everybody.

Almost everybody, which is almost the same percentage of people living paycheck to paycheck. For most people, that car payment is about $525 a month, which is very close to where you guys were at.

If you invested that instead of give it to a car company, what would that be, Jay?

Well, think about it. Most new Our payments are over a term of six years. If you had listened to us and invested that money over the last six years, you'd have $85,000 instead of a car debt that's gone down in value. Be weird, Brent.

Be weird.

The calendar might have flipped, but the way to win with money hasn't changed.

Living on a budget, staying out of debt, and building wealth intentionally. Now, here's the deal. Most banks make their money when you don't do that. They're fine if you stay broke and frustrated. And that's why I recommend Fairwinds Credit Union. They actually want you to win with money. Their smart bundle gives you a no fee checking account, a high yield savings account, and the new Ramsey Beweerde debit card that says It is normal. Be weird. Right on the front, it's not just a card, it's a statement. Because every time you use it, it says, You control your money. Your money doesn't control you. So this year, stick to your plan, don't chase gimmicks or points, and partner with a credit union that helps you make progress in the baby steps. Visit fairwins. Org/ramsey to take control of your money and stay weird.

Fairwins is federally insured by the NCUA.

We're always thankful for the listeners of the show, the people that view it on YouTube and watch us. But one of the best ways to help spread the word is to share the show with the people that you know, your friends, your family, even on your social media feeds. But Even subscribing, leaving reviews. All of that helps because with the algorithms of today, when you're able to get this show in front of people that may not know about it, just like our last collar, he just said, he just found us two days ago on YouTube. I know, on Facebook. Yeah, or on Facebook. Is that what it was said? It's great because we want to be able to help people. That's our goal for the show. The more people we can help, the better we're doing at our jobs. That's right. This is the way we look at it. Thank you again, you guys, for subscribing and sharing. We really, really appreciate it. All right, up next, we have Wanda in Los Angeles. Hey, Wanda. Welcome to the show.

Hi. Thank you so much. It's really a pleasure to be on this show. Thank you for taking my call. I do apologize if I'm hyper verbal. It's the excitement and the coffee couple together.

You're good, Wanda. You're great. How can we help?

I recently got a divorce, and I owe my husband $50,000, and I'm not quite sure where to take the money from or borrow the money from for the $450,000. I don't have any money in my savings. I owe $25,000 on my car, $12,000 to my 401(k), and my other expense is my home, and my mortgage is $24. 70 a month. I looked into refinance, and I really don't want to refinance my house because my interest rate on my house is two and a quarter. And so I've been looking at other, like Keylox, personal loans, Personal loan is 12%, the Helic is 10%, and I just don't know where to go.

Okay, so Wanda, the 50,000, is it because of the house? Are you supposed to give him the equity?

Yes, I'm supposed to give him the equity out of the house. Originally, I was supposed to give him 150,000, but he knows that he didn't put any money into the house or anything like that. So he settled and said, I'll take $50,000. So I'm just trying to figure out the best course to give him the I did take on a second job. I've been working the second job now for about three months. I haven't received any money for it because I just haven't turned in the invoices. Sure. Because I started- What's the time frame that you owe the 50K? It's supposed to be because we went back to court, so it's 30 days after the court ruling, and I got the court ruling in the mail two weeks ago. So I have. Yeah.

So basically in 2-3 weeks, it's due?

Yes.

Okay. So let me set the stage for this right quick. Is his name on the mortgage? Is he on the deed or the title of the house? It is. Typically, what would happen if you're divorced, you would do a refinance to get his name off of it, and you would do a cash-out refinance so that you could also pull the 50K out, give him his money, and now you're free clear from that. But I see why you don't want to do that because of the interest rate. Now, double-check this because I'm not sure, but I feel like when you refinance, you don't necessarily have to refinance the entire- Entire mortgage.

Yeah.

But just the amount that you're- A portion of it.

Yes.

A portion of it would be at the old interest rate, and a portion of it would be at the new interest rate.

Yeah. Have you talked to your lawyer, Wanda, about different options? Considering it's because of the house and his name is on it, so you are going to have to get his name off the home? Yeah. Right.

What I was advised was, I actually talked to the accountant. And so what I was advised to do was to do a quick deed to take his name off the title, and if he agrees to stay on the loan, let his name stay on the loan, because if I ask them to take his name off the loan, they may make me be financed anyways, and then I lose the two and a quarter. And so he said he was agreeable with his name being on the loan, and he was just quick deed to home into my name.

Yeah, quick deed is definitely a great option when it comes to the situation. Yeah, we never I never tell people to go and take on debt, but there is a point that you're going to be owed this from a legal standpoint. You have to give that money, and Wanda, you don't have it right now. And so I don't want to see you take equity out of your home and get into that mess of a heelock or anything like that. So it may just have to be a personal loan.

Okay. Even though the interest rate for the personal loans is just through the roof?

From the court of law, you have to give this money. So either, Wanda, you sell your home and, you know what I mean, take the equity and pay him what he's due, and you have to go find a new situation. Are you able to sustain the home that you're in?

Oh, most definitely. Most definitely. Yeah. The house is now worth almost 700,000. When we purchased the house, it was at 391.

And so I'm very happy. How much do you owe on it?

360.

Okay.

And- And in California, I came buy another house at 391, and not in the area that I live in, anyway.

Sure. How much do you make? How much are you making?

I make 188,000 a year.

Good for you, Wanda. And you're bringing... How much are you bringing home after taxes and insurance and everything per month? What's your take home pay?

A little over $6,000.

Okay. Yeah. And your mortgage payment's $2,000? Mm-hmm. Yeah.

So you're in- And that's the reason why I got a second job, too, because whatever I do, I want to chop it down. With the second job, I just haven't received any of it because I don't know which way to go with that yet.

A hundred %. Yeah. You're stuck between a hard place. I don't want you to make a bad decision with your home. I think that would be unwise. So it's not this idea that... It's one thing if you couldn't afford the payment on your income, but you're able to sustain that, which is wonderful and great. But yeah, I would do the quick data. I would, again, ask the accountant again, wrap back around and just ask what Jade was talking about, and if there's a way to take a portion of it where you're able to pay him out of it and the entire loan is not then subject to the new interest rates, because that would not be smart.

It's a blessing that he dropped from 150 to 50,000. That's a big blessing.

Yes. Wanda, I'm looking at this. Let's just say you have $50,000 in debt because of the divorce. You got a $25,000 car, and you got a $12,000 401k debt. I mean, that's $87,000. You make $188,000. I want you to pay this off in 18 months, Wanda.

That's why I got a second job.

Yeah, which I'm so proud of you. Seriously. I put all the money to it. Yeah. And that's the thing is that when you look at this high income, I'm like, Man, and I know you're in Southern California, so it doesn't go as far as it would in Kansas City or something. I get it. But, man, you have a lot on your side, Wanda. But from this point forward, I want you to draw that line in the sand and say, No more. I'm not doing car payments. We're not doing credit cards. We're not borrowing our 401(k). I'm living on what I make. I'm going to be funding retirement. Why? Because, I mean, how old are you, Wanda? 55. 55, yeah.

We're going to be 55 this year.

Great. So, yeah, here in 5 to 10 years wanting to retire and do something with your life. And you're going to be able to make a lot of progress really quickly, which I'm so excited for you. So congratulations. I'm so sorry that with the divorce and everything that's brought you to this point, that's always heartbreaking and grief in and of itself. That's so hard. But you have a lot of great change ahead and a lot of things that you can make a big impact.

Thank goodness that he was a good guy and was like, I know I didn't put any money into this house.

It could have been 150.

I think that's the really difficult part about... One of the many difficult parts about divorces. There's all these assets, and it's like somebody gets to keep the house, but if you've been living in that house together, there's also a portion of it that goes to the other spouse. How do they get their money? That's one of the frustrating things. I know during these times where interest rates, it's like, if I had it at 2. 3 33%, you don't want to refinance with these rates. I think that's very painful.

Yes, for sure. Again, it's one of these things to tackle the debt snowball method. Even looking at the car, she can pay off her car in 12 to 18 months. One hundred %. It's just our buffer, so she can keep the car, pay it off. It's not an outrageous different amount, considering her income.

But she never needs to borrow from her 401(k). No. Never again. No. Wanda, you hear me.

Thanks for calling in. This is The Ramsey Show. The last thing you need this holiday season is more stuff collecting dust or tech that keeps you glued to screens and up too late. You need better sleep, and that's what you'll get with Casper. Their mattresses are made for deep, uninterrupted rest that keep you cool and comfortable so you wake up feeling ready, not wrecked. Because rest is not a luxury, it's an investment, and the ROI is your well-being. So go to casper. Com/ramsey and use promo code Ramsey for 25% off mattresses and 10% off everything else.

You get free shipping, too.

That's casper. Com/ramsey, promo code Ramsey.

Exclusions apply. Buying or selling your home, it's a really big deal.

And you want an expert in your corner fighting for you to get It's the best deal and the best price, honestly. It's probably your largest asset that you're ever going to buy or sell. So you want this to be a really smooth process. And the Ramsey Trusted program is the only way to find a top agent that you can trust who will make sure that your home is a blessing and not a burden. And it's easy because you can compare agent profiles, interview them, and choose the right one that you want to work for you. So find a local trusted real estate pro for free at ramsey solutions. Com/agent, or click the link in the description Shem, if you are listening to this on podcast or watching on YouTube. We mentioned in an earlier segment, Jade, about college and school and all of it. It is Teacher Financial Literacy Month. That's right. Or Teacher Appreciation Month and Financial Literacy Month. We just appreciate teachers around here. I know Jade and I, we both have kids in school. When you have teachers who are part of your own story from being in school, and now if you have kids that are in school, they're just What's such a gift.

These teachers are just absolutely incredible. We love them, so we do want to honor them. So make sure to enter our teacherappreciationgiveaway at rs. Com/teacher. We want to celebrate you. So make sure to check that out, teacher. All right, let's go to Sarah in Philadelphia. Hi, Sarah. Welcome to the show.

Hi. Thanks for having me.

Absolutely. How can we help?

Okay, so just really quick. So when I When I turned 18, I got married to a man who was about 14 years older than me.

We ended up getting a divorce.

It was a really controlling situation, but in the midst, I did get pregnant right as soon as I got married. I have a baby now. She's going to be five months in May, so he doesn't help financially. I did stay home after I had the baby, so I was leaning on him financially.

Even when we were together, I didn't go to school.

The good part is I don't have any debt or anything, but the bad part is I don't have a career path because I went right into being wife and mother and everything. Sure. Now I just need help with- Yeah.

Where's your parents, your family situation through all of this, from when you got married to now?

We got married, and my parents not super happy with the idea of me getting married, not because they didn't want me getting married young or getting married- I can hear the circumstances.

They probably picked up some things around town that they probably didn't like being a 34-year-old.

Yeah, exactly. We ended up getting a divorce, so I'm staying at my parents now because he took me to the right house.

Okay. Wow.

I'm sorry.

It's okay. Actually, his family has been, not his family, his brother and his brother's wife have been great throughout this. They let me stay in their house for two weeks without charging me anything. They were super helpful. When everything happened, they were like, Listen, whatever you need, we're here for you. His brother's wife will call me every day. His brother was always like, Hey, if you need any help with the baby, we're here.

That's great. You need that community right now. If you have that to depend on, I would, because the truth is, if you are going to get out of this, it's going to require you working some hours, working a full-time job, probably to support your family. And childcare is going to be a huge piece of this. So the question then becomes, is what can you do for money? Right?

Yeah. So, thankfully, I'm staying home with my mom. My parents are, thankfully, well off. So it's a place that I can stay, and I don't have to worry about, Well, what about the bills? My parents are okay all that stuff.

It's just like, I just don't know where to go from here.

It's not like I'm in any danger right now. I just don't know where to go.

Yeah, the next steps for you. Right. In life. Yeah. Because you'll be turning 20 and all of it. Okay. Just because of what you've gone through, Sara, from a divorce standpoint, having a child, and I never want to minimize someone because of their age, but I am going to say because you're 19, I mean, you're a kid, where you're still a teenager, technically 19, right? Yeah. So All of those factors, I do want to give you so much grace. You're still a teenager. You're still figuring out how the world works, let alone the responsibility and the events that you've walked through a divorce already, right? We have a lot of time here, Sarah. I do not feel like this is a rush situation. There's a lot of grace here.

I just feel like I'm sliding down like a hill. You're not- You're not- You're not- Like a hill, you know?

Oh, yes. If you feel probably out of control. So I understand that, yes. But you're not sliding down in an one responsible way financially or something, right? You're fine, okay? So I just want you to just- No. Yeah.

If I have a lot on credit cards, it's like $40.

I have no debt.

I have money saved up.

I just don't know what to do. Yeah. As the divorce final, is all of that done? Any legal bills or anything outstanding there? No. So that's finished. And does he have any responsibility from the divorce, any child support coming in, any joint- I have to file still. I'm sorry?

Oh, okay. She has to file check for child support.

I have to file still. Yeah, this has only been a month. I have to file still.

File for divorce or child support?

Yeah, file for just divorce.

Okay, so it's not even... Okay. Yeah. Okay. Good to know.

All right. Yeah, that's why I feel like everything is explained.

Do you have a good lawyer? Do you have someone? I don't. Legal representation? No. Okay. So that would be step one. No. That's going to be step one, is to find someone in your area who's a great divorce lawyer. I mean, you're You're going to want somebody there supporting you and representing you. So honestly, Sarah, I would make that step one is to find that person because when you file, it's about to snowball into a lot of things, and you're going to probably... You or your parents will be paying for some of this, too. So that would be my first goal. Find somebody and then figure out, okay, from a money standpoint- How is this working? How much are we going to have to have? Because that's going to allow you to know- Because he hasn't helped with the baby since she was born.

And he might- Even while we were married. It'll probably take a court order for him, too. And even still, he might not. And so for you, I think- I'm just trying to figure out what I do without…

I'm trying not to depend on him at all because I know that that's not- Don't depend on him right now.

What Rachel says is right. First step, you get the divorce lawyer. Second step, you sit down with mom and dad and say, Okay, we're getting the divorce lawyer. How do we pay for this? And find out what help you have and what help you don't have. In that same conversation, that's also a good time to figure out, Okay, mom and dad, this thing is happening. I don't live with him anymore. And figure out what... Create a plan and a vision for the future. It's, how long can I stay here? What's that got to look like? And guys, everybody set really clear expectations of what that means. Can I stay here for a year? Can I stay here for it? And really talk this through, because then when you what the plan is, you'll feel better, and then you'll know what you can actually focus on. If you know that you have 12 months, and then at the 12 month point, your parents expect you to either start paying some rent, or I don't know what you'll decide, but then that will inform, Okay, what do I need to do next?

Yeah. I would say, too, because we always do talk about that expectation, like what Jade's saying. In this case, Sarah, maybe that expectation is dependent upon your next step and how long the divorce takes. It may even be if you need to go back to school, and while you're in school, you can stay with them. It's mapping out. Again, this is not in a rush, Sarah, for you. I really don't feel like you have to do all of this tonight by any means, but this is your next big steps is finding the lawyer, filing, starting that process, and then in the meantime, because it's good for you, Sara, to be thinking through, what does my future look like to Jay's point? What is the next steps? What does it look like? Just paying a broad stroke of like, okay, if I'm 23, what does it look like for me to self-sustain? That's right. To pay rent, all that. Do I need a college degree to do that? Do I love accounting, and I probably need to go get a degree in that? I actually work as a secretary for several construction businesses.

I like doing that.

Okay. So administration is probably really high up in your skillset. Yes. So finding those things and then backing out from there and say, okay, would I be able just to plug in with one or two businesses around to be able just to start working maybe in the next six months? And that's great. Or do I need to go back to school? And then with your parents being that safety net for you right now, how much are they willing to be a safety net financially for you right now? And from a time housing perspective. That's right. That's what Jay just said. But, Sarah, stay on the line. I'm going to get you Ken Coleman's book, Find the Work You're Wired to Do, because that will help in that mindset. I think it could just be refreshing to you to have a level of grasping control over your future. But I'm so sorry about all and we just pray that it's a smooth process for you from here on out. Thanks for the call. Welcome back to The Ramsey Show in the Fairwinds Credit Union Studio. I'm Rachael Cruz with Jade Warshaw, and we're going to Gabrielle in Los Angeles, California.

Hi, Gabrielle. Welcome to the show.

Hello, Jade. Hello, Rachel. It's Gabriel.

Sorry. Oh, Gabriel. Gosh, I'm sorry. My bad. Thank you, Gabriel, for the How are you? For the fix. How can we help?

All right. I was calling on behalf of my mom. She's 72. She's a widow who never remarried. Currently, she's retired. She's active in her church, and she has a home that's almost paid off. It doesn't include taxes and insurance, but lately she's been asking me for money. It started off small, but it's starting to escalate. How can I help her protect her being independent, but also set up her finances wisely for the future without becoming dependent on me or my siblings?

Yeah, for sure. How old are you? I'm 40. You're 40. Okay. And her house is almost paid off. Is she still working? She's not. Okay. So she's retired. Do you have any idea numbers of what's in her retirement?

She's currently receiving... As far as her retirement savings, I believe she's exhausted them. So she's currently The only income coming in is Social Security.

Do you know what that is?

I believe it was like 1100, 1300, possibly.

Oh, wow. And do you know- She's working on the bare minimum. Do you know what her mortgage is and what she has left on the mortgage in full?

So the mortgage currently, outstanding balance is around 100K. And then the mortgage payment is around, I'd say 1450.

Oh, gosh. Okay. Well, yeah.

So- How is she paying for everything?

Right now, I have my older sister who's living with her, and I believe they're splitting the cost of the mortgage.

Okay, so they're half and half. Okay, so that's 700. And then everything else, I mean, is she able to pay for… Is your sister splitting other bills? Do you know? Like electricity, water, all of that?

Yeah. So from what I understand is that my other siblings, she approaches each sibling individually and ask for help, whether it's covering a bill or a few dollars here and there.

And it's for real needs. It's not for- Yeah.

Is she able-bodied to go to work? No, she's with people. Is she able to work?

She is able-bodied. However, she hasn't worked in some time.

Yeah, that's so hard. I mean, the reality is she either... I mean, if she has no money and all she's getting is Social Security, it's not enough, to your point, when taxes are due for property, I mean, when she pays off the house, she's going to have to pay for property tax and all that.

What's the home worth? I'm just curious. If she were to sell it, if she were to sell it, what would it be worth?

Conservatively, probably about 1. 1 million. It's a five bedroom, three bath. As far as her renting up a room, that's also been thrown around, but- I hate that for her. But it does require me involving myself.

I'm just wondering about...

Is there like a...

Go ahead, James. I'm just wondering because my head is at she's 72, she's still fairly young and she's in good health. She could live till 92, right? So in my mind, I look at $1 million that she stands to take away from this and I go, Okay, we can throw a decent amount and invest it and start that fund going. And then maybe she can buy a condo for $250 or $300. I mean, you're in Los Angeles. I don't know what's there, what's possible. Can she buy something that's very small just for her? And then your sister goes and does her own thing. Because I'm also thinking, what happens if the sister moves out and gets married or moves on in life, right? So There's a lot of variables here. I'd love for her to get some hands on that money, get some of it invested, and get some of it in a smaller, modest living space for her.

Yeah, I think that's what I envisioned for her. I just don't know where to start. I think if I do get the ball rolling, I'm seeing it through start to finish. So where would I start?

Well, I would start with, is everybody in Los Angeles, your whole family, or do you have family that lives in less expensive areas of the country?

No, we're all basically based out of the Los Angeles area. Okay.

Have you looked at or would you know price ranges of, again, a very modest one-bedroom condo that she could purchase?

One bedroom, one bath condo, purchased outright, possibly in the area that we're in, like around... Oh, outskirts?

Well, yeah, because she's got to be able to afford it.

She gets 400.

400, okay. Okay.

So then She could invest 500.

I'm not mad at that. And get that ball rolling. And then, again, if she's able to not pull from those investments and maybe for just three years work somewhere just to pay just the rent, just mortgage. I'm sorry, not mortgage, hopefully it's paid for. Yeah, taxes. Taxes, lights, water, food, and just not touch that money as long as possible and let it grow and then live off of that. Because it's either going be that or you guys as grown kid adults all have to say, Okay, mom's not going to be able to afford this long term. Are we going to be willing to support her in it? So that would have to be a conversation that you guys have.

Will she sell? If you imagine yourself bringing this up to her, what does that look like?

The last time that I brought up the conversation to her, it was emotional for her. For me, it's pretty straightforward. I mean, the way that we're talking right now is the way that I talk with her, and she's open to it. But again, she pushes the work onto me, and so do my siblings.

Do they look to you, your sister, investors, too, to say, What do you think?

No, they don't have an opinion as far as what she should do. They feel that it's our home that we grew up in and that she should hold on to it, and she's only got such and such ways to go.

Listen, there's no getting around the fact that this is emotional. I'm telling people all the time that plays such a factor in how we manage the money. But if we look at the numbers. The math is not emotional. She doesn't have any money. She doesn't have anything, and she's healthy. She has a lot of years ahead of her. So she's got to get to the point where the discomfort of staying the same is more uncomfortable than changing. She's going to start to feel the cracks in that when you guys stop supplying the money, if that makes sense. The more that you got, and it's your choice, but the more that you say, Okay, we'll float it, we'll float it, we'll float it, just know that- It'll float through the- For the next 20 years. You guys have to get on the same page of saying, We can talk to her about this, but if she doesn't do it, we have to allow her to feel it, because when she feels it is when she's going to Okay, I have a difficult choice to make. And just try to support her as much as you can.

And it is emotional. It is tough. It's your family home. There's nothing comfortable about that. But the solution often lies outside the comfort zone.

It sounds like my next steps might be two part, right? It's initiating that conversation with my mom about selling the home, possibly. And then as far as with my siblings, it's having that conversation. If we're going to do this, we need to stop enabling her and giving money, essentially.

Yeah, absolutely. I mean, that's what I would do. And even pull some options. You can even get in touch with one of our real estate pros. Just to look for the area, like what's in the areas of where you guys are, just different options condo-wise. There could be one a mile down so she doesn't have to move major locations, right? Maybe it's just the actual home itself, but run some numbers and get some more facts around it. But yeah, this is difficult.

Hey, George Camel here.

So you're thinking about buying or selling your home.

It's exciting, but there's a lot to think about, and all those decisions can feel overwhelming. Well, here's the good news. You don't have to tackle the process alone. Ramsey's Real Estate Homebase is the place to find all of your free tools and resources for help to get prepared to buy or sell your home with confidence. You'll find calculators, start to finish guides, a podcast, and even an in-depth video course hosted by yours truly. What's not to love? So if you're ready to take the next steps toward your home goals, go to ramsey solutions. Com/realestate. That's ramsey solutions. Com/realestate.

When it comes to debt or building wealth, people often can forget an important step when it comes to reaching their goals, and that's having insurance and having the right coverage, or too little or too much can really impact how long it takes you to build wealth. So skimping on insurance might feel like saving, but when life happens, it is not great because you may not have a safety net that you need, and we don't want debt to be that safety net. So the right insurance acts as a shield around your loved ones and your wallet if disaster strikes. And in some cases, it can save you money if you're paying too much for insurance. So how do you know if you have the right coverage? Make sure to take the coverage checkup. It's an online free resource that creates a personalized insurance action plan for you that's unique to your situation, and it makes an overly confusing topic really easy to understand and gives you the next step specifically for you and your situation. So go to ramsey solutions. Com/checkup to take the coverage checkup or click the link in the description if you are watching on YouTube or listening on podcast.

Up next, we have Derek in San Jose. Hi, Derek. Welcome to the show.

Hey, Rachel. I'm a big fan. It's a real honor to speak with you. Thanks so much for taking my call.

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

So I recently got engaged. My fiancée and I are both 36 years old. We're looking to start a braided bunch. We've got five kids between 10 and 12 between us.

Oh, wow. Between 10 and 12? Is that what you said?

Yeah. I have twin sons who are 11, and she has a 10-year-old, 11-year-old, and 12-year-old.

Oh, my gosh. That's going to be a household. That's fun. Great.

Yeah, it's been really fun. So the reason I'm calling is because we have a pretty large difference in the asset. And I think based on your advice, the advice would be that we should get a prenup. So I have roughly $12 million, and she has roughly $50,000. And so we started the process of I'm looking into a prenup, and it's been an emotional one, and I totally understand why. I think, especially, we went through a questionnaire talking together about it, but then when we got the first draft back from my lawyer, that's when she's really not been feeling good about it. I understand the concern. She feels like I wouldn't be fully entering the marriage in the same way that she is because it feels like I'm holding assets separately off to the side. I'm sensitive to that, and especially in some of the context of her former relationship. And so I'm just looking for maybe more clarity and what you guys would recommend.

Oh, man, this is a hard one. Because I think it is a wise decision to do one. And I say that even more. I have a friend who's going through not a great situation, and she came in with a lot more, and now he's just... I mean, it's just messy. It's messy, messy. And there's a level... Again, you're hoping and praying, obviously, that this is the one and that it's going to last a lifetime. But as you guys have experienced, there is a reality to all of this. And whenever any of us get married, right? I think there is this like, okay, I'm choosing you for a reason and for a lifetime. But we also don't live under a rock and know that things change in life and situations come up. And unfortunately, some really hard things happen and does cause us marriages to break up, to enter into divorce, and we don't want that. I'm curious, what were the parts of it that was making her... Because you guys went through a questionnaire together, and it didn't sound like the questionnaire brought up a lot of red flags, but when she was actually reading it, does she feel like she won't be taken care of if something happens?

Or what's that underlying?

That's a concern, yeah. Yes. I think especially her kids as well, too. And it's something that I want to address, and I think we could address in a will or some other document or method after we get married. It's something that I want to do. I absolutely would want her and her kids to be taken care of, too, if something didn't happen to us. I think it also feels very condescending to her that either she... I don't see it being a problem for her at all. My goal in this, and I think that's what your advice is, is that in our case, that I know is rare, it would help protect our marriage, and that's what I want to do. But I totally understand that she feels it's condescending to her, maybe, and her family and her friends, that they might be a problem, and that we would need this to protect against them.

Can I ask how stringent this prenup is? How strict it is? Because when I've heard calls about this before, my question is always, is there a way that this can be more progressive, that maybe over time and over years, some of the restrictions fall off? Does that make sense to where it's like the longer we're together and the more that this feels right, some of this starts to fall off and now we start to become one. And after a while, it's all gone and we are one. Is there anything built in like that?

So there's nothing currently built in like that. Other than that, it's pretty basic. So everything we enter into the marriage with is separate property, except she has a small amount of debt, and she's been awesome about eliminating debt, especially the situation she came from. But I don't want her to carry it all. We would just pay it off. And then everything after the date of the marriage is shared. So income that I make or she made, we just share it. Our plan is that she would stop working, she'd be able to be home with all these kids.

Does that include interest on the 12 million as that grows, or does any growth on that 12 million remain yours?

Yeah. So at least as it's currently structured, the growth in that would remain mine. I think we have talked about, it's not in the document, but if I were to stop working to also help with the kids, which would be an option, the income that we drew from that would be considered our income.

I think I would. Yeah, I'd be wondering about that if I were entering in that marriage. How can we protect what you've already created, but how can I be a player and how that grows from here on out? How can I be a part of that? I think I might be wondering about that. That's tough, man.

Yeah, that makes sense. And then the only other additional part is we're planning to get a house, and I was just going to buy the house. We title it in both of our names. I just consider it a community property.

Yeah. Well, it sounds like you're being very gracious about this, Derek. I think it's such a hard line to be wise in a situation and being... I mean, you don't sound like you're drawing these crazy hard lines, and you know what I mean? No. Your tone feels very humble and gracious, which I think she probably very much appreciates. I'm trying to think. If I were in her position, which you never can fully do for somebody, there's a part of me that, I don't know. I think I would understand you're coming in with 12 million, and I understand that's not mine right now, right? I don't know.

Yeah. This one's hard for me.

I see both- Are you an anti-prenup?

No, I would not go that far. I think it's a very tough way to start out a marriage, clearly, because we're dividing yours versus mine, and everything else in the marriage is, we say we, us, our. So it is tough. And if you're a person, I'll put myself in the shoes. Me, I've always viewed, Oh, when you enter a marriage, it's like this. You don't know who you're going to fall in love with, and that person happens to be loaded. And now suddenly you're like, Oh, this picture I had of it being ours is not possible. That's just tough. I'm not saying it's wrong.

It's just tough. Yeah. Well, and I think, too, Derek, I think it can feel like the 12 million is off in corner, and we're never going to participate in it. But I think it comes into its mind if something happens. But up until that point, it's ours. We're sharing assets. That's a good point. That is a very good point. We are living our lives together as one But for some reason, if something ever happened in a divorce, this part still goes back to me. Does that make sense? I wonder if framing it- That's a good way to frame it because that actually- With her, because it can be hers, right? You guys can share on this. It's the only time it's not hers is if you guys legally go through a divorce. Does that make sense?

Yeah, it totally makes sense. And that is how we want to live going into the marriage.

Yeah. And it sounds like your attitude because you're going to take some of our money and we're going to buy a house together with this money and use this money for our family. So I think it's such a fine line, Derek. I mean, it's so hard, but I think I would keep... And bring in a third party. If there's a great marriage counselor or therapist, honestly, it's something to think through and even get other opinions because you want to be on the same page with this.

Hey, do you ever feel like you're doing everything right with money but still stuck? I was you. In debt, running hard, but taking three steps forward and two steps back. Turns out it's not the numbers. It's the fact that changing our ways with money is emotional. That's why I wrote my brand new book, What No One Tells You About Money, to help you push past what's really been sabotaging your progress so you can finally win. You can pre-order now and score over $100 in free bonus items. But only if you order by January fifth, go to ramsey solutions. Com/store today.

The all-new Every Dollar is here, and it is way more than just the incredible budgeting app that it is. It now has tons of advanced features to help you make progress with your money so much faster. And the average person is finding thousands of dollars in margin in just the first 15 minutes. So get every dollar for free starting today. Just get it in the App Store or Google Play. All right, let's go to Alex in Grand Rapids, Michigan. Hey, Alex, welcome to the show.

Hi there. Thanks so much for taking my call. Absolutely. So I am I'm 28 and debt-free. I'm looking to buy a tiny house to put on my parents' property. Without a credit score now, I'm in a tiny house technically not qualifying for a mortgage. How do I go about getting a loan for it?

Well, let's talk about the loan process, and then we'll talk about the tiny house on your parents' property. So with the loan process, if you have no credit score, you're just going to have to find a place that does manual underwriting for that. Now, we would recommend Churchill Mortgage. There are There's companies that do that, and you just have to check and make sure they'll do it in your area. But it's the same process. You're just going to have to show different trade lines. You're going to have to show your pay subs. You're going to have to show proof of income. If you work for yourself, you're going to have to show your tax returns, that thing. But for the most part, the process is the same.

But you're saying it doesn't qualify for a mortgage because it's a tiny house?

Correct. Yeah. So if it's under 400 square feet, I'm looking at 15 square feet, it doesn't qualify for a mortgage.

What's the cost of it?

I'm looking at about 40 to 50,000. Oh.

Oh. Oh. We'll save up and pay for it, Alex. I'm sorry? Save up and pay for it. It's like a car.

Right now, I only have about 10,000. Okay.

Well, then just wait a little bit. Yeah. So just be putting some money aside, 2, 3,000 a month, and just work your way up. And in probably 12, 18 months, then you can do it.

Can I ask the long-term strategy on this, Alex?

Yeah. So I have autism, and I can't really live independently.

So it's pseudo independent being on my parents' property. Got you. Okay. What are you doing for work?

I coordinate volunteers for hospice.

Cool.

Are your parents involved at all, Alex, in this process? Would they be able to help you?

Not financially, no.

But they've been a great support.

Okay, great.

How long did it take you to save up the $10,000?

I just finished. I got debt free in February and then saved up like, 6,000 for my emergency, two to six month emergency fund. And it's so, I don't know, last six months.

Okay. Yeah, I'm with Rachel. Just keep saving for this. It seems like you've thought through the best way for you to live. And I like that you've thought through that. I don't think you need to go into debt for this. And for anybody who is listening to my zero score spiel, that's for- A mortgage, no, but that's it. People that are trying to do a full mortgage on zero credit But yeah, save up for it. I like the 40 to 50,000. Just understand that this is yours. Like, the resale on this virtually doesn't exist because it's on your parents' property, and this is money that you'll likely never get back. So understanding that is important, I'd say. Yeah.

So running the... Are you able to pick up extra work, Alex?

Yeah, I'm looking for a second part-time job.

Okay, good for you. You sound incredible. I mean, the fact You're very ambitious. You're very well-spoken. You know what you want. You've been doing the baby steps. You've been debt-free. You got your fully-funded emergency fund. I mean, you're literally doing it all. The only thing that's going to suck is the next probably three years of saving for this. You know what I mean? You just look at it like people want to save up for a car. They want to save up for a college education. And these numbers, these are big numbers. I'm definitely not downplaying that. It's going to just take you longer to do it. And even though, I guess, technically, I guess you could Ramsey go through it to say, Well, but a mortgage is the one type of debt, and this is for a house. Sure.

You could figure out a way to do it.

But the fact that there is no resale, because the one reason we do say a mortgage, not only is because it is the most expensive thing that you're ever going to purchase as a home. But also, homes go up in value over time. And this is more like a car, in a sense, where it's going to go down in value. And so getting into debt, even a personal loan for this, financial essentially would not be wise. So it really would be you putting money aside. And I don't know about the market in tiny homes. Can you buy or buy used ones? Can you buy a used one? Yeah, that's what I'm looking at.

I'm looking at them on Facebook market Okay.

Got it. Okay. So maybe you could even, Alex... I don't know. Because for some people, they may want it off their property. There may be some urgency to get one-off. So maybe you could even negotiate with them and say, Hey, if I have cash, what's the lowest? You wouldn't be able to do that today because you don't have that amount. But when you're getting closer to that in three years or something, you may be able to negotiate.

Okay.

For a lower price. Thank you, guys. Yeah. Absolutely, Alex. Thanks for the call. And again, I think I just wouldn't go the debt route.

I wouldn't either. Because you never know, especially if you're already buying it used, what type of resale would be on maybe selling it in the future. Yeah, it's tough.

All right, let's go to Elijah in at Salt Lake City. Hi, Elijah. Welcome to the show.

Hey, how's it going? I just have a question. I am 22 years old. I'm currently going to college right now. I'm always done with my bachelor's degree. I have only about a year left. I'm only about 14,000 in student loan debt, so almost done. But yeah, that's my only debt, no credit card debt, nothing, no car loan, nothing like that. I guess my question is, I'm looking to go into law enforcement after I graduate. I guess my question is, is it worth it to stay for a master's degree if I get an extra pay incentive for the rest of my career, or if I should just, once I get my bachelor's degree, take that pay incentive and just start working?

Well, what would it cost you to get your master's? How would you pay for it?

So that one would be loans, but it would be for a total about master's degree, I've been doing my research about 18,000 for the college that I'd be going to.

And what's the difference in job that you would get if you just went into the police Department with a bachelor's versus a master's?

Yeah. So if I went in with a bachelor's degree, I'd be getting a 3% pay incentive for the rest of my career. If I went in with a master's degree, I'd be getting 5% pay incentive. So I guess my question is, it would take a long time to repay that, get that money worth, get that extra 2% every year. But I do really enjoy college. I do want to get married before I leave college, and I enjoy my hobbies. So I just don't know if it makes financial sense to get a master's degree.

Not on debt. Paying? Not on debt, but I'm wondering if there's a way that you can cash flow it. Are you working at all? And my next question is, do you have to do it right away or can you work on it later while you're in law enforcement and still get the 5% bump?

Yeah, you can still get the 5 % bump. I just heard from a lot of people that it's really hard once you're starting this full-time job to go back.

Yeah. I mean, how much are you getting paid, like your first year that you're working?

So, yeah, first year, with a bachelor's degree, would be about 90K. And then with a master's degree, if I came in first year, it would be about 95.

Okay. So that's my thing, is the percentage-wise is not big. I mean, we're talking maybe a $4,000 difference, and you could do that in two months with a side gig. You know what I mean? So there's a part of me. And I know, I have friends in law enforcement, and they even move around. They get up to detective or they move around within it. That can change your pay over time as well. So Yeah, I think if you had the money and you wanted to do it, I don't think I would stop you. But also, since you don't have the money, that's a no-go for me, personally.

Okay, yeah. So you wouldn't be okay with taking out student loans for the master's degree? No.

Okay. No. Yeah, I'd get this paid off. And man, I wish we had a Ramsey dating app because I feel like we had a lot of calls of some ladies that are always single, Elijah, and they're always looking for a man, and we could have pointed them your way. I know. I appreciate the proactiveness of love.

I do.

With him because I do think that's great. I am for getting married young and enjoying life.

And what he said is true. When you're in college, there's people right there to choose from. Once you get out in the world, it's like, I got to work. I got to go out after hours.

It's exhausting. It's absolutely exhausting.

I got to go to an an event, get dressed up. College, it's like you got your pick right there.

Got them right there. Oh, Elijah. Yeah, I hope that helps. So yeah, if there's not the cash, but to Jade's point, if you're able to somehow cash flow, or even if you get into a situation where they help pay for half of it, I don't know. Your work, that would be incredible, too. So I hope that helps. And yeah, good luck.

Everywhere you turn right now, you're being told a lie about money, that you can't get ahead, that you can't survive without debt. And those lies are keeping you broke. Don't buy into it. Yes, there's a lot of noise and chaos and confusion out there, but there's also hope. The truth is, you have more control than you think. This year, it's time to take back your hard-earned money and your life. And it starts by joining our free live stream. On January eighth, me and Jade Warshod will show you how to go from chaos to clarity with your money. Help you break free from debt and change your family tree, all by using the all-new EveryDollars app. Plus 10 people who sign up will win $2,000 cash. Don't let this be another year of I can't. Sign up for free at everydollars. Com/livestream.

Our scripture of the day comes from Philippians 3: 13-14. One thing I do, forgetting what is behind and straining towards what is ahead. I press toward the goal to win the prize for which God God has called me heavenward in Jesus Christ. Booker T. Washington said, You measure the size of the accomplishments by the obstacles you have to overcome to reach your goals. That's good.

That's really good. Love it.

Love it. All right, up next, we have Jacob in Grand Rapids. Hi, Jacob. Welcome to the show.

How are you doing? Thank you for having me.

Absolutely.

Recently, this year, I've had a change in my whole money, and it's really been having $3,000 in a checking account for emergency, putting everything else towards a high-yield savings account or cash plus account to some banks, and then maxing out my Roth IRA as much as I can every year. As well as traditional brokerage investments. But it really got me thinking, it's like, can you live with these cash plus accounts or high yield savings accounts, considering that they accept direct deposits and bill pay and you can deposit checks? Can you only live with using a high yield savings account with a credit card? And if so, what's the disadvantage with that without going through your traditional local bank or even your commercial bank, the bigger ones, right?

Yeah. Well, from a high yield perspective, you Usually, you have a limit on how many withdrawals you can have. So you can't use it like a full checking account. Sometimes they have a limit of five, is what I see most of the time. But yeah, you will get a a credit card and a checkbook with that, so you can take money out of it. But if you think about the expense, I just think about my every dollar app, and when I open it, it's like 15 transactions. And it's like an Amazon, an Amazon, grocery, Netflix. You have a lot of transactions coming out that will not... It'll exceed the limit of most high-yield savings accounts.

I see. So there really isn't much As long as whatever company you go with making sure they don't have those limits and whatnot, or a high yield, at least.

Well, they do.

They will. Yeah. A high yield usually does have a limit of how many withdrawals you can have per month. Yeah. So a traditional checking out. Now, I will say, Jacob, there are some, and we're actually in talks with one right now, possibly for the Ramsey show. There are now banks that are offering a higher percentage rate, maybe like a 2-3% for checking. Just a normal checking. Yeah, which is great, versus I think our checking is less than 1% or something. I don't think we basically get anything from it. There may be some more on the market that are great. It wouldn't be considered a high yield savings. It would be considered a checking account. But there are some banks that are offering, usually online banks, are offering more of a higher interest rate on just a traditional checking account. So that's something you could look into if you wanted to.

No, that is true. I've been seeing that with a lot of banks. I'm looking at one, it's Vanguard, and That's the one I was looking at. It is labeled a Cash Plus account, so it might not be a high yield. I guess that's where my question to myself is a bit confusing. But the main motivation behind it is making my money work for me, right? And making sure that it's not sitting in the little account.

Yeah, for sure. But I would say the money you have in your checking, or the way I look at it, Jacob, is that money is sitting there not to make me money, it's to keep my life afloat. In my investments, are there to make money for me, just like you're saying. My high yield savings, it's there for a little bit of that bridge mentality of like, we had a good amount of money in our high yield because we were building a pool, so we were writing some checks out of it throughout this past year. But I'd rather it sit in a high yield savings versus a checking account. But yet I know my high yield savings is not where I'm going to make a ton of money. That's not why it's there. It's fine to have it sit there, some savings, because it will make more than a checking account. But I look at, for me, my investments from retirement. Winston, I have a separate mutual fund, and then we also have some real estate. I look at those as where my money makes money, not necessarily my high yield savings or my checking. I wonder if from your mentality perspective, Jacob, to loosen that a little bit and maybe put some more emotional parameters around these accounts.

I think so. It's also about the habits you're forming. When you tell me that, I'm thinking you're building the habit of I have a block of savings, and I can pull from that block of savings for normal every day. Do you know what I'm saying? Yeah. As opposed to when you're checking accounts on your checking account, I only use this for day-to-day purchases. My savings over here, I only touch it if it's an emergency. And this HYSA, you know what I'm saying? So you're building those habits. And when you blur the lines like that, I think also to Rachel's point, I think it causes confusion, personally. But I wouldn't do There are definitely worse things you could do. You know what I'm saying? For sure.

But I wouldn't do it. Yeah. Does that help?

Yeah. No, it definitely does help. And that's where I'm going eventually. I have money set aside. I mean, a little background for an investment property, a multifamily unit, and it's just been sitting in, I think, like a 0. 1 %.

So I was like, I got to move this. Yes, for sure. It comes time to buy a property. Yeah. And I would say this, too, Jacob. I love that real estate goal for you. And if it's going to be longer than five years, you could even drop that in the S&P 500 through Vanguard if you wanted. There you go. If it's longer than five years, you could invest it. It's going to go up and down. It's not going to be as steady as just a high yield savings, but high yield savings, you're only going to get 4 to 5 %. Now, if it's less than five years, I wouldn't probably risk it putting in the market. But if you know it's going to be longer than five years, you could drop part of it, maybe not all of it, maybe some of it, maybe all of it into just the S&P.

Yeah, that is very smart because it compounds and it's relatively good performance.

Yeah, for sure.

So again- That answered my question.

Okay, perfect.

Well, thanks for the call, Jacob. You're a sharp guy, sharp young guy. Sharp young man. To be able to be thinking about all of this, which is All right. So again, you guys, just to clear that up, you want to have your checking, you want to have some savings, and we love a high yield or a money market account. But in that, you're going to have your emergency funds, some short term savings that you're looking towards once you're debt free and have your fully funded emergency fund. Maybe your down payment you're saving up for could go in the high yield. And then beyond that, be investing. And retirement is your number one priority with investing. 15% of your income will go into that. And that's Roth IRAs, 401(k), 403(b).

Now, I keep my emergency... Sam and I keep our emergency fund in one high yield. We do, too. And then we keep another high yield for renovation, things like that. Is that what you do? Yes, totally. I just like it over there.

Yes, that's how I I'm like, Don't count that.

I like to forget it's even- I know.

I'm such the free spirit, even though I'm like, talk about money every day for my job. I'm always like, Hey, babe, out of all their accounts, well, how much is in this? And he gives me the number. I'm like, That's not including the emergency fund. He's like, No, it's not including the emergency fund? Never include the emergency fund. I'm like, I just can't even emotionally go there. But yeah, those are some great questions. We were the high yield savings, the returns have gone down a little bit. We saw them. They were crazy.

They were like 5. 5 at one point.

It was wild, wild, wild, wild. That's always a thing to remember, too, in the economy, when interest rates go up, it's bad when you're in debt because you're having to pay that interest. But when you're earning the interest, it might be great. All right, let's go to TikTok real quick. We'll close up the show with a little TikTok. We got Brian, and he said, Because of your show, we're living the dream. We're tired early, we're traveling the country in our RV, and we can't stop saving and eating cheaply. How can we eat steak, rimed seafood without guilt? I thought it was without a grill.

Wait, wait, wait.

Basically, how do you enjoy life on Baby Step? I think they're on seven. I think they're done. They are living a dream.

I'll give you my framework. Basically, they're feeling guilty about their spending. Is that what they're saying?

Yeah. But they have the money.

I love this because Sam and I sometimes feel the same way. Whenever you've gone through a struggle and you've sacrificed to win, you do... It's like, Oh, you're afraid you're going to mess it all up, right? Here's five pillars of personal finance. Go, Jade. Here we go. If you check the boxes, is, then you're a financially responsible adult. Love it. Number one, are you living on a budget? Okay. Green check. Number two, are you a person who is living out of debt? You're out of debt, you don't have a debt. Check that box. I Do I have the proper insurances. Do I have the proper insurances? Yes. Check that box. Am I a person who's saving for the future? Am I doing my 15% to retirement? Am I doing the 529? Am I investing in my four savings account through my home? And am I prioritizing giving? If you're green checking all those boxes, permission to spend, to use your phrase.

Enjoy some life. I love it. I love it. Hope that helps, Brian. Enjoy the RV life, the retired life that is. I love it. Oh, thanks to all the guys in the booth for helping out Jade. Thanks for the great hour. Remember to take control of your money and create a life you love.