Transcript of You Don’t Build Wealth by Ignoring Basic Financial Principles

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 broke, and common sense is weird. So we're here to help you transform Transform your Life. From the Ramsey Network in the Fairwinds Credit Union studio, this is the Ramsey Show. I'm Ken Coleman. Rachel Cruz joins me, and we're here for you. 888-825-5225. 888-825-5225 is the number to jump in, and we would love to coach you up today. We start off with Dan in Grand Rapids. Dan, how can we help you today?

My wife and I are preparing to retire. As a matter of fact, her last day of work is tomorrow. Oh, wow. My The beginning of February, so 40 years of effort towards this.

Dan, I got to ask you this. We men have to unite because we don't do this well. We got Rachel here to help us on this before we dive in. What is the plan when she finishes the day tomorrow and she wraps it up and comes home? Do you got something planned?

We don't. It actually came on pretty quick. We both had this date in February picked, and then her department dissolved, and they said you can either take a buyout or you can transfer to another department. So this all happened for her in the last three weeks.

Okay, but presumably, she's excited about this?

Oh, absolutely, yes.

Dan, listen, I don't want to spend too much time on this. Rachel's here to back me up. This is where you got to step up. I mean, you got to do something special. She comes home, maybe a little surprise. If she hates surprises, plan a little something, at least a nice dinner, a gift.

A little retirement celebration.

A gift. Forty years, babe. You're wrapping it up. We got to celebrate her. It's my point. I don't want to... And I'm glad I said this, Dan, because you might have blown it had I not brought this up.

I appreciate that. She works from home, but I will bring someone to make it monumental.

She works her... Okay, Rachel, what does he do in that situation? I feel like this is your category.

Champagne. Pop the bottle. There it is. Right outside the door.

Neither one of us drink, but I'm just- Oh, man.

We are striking out, Dan.

We're striking out. The grape juice. Sparkling grape juice. Okay.

No, just do something special. I will do so. All right. So We've now helped you there. Thank you. That's wonderful, envoyer. That's the help you didn't know you needed. Now, keep going.

That's the point plus year marriage we got by. We've worked very hard to get where we're at, and we're very comfortable with what we're planning for retirement. We're very comfortable with our financial advisor. But I have one concern that he's got me a plan that he's got for me. We are going to put an addition on our house next spring. We're planning to spend about 100 to 120,000 to do that. Now, my plan was just take that off the top of our 401k and our savings and make that do the addition. What he's suggesting, and he gave me, I guess, good reasons, is he's suggesting that I take out a Heloq or a home equity loan to do this project. He said, We'll chunk it away pretty quick. But he said, There's reasons for that. First of all, I'll be paying a lower interest rate than he can make me. That's argument. The second thing he said was it is definitely be a tax rate off. And the third thing was the fact that it'll save me $20,000 plus next year in taxes because of the tax bracket that he's aligning us with. And it's very hard for me to think about going into debt immediately as I retire.

Well, yeah, 100 %, because where is he planning on having you guys pay off the heat lock? When he said you can throw a bunch of money at it, is he thinking just a little bit every year so that you don't mess up the taxes and all of it?

Yeah, he's saying We will chunk it away, and I don't know how relevant chunk it away is if it's a year or five years. But he said, We'll just make a monthly payment on it. And again, that it'll give us a tax advantage, it'll save us taxes and all this, which all makes sense. But, dang, I just got myself 40 years of work to get out of debt and retire, and then just thinking about going back to the debt just scares me.

Well, some financial advisors are so stupid. They don't even think about your values and what you want out of life. Clearly, living a debt-free life has a price tag for You can't put a price on it, but it's a value of yours that he's not putting into any consideration. And so as he goes around... So no, I would not do this. I would 100% just cash flow it. And if the cash flow comes out of I don't know if it's the 401k, if you guys have money elsewhere, but you have the ability to cash flow, right, Dan?

Yeah, we got a set amount that we're going into retirement with that we're comfortable with, and it's going to last us long beyond our retirement. And just thinking of Taking that 100 or 120 right off the top of that and doing the addition was my plan.

And so he- Well, let's just put your plan- He's offered a suggestion. Yeah. I'm sorry. I want to put your plan to the test, not his suggestion. We hate his suggestion.

We hate. Okay.

So let's put your plan to the test. Let's assume that you didn't get this advice at all.

Okay? Yes.

And you just went ahead and pulled the trigger on your plan. How do you feel emotionally about your plan? And Any stress?

No, I don't think so. Intentionally, we have this 403B that we've been carrying for a long time, and I've been very aggressive with it. I took it from 20,000 to it's about 170 right now. So my thought was, that is just some play money we've been actually not planning on that we've accumulated that would do this project for. What's the addition for? Well, we raised seven kids in our house, and it was fine with nine people. But now what we find is with adult children. Instead of nine people every day, we have 29 people 10 times a year. So we want to double our kitchen and our living room. Sure.

How much do you guys have in retirement total?

Just about 2 million.

Okay. Golly. See, and he's going through all these hoops and stuff about this and then that. You guys have $2 million. Do you know what I mean? And you want to take 100,000 of it. And if you go and burn that amount in the middle of the room, you're not going to have any emotion towards it because it's such a small percentage Change of your networth. So that's where the peace of mind of your value system overrides his snaking and maneuvering through where it's going to be that much money at the end of the day. Do you know what I'm saying? I agree.

Dan, you answered your own question. I asked it that way just simply for you to hear yourself say, his plan gives me a little bit of heartburn, enough that the peps at AC is not working, and you called us today, right?

It did, yeah. I think I knew where you were going to take me, but I just I'm glad to learn to hear it.

Yeah, and I appreciate that, and we're happy to be here for you. But you, sir, are the ultimate arbiter on this. Your body, your heart, your head. And man, you're just like, Man, if I can put this edition on, I'm paying cash for it for my grandkids to be there.

Yeah, and I would run I have numbers, too, because I am curious because the Helux, the rates go up and down. It really is very dependent upon what's going on.

Don't run the rates at all. I don't want you to be tempted.

No, it's not a temptation, but it's that versus the taxes that you're going to pay on 100. What I'm saying is, I think it ends up being closer to a wash than what you realize. I think that the guy- I think that's all I see what you're saying. I think he's nitpicking every little thing. I agree. I'm making this number up. I haven't done the calculations. But to save 10 grand, whatever the thing is. And that's pennies to you guys. So I'm like, the peace of mind is worth that so much more.

Yeah. Just listening to you describe everything he told you versus your plan, yours is simple. Boom. We're done.

We're done. And I guess, and so I think he said, makes sense. Do Yeah. Do you have money elsewhere, Dan? Where to his point, do you have money sitting in a high-yield savings or something where you wouldn't necessarily have to pay taxes if you use that cash?

We have about a $40,000 savings account. Okay. Yeah. Then $4,000 1K. I have a lump sum pension and a 403(b), as I mentioned.

Okay, got you. No, that's great. Yeah, no, I would not go borrow on my house to do an addition when I freaking have the money for it. Yeah. That's the bottom line.

Trust your What's your gut, Dan. There's a whole bunch of science on this that trusting the gut is not this mysterious thing. It's actually the brain sending physical signals to the body, and that we feel it in our body. That's a real thing. It has the same validity as the logic. Listen to your heart, listen to your body. You were right. Thanks for calling. Tell the financial advisor, thanks or no thanks. 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 boostmobil. Com/ramsey and unwrap the savings today. That's boostmobil. Com/ramsey. Restrictions apply. See boostmobil. Com/ramsey for details. Well, you know, some days we have a fabulous audience.

Most days for the show, we have a fabulous audience comes to the lobby here at Ramsey Solutions. We can see these fine people looking through the glass. We go out and say hi and all that stuff. Today, it happens to be a birthday day. We've had two birthdays. A lot of birthdays. We had young Millie, who was 28, and now we just met the fabulous Carol, who just turned 80 a couple of days ago. She's got the team out there. And notice the glasses. She's got a sash. What do you call that? A sash? Yeah, I think. A sash? She's got a Tierra, and she's got these fabulous glasses, James.

She's hating this right now, I think.

By the way, Carol looked as though she was in shock, James. She's very embarrassed by all the attention. One of the party that she's with loaned me their glasses. I wanted to say a special happy birthday Day to you, Carol. You look fabulous. You don't look a day over 50. We're very blessed that you're here.

They're about to hit the town. They're going to go to... You should meet them on Broadway.

Actually, I'm going to ask James if I can take the rest of the show off. I'm just going to hit the name. You look like you're ready to play Billy and the Jets or something right now. Billy and the Jets. There you go. How about that? Very fun stuff. Happy birthday again. So fun. So fun when people spend their special day with us.

I know. We get anniversaries. We get honeymoons sometimes. Yeah, we do. That's always the craziest one. I'm like, I can't believe you're here on your honeymoon. What are you all doing here?

The Ramsey Show Question of the Day is brought to you by YreFi. Yrefi offers a different approach to paying off your defaulted private student loans with a low fixed rate for less stress. Go to yrefi. Com/ramsey. That's the letter Y-R-E-F-Y. Com/ramsey. It may not be available in all states.

All right. Today's question comes from Aiden in New Mexico. My wife is a contract business consultant and Is also self-employed as an artist. When it comes to paperwork, she's very disorganized. It has gotten to the point where I have taken my tax documents to a tax preparer twice because I didn't want the IRS auditing me. I beg her every year to get her stuff together and to file on time, but it never happens, which leads to arguments. How do I get her to understand the seriousness of this situation? That's tough. Well, it's taxes. I'm like, Back to taxes. Yeah. But you got to do it.

Yeah, and that's what I was going to say. This is a relationship issue. But in this situation, it's not you coming to the table with a, Hey, let me tell you about these baby steps. Let me tell you about this Ramsey plan. I'd like to get us on a budget. This is the federal government. This is the law. Yeah, there's a wiggle room here. It seems like it needs to be a reality check. This isn't trying to get her on board. Right. This is like, We will go to jail. This is the law. I don't think I look good in orange, sweetheart, or whatever you got to say here. This comes back to a relationship thing, but I hate to make it so simplistic. I want you to weigh in, but I think it is, Hey, this is super serious. This isn't my opinion. We have to do this. Let's make this a lot less difficult by let's get all our stuff together and be on the same page.

Yeah, and I think self-awareness is huge because she's an artist, and I'm not pointing fingers, but I do think there is a- I think that's a fair point. When you are an artist, there a little bit more of a free spirit within you. Numbers is usually not your strength, and vice versa. People that are great with numbers are terrible, usually, at being creative. Again, it is how you were wired and gifted. Then I think it is a self-aware adult, to say, Hey, I have things and weaknesses in my life, and in my personality, I'm going to be an adult, and I have to obey the law. But also what systems can I put in place to help me in those weaknesses? Because I'm not naturally good at all of this. She's very disorganized. This is what he said. That would be more of the conversation of, Hey, what can we do to help you? It's not to point the finger at you constantly. It is, Hey, yeah, this is the law, so it has to be done. What systems can we put in place together? As a husband, I'm here to help you. He's on his own.

He's like, I'm just taking my tax documents and blah, blah, blah, over here, which I get because he doesn't want to go to jail either.

He's hedged his bets.

Yeah, seriously. But I think it is, Hey, how can I help us help you put some systems into place. I think that's right. But there is a point that she has to be an adult, right? You can carve a situation in a conversation a certain way to a point. But there's also a point, Kim, with all of this, especially the law. But then other things of my wife just continues to spend more. There's just a point that you're not able to change that person. They have to be the adult, and it's sad when they're not. But we see that a lot around here.

It's a really tough situation. Thanks for sharing the question with us. Knoxville, Tennessee, the home of Rachel's alma mater. Go Vallss. Go Vallss. Sam is there. Sam, how can we help?

Yes. I have a question for you, a regard to my truck. I have a 2001 truck, and it just rolled out of warranty. I intend to keep the truck for a longer period of time, or at least I hope so, and was offered an extended warranty by by the dealership. And so what I did is added up all of the cost of repairs that wouldn't have been covered or were covered by warranty that no longer would. And it came out to about $8,800 in the four years that I've owned the truck. So it hasn't been necessarily super reliable, very expensive to repair. And as I intend on keeping the truck or want to keep the truck, I want to explore my options. Should I buy this warranty for $5,600? Should I risk it, continue driving the truck for another 100,000 miles without warranty? Or should I go out and get a new truck with a fresh warranty? What's your opinion and just want to gage the direction to go in?

What's been the repairs? I mean, about 2,000 a year is what it ends up being. What has it been?

Yeah, it's really little stuff, to be honest with you. It's the motor and the tailgate. It's got one of these automatic tailgates. It was the air conditioning control module in the dash. It was a sensor in the, I guess, the parking sensor system. Yeah. It's what I'm concerned about. Go ahead. Go ahead.

Well, I was going to I mean, as you look through this from a math perspective, it's less than 200 bucks a month is what it ends up being, which just feels expensive. If the stuff isn't being fixed, that's one issue. But I'm not a big fan of extended warranties because I'm like, The thing should work. If not, I would rather it be in my court. Unless there's some crazy recall right now, Sam, and they're like, giving you some discounts on the extended warranty or whatever it may be. But we usually factor in cars. We have a sinking fund that we've set up that if anything goes wrong with the cars, we use that sinking fund. Again, for yours, it's coming out to be around $200 a month. I would probably just set some money aside. Then hopefully, most of this gets fixed because the fact that you keep going in and in for repairs, that's frustrating.

Yeah, no, you're right. For me, it's not really a money issue. The truck is paid off. The 200 bucks a month is really negligible based on our income. It's more a, I guess, a psychological feel. Do I keep throwing money at a truck?

That's a different question.

That's where I came down?

Yeah, that's a different question.

That's where I came down. I agree with everything Rachel said. I'm going to come down on this one and go, I'm the guy. This is the way I'm wired, where I'm not going to keep dealing with this truck. I'm going to go, This thing's a lemon, or it's an issue with the manufacturer, and they just don't do a good job making the parts, and I'm just tired of this mess. For me, because in your situation, I would be in the same boat. Any mechanical work I got to do, I'm not stressed out about it. I got the money set aside, whatever, whatever, whatever. But it's like, it's time. Time is money. You remember that old phrase? It's true.

It's a 2001, Sam. Is that what you said?

Yeah, it's a 2001 with 80,000 miles on it, and it's a hybrid. I don't know if you look into some of these hybrid issues, but if the hybrid motors or the battery- Is it a 2021 or- No, 2021.

2001? I didn't know they were making hybrids in '01. No, it's a '21. Yeah, about 2021. '21. Yeah, you kept saying '01. I was like, Man, they were ahead of their game with that hybrid. I know.

That was 2021.

In 2001.

I couldn't spell hybrid in 2000.

Okay, so 2021. That makes way I was like this.

I'd get rid of it. I'd sell it. About four years old. I'd sell it, and that's somebody else's problem. I'd go get myself a truck that had a much higher rating that I'm not in the shop all the time. Again, it's just the nick. These are like little paper cuts, it feels like. What a nuisance, man. I'd be like, Why would I buy your warranty? How about you make a better truck? That's what I'd have said to the dealer, but I can be sassy that way. But I feel like that's true. Yeah, I know. Absolutely. I got an idea. Why don't you make a better truck? I don't need all this warranty because all the stuff seems like it's- That's hard. It's a little piddly stuff. So you got the cash. I'd get rid of the nuisance. Let it be somebody else's problem. You know, one of the first things I discovered working in the financial world is How absolutely devastating it is when the breadwinner of a family dies and there's too little life insurance or none at all. Grieving families are suddenly left behind scrambling to pay bills and trying to make ends meet.

I also discovered that there are a lot of rip offs in the life insurance world, like that whole life crap posing as an investment opportunity. What you need is level term life insurance, usually 10 to 12 times your income, which is the smartest, most affordable way to protect your family. The key is finding an independent broker who represents a ton of companies and works for you, not for the insurance company. This is exactly what my friend Jeff Zander and his team at Zander Insurance are all about. They shop the term life companies to find you the best options, and they've been around for over 95 years, so you know they'll be there when you need them. Zander is the real deal, and that's why they've handled all my personal insurance for over 25 years. I I trust them, and you can, too.

Visit zander. Com. For instant online quotes or for a more personal touch, give them a call at 800-356-4282.

Welcome back to The Ramsey Show. I'm Ken Coleman. Rachel Cruz is alongside, and we are here for you, 888-825. 5225, 888-825. 5225. Henry's up next in Tampa, Florida. Henry, how can we help?

Hi, everybody. Thank you so much for taking my call. How are you guys?

Good. How are you today?

I'm all right. Question for you. Quick and easy question. I mean, not easy question, but I have a lease that I purchased in the last year or two there, but just I heard about you guys. The lease is for the next two more years left on it there. I'm wondering if I should ever get out of it, pay out of the lease there to get some money, not necessarily money back there, but pay a lease there. I mean, sell the car or get out of the lease to be able to pay some of my debt.

Yeah, it's a great question. What are you paying a month?

1,500.

What car is that?

Mercedes GLE 350.

Gle is pretty nice. That's pretty nice car.

Good taste, Henry. You got some good taste. Thank you very much. But it's eating you alive, and it's not worth it. We got to get it out of here, right? Yeah. Is there a lot of- Yeah, so I'm like, bad.

Give us the terms of where you are. Walk us through the terms.

All right. So if I If I were to terminate my payoff right now, it'd be about $60,000 there to payoff there. I've looked on, I've heard you guys talking about it, so I looked on Kelly Blue Buck, and it's about, you get 46, 47,000 on Mm-hmm.

Then- Was that private sale?

Was that? Private sale. Yeah, that's private. I'm sorry.

A little bit of private sale. That would leave you with 13,000 that you would owe, right?

Yes.

Do you have any cash, Henry?

Not much, no.

Okay. What do you make a year?

I make about $250,000.

Oh, that's good news.

Yeah, that's great.

You would need another car, correct?

Correct.

To be able to replace it.

We got the $13,000 that you would then owe, and then we've got the cost of a replacement car. But with your income, you can get something decent if you really work your budget, right?

Yeah, that would be my goal because two more years of this, I mean, that's a lot, right?

It's a good amount.

Yeah, for sure. According to you guys, I was just doing this the first time I thought it was like, I'm broke, but I do all have a good amount of debt as well, too, over a million dollar debt. Okay, so give me the rest of your financial picture.

I'm just curious where you're at. So student loans, $180,000. You Credit card debt, about 70,000. Okay. And then mortgage is about 690,000.

Okay. Henry, you've been living the life, haven't you?

Yes. Me and my wife. Let me rephrase that because I know you mentioned total income. My wife is making 100,000, so a total is 350. Okay. So I'm 250.

You guys have plenty of money. You just got to get under control.

Is Yes. And that's the other thing, too. They're trying to go from that life to hearing about you guys and change their lives completely. I know. Totally. I'm like, Let's go hard. And my wife is like, What are you talking about there? So it's definitely different and hard there to actually talk to her about it as well, too, just the budget.

Yeah, totally. And I think, Henry, too, just as a piece of advice, usually when people are in your position, the one that hears, Okay, there's a different way we can do this, and you go in and tell your wife, We're going to stop shopping and stop eating out. She's probably like, What the? Henry, what are you talking about? You've lost your mind. So I think approaching her in that aspect is the why. So I am curious, Henry, for you, what has caused you up to this point living the way you have with money, both of you, and then you hear us, which is very counter with how you've been living. What's been appealing about that? What is it in you that's like, Oh, my gosh, I want that side of money, not what I've been doing?

I The idea of freedom. I'm trying to talk with you, but I'm holding my breath. And the heaviness of just owing so much money, the fact that I'm like, Wait a second. I'd never thought about how much I owe and how much debt I'm in. I've always been thinking about right now how much I owe for the month. When I calculated all, after talking to you guys or listening to you guys, I was like, I owe a million dollars. What in the world? I'm like, I can't do this anymore. Especially when the wife says, Oh, I'd love to have a new summer kitchen. I'm like, What are you talking about? We have no money for that.

Yeah, that's right. That's right. So, Henry, that's what I want you to communicate to her, is I can't breathe. And we hear that a lot, Henry, that you're not the only one. It's this level of stress and anxiety and weight because you don't own your life. Somebody, these credit cards, everything owns you. And it's exhausting. To your point, we work hard, and I feel like I have no money, right? When I ask you how much money you have saved, it's like, I don't have it.

That's what I'm thinking. We work so much hard. Over time, sometimes, too. I'm like, How am I having nothing at the end of the paycheck there? I'm like, Is this what everyone does?

I don't understand this. Right, exactly. How much do you guys bring home a month? I was trying to do it with taxes and everything, but when you guys get paid, how much per month are you bringing in, both you and your wife?

I think I'm about 12,000 to 13,000, and she is about 4,000. I would say about 16, 17, 16,000.

16,000.

Okay.

And that's after taxes?

Are you guys funding retirement? Yes. Wait a second. We have been putting in retirement. Wait a second. Wait a second. Wait, wait, wait, wait, wait, No, no. Yes, so total. Total. I don't understand those take home numbers. What is your take home? Yours, just you. Just me, about, I'm sorry, 12,000 for me.

And you're off of- Because you asked about putting into retirement.

Yes, I've been putting into retirement.

Yeah, off of gross. What's your gross? Your gross and her gross.

Total gross is 350.

Right. You're 250.

She's 100. Then after taxes, retirement, insurance, after all of that, what hit you- I just felt like her take home was really low off of a $100,000 salary.

Her take home only being 4,000. That felt low to me. I just I don't know if you know your numbers. The only reason I'm calling that out is part of this problem is you don't really know your numbers.

Yeah.

Or she's having way too much withholding taken out. At this point, you're brand new to us. Rachel, explain the retirement should be paused and all that right now to bring in as much as they can.

Yeah, for sure. So, Henry, the whole concept, you guys really need to dig in because if you're getting a big tax refund every year, that's money back in the paycheck that may not be shown here. I would be pausing retirement. I'd be pausing everything. You and your wife, again, sitting down and saying, Hey, together, it's going to be really hard to do this without her. I want Henry to be as honest and vulnerable with her tonight and just talk about How scared you are, honestly. Can you guys be in the phone with me? I know. We'll coach you. We'll coach you.

Probably should have had her on this call.

Yeah. To show her the realization. The truth is, Henry, for your own mental sake, You guys can't keep doing this, right? I mean, you're going to hit a breaking point eventually. For you guys, it's going to look different. I would sit down with her and just say, Hey, here's where I want to go. Here's the goals I want to have. You can map them out ahead of time just to say, Okay, we have, gosh, yeah, almost a million dollars, not including the mortgage, but the credit cards, the student loan, all of it, mapping it out to say with our income and doing a budget and saying, If we just cut That everything. And, Henry, to your point, this is going to be a 180 from the lifestyle you guys have been living. You've been living the high life and enjoying life. To get out of this, we always say you can wander your way into debt. You cannot wander your way out. And so there has to be an intentional plan. That's right. But, gosh, in three or four years, you guys could have a completely different life, financially speaking. I think so. And you getting a side hustle, Henry.

I would love that. Yeah. Adding more income and all of that. So If you stay on the line, Henry, Christian is going to pick up, and we're going to give you Financial Peace University for you and your wife to sit down together and go through it. It's our nine-lesson course, and this gives you the basics. She can get mad at us, not you of delivering the information.

Henry, I would say this. I think do what Rachel said as far as your approach to her, but I think you need to show her you mean business by you getting rid of that car. That will show her you're not just talking. Get it out of here. You're making some sacrifice. Then one of these days, you'll be driving one of those bad boys again, but it'll be cash. This is the Ramsey Show. This episode is sponsored by Better Health. All right, the holidays are here, and the holidays are full of traditions. Some of these traditions we love, some of these traditions we just tolerate. In addition to the traditions, this time of year can also bring a a lot of noise, pressure, and even loneliness. Maybe this is your cue this year to slow down and ask yourself, what really matters to me right now and moving forward. Therapy gives you space to do just that, to think, to breathe, and to make room for peace. If you're thinking about therapy, I want you to check out my friends at Betterhelp. They've got more than 30,000 licensed therapists, and they've helped over 5 million people worldwide with an average rating of 4.

9 out of 5 stars. Betterhelp is totally online, so it fits around your schedule, even during the chaotic holiday times. You just get online and answer a few questions, and Betterhelp will match you with someone who fits your needs. If the therapist isn't the right fit, You can switch therapists at any time for no extra cost. This month, start a new tradition by taking care of you. Visit betterhelp. Com/ramsey to get 10% off your first month. That's betterhelp, H-E-L-P. Com/ramsey.

Welcome back to The Ramsey Show. When it comes to your money, Ken, one of the largest purchases that majority of people make is their home. Yes. When it comes to buying and selling your home, it can be very overwhelming. The whole housing market, the industry, when it comes to real estate, it can be really hard to tackle, especially alone. That's why we created Ramsey's Real Estate Homebase. It's a place with all the tools and resources that you need to be prepared when you buy and sell your home, and to give you the confidence that you're doing it the right way. So there you're going to find calculators, a start to finish guide, multiple of them to help you. How to articles a podcast a book, and even a video course, all packed with actionable steps to help you navigate this process of buying and selling your home. So if you're ready to take the next step towards your home goals with peace of mind, make sure to go to ramsey solutions. Com/realist. Com. State, or click the link in the description if you are listening on YouTube or podcast. All right, up next, we're going to Diego in Sacramento.

Hey, Diego, welcome to the show.

Hi. Thank you.

Absolutely.

How can we help? My wife and I just had a baby, and we've been having a discussion about opening a college account for him at 529. And my wife's on the side of saving as much as we can enough to pay for his whole college tuition. I'm more on the side of maybe not doing that just because for me, when I went to school, I didn't have that. I think it built a lot of character in myself. My parents, they provided a place for me to sleep. They didn't charge me any rent, and they provided food for me every day. I felt like I was really blessed in what they gave me and what they could. I felt like it built some character in me. I worked through school, and it showed me the value of money and what I'm paying for it for school. It just showed me the value in it. I just wanted to get your guys' opinion on whether maybe there's a middle point between my wife and I, or maybe you should just avoid it altogether, or saving all of it that we can. Maybe that's a good thing.

Well, I think this comes down to, Rachel, how big of a stressor this is for you guys when you talk about it. Are you both pretty adamant and it gets tense and there's a lot of separation, or are you guys a couple more conversations from going, Okay, I see it your way? What's the real tension level now on this?

Super low. We're very good about communicating. We never had a problem with that.

When you told her your point of view, did she agree with you and go, That's interesting, or did she go, It's too old school. I want to help?

No. She said, Yeah, pretty much what you're saying. She would prefer us having a better means than our parents did. She's saying we should afford something that we didn't have.

Let me tell you, Diego, the way you're going about this and your heart and your thought process, I really love, because I do think that our kids have to have grit. Our kids have to have a level of struggle. Our kids have to be able to know how to appreciate things, not be entitled, know how to work hard. All of these elements of who they're going to be, the character part of them, we all want as parents, or at least I hope parents want that for their kids. That's what you're wanting, right? What you're thinking is you're going to do it through the means of paying for their own college. Where I would challenge you is, are there other places that they can learn those same character qualities and also be able to have their college paid for? Because Diego, my parents paid for my college, and I'll tell you, there was stipulations around We had to go to an in-state school. We had to graduate in four years, and that was the main barrier. I remember thinking, I went to go to Auburn University, and I remember my dad being like, All right, well, calculate the tuition and the difference between a school in Tennessee, a public university in Tennessee, minus the tuition of a school in Alabama, you pay the difference.

I looked and I was like, No, thanks. Go Vallss. I'll go instead. Then it was, All right, well, now I have to take 15 hours every semester while some of my friends were taking nine because people will graduate a semester late or a year later, and they just work their way through. I had to be on a... You know what I mean? I had to have that schedule. I think it's a misnomer to generalize if your school is paid for, you're not going to have hard work and grit. I don't think that's true. I think it's a way that you feel that. Winston, my husband, he had to work his way through not the tuition part, but everything else. He had to have a job to pay rent and pay for food and all of that. I think that there are ways to accomplish what you want for your kids, and it may look different. I'll give you one more example, then I'll be quiet and like, Ken, jump in. But for us right now, Diego, we have a nine, seven, and five-year-old. Winston sold his lawn mower about three years ago, and we have a lawn company, Mow Our Lawn.

He really struggled with our kids not growing up watching him mow the lawn because he had lawn care business in college. He was like, I want my kids to see physical... He was so hard on that, on himself on that. But then as we talked, he was like, But right now, my time is better spent with them on Saturdays than going and doing that. What are ways now that we almost have to manufacture a life where they don't get what they want. They're going to have to work and do things to get what they want. Does that make sense? I just don't want to over generalize that if your college is paid for, you're going to be some spoiled entitled brat. Because let me tell you, there probably are some spoiled, entitled brats whose college is paid for and isn't paid for, but it's more of the character of who they are. Maybe it's revealed in that.

I'm glad you really segued nicely for me. You didn't even know. I'm going to throw a different angle at you, Diego, because on one hand, I love the fact that you're going, I don't owe my kids a college education, and I don't think you do. But I'm not going to qualify this. I'm just going to say this, and this comes from experience. Diego, Just because you worked your way through college and you took all the benefits that you obviously did, doesn't mean that your child or children are going to do the same as you. They aren't you, number one. They really aren't. They aren't you. They will have some of your DNA, but they are not you. They will have different experiences. They will have different environments growing up. I think one of the challenges that we face, and I'm just being really vulnerable here that I've had to learn as a father of three, is that the things that I did, the things that I learned, the way that I handled life is so unique to me. I know I'm saying something that's completely obvious, but I think we forget this. I would just say that in this case, if you played this out the way that you desired, let's say your wife just went, I love that, Diego.

Let's do that. There's a really high, high probability that one or both or all of your kids, however many you have, won't deal it the way that you dealt with it. They may go, Dad's out of his mind, the old coot. He's a goofball, and I'm going to go get a student loan because I can. They get it done so effortlessly. The very thing that you idealized and thought, This is how I see it going, it would even break your heart. To that end, I would say, if you can fund it, you should. As an option in the 529, as we teach, I'll give it back to my partner here, it's very It's flexible as to how you can use those funds for lots of qualifications because the world... Here's the other thing.

The world's changing.

The world is changing so quickly right now. What will higher ed look like when these babies are to that age? You and I have zero clue what it's going to look like. I hope that perspective helps you. I don't think it's as easy as you just going, This is how I want it to be because that's how it was for me. I get that. If anybody gets that, believe me, I actually talk like that sometimes.

You know me well.

I'm trying to be transparent.

I think that's true. Again, I want to reiterate, Diego, the sentiment of what you're longing for your kids to have is so good. That is so good. Absolutely. Because we want our kids to be able to do it. You're right, other ways to do it. But I think that there is. I'm like, there's different... There's so much between. Have them pay for their car when they're 60. There's things you can implement.

Have them try an instrument.

Along the way. A sport, a hobby.

Let them fail.

They're going to, and the world's hard enough in general. I'm like, they're going to bump up against it. But I think you can create an environment within your home between now and 18 that creates... Knock on wood. I believe this, and I hope it's true. Not perfect kids, but kids that you are able to shape under your household, and you as a parent get to put some of those guardrails in place. If you give them everything they want, are they going to be more spoiled? Sure. If they got to work and figure out and problem-solve, then that's going to be good for them, too. I think there's ways you can do it. But thanks for the call, Diego. Thanks for all the guys in the booth. Thank you, Ken Coleman. Thank you, America. We'll be back.

There's no better time to start protecting your home than right now. This month only, my listeners can 50% off any new Simply Safe home security system during their last chance Black Friday sale. Do not miss this deal. I've recommended Simply Safe for over 10 years, and it's simply the best security system you can get for your home. That's because Simply Safe helps stop crimes before they start.

Their AI cameras detect threats early, and then live agents stop them by speaking directly to intruders letting them know they're being watched and that the police will be dispatched.

Simply Safe stands behind their security with an anti-theft guarantee and no long-term contracts. That's why Simply Safe was named the best home security of 2025 by US news and World Report. So don't miss Simply Safe's biggest sale. Head to simplisafedirect. Com and claim 50% off today. That's simplisafedirect. Com. There's There's no safe like Simply Safe.

Welcome back to the Ramsey Show, coming to you from the Fairwinds Credit Union Studio. Alongside Rachel Cruz, I'm Ken Coleman. So excited to be with you today, and we want to coach you up. 888-825-5225. Antoinette is joining us now in Fortworth, Texas. Antoinette, how can we help?

Well, I'm going to be 62 next month, and I don't have anything saved for retirement, and I want to become a first-time homeowner. I don't know if that's stupid and ridiculous or if it's possible.

Well, I don't think it's stupid or ridiculous. Let's focus on the possible part. Give us a picture of your financial situation, given that you have zero retirement or very little retirement.

I have no retirement, and I have no money for a down payment, so I would have to go USDA or set five with a zero down. And so that would make my payments even higher.

No, you don't have to do that. You don't have to do that. Do you have any debt?

Yes, I have some, but not unmanageable, and I'm getting it paid off really quick.

Okay, how much debt do you have?

I think Credit Karma said I had about $8,000 or something like that. I just paid off $600 worth of two of my accounts in the last month.

Is that 8,000 credit cards or personal loans? What is it?

Let's see. I paid off the personal loan, and one of them in my car, and the rest of them are credit cards.

I've got, I think, four credit cards. How much is in your car? How do you owe on your car?

Gosh, I can't remember. I'm really bad with numbers. I just know that I just got it two months ago, and I had to in my other car because it was a 2019. It was convertible, and it didn't convert anymore. And mechanically, it was sound, but everything else on it was falling apart. So I had to get rid of it, and I was upside down on it because last year it was worth $17,000, and then this year it was worth $5,000. And so I was real upside down on it. And so I owe more on the… I had to get a minivan because I'm so popular. I can't have a convertible. So I owe more on my minivan than Well, yeah, I should.

Did you roll over the negative equity on the convertible?

Yes.

Into the minivan.

Okay, so how much do you owe on the minivan?

I don't know.

You don't know. Antoinette, you signed a loan. You don't know how much the total is.

That's right.

All right.

She had to go to credit Karma on the other thing. One of our problems, Antoinette, is you don't have a firm of your numbers.

Yeah, she already said she's bad with them, but it's not a good thing.

I have a bad memory, and I can't remember numbers.

Oh, but it's not about that. It's about, do you have a file in your house somewhere where we got the car information?

Yes, but I'm a truck driver, so my house is 2,000 miles away.

Why do you need a minivan if you're driving a truck all the time?

I go home sometimes.

You're popular, so you and the ladies are hopping in the minivan. Yeah. Okay. All right. I'm trying to catch up here. Okay. Because I'm trying to figure out, honestly, if we can sell the minivan.

What year's the minivan? What year?

Well, I had to go for a, let's see here, a 2023, I think.

Okay. You had to. We got to change your words. And with the negative- I mean, this could be 30, $40, $40, $1,000. I mean... Yeah. Okay. So, Antoinette, I want to paint you a picture. Yesterday on the show, we had a truck driver, Christopher. He paid off all of his debt, and And he has tens of thousands of dollars. I mean, he's just absolutely killing it. And he's a truck driver. He was telling us he had a Subaru brand new, ended up selling it, had to take out a small loan because it had gone down, and he was upside down a little bit, bought an $8,000 Lexus. The Lexus gets hit. He gets a check from the insurance company for $9,000. He ends up buying a $2,000 car, takes the rest of that, and throws it at the debt, right? So there's a way to do this. And even someone in your industry, we literally just talked to him. He did his debt free scream yesterday. Here's the thing, Antoine. Okay, so the excuse that I am bad with numbers can't be an excuse anymore, okay? You are an adult, you are smart, you are capable, and we have to get this under control.

So the first thing I need you to do when we hang up is I need you to call the dealership or the credit, wherever you got the loan for the van, I want you to pull up the credit card again and know exactly, exactly which credit cards are out there and know exactly what you owe on them and companies. I want you to write a list down, and then take your phone and take a picture of it so you have it documented. Even if you're out and about, you have it documented. And then the plan is going to be, homeownership is going to be down the line for you. But I think the goal here is to get yourself out of debt. And, Antoinette, you're more than likely going to have to sell the minivan, okay? And you're going to get a beater $2,000 car because I want you to be out of this debt so that you can start saving for retirement. I don't want you to have to be a truck driver for the rest of your life. I want you to be able to have a great retirement. And that's not going to be possible with the habits that you've been in, not only just financially, actually, but the way you're going about it and your attitude about it.

You've got to make the turn. It's going to be difficult and hard, but you need to get as much facts in front of you as possible because you don't know what you don't know.

Are you an independent contractor? In other words, work for yourself, or do you work for a company?

I'm a company driver. I'm not kidding about having a bad memory, and I update all of my bills every other month. I have a piece of paper that tells me I keep it on a book, I I look at every one of them. I see how much interest they're charging me. I see how much my balance is. And then I tally up my total debt. I also look at Credit Karma a few times a week. I just have a bad memory. If had I known If you were going to be asking me this question, I would have had this stuff- You called a money show, my friend.

You know what I mean? And so we're trying to help. We really are. And so my encouragement to you is that when there is something, a big, big missing piece, and the car loan is that for me right now, that I need you to know what it is, because I may need you to make a really quick decision to sell it, because you know how much the payment is each month?

Yes, the payment is $995.

Okay, almost $1,000. How much money do you get paid once a month? Per month, what are you making?

Probably about $7,500.

Okay.

Let me do a quick follow-up, Antoinette, because I didn't hear you. That's my fault. Did you say you're independent? The reason I'm asking this, did you say you're independent?

No, she works for a company.

Okay. Do they have a 401k or some type of retirement program that you can be contributing to?

Yes, but I thought, because what's the point of that at my age?

Because you have nothing. We can run these numbers, but the baby steps as we teach them is $1,000 in savings just for basic emergencies. Baby step two is to pay off your debt, smallest to largest. That's why Rachel leaned in there. We want to get the debt out of your life because we just learned that that could save us $900 a month.

That could be going towards- A thousand dollars? That could be going towards, yeah.

Retirement.

Why would I want a $2,000 beater car? She's going to break down all the time.

A $2,000 beater car doesn't always break down all the time. You can ask Christopher yesterday. He literally had a picture of his, and it runs great.

And I'm talking to a person who's super popular. In your own words. Have the ladies pick you up when you're not in the truck.

I don't want to be your car. I want to get all of my We're going to come together and take some places.

I hear your heart in it. I want a Lamborghini.

I want a Lamborghini. I don't need to argue.

I want to dunk a basketball, but some things are not going to happen because I'm 5'8 and can't jump. If I want to retire with dignity, I've got to start saving money. And I can't save money if I'm in debt.

Hey, Antoine, I want you to keep listening to the Ramsey show for real. I want you to listen every single day for the next six months. Make that be your goal. Just as you're driving, listen to this show because I want this knowledge to soak in in this way of thinking and the way of life when it comes to money. We all want peace, peace with our money, our homes, our schedules. 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 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 That is why I love what Delete Me 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 joindeleteme. Com/ramsey for 20% off an annual plan. That's joindeleteme. Com/ramsey.

Welcome back to The Ramsey Show. We are here for you to answer your questions about your money, your work, your relationship, Ships, and I'm Ken Coleman and Rachel Cruz. Joins me. The phone number is 888-825-225. Lindsay is going to join us now right here in our neck of the woods, Nashville, Tennessee. Lindsay, how can we help today?

Hi. Thank you for taking my question. I am writing in with a relationship money question, actually. Back in college, my parents loaned me about $18,000 to go to college. It was $15,000 in principal and $3,000 in interest to help me pay for college under the agreement that I would pay it off within three years of graduation. Fortunately, I was able to do that. But after listening to many, many episodes of your guys' show, I feel a little bit taken advantage of. My question is, is it worth expressing my feelings to my parents now despite the loan being paid back, or do I just accept the lesson, don't borrow from family and try to do better with my own kids going forward?

Okay, I'll start because I think I represent my colleague here. I don't know that we can answer that question without understanding why it is you think they took advantage of you. Based on what you've laid out right now- You knew what you're getting into, right? It doesn't sound like they took advantage of you. What are we missing that makes feel like they took advantage of you?

Correct. I knew the full amount when I signed for it. They told me things like, You can go get a loan from a bank, but God forbid, something happened while you're paying them back. We're your parents, we would be much more understanding of that situation, should it present itself? I guess it's the whole charging interest thing that, I guess, doesn't sit right.

Okay. Another question. You've paid this all back, as I understand it, correct?

Correct.

When did the tension arise over the interest? In the middle of it, before you started paying it back, or after you got done with it?

Paying the whole thing? More so after I got done with it.

How long after you got done with it?

It was about a year after.

What changed? I'm digging here on purpose. Rachel, thank you for giving me a little leeway here. No, it's a fair question. It's just a very fair question. Let me explain it to the audience and to you one time, and then I want you to answer this. You paid it back. You paid back the full $18,000 and about three grand of it was the interest. Is that what I'm understanding?

I was $18, three of it was interest.

That's what I'm saying. Okay, so you paid it all back, all right? A year after you paid it back, at some point, at some day, A year after you paid it back, this started to bother you. That tells me something happened. What happened, or dare I ask, who happened?

I got married a little over a year after I graduated college, and my husband and I were talking about it, and he was shocked that they charged me interest and thought it was horrible that a parent would charge a child interest on a loan.

You believed him all of a sudden? Yes. Had it occurred to you before his comment that that might be a horrible, despicable thing in someone else's eyes? Be honest.

Sure.

It had occurred to you. You're telling me at some point you were like, I appreciate what my parents are doing, but I think this is a bit shady.

No, sorry. I misunderstood your question.

I know. I'm playing lawyer. I watch too many television shows. Here's my point. The husband said this, and because of his understandable influence on you, and probably just by his sheer reaction, which he, by the way, has every right to his opinion, this totally shifted everything. I'm going to get out of the way and let Rachel weigh in, but I'm going to tell you my opinion now. I've gotten everything I need to know. My opinion is it's too late, and I don't think there was any tension or resentment at all until your hubs opened his mouth. He has every right to open his mouth. He has every right to opine on what your parents did. I don't like how he said it because I think he should have been wiser and more mature. If he was on the phone, I'd tell him this. He has every right to his opinion, but he's now created some tension and resentment after the fact and only from his point of view. For that reason, no, I don't think you should bring it up to your parents. I think you need to figure out how to process this. Maybe it's therapy.

But to create tension now, to me, seems foolish.

Yeah. I think what's hard for me, Lindsay, where it does not feel like they took advantage of you is because everything was up front. If you had called, and we've had these calls of people called, they said, Oh, my gosh, we pulled my credit report after I got married to buy a house, and I had a student loan on there. My parents took out a loan. I remember signing papers at 18, but they never told me. That's deceitful. Parents that loan with strings attached, that we'll give you this money maybe for a down payment on a house, but you guys have to live this close to us. We have to see the grant. There's strings attached in relationships. It's gross. This sounds like, even though we're not for, you're exactly right, we are not for family members loaning money, period. But the way they did it, Lindsay, it sounded very clear, very upfront. The reason they did it, from what I hear, is they They did it from a situation that is less risk with the loan being held to them. It was not a, Hey, we're going to give you a deal. We're going to charge you.

Now, if the $3,000 was unreasonable interest, if they're charging you 50% interest and they're taking advantage of you, that's gross and weird. But did they do that? But if they pulled the average interest rate and they just said, Hey, just do the loan with us, because if something happens, their words, we can give you grace, period. It won't hurt you That's a very good point. That's the reason they did it. It wasn't a mathematical, you're going to get a deal from us. We're going to give you this half off. Lindsay, I don't think they took advantage of you. I think you knew exactly what you were signing up for. I think that the reason they did it was so that a bank wasn't involved, but it wasn't a financial deal on their end. It was just a, Hey, here's this.

Did they charge you the going rate on interest? I mean, Rachel brings us a very good point here.

Well, no. It would have been about, what is 20%, maybe. It was $1,000 for every $5,000 that I borrowed from them.

Okay. All right.

Yeah, so that's a little bit- That's a little high. Are your parents super tight?

Yes, very. Okay.

Actually, I'm glad you brought this up, Rachel. Sorry, I know I was diving in a little bit, not truly interrupting because I don't like that.

Go, Ken. Go. Okay.

Well, I personally wouldn't charge my kid interest. Then again, we don't loan our kid's money. All right, nor am I going to. But I'm trying to put myself in this. Sure. Remember the old classic, we tell you what we would do? Okay, we wouldn't do it, but if I'm sticking myself, I think it's a little tight. I think it's a little tight.

Yeah, sure.

But they didn't do anything.

But take advantage is a really strong language. I don't like that language. That feels like it was deceitful or something.

I don't think they did. I am going to say, though, Lindsay, so I have another follow-up question. I can't wait for Rachel to get involved in this, potentially. The timeline for all of our viewers and listeners here, a quick review. It was a year after you paid it off that Hubs and you have the conversation, he gets upset and it affects you. How much time between that first moment where he makes the comment and this phone call today? How much time has passed?

Years. We've been married for almost three years.

Oh, wow.

That really concerns me. I was very intrigued by this. Here we are. Are you saying three years ago is when he first got alarmed and you started questioning this deal? Three years ago? Yes. All right. You've been sitting on this for three years.

The loan has been paid off for three years as well. Four.

Loan has been paid off for four.

I got you. I'm sorry. I'm still in the timeline here. The question is, Rachel, doesn't that concern you? I'm very concerned.

Concerned? What do you mean that she's just resent?

This resentment is just boiling it up. It's built. She's calling us, and I'm glad you called us.

Lindsay, I would- Stop talking about it. I would release it, Lindsay. I really would. I think that, yes, they're probably cheap to a degree, like you said. Probably. Yeah, they're cheap. They're big time cheap. But they didn't do anything You knew exactly what you were signing up for. I think it's one of those things that, again, thankfully, you have the money to pay them back and all of it. But the deal is this is another reason why we don't loan money. I'm glad you've been watching the show, Lindsay, because you're exactly right. I would do this because it does feel weird. It's not only does it feel weird because you owe your parents money when we talk about that, but it's also weird in this situation when you look back and you're like, Oh, gross. I don't like how that felt. All of that is standard and justified.

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 Ramsey, promo code Ramsey. Exclusions apply. All right, let's go to Jessica now, who joins us in Columbia, South Carolina. Jessica, how can we help?

Yes. My quick question is, I was a victim of identity theft. I found out at 18, my mom had been using my social security number since I was two years old. Oh, no. Found out at 18 when I went to go get a car, and they wouldn't even touch me with a cosign or with an 800 credit score. No money down. I found out I had $186,000 in credit card debt just alone.

Wait, wait, wait. Say that again, Jessica. A hundred and what?

$186,000 in credit card debt.

Oh my gosh.

That your mom racked up?

Yes. Oh, Jessica. How long ago was this?

Oh my word. I mean, all the way back to 2005, the most recent one was in 2021, which was right before I was 18. I got it with an attorney, and we got my credit wiped. But what What it left me with was zero credit history and horrible credit score. Not even a secure credit card will touch me now. I have a significant other. We're not married, but we have gone to plenty of financial advisors, and We have been told both that our best option is to get married because, again, I can't get even a credit card in my name. I'm an authorized user on only one card. I can't be an authorized user on a lot of other credit cards.

All right, Jessica, slow down. I'm just stuck. No, you're not actually. This This is going to be a great call for you because you're not stuck. But quick question here, and Rachel is going to give you some amazing guidance here, I promise you. But why are financial advisors telling you that the best thing to do is to get married? Because that feels like a financial reason, not a good reason to get married. I want to dig into that first. What are we trying to accomplish?

Yes, they always say, Sign if I can't. I don't have a car in my name. I can't get a car of my own. We share my My partner's car. We moved up here to South Carolina from Southwest Florida, away from my grandmother, and to live up here near my father. I work from home, which isn't a big deal, but our biggest issue right now is we have one car.

When he's gone, Slow down. I'm stuck. You're not stuck. This is the theme of this call. I know. I'm just going to ask a quick question here. Rachel, I'll get out of your way. No, you're good. But I want to ask a question here. What do you do for a living and how much do you make? I have a quick follow-up, so give me the real quick stats. What do you do and how much do you make?

I'm currently a debt collector for Advanced America, and I'm currently making about, after commission, 18 to 19 an hour, 40 hours a week. All right.

If you could save up money for, let's say you could save up $10,000. I don't care how long it takes you. Could you buy a car without a credit card? Could you buy a car with $10,000 cash? Yes or no?

Yeah, most definitely. I mean, there's plenty of good vehicles for that price.

I'm challenging some of your thinking here. Rachel is going to guide you here, but I want to challenge this idea that you're stuck because you have no credit score and that you have to get married in order to have a car. You have a job and you can go buy a $5,000 car, a $7,500 car. I just want to make sure you catch that.

Definitely. Most definitely. All right.

I want to get out of the way, Rachel, because I know you got some questions, but my goodness.

I mean, the paradigm shift that you have to have, Jessica, is a pretty big one because everything you've been talking about so far on this call has to do with how do I live my life around having a great credit score. Actually, you called the Ramsey Show, and we're the opposite. We actually don't care about the credit score because primarily you use a credit score to go into more debt, and you're finding that out. When you're trying to go get a car loan, they won't give it to you because you have a bad credit score. You try to go deeper in the debt with a credit card, they won't give you a credit card because of that. So living debt-free, this is actually a gift Jessica, you don't even have the option. Most people listening right now could go apply for a credit card. You don't have the option. So see that as a blessing, because I don't want an option for you, even if you had a great credit score. So how do we live life debt-free? Well, number one, starting out, your biggest need is what you're saying is a car. I almost think your biggest need is maybe a new job.

As a debt collector, that can't be a very fun job. So I can't even talk about that.

Yeah, you're limited there.

I think you can do some really great work, Jessica, and I think you can work overtime. Do you have kids?

Yes, I do not. I don't have no kids.

So, Jessica, I would make a priority right now to say, Here, making a very detailed budget, knowing exactly what you need in life for food, shelter, utilities, transportation. And that's about it. We're just going on the Here's what it says here. Everything else is going to go to save up for a car. And maybe $5,000 is your goal, whatever it may be. Because do you have any consumer debt in your name? No. No. Okay. And you're fighting this whole $186,000 $6,000, right?

We successfully sued the credit juror. You did? Okay, beautiful. Then it got wiped 100%. How much do you have in savings?

I'm just left with a low credit. Okay, yes.

Do you have any savings?

Currently, no. We just use our savings to move and get out of selfless for it because the jobs there weren't any good. I'm trying to get back into college. I have one semester left to get my associates. But again, my mother messing with my identity has affected my tax forms to getting grants and loans.

You don't need a loan. Listen, Jessica, you don't need a loan to get one more semester paid for. I think your remaining semester of your associate's degree is secondary to what Rachel is saying, which is, let's get some money saved, let's get on a Let's get a budget, and let's buy a car.

Because, Jessica, we have people call this show all the time, and they're trying to get out of debt. When we talk about getting out of debt, for instance, we say you cut everything and you work extra. We have people in a very normal with them on this show that are making an extra thousand, $1,200 above their income on side hustles. So let's just make it a goal for you. And especially since you don't have kids, be like, Hey, evenings, I'm working. Whether you're waiting tables, you are doing something. And let's just go crazy. And let's say you earn an extra... Let's go two grand a month. I know that sounds crazy, Jessica, but seriously, what if you worked your butt off, earned an extra 2,000? That means sitting right now where we are in the calendar By July, August, you could have a car. Depending on how much that one semester cost you, between now and December, after you have a car, another couple of months of working extra, you could have saved six, $8,000 for your tuition. So that's literally between now and the end of the calendar year, Jessica. So it is possible.

You just have to make some really big goals, and you have to... Not that you're playing victim to this by any means, but don't be leaning on the credit industry to get you out. Jessica, you can get you out.

I know that's what we're fed. We're fed our whole lives that credit is what matters. I mean, again, we moved up here with the intent to buy a home, and we found out quickly that I couldn't be on it. I guess that's really what devastated me the most.

You don't need to buy a home with someone you're not married to either, Jessica. Definitely not.

Or get married at the advice of a financial advisor so you can get a car. All right, now, listen to this. I just found this is in the Columbia, South Carolina, area. I just found a 2009 Toyota Camry, 182,000 miles, which on a Camry, it might as well be a new car. Okay? That car can go for $482.

Oh, I know.

All right, listen to this. $3,700 they want for this car. You walk up there with $3,200 and $100 bills. That's in two months. And say, Guys, this is what I'm going to pay you for this car. They'll give it to you so fast, your head will spin. No credit.

Do you hear me? Yes, I do. I've had plenty of... I mean, my first car was in '05 Civic.

I don't have any problems with these cars. Okay, so I want to know for you, because we've thrown out a couple of things, whether it's cars or college or not buying a house with someone you're not married to. And you're rebuttaled to us. This whole call has been, Oh, I know. Oh, I know. I know. But why are you then still dabbling in this idea, like, I can't get a credit card, I can't get a car loan, I can't get a student loan? Because you're saying you know, but you're still giving it an option. Why?

No, I think it's just more so, again, my whole family, obviously, they got their own troubles. But the whole thing is to have great credit and to not have this negative stuff dragging behind you. Even though I got my credit history wiped, everything nowadays, they want to pull some type of credit, even buy your pay.

No, they don't. If you pay cash- Buy now, pay later is horrible, Jessica.

That's what I'm saying. You're not hearing. You don't need to worry about those stuff. You don't know.

I know. No, you stop saying you know.

It's more so the- Jessica.

Knowing the But you only need it, Jessica. You really only need it to go into debt. And that's what we're telling you is- Pay cash. Just pay cash for everything, and you don't have to worry about it. And if some cell phone company pulls up your credit report, you can just show them the police report and be fine. You can get away with other things, but you have to be convicted about this, Jessica. You're going to keep getting pulled. I feel like you're getting pulled into it, even though you're saying, I know. So you need to stand firm, pay cash for anything. It is possible, Jessica. You can do this, and keep things separate from the boyfriend right now and live your life. Get yourself a car, save up for the semester, get your college degree, and ride off into the sunset, and then maybe get married because you love him, not because of his credit score.

She's been hypnotized. Stop staring at the sun.

Hey, guys, it's open enrollment time for health insurance. If you have ever felt overwhelmed trying to figure out your health care costs, you are not alone. For a lot of families, health care is one of the biggest line items in the budget, and it gets more confusing every year. But you don't have to settle. Christian Health Care Ministries is a biblical and budget friendly alternative to health insurance, and I I'm proud to recommend them. With CHM, you are joining a community of believers who actually help share each other's medical bills. Yeah, it's true. Members have shared over $12 billion in health care costs since CHM started nearly 45 years ago. And it's simple. You choose your provider with no network limits. You submit your eligible bills online, and other members help share your expenses. Chm has program options for every stage of life, whether you're single, self-employed, or raising a family. Y'all, open enrollment has a lot of people scrambling right now, but CHM lets you join anytime. So go to chministries. Org/budget to check them out. That's chministries. Org/budget.

Rachel, the all new Every Dollar is here. Folks, it is truly way more than just our world-class budgeting app. I've been talking about this on the show. I got a meeting with the team, and I said, Show me all the... Just take me in the thing. Give me a tour. It's It's amazing. It's literally like a digital version of us on the show for those who call in. The first 15 minutes of answering the questions that the team provides you in this app, they're going to help you find thousands of dollars immediately in savings. We're seeing this in an average of people who use it. You can start every dollar for free by going to the App Store, Google Play. Tons of advanced features, not just budgeting. Now, that's amazing. But the fact that you've got a digital coach, mentor, accountability partner, whatever you want to call it, all those facets are in there. Fantastic. You got to go check it out. Give it a whirl, it's free. I'm going to tell you, you're going to love it. Donna is up next in West Virginia. Donna, how can we help?

Hi, Ken and Rachel. I love all the personalities, but Ken, I'm really glad you're there today. I love the way you spin a tail. You really make me chuckle. I love your story from a few weeks ago about the welfare chicken I grew up on a farm and can relate to that.

Thank you. Yes. What a fan. The welfare chicken.

I hope you didn't get in trouble for telling them to sell the chicken.

I think I was on there with you during that.

I did not get in trouble, and I had forgotten about that, Donna. So thank you. That's really fun. Thank you, your sweet lady. By the way, I have to ask, where in West Virginia are you?

Oh, jeez. Romney.

Do you know that town? I think I've heard of it. Do you know Point Pleasant by any chance?

That's way far away. We're in the panhandle between Winchester, Virginia, and Cumberland, Maryland.

Yes, yes, yes, yes. Okay. I was born in that little teeny town of Point Pleasant, West Virginia. Point Pleasant? Okay.

I know where it is. I've been there.

Well, I'm going to tell you, not many people have.

It's across the state.

Yeah, that's right. It's across the state. All right, Donna. My sister from another Mister here in West Virginia. How can we help today?

Well, I'm 69, and my husband is almost 71. We started our careers in the '70s, and at that time, people were saying, Oh, you're so lucky. You have a pension, you'll have Social Security. You don't have to worry about retirement. So we didn't. And we're doing fine now with our pension and our Social Security, but we haven't saved a lot of money. And we had to put my mother in a nursing home last year, an extended care nursing home, and it really scared me and shocked me at the cost per month for that stay. And what my question is today, and I've been having friends tell me, You need to sign your house over to your kids to save it from being taken and all of this. I know Dave says that you shouldn't do that. I haven't heard him talk a lot about that, but I have heard him say that. I was just wondering what the pros and cons are to that. If there's no pros, what can we do, or is there something we can do to save our house?

Well, let's go back a step. What are we afraid that's going to happen that would even allow us to consider that advice? What are you afraid it's going to happen?

For the signing your house over? Yeah. Oh, well, there's, I guess, a lot of things. I mean, I've been listening to the story. I shoot. Show long enough that I know if you have kids, if anything happens to your kids, then then that can… If they're in an accident or anything like that.

But you're talking about your house.

I'm talking about my house, yes.

My house that my husband and I own. Sure. You're worried you're going to lose it to who or why?

Medicare. I mean, if you can't pay, if you go into a nursing home and you can't pay, they take your possession.

Oh, Medicaid is going to look at your- They're going to be looking at your- Okay. I hear you.

Now we're caught up. Sorry, we weren't 100% sure.

The reason we say that is because a little bit it feels like you're hiding assets when you just sign it over. That's what I wonder. I know. Yeah, not a That's a great thing because you're basically lying to the government that you don't have an asset when you really do. Okay, do you have long-term care insurance, Donna?

We do, but I got it. It's been probably before I realized the cost. My father-in-law went to just an assistant living, and his was about $3,500, $4,000 a month. So when we got our long-term care, it was very expensive anyway because I have some health issues, so it was high. Sure. And ours is only $3,000 a month. And then my mom's came up, and it was 14,500 a month. And I'm like, I was just in shock that it was that expensive.

Yeah, totally. Well, okay, so a couple of things to think about that we don't know yet, because how old are you guys?

I'm 69. My husband's 71.

So a lot of different things. Number one, you don't know if you guys are going to need a nursing home, anyways. Number two, if you did get to a point of a nursing home, there are things you You can do, you can sell the house and use that to fund if you need to. There's also, what are you guys doing with your pension and all of that? What do you have coming in?

Per month? You mean what we have? We have- Yes. It's like $9,942. Okay. So it's decent. And we did just start. Two years ago, we have started putting some away. We both bought. I bought us and my husband, I'm still working a little bit. Okay. And I made enough money to be able to max out both a Roth for me and a spousal Roth for my husband. I did that when we got one of your pros. Good. Great. And he said to get one. We got him in April, and he said, Oh, hurry up and get a Roth before April 15th, 2024.

For the taxes. Yeah, that's right.

So we did that. And then when we finally sat down with him, we had enough money saved to do another one for 2025, max it What do you have total?

What do you guys have total?

We have 32,000 in Roth right now. Then we were playing around just during the years, and we have about 50 that our financial advisor is rolling over, about 50,000 that he's rolling over into IRAs now that we're still in with the companies that we retired from.

Just below 100,000. Then what is your house worth?

About $400,000. Okay.

Yeah. So it would be one of these things if you guys did get into that situation, whether it's the insurance, some savings, whatever you can put together to get into a nursing home, and I'll be honest on it, it sounds horrible, but there is a stat that once you enter into a nursing home, on average, there's not that long of a stay, usually. Sometimes it is, sometimes it's not either. So it is one of the last steps that family members will take if they're not able to care for their family member. And so that would be that last step, if you will. So if I was in your shoes, I may ask about upping the long long term care. I'm just curious what other options are out there for you guys. I would be looking at that because that's going to be very helpful type of insurance for you all if the time comes that you need in-house care, nursing home, all of it. And you guys also are sitting on a great asset. You know what I mean? If something were to happen to either you or your husband, and you did get to a point that you guys didn't have the money to cash flow it, and yet there was a nursing home that you knew they needed to be in, him or yourself, there's always the possibility of selling the house and figuring out what to do there.

Dawn, I'm going to give you something. Rachel made a great point. I looked it up. The average length of stay in a nursing home is 485 days. Now, of course, this varies, but averages do out. You're looking at about a year, three, four months. It's horrible. But that's the reality, and we're talking about that. Between the pension and everything, Rachel, you make a very good point. It's not like you got to fund this crazy amount for five years. I think you guys are doing everything you can. How much longer do you think you're going to work?

As long as I can. I love it.

Okay. Do you work full-time?

No. I do occasionally. I'm a teacher, and sometimes I'll take a long-term sub job, and sometimes right now I'm just doing day-to-day.

I bet the kids love when Donna shows up to be the sub. You seem like a really nice sub.

I hope so. I hope they do. They always say they do, but you know.

Well, that's good. What about your husband? Is he officially done working or still working? Yes.

No, he's officially done. He's a golfer. He's fallen into the golf.

I love it. Good for him. Well, at least there's a little bit of a foreshadowing of watching your mom and how expensive it has been for your mom or your dad that you guys can start planning. But if that time were come, how would we be able to cash flow that? So thanks for the call, Donna.

Do we know if people can search Welfare Chickens on Spotify or YouTube and find that rant. Do we know? We don't know.

I'm sure you could try.

They can't. Oh, you all missed it. It was really great. Donna said so. Welcome back to The Ramsey Show in the Fairwinds Credit Union Studio. Alongside Rachel Cruz, I'm Ken Coleman. Thanks for being with us. We're here for you. 888-825-5225 is the phone number. Let's go to Kaitlyn, who joins us in Charlotte, North Carolina. Kaitlyn, how can we help?

Hi, good afternoon. I'm a recent college graduate from West Virginia University, and I will start paying student loan debt come January. I want to know what is the best That's an effective way to go about that.

How much student loans do you have?

They will be around $26,000.

Is it multiple loans?

Yes.

Okay, so what's the smallest amount?

The smallest amount, I believe, is about $5,000.

Okay. All right. Is that the only debt you have?

Yes, that's the only debt I have.

All right. Rachel walk her through the baby steps.

Are you working?

Yes, ma'am. I work a full-time job.

Great. How much do you make a month? How much do you bring in?

About a month, maybe $1,500-$1,800 a month.

A month? Okay. What are you doing?

I work at a boutique.

A boutique? Okay.

What boutique?

A women's boutique, just locally owned. Like a spa?

No, like a clothing store.

When it's clothing.

Oh, sorry. A little slow on that one.

I didn't know what I was thinking.

Well, there's lots of different boutiques. There's like boutique hotels, boutique spas.

Fair. Sorry. Fair. Okay.

None of this matters. I have a question on your income.

Yeah, that's not a lot.

For a college grad, that is way below what your expectations were, I'm guessing. Yes or no?

Yes. I've had this job for about two years. I worked this job throughout college, and that is the job I'm still currently at.

Okay. What did you get your degree in?

Business and marketing.

What do you want to do? I'm not going to put you under pressure here on a show live, but give me a general idea. It doesn't have to be a company and a title, but just Can you describe the work that you went to school for that you would love to have if I could just wave my pencil in the air and give it to you.

Well, the work I would be interested in is going into law school.

We went for business and marketing, and we're like, This is not what I want to do, but I'm just going to finish it. Then somewhere along the way, we discovered, I want to be a lawyer in a specific type of lawyer?

Corporate law, sir.

Corporate law. Okay, so a tie into the business and marketing? Yes. Okay, what's law school going to cost you?

Law school is probably going to cost me around probably $100,000.

Where are you going?

I have not yet made my decision, but I'll be taking the LSAT soon.

Okay, great. I want to make a quick commercial, and I'll hand it to Rachel. But you got to get your two things. Number one, you need to get your income up, right?

You should be making double.

I don't even care what you're doing. At this At this point, you need a target of $40,000 to $50,000. Let's just put it out there. I don't want to limit you to that, but you just need to get out there and find something because more cash, the better. Now, and Rachel will tell you what to do with that cash, but I just want to make a point on the LSAT. Years ago, I interviewed a law school expert on this, and this is a fact, by the way. There are certain schools, you're going to have to do your homework on this, but you can figure it out easily, that based on your LSAT score, Rachel, if you get a high enough LSAT score, they will give a full ride. The reason is, these aren't the prolific ones. Let me just go ahead and tell you. Sure. This isn't Harvard. It's not Harvard. It's not the big-time schools. These are the schools who nobody wants to go to their law school, so therefore, they're trying to get people into their law school because they want lawyers out there, and they will give full ride. So these are going to be smaller schools, not as well known, but they have legit law schools.

Let me just make my pitch on this. Nobody cares where you got your law degree from. The trade-off is, Kaitlyn, you have to pay for the LSAT. If you need to take the LSAT five times, take it. If we're aiming for, and we feel like, the tutors will tell you, we can get you to the score, which gets you a free ride. So that's my commercial It's worth investing five, six grands.

Honestly, when you think about it. Totally. With tutors and everything.

I don't know what the current LSA cost is.

To get $100,000 degree for free.

That's what you need more money for. Yes. Plus, we got to pay off these loans. Rachel, tell her how we pay off these loans.

That needs to be your way to law school, Kaitlyn. I really want you to see that because you're going to be $126,000 in debt if you don't. We want to really work hard to avoid all those student loans. Yeah. So it's getting your income up, Kaitlyn. So I mean, I really hate to say it, but I mean, I would probably be looking for another job. I think it was a great thing to get you through college. But now that you're a college grad, you made that investment for a reason. And so now we need to go ROI it, and we need to go get a job, like Ken said, making 40, 50,000 a year. And I would limit all my expenses. I would live on nothing, and I would make it a goal to get this paid off in 18 months, 16 months, 14 months. And I really think you can. Do you have rent? Are you living at home? What's your living status?

I live at home with my family.

Okay. So no rent. So I would take full advantage and make a really, really aggressive goal of getting this paid off, and then at the same time be looking at the LSAT stuff and make that also a part-time job. So I don't know if it's a... I don't know right now if it's a full-time job that you go and find, a receptionist, I mean, anything. Just go and answer phones. I mean, do something. Or if you do the boutique during the day and you wait tables at night and you're doing a two-day, a two-job-a-day thing to double this income. But this income needs to be doubled, Kaitlyn. You're a college grad, and I think that You have things to offer. And again, it's back to this college degree conversation that you got your degree for a reason to go and create a career. And so taking that knowledge and going and doing that and upping this income is going to be is going to be your number one goal.

Because, Kaitlyn, here's the deal. You are young enough, and this debt is small enough that you could pay this off in a year. But you got to make more income to where you're putting two grand a month away. Like Rachel said, what must be true for me to be able to sock $2,500 a month away at the $2,600 loan. Knock that out and get it out of the way before the interest starts hurting you. Because I know people that have your amount of loan debt, and they're paying it for 15, 20 years because they're never catching up because of the interest payment. You want to get this out of your life. I'm telling you, if you trust me and you do your research, you can go to law school for free or for a very reduced amount you can cash flow. Most people don't know that. Please do that because you're going to just be so much more at peace. There's your homework assignment. Pretty straightforward, but you got to hustle.

Yeah.

So thanks for the call. Rachel, I love when we get that call. I'll be honest, I've not interviewed people in other lanes, but I would almost bet you there's other professional lanes like that, that where certain schools are going, like med schools are going, We don't want to people in here. The sticker price on a Vanderbilt, which is in the shadow of our campus here, versus a small school.

Totally, yes. It's an ego play to go to it. It is. If someone's like, Hey, where are you going to law school? It's a school that maybe... Arbored law. Or you're going to one that no one's ever heard of. You got to have some humility to it, but you're doing it in a wise way. You know what I mean? There's something so smart about it.

But it just rarely comes up. Yes. Your clients aren't going to go, Hey, I've heard rumors that you got your law degree from Greenbriar State.

Is that true? When you think about vet school, law school, med school, I bet George Campbell, when he took his dogs into the vet, he didn't say, Let me see your degree before. He said, Save my dogs. That was all last week. That poor guy. That poor guy and his dogs.

It's like a soapop around here, folks. We don't have time to cover it.

We'll have him cover it, George, if he hosts here in the next week. 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 ramseysolutions. Com com/store today.

Welcome back to The Ramsey Show.

I'm Ken Coleman, and Rachel Cruz joins me, and we are here for you. The phone number to jump in is 888-825-5225. We want to help you win in your relationships, in your work, and in your money. And speaking of winning with your money, a lot of people right now, Rachel, are watching, what is the Fed going to do? We've seen the interest rates on mortgages come down a little bit off of a several-year high, and everybody's going, Do I buy? Do I sell right now? What do I do? We've got some great advice for them.

Yeah, and even in this show, Ken, I feel like we've had a lot of home questions even about, Hey, what's my next step? Well, the goal is to make your home and homeownership a blessing, not a burden. If you are in a place where you're like, Okay, I'm thinking about selling. I'm thinking about buying. Maybe I'm a first-time home buyer. Having that 5% down payment is crucial. A 15-year fixed rate mortgage is what we recommend. For your payment to be no more than 25% of your take home pay. It's always been our formula for decades, regardless of what the housing market is doing, that just keeps your household budget in a good spot. But finding a house, and specifically finding an agent that you trust who's really incredible and of high caliber in this area is really important. The Ramsey Trusted program really is the only way to find an agent that you can trust to keep you on track with what we teach here at Ramsey. They're going to get the best offer on your house or is going to help you find the right house. We send you to some of the top agents in your area who we trust, and you get to review their stats, you get to interview them and decide which one you want to work for because we have multiple in different markets across the country.

Ramsey Trusted agents have years of experience and will help you make wise decisions when it comes to the marketing, or in choosing the right offer as well if you're getting multiple offers. To find a Ramsey Trusted real estate agent for free, go to ramseysolutions. Com/agent. Again, use this resource, you guys, because this is home buying. For the majority of people, it's the largest investment you make in your personal finances. Do it well and do it right with an agent that we trust so that you can trust as well. Ramsey solutions. Com/agent.

Good stuff. All right, let's get back to the phones. Kansas City is where we're going to go, and Jerry's there. Jerry, how can we help?

Yes. My question relates to the National Public Data Breach. What steps should I be taking to make sure my Social Security isn't used to open a line of credit with that, or what things should I expect to do?

There's a couple of things, Jerry. Number one, you can just freeze your credit. If you're not currently in debt or using debt, you can do that. That's a line of protection. But having Identity Theft Insurance is really, really key. It's really inexpensive. I would recommend going to zander. Com. Zander is who we use. That's one of the benefits here at Ramsey Solutions is every team member gets identity theft as part of working here. That's how much we believe in it because stuff like this is going to happen more and more. Honestly, I would go to zander. Com and check out their identity theft protection. I would get a policy on you. I'd get a policy of every person in your household, honestly, too, Because even kids, we're seeing identity theft happening within kids as well, and people running up stuff on their credit. It is wild. I would do that. There's a number here on our screen that you can call as well, Jerri. It's 800-356-4282. 356-4282. Yeah, that's what I would do personally, Jerri. That's as much offense as I know to do, Ken, on this, unless something does happen Then you do have to take action.

But if you have Identity Theft Protection, they go in and do a lot for you.

Just to catch people up who may not know the story here, and Jerri, I'm glad you bring this up. Just let people know, because you need to know, it is widely reported that hackers may have stolen the social security numbers of every American. That's me, Rachel. That's all of you. There is a notorious hacking group that has claimed to have stolen a ton of information. This is being reported across a lot of news networks, and you can find this story.

It happened what, two weeks ago?

Yeah, just last week, actually. Or last week, okay. Yeah. That's what you can do. This is how you check. Do that freeze. This is exactly what Rachel said until you can check everything and then go get protected with Xander. Xander Insurance, xander. Com, 800-356-4282. That's 800-356-4282, xander. Com. They do a great job. We get an email every month, tells us we're good or what might be something we need to check into. That protection is- There's other services like delete me and other places, too, that are incredible for online scammers as well.

Identity theft protection Again, you guys, it protects your identity, social security, all that. But then you think about how much our information, not necessarily your social security number, but just your address, your phone number, I mean, all this. I'm getting blown up all the political stuff. I'm like, Where did my number get sold to? What list is recognize this, too? There's full on companies that help people get their information off, but it's going to be... I mean, that's part of the curse of 2024 and technology, because I don't know about you, Kim, but I do. I plug in my information on stuff. Whether it's you're shipping something or buying something, whatever it is. It feels like I'm putting in my information a lot on website.

By the way, just in the overabundance of giving you all information, the three credit bureaus that Rachel is talking about, again, Experian, Equifax, and TransUnion, it's a free deal. Call them or do it online and put a freeze on your credit. And that will- And pull your report once a year, you guys, regardless of whether it's a data breach or not.

Make sure you pull your... And you can do that for free once a year. So use each of those companies and get three reports three times a year. All right.

Let's go to John now in Los Angeles. John, how can we help?

How are you? How's it going, guys?

Good. How are you?

Pretty good. How can we help? I've been in college pretty much all my life. I'm about 33. I'll be graduating with a PhD next year. My wife just graduated, so she started working. It's the first time we really have a real income in a shovel. We have $100,000 in debt, no retirement savings. We want to look into buying a house next year when I graduate. No. We're not really sure.

No, John. No. No, John. We're interrupting because you're not catching. No.

No, no, no. Okay, John, what are you all going to be making? Household income together, combined.

Right now, to In a day, combined, we make 170. When I start working, it should be 230. When I finish my post-doc, because I still need a little bit more, it should be about 280 in about three years.

Three years, okay. But in the next four months, six months, what will it be?

Still 170 while I'm finishing up my PhD.

And when will it bump up to 230? How long?

When I find a job, probably next summer. So probably- A year, twelve months. That's the line in September next year.

Perfect. Is the debt all student loans?

It's 60,000 in student loans, 40,000 in car loans.

Okay. What's the car breakdown? What do you own each car?

It is 17,000 and 23,000. Okay. Both pay off in about four years.

Yeah. Okay. How are you guys? You guys currently are making 170, though, right? Is what you said.

Yeah. So take home is 10,000 a month.

Okay.

And basic necessities is between $3,000 and 4,000.

Okay.

So there's a lot of room there to tackle it.

Yeah. For sure. Yeah, yeah. No, you guys have a great income, which I'm so thankful for, and it will continue to go up. Yeah. I think my goal, John, for you guys, if I was you between now and next summer, is I would be working on these car loans, and you may run some numbers and see what could you sell the 17 for, the $17,000 one?

They would both break even. That's how I was just looking at it. Okay. Because I just think- We owe pretty much exactly what we can trade in.

Okay. To jumpstart this, you're not overly heavy in cars by any means from our math comes to when we look at car debt versus income. But I would make it a goal, John, to be cash flowing the rest of your school. I would make it a goal to start paying off that smallest debt. Even if it's a small student loan, more before the car, just start working that debt snowball, working the smallest debt to the largest debt, and then be saving an emergency fund, and then I would say for a down payment on a home. But I'm really encouraged, though, because your numbers, you guys can make some significant we can progress really fast if you stay focused and you guys have a plan. So tonight, lay out a timeline between now and the next three years and have some data points to say, Yes, we want the car paid off here. We want this student loan paid off here. And you map it out to know that You guys will get to a saving to a down payment ASAP, which is where I want you guys. Thanks for the call.

Thanks for the call, John. We'll be back. This is The Ransy Show.

Listen up, guys, because I've got a big question for you.

Where will you be with your money at the end of 2026? Will you be better off, worse, or exactly the same? Believe it or not, you get to choose. Look, I know there's a lot going on that can make you feel powerless over your money, but I want you to hear me.

You're more in control than you think.

You can turn your finances around. So let me help you out. Start your year off with me and Dave Ramsey at our free Every Dollar Livestream event on January eighth.

We're cutting through all the lies and all the chaos out there that's keeping you stuck.

So you have the clarity you need to finally get ahead. And you could even win $2,000 just for signing up.

Listen, Another year is going to pass anyway.

So decide that this is the year you're going to take back control of your life and your money.

Go sign up for the free livestream at everydollar.

Com/livestream. Welcome back to The Ramsey Show. Rachel Cruz joins me. I'm Ken Coleman, and you are listening and watching The Ramsey Show. So excited that you are with us. 888-825-5225 is the number. Stephanie is joining us now in Los Angeles. Stephanie, how can we help?

Hi. Hi. Happy birthday, Rachel.

Thanks, Stephanie. I appreciate that.

You're welcome. Okay, so I am a single mother of two girls. I've been a single mom for a long time now, and I own a business. I'm a professional organizer, and I actually coach families on how to keep their lives together. Well, I just am really struggling financially. I ended up having to get a full-time job. Long story short, my savings just got drained when I put employees on payroll. Out here in California, it's super expensive. Anyway, so I don't know the first thing about good budgeting. I did not grow up. My parents, they're good three times, and I'm just trying to set up a future for my children, and I just want to get out of debt. I need some advice, and I want to sell my car, and yeah.

Okay, I got a quick question before Rachel dives in, because she can walk you through this, but I'm just curious, how does a person who is really good at teaching other people to be organized not figure out how to do a budget? I'm not saying that in a judgmental way. I'm just curious, where do you think the disconnect is there?

No. I know how to stick with a budget. What happened was I was going... A custody battle came up in the middle of everything, and then my dad got early on to Alzheimer's. This was all in a short period of time, and it just threw me for a loop, and a lot of my money went into custody. Then I ended up taking out an EIDL loan, which I've never been a credit card person, a loan person. I actually got talked into getting a business credit card for my business because I was paying everything cash before that. The custody battle happened. I put the whole custody battle on my business credit card because I was I feel desperate. This is where I'm at. I never coached anyone on finances. I coach neurodivergent families, how to set up systems in their homes, to keep their homes functional and how to live purposely in their home. Good for you. But right now, I'm just in over my head as far as what to do. My economy is not that great right now.

What are you making in your day job?

My full-time job, I make 1908 an hour. It's a sales job. I do interior design, and so we do get commission on designs, but I've yet to reach that commission because their whole bonus structure is just... It doesn't make any sense. You have to sell at least $80,000 between installs or whatever. I don't know. I've never reached that. And then my organizing job, I have I have three contractors. So I bring in... Right now, it's not really good. I bring in about maybe 2,000 a month with that. But it's just so slow right now. I was making pretty good money. Now, over the last couple of years, it just hasn't been that great.

Then you throw in things like a custody battle in the midst of it. Oh, yeah.

I pay for everything for my kids. I don't get any help. I pay for the cars, insurance, everything. Wow. Yeah.

Well, let me just say, when it comes to your kids, when it comes to your health, we are all about fighting the fight, right? I'm like, it is. You want to do it because those are the important things in life. I want to free you and not pile on any level of shame. Give yourself a lot of grace. Okay, so how much debt, Stephanie, do you have? Do you know?

Yes. I I have my $20,000 EIDL loan. That payments will start coming out in October. I owe almost $9,000 on a credit card. And then my car is... I owe about 13,500 on that. And then here's the really hard part for me. I got behind on taxes. I just got paralyzed with fear, by the way, but I got behind on taxes three years. Those are just finishing up being filed, so I don't know what I owe on that yet. I'm waiting on that. Those are my debts.

And you're making 2,000 for your organization business. I know you're making $19 an hour for what you're doing, but how much will you bring home a month with that full-time job?

Each check is about $1,200 and some change after insurance and all of that.

You get two checks a month?

Each every two weeks, correct.

Okay. It's a little less than five grand. Have you been able to map out? Are you able to pay your bills, Stephanie? Meaning your mortgage, food, lights, electricity?

I don't even have a mortgage. My rent, I'm actually in a great situation as far as that goes. I live in a two bedroom apartment. It's 1,200. I've refused to move because I'm so nervous. I wanted to get my finances in order first. So 1,200 for rent. Okay. Yeah. Then 404 for my car payment, and then, of course, utilities and all that stuff.

But I have not- How much is your car worth? Do you know?

I'm not exactly Sure. I did look on what other people are selling my car, my type of car for, and I saw anywhere from 15 to 19.

Okay. Here's what I would suggest. I feel like for you, Stephanie, a good Good win would be just a quick win to feel some level of traction because you're going to start to make some changes when it comes to your money, and those changes are going to be uncomfortable because you've never done this before. But the fact that you're not underwater on your car, I mean, man, if you could get If you could get- I sell it. Yeah. I mean, if you could get 19,000 or something for it and go get a crappy $6,000 car, that takes $13,000 of debt. That's gone. Just gone. And then looking at your credit card, attacking that next, and then the loan after that, the $20,000 loan. Now, when your taxes come back, Stephanie, if you can't pay them by the tax deadline, go get a personal loan from the bank. I would rather you have a personal loan than owing the IRS, okay? So that will be a step. Okay. And what you're going to do is pay off the smallest debt to the largest debt. And again, the car, I think, would give you some traction. Do you have any savings?

No. My putting employees on The roll just rained my savings.

I had about- Okay, so you have nothing. Grand in savings. So you may want to relook to... I wish we had more time with you. I would relook maybe the structure of your company. I don't know if it's- For sure. No, I agree. It may be a thing, Stephanie, that you just say- Are the employees gone? Is it Tiffany that you just say, Yeah, that you close it down for now? I mean, is there a way to just take that burden off? You're just carrying a lot, and I'm just trying to relieve some margin for you.

I do not I don't have any employees on payroll anymore. It's all contractor jobs. I just contract. But to be honest, I am thinking about just going back to... Because it is stressful owning a business. I've had it since 2016. It's a great business. We were all around California as far as our reputation and stuff, but I just am so stressed about it. So I am thinking about stepping back and just working full-time and maybe taking on jobs by myself for extra income. But as far as selling my car, that was actually the reason why I called you. I wanted to see if you thought that that was a good idea.

That's a great idea. It's a great I probably would, honestly. I mean, that would be such a relief not to have that car payment every month. What is the payment? What's the car payment? 404?

404.

I mean, listen, Stephanie, how much would you love a $400 raise per month?

I would love I have to just take that $400 and put it into the rest of my debt and just get it right on.

That's right.

No, that's right. If you stay on the line, Kelly and Austin are going to pick up, we want to give you Financial Peace University. It's our nine-lesson course, Stephanie and Every Dollar Premium. It's our budgeting app. Then also, I'll have them connect you with a financial coach in your area, because I know as a single mom, you're juggling a lot. I think sitting down with someone who has the heart of a teacher who can walk through really specific numbers and scenarios. It may only just take one session, but it's better than a seven-minute chat that we were able to have here on the show. But we want to connect you with some of that stuff, Stephanie, because you're on the right track. You're right there, and you got to just start making those steps, and you're going to feel a lot of traction. So we're excited for you.

Cheering you on. We're going to take care of you. Thank you for calling. This is the Ramsey Show. Buying and selling a home is a big deal, and you want an expert in your corner fighting for you to get the right deal at the right price. That's why we only recommend Ramsey Trusted Real Estate Agents. They're handpicked pros who know their stuff, listen to your needs, and have your back from the first call all the way to closing day.

To find a Ramsey Trusted agent near you, visit ramseysolutions. Com/agent. Ramseysolutions. Com/agent.

Welcome back to The Ramsey Show. I'm Ken Coleman. Rachel Cruz is with me in studio this hour, 888-825-5225. 888-825-5225 is the number to jump in. Our scripture of the day comes from Titus 2: 7-8. Everything set them an example by doing what is good in your teaching. Show integrity, seriousness, and soundness of speech that cannot be condemned, so that those who oppose you may be ashamed because they have nothing bad to say about us. Our quote of the day from Les Paul, Don't say you can't until you prove you can't. All right, how about that? There you go. There it is. There you go. Thomas is joining us in Asheville, North Carolina. Thomas, how can we help?

Thank you guys so much for taking my call.

Sure. What's up?

My father has planned a vacation for this summer for the whole family. I'm married. We have two children. My brother's married. He has three children. He gave us a little bit of heads up on it, basically just asking when the kids would be going back to school, and then he planned this trip for the end of summer. We're right in the middle of Baby Step 2. We should be debt free by, looks like, November. He's paid for the location and lodging and everything. But my main concern is I work like 70, 75 hours a week.

I don't have any paid time off.

My main concern is missing that income while we're on this trip. I was hoping to get you guys advice on that.

Before dad comes to you with this vacation idea, what was What was the plan? What were you and your wife thinking about summer? No vacation? Yeah.

We've been busting it just trying to get everything paid off.

It's gazelle intense. Yeah. I'm going to oversimplify it because I think This is the key issue. You weren't going to go on a vacation, and we agree with that. You guys are going hard. Man, you're working 70, 75 hours a week. That's impressive. You weren't planning to anyway. Now, dad's asking you to do it.

Wait, that's what I meant to jump in. Did he ask or did he tell you guys? Did he say, Well, that's an interesting part of it.

It was a little bit of both. My brother has children. Our children have never met their cousins. He's really loving the whole grandpa role and wants everybody to get together. They're getting a little up there in age, so he looked at it as an opportunity to get the whole family together one last time and have all the grandkids in one place because my brother lives a thousand miles away from where I live.

I Well, I'll tell you what, I'll ask one other question. I want Rachel to see what she says here. Is he paying for everything or just the lodging? Meaning you guys would have to pay for the travel to get there, plus meals?

He's handling food and lodging because I'll be doing most of the cooking. That's how it's always worked out, if he buys the food and I prepare it. But we'll basically just be responsible for gas to and from. It's not so much the expense of the trip, but the missed income.

That's right. How many days will you guys be gone?

Six or seven, depending on when we travel back.

All right. The only other question I have is, can you Man, you're already working 70 to 75 hours.

I want you to have a vacation.

Yeah, but they weren't planning on it anyway. I know. This is not so much an opinion. It's advice. I I would do what you believe is right to do, and I think I know the answer to that.

I don't think you want to go, Thomas, right?

I don't think you do either.

I really do. I really want my kids to meet their cousins, and I really want my parents the opportunity to have all their grandkids in one place because they're both two, five, six, and seven, and they've never all been in one place at the same time.

But?

But I'm concerned about- But would a week of Hold on.

I'm going to be devil's advocate here for you.

Hold on. Be devil's advocate. I want him to finish that sentence.

Okay, go. Go, Thomas. Sorry, I cut you off.

We've been working really hard, and I'm just, I guess, very apprehensive about what that month's budget will look like with several hundred dollars missing from it. I don't want that to take away from what the experience is supposed to be if I'm there worried about that.

So have you added up how much money you will lose out on being there?

Probably about $1,100 or so, and that's not counting the gas to and from.

Sure. How much debt do you guys have left?

We've got about $13,000 left.

Okay.

What would it do to your budget? Would it stress you out without the $1,100? Would that make it super tight?

Not particularly. We still have to factor in. The kids back to school stuff is going to be that month and the month prior to that in August.

So we're just- It feels like it would be tight. Can I say this? I know. Okay. Thomas, you got to do what you got to do. Here's my devil's advocate response.

What would you do?

To be with... And again, this is if you want to, Thomas. If you feel guilted, if there's some weird emotional thing, if Dr. John Deloney was in here is asking you psychology questions of family stuff. If it was just a healthy situation, I think giving up $1,100 to be with family for one week because it doesn't happen, it's not like this is a yearly tradition, would be worth It's good for a family situation like that. Everything is paid for. Now, if they're making you pay for everything, that's one thing. You can't afford to go. Everything is paid for. Maybe you go half the time. Maybe you and your wife say, Hey, we're going to go for four days. There's something about living life still, and this isn't taking you guys deeper into debt. It may slow it down for three weeks, the debt snowball. I agree. But there's something about the situation feels the The situation just feels so unique that it's not going to happen. For $1,100, a pardon would say, Oh, my gosh, go be with your family.

I agree with that if that's what's going on.

I can't figure it out. If that's what Thomas wants to do. I don't know if Thomas wants to do it, but I- Well, let's ask him.

Thomas- We definitely want to. No, I forget the want to. No, here's what I'm asking. You're working 70 to 75 hours a week. Is that to pay off the debt faster or is that to make ends meet, and the $1,100 is going to make things super tight. It makes me feel like that's the case when you're talking about school supplies and $1,100.

No. Hold on.

Let me answer.

Well, no. I mean, if I was working 40 hours a week, all our basic... Our budget could sustain on that.

The extra work is- It's just the gazelle intensity.

Because we're putting about anywhere from an extra, probably 1,500 or so a month on the day.

Back to Rachel's point. It's a month behind.

$1,100 not making that. It's not going to make life tight. It's just going to slow the snowball down.

That's right.

Yeah. Then I agree with Rachel now that I have the facts. Wow. You didn't let me. I was trying to get the facts from Thomas.

I threw the life raft in Kinsman. Sure, Rachel.

No, I actually agree. I just needed to get to that point, though. That's good. I couldn't tell him emotionally if he was, what's the 1,100 doing in this case? I think because the kids have never seen each other before, dad and mom are getting older, all the things you already said very well. Thomas, I'm okay with that.

Honestly, Thomas, take four days of a paid-for vacation as a gift of a little bit of rest, too. I mean, you all have been working like crazy, which is amazing. It's exactly- I'm so proud of you. But this is a unique thing, and I- I agree with you.

I would say go. You only got one shot around this globe, and I would do the family vacation, knowing that the $1,100, you're not going to have that. The subtraction of that, it's not going to make things tight to where you can enjoy the vacation. I also want to point out, Thomas, I would like to vacation with you because I'm all for buying the food and you cooking it for me. I would like to point that out, Rachel. This guy's great to be vacation with.

It sounds great.

Hey, Thomas is coming. Great. Let's go get the brisket. Thomas, here you go. How do you feel now? You feel like this is the right move? You're going to do it? You got to talk to the wife? What's the story?

Yeah, I'm going to talk to her about it. I think there's a mentality shift that needs to take place because we've been doing this since August.

Yeah, I think it's a memory.

I don't want you to lose momentum either. So just see this as a quick pause, a breather, paid for a vacation, and then you're back at But I think the scope of family and cousins and all of that, there's something really special there that I would hate for you guys to miss that out because you wanted to pay off debt one month later.

That's right. I'd make the old man cook one meal, for heaven's sake.

Yeah. Give you a break. Maybe go half the time.

All right. Good hour, Rachel Cruz. Thank you, James Childs and our team. Thank you, America. This is The Ramsey Show.