Transcript of You Don’t Get Out of Debt by Accident—Choose Your Hard

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Normal is broken, common sense is weird. So we're here to help you transform your life. From the Ramsey Network and the Fairwinds Credit Union studio, this is the Ramsey Show. Alongside the fabulous Jade Warshaw, I'm Ken Coleman. The phone number to jump in today is 888-825-5225. 888-825-5225. Let's go. Grace is going to start us off in Nashville, North Carolina. Grace, how can we help today?

Hi, Ken. And thanks so much for speaking with me today. Sure. My question is regarding my marriage and how to handle finances. I'm the saver in my marriage, whereas my husband's more of the free spirit. And although we make a really great income, I'm still having a really difficult time staying encouraged when his heart haven't caught up to the sixth grade math, as you all have talked about. So my question is more about how to not be a controller or an enabler and continue being an encouraging wife when I just feel really let down. There's a lot of arguments.

Oh, bless your heart. I love this. Okay, a couple of questions. Are you in the baby steps? And if so, where and then, how long have you been trying to get this going?

Great question. We are in the baby steps. We do have an emergency fund of a little over $1,000, which I'd be happy for it just to be a thousand, but I'll just say that for now. We do have a personal loan that's just left over on a truck that we bought, and we have a mortgage since we own our house. Okay.

How much is the loan on the truck?

The loan on the truck that we have left is just 1975, 69.

So, 19,000.

One thousand. Sorry. One thousand nine hundred and 75. I got it down in the penny.

Who did you borrow it from a family member?

No, we didn't. We actually got a loan from the bank, and then it's a long story, but that's just essentially what we have left on it.

What is What's your income?

I make a base of 60 with an on-target earning of 90. What about his? And my husband is- What about his? He is commissioned only, so that's part of the challenge. And he has been commissioned only since we got married. Okay, and what does he make? He made over 150. Our first year of marriage is about 160 pre-tax. He's on track, hopefully, to at least make 150 at this new position he has. He's been switching up quite a bit.

How long ago did you bring this whole Ramsey plan to him?

Immediately.

No, no.

How long ago? Well, we started talking about it when we were dating, especially when we got engaged. We started talking about the debt that he had.

How many years? I'm doing all this. Sure.

We've known each other for three years. We've pretty much jumped into our relationship. We've been married for a little over a year and a half. Okay.

The reason I'm asking all this stuff is because for Jade and I to weigh in and try to help you on your core question, which is, I love the way you position it, by the way. How do I help his heart catch up to sixth grade math? What I'm trying to understand is, is he opposed to this plan, or is it just really hard for him to live by the plan? What's his response?

I would definitely say the latter. He'll say, I'm a Christian, I'm not a Ramseyan.

Interesting.

Because he thinks I'm so hardcore about it. But he also is aware of the fact that it's relative, right? So I come off very extreme to him He comes off very extreme to me.

Got it. Yeah. I'll be honest. The fact that he's likening a money plan to a religion lets me know that it's coming across to him through you as quite extreme. Give me an example. Give me a real-time example of a conversation that you've had where he was on one end and had one opinion and what it was, and you were on the other hand and had another opinion and what it was.

Great question. So yesterday we were going over where we are for January. And for example, our grocery budget is $1,000 a month.

For just the two of you? Yes. No kids, okay.

We had no children. I think it's very reasonable. I said, What are your thoughts on all of this? And we got to the grocery category. He basically said, I see that we're at the upper 900s, like 990 something. I think That's to be expected. And I caught it later. I said, Well, why would you say that this is to be expected? If we have a budget of $1,000 and we're on the mark to essentially double it, why would we have agreed to this? Are you saying it more so needs to be 2,000. And he'll get really upset because I come off like I'm trying to preach to him or coach him or tell him that he's not really getting it, that this isn't okay. So I feel like I'm also very passive in a It comes off disrespectful, but I'm also getting really, really frustrated.

Go back for me. I may have missed something. So the budget's a thousand. You're up to it at like 990 something. Help me understand the doubling part. I think I missed that.

Yeah. So I basically I basically said because we're at the middle of the month, we're doing a whole.

So you need to slow down. Yeah, you're saying we need to slow down, we're up at it. I just wanted to make sure I understood that properly. Right. And he was more so- I basically said, why did you say this is to be expected?

When he looked at it, he said, Well, that's to be expected for groceries.

Understood.

And I was like, Well, why are you saying that?

Okay, understood. Because you're saying we set a boundary, we should stick to the boundary. And he's saying, Well, this is just an indicator that this is what we spend. So If we go to 2000, that that should be accurate. Okay.

Here's what I want, just a fun experiment. I want you to pick one-word answers to these two questions, Grace, okay? Don't I'll take it.

I'll try not to.

Okay, great. I just want you to go top of mind, okay? If you were to pick one word to describe what you value about money, say what is that one word?

Safety.

What is it? Safety. Safety. Okay, great. I thought that was going to come out. What do you think he would say? What's the word that- Freedom.

Freedom. I knew it. I knew it.

I knew it, too. So the reason I've gone to this is because I actually think this is a 100% marriage conversation. This is not a money conversation. You guys, and you are different in that you said that you're the saver and he's the spender, and Dave has talked about the natural. But I actually think for you guys, you got to go below why each of you is one of you is the spender or one of you is the saver. I think when you're attempting to adopt a value system like Ramsey Solutions, the baby steps are based on a value system, right? It's really hard for some people to get into that system. It's easier for others, okay? Because Dave's got a very rigid plan, right? No wiggle room, a lot of black and white, and people that aren't naturally black and white, who aren't rigid and disciplined, at times, can have a harder time adopting it. We can't really solve this for you, but other than I believe that I would start over. I really believe that I would sit down with a therapist and not make this heavy with him. Just go, You know what?

I've been too intense. I think you've led the system, so I think you've got to lead the healing in the reboot. I think it needs to be, Let's start over and let's give it to the therapist. Not because our marriage is dying, because I think we need to reset on a very important issue. I've got some safety issues with money, and you're so amazing. Can we restart? I think if we start with a therapist on language around this and then restart, I think you guys can heal on this.

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All right, let's go to John in Newark, New Jersey. John, how can we help today?

Hi, Jaden. Ken, thank you so Thank you very much for taking my call. Big fan.

Oh, thank you. How can we help you?

Yeah, so essentially, my wife and I are a single income family. We have two babies, a four-year-old, two-year-old, and one due next month. And we recently starting to following the baby steps. And my question is regarding the size of our debt and when exactly should we start tackling this? So we have about 600,000 in student loans plus a mortgage and two car leases, which after listening to Dave Ramsey, we're going to get rid of.

How much is the student owns?

So 500,000 me, 100,000 for my wife.

Oh, wow. Okay. And then tell me about the cars.

So the cars are two leases, just an F-150 and an Expedition.

What are the prices every month?

We pay about 800 for her car, about 600 for mine.

My, my, my.

Okay, this is an expensive situation.

I know. We may be this fully listening today.

What's your degree in for 500K?

I'm a plastic surgeon.

Good. What's your income? Did we ask that?

It varies a little bit, but it's about 750.

Excellent. Excellent. Great news.

Okay. I feel way better. That's the good news. Yeah.

Okay. So this puts it in perspective. It's all relative, right? Duh, depending on the numbers. So when does the baby do?

Baby do is in three to four weeks from now.

Okay. And what money do you have saved?

We have about $122,000 in a high yield saving.

Okay. So would you say that that covers six months of expenses or four months? How many months of expenses does that cover?

About to cover about over six months.

Over six months. Okay, great. So I would say, typically we say when there's a baby coming, you're in stork mode, save up as much as you can. You've got plenty saved.

Yeah, but hold on. Let's just get real here. What's your take home? As a plastic surgeon, what's your average take home in a month?

So in a month, I've been averaging about 34. Right.

You got plenty of money.

You got gobs of money. You can fix this so fast. It's not even funny. Jay's going to walk you through it, but I don't think he needs to stack up.

No, I said he doesn't. I'm just also saying for the benefit of a listener who is used to us saying, If there's a baby coming, stop and save. I'm explaining why he doesn't need to do that because he's got plenty saved. You don't need to do that. We normally would give that advice, but you've got plenty. I would go ahead and push play. By the way, even if there were some form of complications and your insurance kicked in and you hit your full deductible, even if you hit your out-of-pocket max the year, you'd be fine. So that's why I think that you can go ahead and hit play on this. And if I were you, when do these leases? When are they up?

So next year.

Can you find out what it is to get out of them early?

Yeah, that's our plan. Our plan is to find out and get rid of them as fast as we can.

Yeah, do that. There's no need in keeping this around any faster. I would take a little bit of the money of the $120 $2,000 you have saved and buy some cash cars. It's not going to be the be all end all. I'm not saying you have to spend $4,000, but I am saying it's probably going to be less than the cars you drive now just to get you something in cash. But don't drop that emergency fund below six months in order to do this. And then I would start getting cracking with the rest of that money once the baby is born. With the rest of that six-month fund, I would come in and I would clear out one of these student loans, and you're going to drop that pretty low.

I guess my wife and I worry is that given the size of our student loans, if we follow the baby steps, we will burn through all our savings and be a little ways away from being able to pay them and being a single income family.

Okay, so let me address that because I'm going to tell you straight up. I'll tell you the 100% truth. If you do it the way that I'm going to suggest, it's going to feel uncomfortable because I want you to be debt free really, really fast because I value the same thing you do, which is to get to security quickly. To your point, you're a one income family. You've got lots of kids. Right now, your house is on fire. You've got almost $700,000 of debt, so you got to clear it out. I'm on your side in the way that I want to do it as quickly as possible. If you take $122,000 and you pay off the $100,000 student loan, you clear out the mortgages, you spend $10,000 or $11,000 each on some knock-around cars until this thing is cleared out. Then for, I don't know, a year, you guys live on $200,000 instead of 700,000, and you pay off the $500,000 student loan. I think that that's possible because most people in the United States wish they had a $200,000 income. So if you live on 250 and use the other $500,000 to pay off the loans, you're done in a year.

So pretty much live with a minimum or minimal emergency savings until those are done? Mm-hmm.

Are you familiar with our baby steps?

Yes, 100 %.

Yeah, so that means you have a thousand- The same baby step number two. Yeah, but if you were to follow the baby steps the way we teach, you are emptying that savings account.

Because here's the thing. Let me hit you with this. Let's play it out. Let's say I tell you, Hey, drop your savings down to $1,000 just to have a little cash there. Pay off the $100,000 student loan. Like I said, pay $10,000 or $11,000 each on some cars, and over the course of the year, spend $500,000 of your income to pay off this debt. If you have an emergency, what's the worst emergency you can think of? The roof blown off your house?

Right. I mean, something happening to me that I I wouldn't be able to work.

That's a life insurance question. So we'll talk about that in a second. But let's pretend a big gust of wind comes tomorrow. You've taken your savings down to a thousand and the roof blows off your house, right? Something crazy. You make $34,000 a month. I'm pretty sure you could stop paying debt for that month and cash flow whatever the emergency is, right?

That's a very good point.

You see what I'm saying? Now, if you're concerned about your being a one-income family, that's a life insurance question. And disability. And disability. Do you have life insurance?

I have both, yeah.

Okay, then you're covered.

So the point is, if something happens to you and you can no longer be a plastic surgeon, Have you put in place policies that would take care of you and your family? I have, yeah. All right, then. What are we stressing out about? Now, we know this is extreme, but let's play the numbers out so you can catch a little vision here, because Jay just played out how you can knock off a lot of debt. If you fix these car leases and you get out of these, and then you knock out your wife's student loan, now you've got a $500,000 chunk. How much money, if you're on a tight budget, could you put towards debt That student loan every month based on the 34?

Yeah, I think projecting with the three babies, we could probably put away at least maybe 15 or a little more per For a month.

Great. So let's keep it at 15 for round numbers, right? So you just do the math. 15,000 a month over the course of how many months knocks out the 500,000. I think it's really important that you have that in your head so that you go, Okay, I've got to do this. It's not for 10 years, it's for whatever that's going to end up being. I'm not that good at math. All right, 15 times 10 months, obviously, is 150,000. We're looking at three plus years at the 15,000. But that's just at that. But that's to say you gave us an average month. So how does a plastic surgeon go make more money? That would be the answer I'd be wanting to know. I don't know. I don't know. That's not my world. But I bet there's a way. What you have to do you have to do to make a million dollars.

Yeah, because taxes is eating up a lot of this.

I know there's a lot of vain people.

My point is, and I was using very round numbers, two round, probably. But my point is, the The quicker you get this done, the quicker you can go back to living your plastic surgeon's lifestyle with the cars you want and the income you want and the savings that you want. But if you're trying to solve for security, security is best gotten quickly. Not little by little, drip by drip over time. You want to get to that place of security fast, and ripping off the bandaid is the way to get that. If you missed open enrollment, don't panic.

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All right, let's go to Colin next in Salt Lake City. Colin, how can we help today?

Hello. How are you all doing today?

Great. How are you, sir?

I'm doing very well. I won't steal Dave's catchphrase.

Go ahead. If it feels good, say it. We don't care.

I'm doing better than I deserve.

There it is. I knew you wanted to say it, so there you go. All right.

It's true. Good. Anyway, my question today is, I'm on Baby Step 2, and I keep getting into debt because of my poor spending habits, and that's what I want to fix. And so is it like we can get into where I'm at?

No. Where I'm at my debt? Not yet. Because I think you just presented what you really need to fix. Now, I'll turn it over to Jade to walk you through how to get out of this very specifically. But Let's dive into this. What do you think? Here you are calling a big show, and you're bearing this to the world because I think you're probably sick and tired of this. Yes or no?

Yes, I am very sick of it.

All right, then what do you think is causing you to spend irresponsibly? What do you think is below the surface?

Well, I'm pretty young. I'm 24, and I never really learned how to manage my money well. I had people who tried to teach me, but I didn't listen. And I started making really good money pretty early on.

Who tried to teach you?

My dad. He tried very hard to teach. Okay.

And what money are you making?

I'm making about $60,000 a year base. But last year, I made just under $80,000 with overtime and everything.

And then be really honest, tell Jade and I what you spend your money on. If we were to go through and do an audit, and what would we find that we would consider irresponsible?

A lot of things. Mainly, biggest one is probably going to be food. Even though on meal prep, sometimes I want to go get some food. Sure. But the bigger ones are nice things. What? What? Living outside of my means.

What?

I'm trying to think of some good ideas.

I'm sure they're sitting in your driveway.

How hard is it for you to remember the big things you've bought in the last twelve months. What? What are we talking about?

In the last twelve months. So, of course, I have a motorcycle, I have an SUV. I got those, and that takes up the bulk of my debt. Okay.

Are you taking trips?

No, I'm not taking trips. It's mainly buying higher-quality things because I don't like buying cheap things multiple times.

Okay, so are you buying higher-quality Do you study things on debt, or are you using cash?

In some cases, it's using debt.

Who are you trying to impress?

Probably myself, but that could be a lie. I don't really have anybody around. I'm single. I'm not in the dating market.

Here's the deal. We'll save time because you don't have to answer that now because that's putting you on the spot. But I think that's a legitimate question you need to wrestle with.

I also think the question you have to wrestle with is, what does success mean? Because if success to you means I can buy this, I can buy that, I can buy that, and it just is a list of things that you can buy, you'll just keep buying and buying and buying. But If success equals something a little more weighty, I think it could cause you to pull back on some of those purchases. I think those are good questions to sit down and really think through. What does this mean to me? What am I trying to solve for here? Does that make sense? Does success mean I have an $80,000 vehicle or does success mean I have options? Does success mean I can buy three motorcycles, or does success mean I have time freedom?

How would you define a broke person? Do that for me.

Somebody who's broke is Probably if they lose their job, they lose their livelihood. So not just the job itself, but I'm talking their car. They can't go to work. They can't make money. They might lose their house, somebody who's a slave to the debt.

So that's the path you're on, is to be a guy who has a lot of stuff but is broke.

Yeah, because there's plenty of people who make $40,000 a year, don't have debt, don't overspend, don't go into debt over things that they can't afford. That person at this point, is more successful financially than you are. I think it's really good to think about what Ken just said, to think about what I just said, because it's not a numbers problem. We can go through your numbers. We can show you that you've got margin. We can show you, and we can do that in this call, we can talk about paying off your debt. But this is a values question on who do you want to be with your money? What's important to you? What's actually going to give you meaning with your money? Because my guess is you're a hard worker. You're going to keep earning more and more and more. But stuff really does, when it just starts piling up and piling up, it starts to lose its meaning. I think that you're starting to sense that already, yeah?

Yes. It's almost the instant gratification That's right. Buying things justifies my hard work.

Yeah. Well, and let's also- Maybe. I don't know.

And it can. I'm not saying that it can. I do think that, Ken, when we work, you earn your paycheck and you picture a lifestyle that goes along with the money that you earn. I don't think there's anything wrong with that. I think it becomes a problem when we're willing to go into debt because now it becomes a facade. Once you go into debt, it means you couldn't afford it. So it becomes... That's a fake level of success. What if you just... Because if you had told me before, Jade, I like high-quality things. I would have said, Yes, me too, Colin. If you had said, Jade, I just like spending money on nice dinners and nice clothes. And if I go on a date, I want to do it up. I would have said, Me too, Colin. You lost me when you said you were going into debt to do it. You see what I'm saying?

Yes.

So that's the pullback right there.

Are you a country music fan by any chance?

A little bit. I dabble.

Yeah. I don't know if you've ever heard of the song, Way Down Yonder on the Chattahoochee.

Oh, Way Down Yonder on the Chattahoochee. Never knew how much that muddy water meant to me.

Thank you. There's a line in there that came up in my head. All right. Have you ever heard of the song, Colin?

I haven't. Great.

It doesn't matter. Alan Jackson. Here's the point, okay? There's a lyrics that came up in my mind from that great song that reminds me of you, okay? And I don't say this in an ugly way, so forget the whole country music thing. But there's a line that says, Never had a plan, just living for the minute. Never had a plan, just living for the I think that defines you. I don't think there's some deep heaviness necessarily with you and money. I just think you're young and you want things in life. You want some finer things. You like the finer things. And I'll bet you that there's also a connection between your dad, what a good man he is, who tried to tell you about this. And I'll bet you, tell me if I'm right or wrong, that your dad's pretty darn frugal. True or false?

Nowadays, he is. After Where he made his mistakes and trying to get me to not make those mistakes.

Yeah. So did he have a time in his life where he was buying lots of toys he couldn't afford?

Oh, yes.

Okay. Hey, so listen, here's another thing. That runs in you. So all of this is awareness. All I'm doing is helping you get aware to where you go, okay, now I've got to change my list. And I think this is a fun exercise for you. If I were coaching in your house, this is what I do. I go get out of legal pad, draw a line down the middle, and I want you to write half two on the left and want two on the right. Now, you have a very different half two list at 25 than I do at 51. I got three kids. You got a wife. One's in college. I got two doodles. When my money comes in every month. I have a long have-to list.

Yes, that's right.

But I get great satisfaction, the same satisfaction that you just mentioned to Jade, I get from providing and taking care of my responsibilities. But my have-to list is where my priority is. Even now, and I make good money, all right? But I still have a have to and a want to. My want tos, Jade knows some of that list, there's some expensive toys out there that I want, but guess But guess what? They come in second to the have tos. I think for you to say, Now, where do I want to be when I'm Ken's age? Unfortunately, I'm that old to where I can use that example. That's 30 years from you, right? Where do you want to be? Mm-hmm. Now make your have to list with your money every month based on where you want to end up in life. You're spending all your time in the want to column, which is natural, so not beating up on you, but flip that mindset and watch the discipline come with it.

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A lot of people like you, that's pretty normal. Normal's broke. So this year can be different, right? So let's get a Head Start. Download Every Dollar. Builds a personalized plan for where you are with your money to help you get where you want to be with your money. We have coaching and a personalized plan. It's like being on the air with us, except there's no time limit. Really going to help you beat debt and build wealth. We have found that when people are answering just a few questions that they get prompted with, that you're going to find thousands of dollars in savings on average in just the first 15 minutes, and you get the same great budgeting feature. The new Every Dollar is unbelievable. Start it for free right now in the App Store or Google Play. All right, let's go to Russell, who joins us in Colorado Springs. Russell, how can we help today?

Hello. Thank you. My wife and I just wanted to get some advice on whether we need to sell our home or take one of our refinancing quotes we've recently received.

Okay. Run us through What's the numbers.

All right. We make about $9,000 monthly, but our current mortgage is $3,250. And then our utilities are usually $300. And then we also have a minivan that has $8,500 left that we've been putting $600 to every month.

Okay. Minivan. And so tell me about the refi offers. Tell me about your current interest rate and what the refis are.

So current interest rate is 6. 25. And the best that I could get was actually a Churchill Mortgage who gave me 5. $2. 5 right now, and it would save us $320 a month.

Okay, which doesn't solve your problem per se. You're about $1,000 off from where you want to be. You want to be about 2,250. Is there a light at the end of that tunnel? Because so far, the savings is not enough for me to be like, go do it. I'd be looking at some other things in your life that could shift to bring in a little bit more cash. Is there something there on the career front?

We are active duty military, so we could move on base, which with utilities and rent would It only cost $2,300.

Okay, great.

But then we'd have to sell the home, and that's what we're worried about.

Well, let's walk through that for a minute. When will you be transferring anytime soon? Do you have a a scheduled move as a lot of military folks do?

Yeah. In the next two years, there's a chance we can move.

Well, there you go, Jade.

That is good. How big of a chance that you'll move?

We could stay here. We're in the Space Force, so we could stay, but we could also choose to move. It's not as big of a deal as the other branches.

Do you think you would choose to move, or would you choose to stay?

I think it depends on which house we are in.

Okay. So let's then go back before Before we tackle this house, go back and tell me about the other debt. You said there was a minivan. Did I hear that right? Yes. Tell me what else.

Yeah, and that's it.

How much is it again?

It is currently 8,500.

Okay, 8,500. And there's no other debt besides that? No. And how much is that monthly payment? You probably already said it.

It's only $240, but we've been paying $600. You've been paying $600? We wanted to pay it off, but I was worried about the government shutdown. So That isn't going to happen now.

Got it. So if you moved on base, you'd save the $1,000, you'd get everything right side up. But if you lived in the base housing, you would not want to stay there long term.

Potentially. Yes.

Yeah, but I think that's- The bigger worry for us is that we owe 462 on our house, and their lawyer told us it'd probably be 450. Yeah.

Okay.

I think moving on base This is very black and white to me. I'm sitting there looking at, if I were in your shoes, you guys got way too much house and your income is capped, right? There's no income fixed on this because of your military role. There is also a, let's call it 50/50 chance that you're going to move. If you did that, we always give advice to folks in the military, don't become a long-range landlord. For sure. Because of all of this- I wanted to be right side up on that house a little bit because you said it, you owe 462 and it's worth 450. But he can't. There's no way to... Unless you can find a way to solve that, I don't think that's solvable, but I'd rather take that hit and get into the... Cut their expenses and get in the base housing. I just think this house was a bad idea, and I think I would go on base, reset, and get your financial house in order. You can always buy another house, but because you're in the military anyway- That's an option. I'm not saying it's- You can have a different piece of advice.

I just don't know how you fix being upside down in the house.

Well, let's lay out time. So let's lay out both options. So, Ken, option number one is go ahead and sell the house, take the loss, move into base housing, save yourself $1,000 a month, and then you'll have freed up money to pay off the $8,500. Another option is, can your wife make a thousand bucks a month?

She stays at home and homeschools. We don't really want her to.

So yes. Yes. The answer to that is yes.

Right.

She can make a thousand dollars a month. The kids aren't in school 24 hours a day. Right. Right. That's option two. Option two is, Option two is, wife makes it a point to say, I'm going to try to make between $900 to $1,000 a month. Suddenly, there's no more squeeze on the income. You're right at the 25% point, which is where you want to be. And then your only debt's $8,500 on the Man, that's your only debt. Then suddenly you pay that off. You've got 600 bucks a month back in your pocket. The mortgage is in the rightful spot, and you can ride that house out until it's time to move. And then when the option to move comes, if you want to move, you can. If you don't want to move, you can stay there Here. And hopefully by then, after those two years, you're back right side up on this house and the market has done you well. So that's option two. Neither of these are wrong nor right. They're just what you think is best. Would you agree with that, Ken? Or do you think might?

I think if they're comfortable as a couple with her committing to make that money, but that's not a lifestyle choice they've chosen. So now I look at that and I go, By the way, I 100% agree. That is a viable option, but I still think they have too much house. If she has to do that for you all to sneak underneath where you need to be, it's too much house.

Well, yeah, it is. But at the same time- I'm getting thumbs up from the audience.

That's all I'm saying. Thumbs up from the audience out there.

No, only from that kid.

It's too much house. No, from this lady right here. Oh, there's a guy right there that's frowning at me.

Yeah, I think not, because if it would be one thing- I don't know why you're frowning.

I haven't given them a viable option here.

It'd be one thing if they both worked, and it was still. But they're really squeaking by. It's right there.

That's my point. They're squooking by because of the house.

Yes. No, I'm saying squooking by on the percentage. And I'm saying moving, especially while upside down is a big deal. So I would tend to air it a word option two. That's just what I would do.

I'll go with two to make you and the guy in the lobby happy. But here's the deal. No, stick to your gun. Here's why I'm saying this. They're also in the military.

Yeah, they're going to move anyway.

If they were in this place long term, I would have sided with the option one. I I just think because they're not there long term, probably, then I think you got to look at that. But again, if they decide to stay there- Yeah, but think how much they're going to lose on their upside down.

They don't have that cash. That's going to create more debt for them.

Again, I'm sticking to getting out of debt, and you got to choose your pain. Choose your heart. So there you go. Listen, I don't need to be right. No, I know.

I gave him another option. I know. I want to know what he's going to choose.

Well, a lot of it has to do with the wife.

Yeah. I think in today's digital world where you can hop on the internet, you can You can sell anything, you can tutor. I mean, she's a teacher. Maybe she tutors some kids in the area. There's a lot you can do to make a thousand bucks pretty quickly.

I so am in agreement with yours as an option that she could make more than a thousand.

But you're right. They might decide it's not a value for them.

Yeah, but you're right. There's no question they can write side from an income if she's working.

You're saying it's all values.

Again, you know me, I come down to it's always a Ramsey principle first, but then we got to look at the practicality of the relationship. When there are cases where there's multiple options to achieve the principle- So how will they pay off the upside down? Selling stuff. She's working, doing other things, but they're out of that house.

That's another principle, though.

But they're out of the house. That's true. That's why I like both options.

Yeah, they're both good. Call us back and tell us what you do.

Yeah, either way, though, it's right. You got to choose your heart because you're in a situation you shouldn't be in. So that's the moral of the story there. Hey, thanks for the call. I appreciate you all serving our country. You're a great American.

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Welcome back to the Ramsey This show in the Fairwinds Credit Union Studio. I'm Ken Colmageet, Warshaw is alongside, and we go to Michael, who's joining us in Las Vegas. Michael, how can we help today?

Hi. I was discussing with my wife some some payments we're making in different things and getting things planned out for the near future. One of the clouds that's hanging over us is the money that we owe her parents. A lot of it came into the relationship before I even met her. I was just wondering how I should go about a conversation with my in-laws to try to figure this out, and I guess what's right for me to ask for, and I guess just how to go about it all.

So did she owe them money on her own before you got married?

Yes. So roughly a decade ago, she started college, and they pretty much just gave her a blank check and told her I mean, I'm still cloudy on the conversations that did happen, and I've never been involved in any of them since. And so they basically wrote her a blank check, and then took out some student loans in her name as well. And we're paying off the student loans. We should have that paid off by the end of the year. We're being really diligent with that.

How much were they?

The student loan is about 22 grand.

Okay. And how much was the blank check for?

That's where, based on the ledger I've seen, it's about 46 to, I think it's about $46,000.

Okay. And what did that money go towards? Just life?

Yeah, it was living expenses, college. There were things on there. One of the most noticeable for me was Amazon fake plants for 29. 95. Just a lot of- Just a lot of little knickknack stuff.

I want to rewind to the start of your question here, because the way I heard it, You were asking us, How do I go about you? How do you go about talking to her parents about money they loaned her? I want to make sure I hear it right. Is that what I heard?

Yes, that's correct.

You and your wife have talked about this, and you two or you nominated yourself as the spokesperson. I want to know what's behind this. I'm going somewhere with this.

Okay. I've just been making plans on getting those student loans paid off. Then after that, we're making plans on what to do with that money and made my wife uneasy because she wanted to really tackle what she owes her parents. But then she also isn't up to date on everything. We've talked about it, and she's agreed to have a conversation with her parents, and I think I'm spearheading this, and I really just want to make sure.

The both of you are planning to sit down with the parents, and this wasn't clear to me either, so this is why the follow-up. What is the goal of you all sitting down with the parents?

I'm wondering the same thing.

Okay, good.

I want to know, I guess, what they really expect. The money? Yeah, the money. If that's something that we're really supposed to pay them back for this $30 for plants, even. Things like that.

Yeah, but wait a second. Wait a second. Is it not clear to you two right now that they expect her or you two because you're both together now? Is it not clear as to whether or not they expect you to pay it back?

They have only told her, Oh, just pay it back whenever you can afford it.

Okay, wait. I got to go in on this. So if I go to the bank and I borrow, I don't know, 46,000 dollars, and I spend it on, I don't know, fake plants and some other do-dads, and it adds up a little over time. Doodads, I like that. If I go into the bank and say, You know what? I don't think I should pay you back because I spent this money on fake plants and whatnot, they're going to go, We don't care. You borrowed the money and we'd like it back, right? So it's the same thing here. It doesn't matter what she spent it on. Clearly, you don't agree with the things that she spent it on. Clearly, you view it as somewhat wasteful. Money that shouldn't have been borrowed. That lives over here in a separate conversation.

I think it's really, really a wrong move. This is why you called, so I'll just get this out of the way. I think it's a bad idea for you and your wife to sit down and put that in their lap. I think if I borrow money from somebody, I got to pay it back. I don't go down and go, Now, hey, how much of this do you really want back? That is so passive, aggressive. It's not good for the relationship. And I will also tell you, as a guy who's been married 28 years, and I love my in-laws, ain't no chance I'm getting involved in that conversation. No way. That's between your wife and her parents.

I love- Yes, but Michael's conversation, the person he's really got beef with is his wife. I agree. That's the conversation. I agree. You got to let her know, or maybe don't let her know, but you reconcile like, Man, I'm struggling that I got brought in on this debt. It is for fake plans. It's just, uh.

Say, Babe, I'm willing to pay it all back as your husband, but I've booked a tea time while you're talking to your parents. Let me know how it goes. I'm not getting involved in that. I'm really not. Other than to say, We owe this to your parents. Now, if you want to go try to read new terms, I just don't think that's a good move. Do you?

No, I would not touch that with a 10-foot ball.

Yikes. That's going to make Thanksgiving real tasty. I think you two... Now, this will be my advice. If you and your wife were in the room with us right now, I'd go, Hey, don't do It's hard. Just own it and pay it back. I think you're going to sleep better, don't you?

I think so, too. I think the heart... Again, I just said this happened before Michael was involved, and he's share if he could turn back time. He never would have even done this. And yet here it is, like John would say, not by his hand, but in his lap. So he's just struggling with dealing with this. And I feel for you. Yeah, I do, too. It's tough to take It's on debt from a spouse who's bringing it into the relationship when you don't agree with what the debt was used for.

Michael, I'm only following up here because we've hit you with a lot, and we're both on the same page here. Where do you think your wife is with this response that you called the show and we gave you that? Where do you think she sits with all those?

I think she probably agrees with it. Okay, great. But I think I see the pain that this causes her, too.

Well, let me reframe that. The only pain your wife should feel around this is the pain of paying the money back because you got to sacrifice. Yeah, right. I don't think there needs to be... I think you should come away with this going, When I make this right, I am in good standing as a daughter. I have fulfilled my commitment to my parents. There shouldn't be any pain. In fact, there ought to be an emotional joy to go, I did what was right. The only pain is the sacrifice we teach every day on this show anyway, which is continue to walk the baby steps out. I don't see any pain. Am I missing something?

No, I think just that guilt that she has for lack of financial education and stability.

Well, we've all done dumb. Well, you've heard Dave say it a million times, We've all done dumb and stood with money. No shame. And the best way to get rid of that guilt, Jade, give you the final word on that. You write a lot about money and emotions.

I do. And matter of fact, I'm going to have Christian pick up and send you a copy of what no one tells you about money, because is what I think will really help you guys. One of the ways to deal with guilt and shame is to set boundaries. And I think you both need to do that. It's very easy for us to set boundaries for other people, but you both need to say, You know what? We know the information. We know what happened. It's done. We don't need to keep rehashing it. We don't need to keep bringing it up. We're paying it, and that's that on that. And set a boundary that says, We don't talk about this in that way anymore. This thing you did, this thing you did. She doesn't get to do it. You don't get to do it. It's over. We pay it. We move on. We're not going to keep bashing ourselves over the head with it.

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All right, next up is Karen in Detroit. Karen, how can we help?

Hi. My daughter is getting married pretty soon. And about five years ago, her sister got married, and my husband and I offered them $20,000 to cover wedding expenses, and that worked out well. And we've done the same with this daughter, but she and her fiancé are very frugal, and they would like to just spend six or 8,000 on their wedding. And and have asked us if they could use the rest for other costs, future house down payment or something like that. It's great that they're frugal. We appreciate that, but we have some real concerns about not enough food, not enough seating, too small of a... They're cutting corners so much that we feel it will be a respect.

It'll be what?

That they We will regret it in the future.

Okay. I got to jump right in here and let's lean in on this. So you and your husband feel this way. Have you brought up those concerns to them, specifically?

We have.

What was their response?

We believe it is a waste of money to spend so much on one day. Our values are that we just want to save money, and we're okay if it's a real minimalist day. But they do still want to have a full dinner and 150 people.

Okay, so let's lean in on that one. Did you start walking through with them? How are you going to feed 150 people? We did it. And what they say.

It's okay if we have minimalist food.

We don't need orders. What? Like pizza rolls? Like, what are we saying?

Do they have a real plan is what I'm doing. So I don't keep asking 100 questions. I'm getting at, do they have an actual plan? And then the second question is, if they do, you just don't like it. Is that true or false?

They do have an actual plan.

You're embarrassed by it.

Well, we are. We're inviting a lot of people. We're not even sure they'll have chairs.

Can I just say, and Jade probably will not like this, I just am thinking of past calls. Go ahead, Kate. I am ultra-conservative on wedding costs, and I say this is a fabulous young couple, and I say it's either a gift or it isn't. If the money is a gift, when I give someone a gift, all right, let me just use Sam as an example. I You know Sam loves shoes, for instance? If I buy Sam a pair of custom Jordans or something like that, and I give them to him, and Sam's going to be like, Oh, my gosh, thank you. And I go, Hey, listen, I don't actually want you to wear these outside the house.

That's wild. That's too much.

But my point is, yes, it's insane, but it's a true example. If I give Sam a gift of shoes, I don't get to tell Sam how and where he wears his shoes. I'm giving him a gift, and I actually think you should honor this request, and you need to get over it, and I would start bragging on them. I love the fact that their response to you was, Our values are this. I love that they actually have a plan. You know what? As much as you joke about it, if they want to offer pizza bagels, step into it and tell all your friends, We want you to come honor our daughter and whatever, whatever, whatever, and son-in-law. And you know what? This is the most frugal couple. It's not your normal wedding, but we're so They're stinking proud of them, and they're going to take what they save on the wedding, and they're going to put it to starting their life off and paying off debt and change the narrative. Because I'm going to tell you, I'm preaching right now, but if they feel what I think they've already felt from you and you don't change that tune, there's going to be resentment around what could be the most special day of their life, but it's their special.

So that's it. I'm out. That's all I got to say.

I concur, my friend. Wow. I 100% agree. Because everybody has a picture of what a wedding should be. You gave them. You guys came up with that amount based on what you think a good wedding would cost, is my guess. The hardest part is I think for the parent and for the child is when you're not matching up. I think everybody's probably experienced it. Who's been married, the parent wants one thing, the bride or groom wants something else, and ultimately, it's the bride or groom's wedding.

Now- I got a hot take. Remember this, Karen. What? 50% of the wedding attendees don't even care about the wedding. They don't. It's dudes. Any dude that's going to that wedding is going because his wife wants him to be there, and we don't care if there's- They probably like the pizza rolls. You could hand out peanuts. Yeah. Guys don't care. Only people that really care about all that are women at the wedding.

Guys have to have good food.

What's that?

Guys have to have good food, don't No.

I mean, they'd be okay with pizza rolls and beer.

Are you kidding me?

This guy in the audience is shaking his head. Yes.

No, I'm serious. Like, the average guy, and I'm not trying to be funny. The average guy that you will invite to this wedding is only coming because of the social pressure to come. They would much rather send their wife and stay home and watch football. And so they're there because they have to be there. They don't want to dress up.

I think most people fall into that camp, let's be honest.

Okay, see, I wasn't going to speak on behalf of women because I don't know. I assume women love the pageantry and all the things.

If it's our maid of honor or a best friend or a sister, okay, yeah, a family member. But if it's just Linda from church or from work. It's like, I got to go. A hundred %.

I got to get a gift. A hundred %. You know why? The meal makes me stay at this place I don't want to be at longer.

The cake is the best part. If you have a good cake, you're fine.

I don't even care. I go buy cake. If I want to buy cake, I can buy cake.

People stay for the cake.

I have made enough money in my life to buy cake whenever I want to. So if I want cake, I'm not staying at a wedding for cake. I'll just go to Kroger and go, Hey, Stacey, I just want cake tonight.

I'm just saying, when you go to the wedding, the thing that you look forward to is not the ceremony. You're looking forward to the cake at the end.

The only thing that guys look forward to at a wedding is when they get in the car and go back home.

So the point here, Karen, is- I love this couple. They don't need to spend the money on this. They don't need it. And it's okay that they're doing something different. And it's okay that you don't understand it. It's okay that it's not the way you would spend the money. I think that that's just them expressing themselves within their values. I like Ken's idea to just get with it and be like, This is going to be fun. It's going to be Right. Yes, ma'am.

I will throw out something else because I've been so, I know, I've been so whatever, you can call me plain-spoken on this. If you guys want to do something for your closest of friends, then you all go rent yourself a country club room that you can afford and you do a special It'll fancy something or other for those people. If you really want something that's super impressive, makes you feel good- But the bride and groom probably wouldn't like that because that's not how they get down. But Karen didn't call about them. She called about her.

Right. We have established that. If the tables were turned, and I'm just going to put me in Karen's spot. If I was getting money from my in-laws or my parents, and they said, Here's 20,000. We said, We're going to spend it like this. And then they came to me and said, Well, then you need to come to our party over here. That's our country club folk. I'd be like, I don't want to do that.

Karen, I'm just trying to be nice and spare your feelings. I get it. Trust me, I got it. I really do. I understand your position, but I was just trying with a little bit of levity to go, It's not as big a deal as you think.

Yeah, it's really not.

You know what I mean? No one's going to look down at you.

I'm not worried about people looking down at us.

You just don't want it to be- Well, you said you were embarrassed.

That's why I chose that language.

As my friend would say, she calls it budge. When something's not up to standard, I guess, low budget, budge, you don't want it to. It's a new word.

It doesn't need to be glorious. Just enough food and enough basics. Chairs.

You're just trying to keep basic etiquette. Like etiquette level is... Exactly. I got it. So you might read the room a little bit and ask questions instead Instead of making statements, maybe you say, Oh, if you do that, will there be seating for everybody? Or are you expecting, are these standing? Just ask questions and then maybe offer suggestions in the form of a question. I wonder if they had a way where you could have like... And just be very light. It's just like you're like the breeze, and you mention it and you move on. You don't harp on it.

I just think, get a nacho bar. Everybody loves that. Buffet style.

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All right, question for you, folks. Are you staying on track with the Dave's Baby Steps. We'd love for you to take a quiz to check your progress. Now, this isn't to slap you on the hand, but it's a good reminder of where you are in the process, where your momentum is. We humans, we need to track our progress. That's Dave's Baby Steps have been so monumentally effective is because of the nature of the stages and staying with it. If you take our quick quiz, you can check your progress and get a personalized plan to keep you on track or get you back on track. It only takes just a few minutes. So head to ramsey solutions. Com or click on the link in the show notes to complete the get started assessment. That's what it's called, the get started. If you're new to the show, this is also a great thing to do as well. Now, you're over there.

We humans.

We humans. That was funny? It was. Okay, good. I like that. I like the free laugh. That's great. Let's go to Jennifer in Asheville, North Carolina. Jennifer, how can we help?

Hi. Well, thanks for letting me come I'll just show and ask this. So we just got our January insurance bill, and apparently this year or last year, we made too much and we have lost our subsidy. So we are now going to be paying triple what we did the previous year, and it's going to come out to be about $29,000 a year. So we're not in any debt. We own our home, everything's paid for. But that's still a lot of money to just check. We're all blessed for a very healthy family, so we go for our checkups and all that. And so we just... We talk about maybe just putting $29,000 in an account for an emergency, but then there's always like, well, what if something substantial happened and worrying about that? So we just wanted to know if there were other options out there because- Well, did you shop it or did it just lapse over And then this is what you were stuck with. Well, it lapped over, but then we shopped within because we wanted to stay with Blue Cross Blue Shield because I know our doctors accept that and I'm afraid of going and getting out of network and whatnot.

But Even within, that was still the cheapest option for us, for our family of five.

Yeah. Well, I will say when you are independently getting insurance, it's expensive. It is. That's just part of it. And that plus insurance right now in general is expensive. It's gone up substantially. So your options are to try to see what else is out there. But if you've decided that Blue Cross Blue Shield is what I want because it's in our network and it has the doctors we want, then there's part of that that you may have to own. Now, let me find out, can this fit in your budget? What does this mean for your budget? That's the biggest question.

Like I said, we own all our homes and our cars and Everything. And we net about 234 between the two of us a year.

So it's not- Yeah, so you can afford it.

Yes. It's just a pain in the butt.

It's just a pain in the butt.

We don't use it. I'm glad we don't use it. I'm not saying I hope we spend all that money and make it worth our while. But it bothers me so bad that I feel like we were just flushing that money pretty much down the drain.

Yeah, you're not. It's both, right? Let's just say both sides of it. Our insurance system is broken, right? Health care system is broken, so it's way too expensive. There is that, and I agree with you on that. But then there's a part of it that insurance, it's insurance. So it's there when you need it. And the hope is that, really, that you don't really ever need it for its full value. That's the whole point. That's just an acceptance thing at that point, is I just have to accept that until I'm at the point of wealth where I can self-insure, I need this. Here's what I had to do, and I know that it's a big mind thing, but you have to train your mind to say, It's a blessing that I can afford to have the insurance that I want and need, versus, I can't believe I have to pay this. I had to do that. It's like taxes. It's like, I can't believe I have to pay these taxes, but then you go, Well, I'm so grateful I have the income. It's that whole push and pull. I'm not saying that it's easy, but it's a good mental flip.

Ken, what you got?

Health Trust Financial. I want to mention them. They are partners of the Ramsey Show, Health Insurance It's broker. What I love about them is they're going to go out and search and try to find the best deals. I will make sure you get connected to them. Christian will connect you, make sure that you get there. But Health Trust Financial is the organization. We believe in them, and I think they are worth calling so that you can shop around and let's see if you can get a better deal. Don't just assume that you're stuck.

But do know that it is going to be expensive.

They will shop around with other companies.

It wouldn't just be...

Yes, that's right.

You got to be open to companies that aren't Blue Cross.

To tell me Ramsey show, listener, they're going to take really good care of you. Great, great organization. Then let look at your options. But I know that that's like... Again, I heard you, and that's why talking to them, you're going to get to walk through all of the, Will we lose our doctors? Do we have to change? I know how important that is. So they'll take good care of you.

Okay, that's good to know. Well, thank you for reinsuring me. We shouldn't just go out because like I said, we talked about just opening an account, putting the money in that, but then that scares me.

With five kids, that's a big risk. No, it's three kids. Oh, a family of five. Yeah, but still.

Jennifer just had an episode five. What?

Unless you know something I don't.

Yeah.

Oh, no, no, no, I don't know anything.

No, we don't know anything.

I'm not saying this to be scary. I'm just saying I would not do what you were saying about opening account and just putting money because, listen, if somebody runs into you on the street and everybody's in the car, there's medical bills. Do you see what I'm saying? And $10,000 or $20,000 in an account is not going to help you. It's not going to cover that. Okay. What did the signs used to say? Keep calm and pay your premium? Keep calm and pay your premium because you need it. Okay.

Yeah. Thanks for the call.

I just need somebody to top me down off of that.

You're going to be okay. But again, your first call is hang up and call our friends at Health Trust. They will be a good resource for you. Remember, when you have situations like this, options, options, options. Find every option possible and it just helps you in this emotional process because it's tough stuff. I'm so sorry about this. I mean, you guys represent so many Americans, and I'm just going to throw this out there. We, the people, need to start throwing these bums out at the election dates because this is something that Congress can fix. They can fix it, and they got to fix it. It's unbelievable. It's real, real, real. I mean, health care is not a luxury.

You know what I mean? No. It should be just a basic right that we all have access to.

Those companies got plenty of money. So it needs to be fixed. We need reform. All right, let's go to Matt in Washington, DC. Matt, how can we help?

Hi. I think you're taking a call. Sure. So my wife and I are working on Baby Steps 4, 5, and 6. We're currently contributing 15 % of our income to our Roth retirement, our 529s, and we're putting any extra income on our mortgage. The more I listen, the more I learn about mutual funds and it being a big topic on the show. So I was thinking of changing how we're paying off our mortgage and only making the minimum payment and open an investment account to deposit all of our extra income in to take advantage of the mutual fund growing at a higher rate of return. And when that mutual fund would hit our mortgage payoff value, to take that, to cash that out and do one once on payoff. I was just curious with your thoughts on utilizing an investment account like that as a tool to pay off a mortgage for Baby Step 6.

Listen, there are worse things you could do, that's for sure. And I want you to hear that. I'm going to give you the answer that I think is the best answer, but I want you to hear that what you're talking about is not a bad idea by any stretch of the imagination, especially if your horizon for doing this is beyond five years. It's not a bad idea. The only For me, my only caveat for this is sometimes when money is sitting, other things come up, Ken, that might give us a reason to pull it out. For instance, It's the idea of if you have the money in your hand every month to double the payment or whatever that amount is, going ahead and putting it on your mortgage so that it's done, the action is finished is a good thing versus having a stack of money in a brokerage where I don't know, maybe a trip to Turks and Caicos comes up and it just sounds so good. You're like, Well, we do have the 12,000 sitting there. It's tempting is all I'm saying. Now, you do sound like the type of guy who would never be tempted to do anything, but I'm just saying.

Yeah, we just want you to work the baby steps. The baby steps work, and they avoid all of that temptation. So don't try to rework the plan. The plan works for so many people. But you're doing great. Appreciate the call. Good question.

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All righty. Today's question comes from Sarah in New Jersey. She says, My spouse thinks that line items in every dollar should be a sinking fund because if we don't use the money that month, It rolls over the next month for future use. This includes things such as utilities, insurance, food, and spending. I've tried to explain to him that some things can be a sinking fund, such as HVAC replacement, vacations or savings for a vehicle, but normally monthly bills are not. Can you explain the difference for him? Yes. That question was a little in the weeds if you're just listening, but let's break it down. When you have your budget, obviously the income is at the top, and then down at the bottom in every dollar, you put all There are expenses in there. That's everything from groceries to grandma's birthday, everything you could spend money on goes on in the budget. Now, there are certain things that are not just monthly expenses. There are things that have the ability to happen every once in a while, but be a larger part of your income. Something like car maintenance, Ken, or something like if you know, yeah, your HVAC needs replacement, you can put those things on the budget, and you can do something on the budget that's called a sinking fund.

It simply means that every single month you're putting aside a little in order to have a pool of money there. It's just like a little mini savings fund. If I know my HVAC is going to cost me $3,000, every month I can put aside $200 on my budget, and it's going to accumulate that money in a little pool for me so that it's there when I need it after a certain number of months has passed. It sounds like what her spouse wants to do is make a sinking fund for every single item on the budget, which is a horrible idea because sinking funds are for things that we cannot cash flow in a single month. That's the best way to explain it. In a single month, I can pay the cable bill, or people don't have cable anymore. I can pay the YouTube TV bill, right?

I enjoy cable.

Okay, that's good.

It's It's channels.

Direct TV, you keep that. All right. In a single month, Ken can pay his direct TV bill. I can pay my YouTube TV bill. We don't need to set aside a little each month to pay that. That's very confusing. It creates a A lot of issues. So, Sarah, you are correct. And husband who will remain unnamed. Yes. Let's utilize the sinking funds for large ticket items or large ticket repairs or trips or whatever that we cannot fund in a single month or even really in two single months. That's what sinking funds are for. Yeah.

Love that. All right, let's go to Al, who joins us in Washington, DC. Al, how can we help?

Hello. Thanks for taking my call. So the reason I'm calling is I'm married. I'm 31 years old. My wife is 30. We're finally thinking about having our first baby this year, hopefully, for the God that it happens. So with that, I'm always being financially savvy. I've always maxed out my TSP, maxed out my Roth, IRA. My wife is maxing the same thing. So we're in pretty good shape. I'm of the mindset of, since we're planning to have a kid, of maybe in I'm insuring myself with either term or whole life insurance. I'm more inclined towards whole life insurance. So when I bring it up to my wife, she believes that I may be jumping the gun a little bit. And that's her mindset, the way she explained it to me was, we're going to be incurring to another expense. The way I see it is more as an asset and protection for her and the baby in case something were to happen, unfortunately to me. So that's where I'm at. I'm able to cover all expenses of the house. She's currently a nurse, so everything that she earns, she uses it, and then she investes into whatever she wants.

So I'm able to cover all expenses. I just want to know more of what you guys, I guess the mindset that you guys have on this. I'm trying to see if I could get insurance on myself more so for potential, and hopefully to leave something behind for my kids and grandkids one day.

Well, I think that your sentiment is right on. The fact that you're thinking ahead about your family and you're considering life insurance is exactly right. I think it is a sobering conversation to bring up that I want to have insurance in case, God forbid, something happens to me and your wife's carrying a baby or is going to be carrying a baby. Anyway, she's in a sensitive state, and That can be tough to reconcile in your brain. So I would just form it to her like this. I would say, Listen, there's going to be people in my life that are dependent on my income. And if something, God forbid, happened to my income, how would you guys live? It would just give me a lot of peace if I knew that if something happened to me, you would have plenty of money. And you can talk about what that amount is. I would say 10 times your income, that you would have this million dollars or whatever it is sitting there in case something happens. That just gives me peace of mind. It's a way that I can love you guys really well, and it's not very expensive.

If you can have that conversation with her, I think that she'll understand where you're coming from. But let's talk about the type of insurance, because I think I heard you say that you want whole life.

And that's correct. My mindset is more so I have a couple of rental properties. I've been investing to the market and all that stuff. My mindset is for protection. And then also, how can we also make it a solid foundation for everything else?

Well, Al, I'm going to let Jade walk you through this, but let's be very, very clear. Whole life is actually not insurance. Okay. No, I want Jade to explain it, but you really understand because you call us what we teach. You need term life insurance at 10 times your income. That is what's going to protect your family. That's what's going to take care of your wife and kiddo if something happens to you. I don't know if somebody's selling you on this, but it's not insurance. It's a horrible financial product. That's our position. You want term life, Xander insurance. You want to call them up and have them walk you through how unbelievably affordable, by the way, term life is. But I'll let Jade take the thing on the why here. But we have never, ever, ever, nor will we ever recommend Whole Life. In fact, if you want to get Dave Ramsey really hacked off, you call and you ask him about Whole Life. It's a bad, bad product.

I'm not going to get mad at you, Al, but I heard you say... Because I think you have the right underlying thought. I heard you say you want protection. Let's talk about the best way to get that? So with a whole life policy, let's pretend you're paying, I don't know, let's make round numbers. These are going to be low. Let's pretend you're paying 100 bucks a month for a whole life. Well, part of that money is going to go to your premium, and then part of that money is going to go in another fund that's a cash value. And part of that money is being invested at a very low rate of return. And the other part is going towards your death benefit That if you die, this is the money that your family gets. Well, why split that payment when you can pay, get term life insurance, and just pay for the policy? And then whatever money is left, you can invest on your own because you're into investing at a higher rate of return. So all we're saying is why give somebody money that they're going to invest poorly for you when you could invest it at a higher rate of return for yourself?

That's part one. But part two of this, Al, is if you die, they don't get the cash value. All that cash value that is accumulating at a very, very slow rate of return. If you pass away and that money is sitting there, it's not going to go to your family. The insurance company is going to keep it. And The only way that you could get access to that is if you cashed out the policy, if you got to it early, and at that point, you're going to have to pay a bunch of fees. It's not a fair product for you. It's almost like having to choose one or the other. So for that reason, I'd say, Hey, just spend half the amount on term life and invest the rest on your own. Does that make sense?

It makes sense. I understand your positions on term life insurance. I was, I guess, with the I said, of seeing it as double, two perspectives on things, one being protection and then also- No, protection is not...

Mine gives you protection, too, so there's no upper hand on the protections. So you got to have another argument because there's no upper hand on whole life for protections. Unless you have a better argument, I'm just telling you the facts.

Jade's right. The real argument is the stock market's averaged 11, 12% over the lifetime of the stock market versus four a half % at most on whole life.

You might as well park it in the HYSA at that point.

Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. I'm Ken Coleman, Jade Warshaw is alongside. We're excited that you're with us. 888-825-5225 is the phone number to jump in. Let's stay in our neighborhood here, Nashville, Tennessee. Zack is joining us now. Zack, how can we help?

Hey, Ken. Hey, Jade. Thank you for taking my call.

Sure. What's going on?

Hey. So my wife and I, I'll try to be brief. We're 32 years old. We have $177,000 in debt. We make about 174,000 combined, about 35, 40,000. That's overtime for me. But we have a tax return and a company bonus coming up that's around a $14,000 lump sum. We're trying to see if we should take that money and pay down to get rid of our auto loans that we have and get into something cheaper, or if we should just use our car loans as a line item and take that money and start doing our debt snowball. Also, neither of us are investing at the moment.

Likely, yes, but I want to hear more. So break down the 177,000. Tell us what's the cars and tell us what's everything else.

Sure. We've got the vehicles between myself and my wife, $44,000. Mine's '21, hers is '22, roughly. $81,000 in student loans. We both are almost finished with her. She finished her bachelor's degree last year, and I'm finishing mine this spring. And then $52,000 in consumer debt, like credit cards, line of credit, personal loans, et cetera.

Okay. Okay. And the personal loans, when you break them down, what's the smallest one?

We have some as small as $3,500, and then we have others, I'd say the highest is around $10,000 Okay, so between 35.

Okay, good to know. What are the payments on these cars?

So the payment on my truck is $379, and then her Honda Pilot is $457.

Okay. And what did they originate at? I'm trying to see if they were ever too expensive for you. What'd they originate at?

So, I mean, mine was $23,500. I think I could sell mine. They're both used vehicles. I could sell mine for probably what it's worth. She's got about $4,000 in negative equity than hers.

Okay. If you wanted to sell them to go faster, you 100 % could. How much is the bonus and the refund?

The tax return is about $12,000, and then $2,000 as a company bonus. I just updated my W-4 to change my tax withholding because obviously, that tax refund is a little too much.

You could do that. I'm not going to say you have to. They were never crazy outside of your range. Maybe you do one and keep the other. That's totally up to you. 14,000, though, could knock out lots of these smaller loans. I think that would give you, probably free up a similar amount of money and give you a bigger boost because there's something about when you've got a list of 20 debts and it goes from 20 to, I don't know, 12. That feels great. So how many of these personal loans do you think you could knock out with the 14,000?

Yeah, I know several of the credit cards, the credit cards and some of the smaller personal loans. I think we can take probably five of those off the table, get us some quick wins, and have a little bit of margin there to start tackling the next one. I just want to make sure you guys would maybe start that way, because these aren't crazy high payments that we're paying I commute to Nashville for work. I actually live in Cookville, but I commute for work. So having a reliable vehicle is helpful.

That's good.

If you guys said, Hey, get a beater with a heater, then we would do that. We just was curious on what you guys thought.

Yeah. A lot of times, if If you can pay off the car in two years or less and it be as part of your snowball, you could keep it as long as it was never too big of a chunk of your income to begin with, as far as it being an item that's going down in value at $174,000 of income to have two $20,000, $23,000 cars. It's not a bad thing. It's just that you went into debt for them.

I would do it.

Ken would. I would, too, if I were in your shoes. But I'm not saying you have to.

We're not telling you have to, but I would I'll tell you that I am of a mindset that I want to knock this stuff out, and I want to do it as fast as I can, and I'm willing to suffer short term so that I can win long term. I'm just curious, which way were you leaning prior to calling It's been a 50/50 split.

We've talked about getting debt free for a while. We're long-time listeners.

What do you mean by 50/50? What do you mean?

I think me and my wife have had discussion saying, Hey, let's just sell them both and use some of this $14,000 to move both these vehicles and get in something cheaper. Let's buckle down. Let's do it. And then the other half of me says, I commute quite a bit an hour each way to National Airport based on my job. And so it's like, if I'm trying to make that commute in a vehicle- I get that.

You can clear out one of them. So you know what I would do? Keep one. Keep one. I'm with Jade. That was exactly what I was thinking.

Keep the most- Earth has the negative equity. Okay. So would you pay the $4,000 and maybe keep my truck for reliability purposes.

No, I'd flip it. No, I'd flip it because you don't want to be spending money that you don't need to right now. If you keep paying off the car, the negative equity is not going to matter.

This isn't going to be a fun conversation. Probably not a popular proposal. But again, I'm going to tell you exactly. I wish Stacey were here. She'd say this is exactly what Kim would say. I would say, All right, we're not going to sell the one with a negative equity. We're going to sell yours, and you're going to take what is her car because you're the one driving a long way every day, and she's going to drive something that's not quite as awesome.

Yeah, and you're both taking one for the team, just in a different way.

That's exactly what I would propose. Now, I don't know how your wife's going to feel about it, but I'm calling balls and strikes right now.

Ken, you and I are on the same page, hands on the center.

And by the way, and to validate, I'm talking about it. This one has done it. She and Sam, when they got their story going, they went down to one car. So I believe in what I'm going to call shocking the body. I learned this term from a friend of mine in college. It was like, when you start a new workout plan, you got to shock the body, right? And you just go in on a completely new routine. And what he was talking about is you get the muscles, all of them just like, what is happening? And you start to get real returns. And I believe in that. I believe in it. In most cases, I almost always am a little bit more aggressive because I believe in shocking your system to go, Holy cow, we have burned the ships. We are in on this deal.

Fight or fight.

Yeah. So I agree with Jade. I think she's right. I don't want you to hear me saying, You have to do that. I'm just giving you an alternative.

It all depends on how on board your wife is with this. I agree with that. Because you have to do this in a way that you're both going to be fully committed. It doesn't sound like it, but every once in a while, it's like, if you go too extreme, too quickly, the other spouse is too shocked and wants to bail out. I agree.

It's a great point.

I agree with Kim. She's on board.

She is. Okay.

Then I think she'll like this plan because it's the best of both worlds. You're still safe on the road. You still have one that's a hoopty. You still clear out $457 of payments. You're not eating up the whole $14,000 on getting two new cars. You're only eating up maybe four or five of it, and you're still knocking out, I don't know, four of these smaller debts. So it's a really good momentum boost.

Massive momentum. I love that, Coach Jay. I feel like you just got off the clipboard. You were drawing up a play in the timeout. Strong side. I love that. I'm going to tell you something. Momentum, I don't care what area of your life you need momentum when you start to experience it, when you haven't had it, It is nice. Yes, it is. It can really set you free. Hey, love the call. You guys are going to do it. We're rooting for you.

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Hi, thanks for taking my call. I am a single mother to a 10-month-old baby, and I have 25,000 $1,000 in debt and a low income. I wanted to know how I can get ahead and plan for the future. Specifically, my goal is to be debt-free and eventually save for a home for my daughter and I. Great.

Tell us what your low income is.

I make 26. 67, so $2,667 after taxes per month. What do you do? I work from home for an insurance company.

Doing what?

I do customer service with providers.

Okay. Do you need to work from home just because of the little one?

I would prefer to, yeah.

Do you have family or friends that, if you had to, I'm not making you commit to this, but I just want to know, is it possible that other people could watch your child?

It is possible, but not consistently.

Is the $25,000 of debt, is that Is it a one-time thing that's done and over, or is the debt accumulating because you're using a credit card to fill a gap?

I don't use credit cards, but it is accumulating because of interest. It does consist of student loans, some credit card, and then medical bills and personal debt.

Okay. So even with you paying the minimum, obviously, it's been accumulating over time, is what you're saying?

Yes. Okay.

Do you have any control over your budget, or do you feel like you're paycheck to paycheck and not knowing where your money's coming and going?

I've been using the EveryDollar app every month, and so that's been helping me to see where everything is going. But But I just feel stuck right now.

Are you at 40 hours a week or is it below?

I'm at 40 hours a week, guaranteed, and I've also been working an extra 10 hours per week, with the exception of holidays, to work some overtime.

Does that bump you up from the number that you gave us? Or did that include your overtime?

With overtime, I can make an extra $100 to $200 per paycheck, so that doesn't include overtime. Okay.

We could say $200 to $400 if you're getting overtime in addition.

Yes.

Ken can speak to the career side of this because I wonder if there's just, and I believe there is, if there's another type of job you can do from home with your skillset that can just pay a little bit more.

What's your hourly rate or are you on salary?

I am hourly. I make $21 per hour.

Yeah. The reason I went that line of direction of questions right out of the gate is the answer to your question is, and Jade will walk you through, where can we cut? Make sure you really got your budget in line. But you're going to need to make some more money. You just are going to. It's going to make you that you're getting out of debt. Now, here's the great news, and Jade will give you more insight on this, but the $25,000 doesn't freak me out for you. However, we do need to get more income, and especially if you're going to want to save up money for a down payment on a home. I'd like to see you getting in that $35 an hour. Can we take and hear the questions you're going to ask? I'm going to give you some resources at the end of the call because I want to get Jade involved here real quick. Let's see what we can squeeze out of our current income. But you need to adopt the mindset that you can make more money and you should make more money. Now it's a question of how do you take the current experience you have in customer service, and can you jump up the ladder a little bit?

For instance, One thing I think you ought to be thinking about is contacting a company like Belay, who's been a partner of the show for a while and involved with other events. I know their owners, and they're one of the best agencies in the country for virtual executive assistance. It's a business. The very nature of the job is working from home and virtual. But when you're working for an executive, you're going to make more than $21 an hour. If you have that administrative skillset and some experience there, that's the type of thing that you've got to open up your mind to. That would change your life dramatically if I sat you down with Jade and said, Hey, great news, Jade. She just went from 21 an hour to 35 an hour.

Changes everything. I mean, $500 would change your world right now because there's part of this. I agree with Ken. Got to get the income up. I'm guessing your budget is pretty slim as it is. Am I wrong?

Most definitely correct.

You've cut it down as far as you can go. There's two plays here. You can do what Ken said, which is really, really actively seek to find other jobs that pay more. And in the meantime, do your best, do as much overtime as you can, because if you can keep your minimum payment at just the right amount, if you can figure out what that amount is where it's not aggressively paying the debt down, but it's also not allowing it to creep up anymore, you're just keeping it at bay and staying above water, there's That's good. We don't want the interest to accumulate. But I think if you can do that while looking for a higher paying job, that's your only choice at this point, because income is the magical elixir to fix this problem. Now, if you find yourself in a position, can you love doing this? And it's so true. If you find yourself in a position where you have either found a job or the job you're making, you're able to make a little bit more, and you're at that point where the $25,000 isn't really accumulating, maybe it's slowly, slowly going down.

There is part of this where you've got a baby and you're in a season of life, and sometimes there are seasonalities that limit you, and there's just a part of that that you accept and go, Well, right now this is where I'm Maybe when this baby goes four years from now, your life looks totally different. They're going to kindergarten and life is totally, totally different. Both of those are things to look at and accept and understand. What are your values during the season? Obviously, it's to stay home. To what extent and what does it look like for you financially? Is this a season of treading water and not going any deeper in debt, or is this a season of trying to pay off debt? You get to decide that. You're looking at a four or five year horizon before this kid goes to school, so that's a lot of time. So you get to decide, is this first year that I'm just focusing on the baby, and then when he turns one, that's where I'm going to try to kick it into high gear? Do you see what I'm saying?

Yeah.

You've got that to play out.

How connected of a person are you? And what I mean by connected, I'm not talking about celebrities or any of that nonsense. I'm Mrs. Network. I'm saying, are you pretty connected to friends and family group in your area where you live, or are you just a real small circle?

I am connected to two local churches. Right? Yeah.

You know what, Jessie? I don't know how aggressive you're being right now, but I think now is the time. I would never bet against you because you're a single mom. I think the single toughest person on the planet is a single mom. I've always had mad respect for you. I think you got to really believe in yourself and go, No, wait a second. I've got a good job. You got a good job. Yes. Okay. You found that somehow. So What must you do to find a better version of what you're doing now? I'm going to put a number out there that might seem like a stretch to you, but I want Jade to react to it instantly, just so you... Because we've not scripted this, all right? If she could make an additional two grand a month, how quickly does she get out of debt and then get through Baby Step 3 and 3B?

Well, with the extra money, that's one year. An extra $2,000 a month, that's $24,000 in the year.

Jessie, are you picking up what she's laying down?

Yeah, I can see that. That would be amazing.

Now, here's the fun exercise, and I love what Jade said to you. I don't want you to get off this call and be stressed because you're doing something so important right now, which is raising a human being. You're managing to get through. But if you could figure out how I can make an additional two grand a month, it is life-changing, yes or no?

Yes.

Now, listen, this is where the connections and the network of people come in. You go, Hey, I've been listening to the Ramsey show. I called them. I got a plan, but I need help with the plan. I know how to budget. I'm going to get better at budgeting, but I need better professional opportunities. The right people want to help somebody like you. But this becomes your number one job outside of your regular job is to find better work. Now, here's what I want to do to help you, okay? I'm going to give you some information. I'm going to give you my Find the Work, Your Wired To Do book that has the getClear assessment in it. Take it. Let it AI spit out some great opportunities for you. Hang on the line. Good things are coming for you, Jessie. Thank you for calling.

Hey, good folks.

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On the debt-free stage in the lobby here at Ramsey Solutions are Colin and Megan. Welcome. Hello. Hi. I guess you guys are here to do a debt-free screen. That's why they have you on that stage. Am I right? Yes, sir. Nothing gets by me. I am on top of the details today. I see that. Yes, sir. Where are you guys from? Destin, Florida. Oh, that's a nice place to be from. Any chance I can hop a ride back? Absolutely. Okay, that'd be great. I'll just tell Stacy and the kids. I'll be back in a couple of days. It's going to be great. Going to see some friends. I'm kidding. Don't worry about that. Nothing to be alarmed about. All right, give us the numbers. How much debt did you pay off? $215,514.

72.

Wow, we don't want to miss that. Okay, and how long did that take?

23 very long months.

23 long months. Wow, that's fast. What did that consist of? What's the debt?

All student loans.

All student loans? Just you? Just me. Wow. And that's it. You didn't have any other debt but student loans? No, sir. What was that for?

Pharmacy school. A private pharmacy school. Wow. So please tell me, that means you got some income coming in. Yes, ma'am. What was the income during this?

Starting at around 164,000 and then ending at 254,000. Whoa.

Help me with the math. What in the world? That was a lot of overtime. In the month of June, I maybe had six or seven days off in totality. We both went after it. What What were you living off? I want to know your monthly budget that just went towards you guys, that did not go towards the 10th.

It was very little of ourselves. I would drive home for lunch every day.

You see, ramen noodles almost every day of the week from work. Oh, my word. Is it the healthier ramen noodles or is it the stuff I ate in college? That stuff, yeah.

The orange packet, merchant, the orange packet.

I'll tell you what.

There would be several days I would warm up ramen noodles, drive 30 minutes to her work, and give her ramen noodles for lunch.

Rice and beans was cold ramen for us. You are a good man.

Oh, my heart.

I'm going to tell you something. If Mrs. Coleman would let me eat those, I would eat those.

Listen, they're delicious.

They are. They're terrible, but they're delicious. I'm telling you, wow.

So you took one for the team for 23 months. You ate chicken ramen. Well, did you at least vary the flavor a little bit? Did you get the beef? A little bit? Yeah, all the time. Okay, good.

By the way, what do those... Because I think this is good information for a lot of people. What do those go for now? Because back in my day in college, I'm dating myself. You could get 10 of those for a buck. Yeah. What's the cost of these? I don't remember now. I don't know.

We shop at Aldi completely, so that's a hard gage.

You don't even know how much they cost. No.

Wow. So tell me, now I'm entrenched now. Tell me a day's. Tell me what you eat in a day.

Ramun. That was the goal. It would be ramen. Every now and then a week, we mix it up, do peanut butter sandwiches.

But that was it. No jelly.

No, he's weird. He doesn't eat jelly on his peanut butter and jelly.

I wasn't going to say that, but since you said it, I do think it's weird.

It saves money, too, What's breakfast?

Just a bowl of oatmeal, just Oats. Who's breakfast? I don't know her. What? This is extreme.

This is Gazelle. Yeah. This is Gazelle Intensity. Okay, so we're having fun with this, but you guys really, really busted it here. Okay, take us into that. What were some of the emotions that you dealt with during this extreme gazelle intensity, flavored by ramen?

I would say frustration, given so much money over that. She basically worked for free because her whole paycheck was just going towards the loans.

So it was just that frustration of like, Hey, all this money really belongs to somebody else.

Having pushed that frustration.

For me, it was really fear.

I was always afraid that I wasn't going to accomplish or we weren't going to accomplish what we set out to do.

We didn't have to do it in 23 months. We wanted to.

My goal was always to pay it off before he retired from the military.

So that fear and that pressure I actually put on both of us of what if we don't actually do that? If we did it in five years, that's great.

I mean, any amount of time, less than 10 or the rest of our lives is better.

So take us back 23 months ago. What was the catalytic? Oh, I'm seeing giggles. I like where this might be going. What happened 23 months ago that decided that you guys came together and said, We're going to do this?

So towards the end of her pharmacy school, she was stressed about paying off student loans. And I'm the free spirit. So I'm like, We can pay $1,000 for the rest of our lives and get this out of her way eventually. And then one day, being the free spirit, I impulsively put us in the negatives by buying a pair of headphones. And I was like, There's got to be a better way. While she was just wrapping up for my school, I read Total Money Makeover at Barnes & Noble. Oh, wow. And I was like, Hey, we can do this.

And then it started- Did you say you read it at Barnes & Noble? You didn't buy it. You just went there to read it.

Listen, I thought the same thing. The dude just admitted, didn't buy Dave's book, just went in there and treated it like it was a library.

Life hacks, life hacks right there.

By the way, raise your hand if you've done that before. I've done it. I've done it. I've done it. I got to admit it. I love your honesty, my man. Confession's good for the soul. Sorry, David. Okay, so you're reading the book, all right? And you're getting this in your system here. You're going, okay. And you're the free spirit, and you come home one night and tell her, Hey, babe, I've been reading this book. Is that how this went down?

Pretty much, yeah. I was petrified because going negative is not great.

So that fear got you all in?

Oh, 100 %.

I mean, I've always been like a penny pincher, and I've always, Oh, God, where's my next meal coming from?

Person.

So when he came to me with this, yes, absolutely.

Say less. Wow. Wow. Okay. I have a question. I saw they flashed the photo up and there was a whole wall, and on the wall said Our Why. What was under that? What's there?

Oh, I like that.

Oh, look at it. So right before we started doing the journey of paying this off, I bought these thermometers on Amazon.

And so we broke down how many loans we had, and you'll see one of them is 62. 50.

And so every time we would pay off a loan, we would color it in.

And so each loan or benchmark, because some of them are some pretty hefty loans, we would have a benchmark. So I'm going to be honest, 75% of it was food motivated.

So, okay, we paid off this much. Now let's go get some food.

Yes. I've been saying that. That's what I've been saying. Milestones. I'm sorry. I'm very excited.

I feel like I should get out of the way. There's a lot of connection. Very good. Give us an example. What would you go get?

Chipotle, 100 %.

So you reward yourself with a non-raman meal. Yeah.

It's not enough to throw you off track. It's just enough to keep you going. I like it.

What about dessert? Did you ever get any dessert?

Ken, please.

No, it's just the benchmark.

I apologize.

Instead of spending 12 cents, they get to spend a dollar and twelve cents.

After all that ramen, I would need some sugar. That's all I'm saying. Rock is extra. What would you all say to people that are listening and watching is the key to work in the baby steps and getting out of debt? What's the key?

I would say communication. We've been married almost 15 years now, so it's building a budget for the first time and actually trying to work through that.

It can be difficult and showing yourself grace, too, in the beginning. Hey, we're learning a new way of life.

So trying to show yourself that grace. I would say the whole process has just been very therapeutic as a couple, actually.

I've known him since I was 19, but really learning how he spends, how he saves. It's just, just do it. I mean, it really is hard. And yes, it matters how much you make, but it really doesn't. It's determination.

It's perseverance.

Say you want to do it, write it down and do it. Boom.

I would say it flies by, too. Before you know it, you're out of it. We started this like, $215,000.

This is going to take forever. And as soon as we on the other side, that actually flew by like nothing. And it feels so free now. I think people really want to know this. Have you had ramen since you paid it all off?

Yes. I knew it. I knew it. I'm like, this guy just likes ramen.

That is so fantastic. Okay, so how old are you two?

I'll be 37 this year. And I'll be 35 in July.

So now, how has this changed your perspective about your future now being debt free?

It feels amazing.

Again, being free, being like, do what you want, go where you want, and not have just the freedom like, Hey, I can move a different career if I want to.

I can, whatever it may be. We have that freedom in life to move forward. And it's like a level of stability that I never had growing up, something that I've craved my entire life.

We got that. We have stability.

Peace. Are you still in the military, sir? Yes, sir. What branch? Army. Well, thank you for serving our country. You're a great American. I thank you. Absolutely. Well, there it is. Another young couple. Isn't it fun just to see a complete future? You guys are going to be millionaires. You're going to have all that stability, and you earned it. All right, you guys ready? Yes, sir. Okay, here we go. We got Colin and Megan from Destin, Florida. They paid off 215, In 23 months, making 164,000 to 254,000. Colin, Megan, you inspire us all. Count us down. Let's hear your death-free scream. Three, two, one.

We're death-free.

Yes, you are. But not ramen-free. Big distinction. Never that. So fun, isn't it? Excellent. Major intensity. Well done. They I put a beautiful picture on what Gazelle Intensity looks like. Folks, it's worth it. You heard it from them.

Hey, guys, what's up? It's Jade, and I'm pumped for the new year, and I hope you are, too. But the problem is, most people start the new year with a lot of promises and no real plan. You You know how it is. I'm going to save money or I'm going to get my financial act together. But without a plan, you just wing it and hope it works out. Listen, don't play yourself. I want you to win, and our EveryDollar app is the game changer you need. In 15 minutes, EveryDollar helps you build a plan based on where you're at with money right now. And every day, the app coaches you with ways to find extra money so you can beat debt and build wealth faster. It's like having me in your pocket. Budget, helping you stay on track all year long. So don't just wish your money works out. You can be the one to actually make it happen this year. Download the EveryDollars budget app and get started right now for free.

Our scripture of the day, Romans 13, Verse 7, Give to everyone what you owe them. If you owe taxes, pay taxes. If revenue, then revenue. If respect, then respect. If honor, then honor. Our quote of the day, as we celebrate Dr. Martin Luther King, is from Dr. Martin Luther King, The time is always right to do what is right.

That's good.

Simple but profound. Yes. The man had a way with words. He did. I love it. All right, let's go to Mike in California. Mike, how can we help?

I've been on the Dave Ramsey program for a while, me and the wife. We got all of our bills paid off. We're able to buy a couple of cars, cash. We're at the point of wanting to pay our house off. But I was married prior, and I got put in a modification because I was going to let the house go. So there's a $50,000 balloon payment at the end of the loan. And we're about Ten and a half years left, and that's just on the loan. And then I have a $50,000 balloon payment.

Can you refinance out of that?

Well, the problem is I got a 2 % interest. Nobody's going to touch that.

I'm saying- I'm seeing what I'm saying.

So go ahead.

You can't refinance that loan. You can't call up Churchill and say, Hey, I need to refinance this thing.

Yeah, but it's going to make the payment go up. Right now, I only have 10 years, 10 and a half years left besides the balloon. I don't know if I should just start hitting the balloon payment. Every month we start, because I can start paying on it. It's interest-free, the balloon payment. There's no interest on it. Should I start trying to hit that thing? I thought about reflying the loan, which I would love to because my ex-wife's name is on the loan.

An even better reason.

She's not on the deed. Yeah. I know. She's not on the deed, though. My new wife is all... We've already... She signed the house over to me and all that. But the loan is the issue.

If I can understand this, and you got me when When you mentioned balloon, my mind zoomed out, so there might be more details that you want to fill me in on later. But from what I hear is an old house that I had with an ex-wife that I'm living in now with my new wife that has a balloon payment that's going to be due of $50,000. And even though it has a fine interest rate of 2. 5 or 2 per... I don't remember what you said, 2 % now. For me, this is not good. In my mind, I go, if I'm your new wife, I don't want to live in your ex-wife's house, and I certainly don't want to live in it with a balloon payment at the end that we're going to be due for in the next however long. That's where my brain It's been 10 and a half years, yeah. Why would you not? And it's got your ex-wife's name on it. So why would you not either sell this house? I would sell it now that I see that your ex-wife is even on it, because it's not fair for her to be attached to that either.

Do you want to know why? Why? Yes. Because my new wife loves the house. Oh, boy. She doesn't care about it.

But your ex-wife is on it. I know. And that's not fair to her to- I know it ain't.

I I agree with you 100 %.

So you've got it. At that point, it doesn't matter. That's one of the reasons why I thought about doing that. At that point, it doesn't matter if you love the house. There's plenty of houses out there she can love. But your financial life is going to be tied to your ex-wife for life. If you keep this home for life, that's not fair to her.

If she tries to- No, no, no. Once the house is paid, if we pay it off in 10 years, she'll be gone.

Ten years is a long time, my guy. That's a long time to be tied in.

I know. I know. I know. I know what you're saying. But if we leave now and try to buy another house, our payment Our payment's only $1,400 a month.

I know that. I understand that.

So if I do this, our payment's going to go over double, if not higher. It will. And then I'm going to have to get a second job in order to pay for it.

No, that's not true. So here's what's true. I'm going to lay out what's true, and then we'll talk about it. We could talk. The truth is you're divorced from her. That's true. Oh, yeah.

That's a truth.

That's a truth. And you're remarried. That's true. Other thing that's true is you're finances should not be connected to your ex-wife for any longer than necessary. Fair enough? Yeah. What's also true is there's a $50,000 balloon payment here. Yeah. Okay. These are all truths, what we'll call in the con category. The only pro is your wife likes the house and there's a 2% mortgage. That's really the only pro. Yeah. There's part of this that you have to accept because of the divorce, and I'm not saying it's wrong or right. I'm just saying because of the divorce, your housing situation is going to change. I think you just have to accept that. You can't keep it as it was because a major thing has been upended. And so there's change there. And to say, Hey, well, we can pay it off in 10 years, and to have that link to her for 10 years is unfair. It's to everybody. Do you see what I'm saying? Because If something happens, if anything happens that changes in your life, that causes you to not be able to afford this house, that causes that balloon to be an issue, it's going to affect her majorly.

It's also going to affect you, Mike. You're talking about getting another job, all these things. The only thing, by the way, I'm just letting Jade roll here. This is fantastic, but I agree with her, by the way. I agree with her. I'm going to take what Jade said, and I want to put this back to you and go, after hearing everything Jade said, which, by the way, I heard you categorically They go, I agree, I agree, I agree. If I'm hearing you and I'm hearing Jade, and I am, the only reason you're considering this is because your current wife likes this house.

Yeah. It's in our budget as far as being able to afford.

Well, but she already knocked that one down.

Live the way we want to live.

Well, but no, you can live in other places. No, she knocked that down. You can live in other places. The idea that this is the only place where you can live within affordability is a myth.

It's not affordability. You have a $50,000 balloon.

Yeah, it's not affordable. It requires you to get another job just to afford it. You've created. It's like, after all that, you're still stuck in this thing. I guess what I'm trying to help you see as a friend, Mike, is I think this is because you would rather be miserable than be uncomfortable. No, you didn't let me finish. You'd rather be miserable instead of being uncomfortable and telling your wife, We're getting out of this. We're changing our life. You don't want to have to tell her that. Tell me if I'm wrong.

No, honestly, no, you're wrong. Okay. Because here's what our plan, what we wanted We wanted to sell this house and us retire up by Cambria, up in Northern Cal. You know where Cambria is? Sure. I don't know if you- Up north. Yeah, up north. Because we love it up there. That's She loves it. But her daughter's here with a grand baby. Her son lives here. Those things are in fact, or my two kids are out of state. I got four grandchildren with them.

They're out of state, Baltimore. So did your wife change her mind completely on the move up north?

No. The reason why we decided maybe not is because of family and stuff, like being close.

How far- Because you love your grandbaby. How far? I totally get that. Never going to dismiss that. But how far away are we talking about?

It's probably five and a half, six hour drive.

And that still has no bearing on whether or not...

Because it's like, okay- Well, I'm trying to get it in the mix to go. That's why you should sell this house, because they already had another plan.

I mean, but even if you've decided that's no longer the plan, if it is or it isn't. I know.

I'm trying to make this hard decision easier. I'm with Jade on this.

You know what? She's the one that got me in on the Dave Ramsey thing because I was the opposite. Okay. When it came to I wanted to, If we didn't have it, let's go get it. I want to enjoy life. But when I met this woman here, she turned me around in my mind.

Tell her you called us today, and we said no to the balloon payment.

I just think you're on a tight rope without a net. You're just walking this thing, and you're hoping you get to the other side. It's a 10-year journey with a $50,000 barricade in the middle. And an extra job for you. And a X, Y, Yeah, I know. Yapping about having this debt around her net.

I don't hear from her ever. No, I haven't for years. We've been married for 10 years. It's going on 10 years now.

You can do what you want to do, Mike.

We have spoken, and you said your wife introduced you to us, and now you called us. You do what you want to do, brother, but enjoy that second job, man. Enjoy that and that stress. Well, I hate to do that to him, but that's the facts. That's the facts. That's how we see it. Hey, folks, remember this. There's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.