Transcript of You Don’t Have To Live One Emergency Away From Broke

Brought to you by the Every Dollar app. Start budgeting for free today.

Normal is broke. Common Sense is weird. So we're here to help you transform your life. From the Ramsey Network in the Fairwinds Credit Union studio, this is The Ramsey Show. If you want to get involved in the conversation about your life and your money, it's easy to do that. The number is 888-825-5225. And we'll get you on the line. I'm Jade Warshaw. Next to me, Dr. John Deloney. Chopping it up with you for the next couple of hours. Let's go to the phone lines where we have Lee, who's in Charlotte, North Carolina. Lee, what's going on? How can we help?

Hi. I'm so excited. This is a happy day so I can get to talk to you guys. So recently, my husband left four weeks ago today. And the reason why he left is because I had found out that he took... There was a... Back in 2021, he never paid a debt. I went to go get renovations on my house and found out that there was a lien against my home, and it was in his name. So this was 2021. So since then, in December, I paid that lien off with a heat lock loan because I didn't want it to go against my house. He was on the deed. Since then, I have found out majorly, sorry- It's okay. Stuff that he had done. So he got called, and I guess he may be getting garnished wages. Because he left after I gave him a few choice words, and I found out that he had changed his address and that the state was coming after him from our 2024 IRS that we filed together. That was the only year. They took his half, and then he took mine. So I am drowning here because he left.

He has not held I don't have any responsibility, any of the debt. So in North Carolina, they can take your 401(k), they can take your half in your house. Okay, so- That I have worked- Oh, go ahead, hon.

Go ahead.

For eight years, I have worked my tail off for my 401(k), where I put it in a raw, so I'm gaining like $3,000 a month. I'm 59 years old.

Okay, so let me back up here, okay? Help me understand the situation in your marriage. Are you all still married?

Yes, but he left, and I will not... It's done. It's a done deal.

Okay, so have you met with an attorney yet?

Yes.

Okay, so You all have separate houses, or he put your house up as collateral on some loans? Has he just been running around, running up debts, and doing all kinds of wild stuff? Oh my God, yes.

Okay. Well, so what happened was when we got married, which we should have been a red flag, I had good credit, so I put the house mortgage as he's on the deed.

So the mortgage is just in your name.

So when they come after him- So the mortgage is just in your name? Yes. So when they come after him, they put a lien on my house, which I couldn't stand that, so I took care of that. Okay.

You took the Heelock. How much was it, Lee?

It would have started out at 21,000, but he disregarded it. It was 27,000.

So the Heelock was 27,000.

And I had to pay two more loans off that I did when he wasn't working.

And what were those?

It was a total of $48,000.

So $48,000 of personal loans?

Two. It was the... Yes. The HLAA total of 48, 27 was his lien, and then the other two were loans that I took out because he's not been stable working.

Okay, so here's what we need to do. I want you to hear what Jade is doing, okay? You have several things going on at once. One, you're really upset with yourself.

Yes.

The second thing is, you've been completely taken advantage of by a dishonest, not good man. Oh, yes. Number three, you have a big financial mess. And so what we don't want to do is let the shame you feel right now and the anger you feel right now towards the people involved cloud the judgment of, We have a math problem that we got to solve ASAP. And that's what Jade is walking through with you, okay?

Okay. All right.

Thank you. So I just want to clarify the numbers. Is it 75,000 total, which would be 27 of a HELOC and 48 of personal loans? Or was the 27 part of the 48?

Part of the 48.

Okay, so it's 48,000 total? Mm-hmm. Okay. And that's the only debt to speak of, or is there other things? Are there cars? Are there other things that you guys are involved in together and separately, money-wise?

Yes, there is. Tell me about those. Since he left, I had to use my credit card to get my attorney fee for 4,700, and then I had to use some of it to live on because he just went drastically. I have $14,000 on a car loan that I have.

And in my house- And tell me, before you go to the car, you told me that you had 47 from attorney's fees, and then you said you were also living on it. So tell me the total amount of credit card debt.

Right now, it's 5,400.

5,400. Okay, great. And then there's 14,000 of car debt. Right. Anything else?

Then the heat lock in my home, which is 137,000.

Okay, 137 is what you owe on the mortgage. Okay. So here's the thing. You've already started, and John will probably talk to you a little bit more about this. You've already started the process of getting a lawyer, you're getting a divorce, okay? That's happening. How long were you married?

We were married nine years, total 11 years together.

Okay, nine years. So there's a good chance that a lot of this is going to be split up and you're not going to be left holding the bag on this, okay? In many ways, you have to push pause on whatever your steps forward are because we don't know what the courts is going to say about this. Now, what you can do today is, yeah, Now is the time to separate your finances. You have your own account. You guys are no longer sharing anything. The good news is his name is not on the mortgage, so probably you'll end up figuring out some situation where you keep the house and maybe you have to cash out his amount. If that even works It's out that way. But there's a lot up in the air because of this money and how it's going to be divided. So today, let's focus on, instead of thinking about the debt and all that, let's focus on, are you able to eat and pay your personal bills today? Are you working?

Yes, I do have a good job.

Okay. What do you earn?

Eighty thousand.

Excellent. And what do you do for work?

I'm a property manager.

Okay, great. So you've got 80,000. When you take home your paycheck, how How much is it every month?

Now that I backed off on my 401k, it's about 2100. It'll be about 2100 on the next check.

Okay, every two weeks. So you're $4,200 a month. Great. And are you using an every dollar budget? Because that's going to give you a lot of peace right now.

No, I'm not.

Okay. Before you hang up the line, we're going to get you with the budget. Because what you need to know today is that Lee can take care of herself each and every month. We're putting the debt on the shelf right now because nobody knows what will be with that until we come out of court. But on 4,200, can you pay your mortgage? How much is your mortgage every month?

Thank goodness. The mortgage is only 1,079. Excellent. In the Exe line. But see, I have one question. The 27,000, he accrued that the month before we got married. But I'm paying for it. He's not giving me anything.

I understand, Lee, but John and I don't get to decide how that money, how that debt is split up.

Only a judge is going- Pay the minimum and keep it from getting any higher. Pay the minimum balance. Okay. Then when you go to court, your attorney should use that in his quiver or her quiver to help protect you. Mm-hmm. Okay?

Yeah, I get it. Thank you so much. It helps me a lot.

No, there's so much anger and frustration and shame and rage all wrapped up here, and you got to deal with a math problem ahead of you.

. For you, knowing that you have the peace of being able to pay your mortgage, you can cover your four walls, your food, your your utilities, your transportation. You have the money to do that. Like John said, pay minimums on everything else. Do not try to pay these debts off. Wait until your court battle so that this can be settled in court by a judge.

Don't take out any more debt. This show is sponsored by Betterhelp. Most of us are guilty of oversharing with the wrong person sometimes. And as fun as it can be to talk to people about everyday stuff, when you need help with relationships, anxiety, depression, or other clinical issues, random people may not have the right answers. Sometimes you need real guidance from a licensed therapist who follows a strict code of conduct, someone who's actually trained to sit with hurting people. That's That's why I recommend reaching out to my friends at Betterhelp. Betterhelp is the largest online therapy provider in the world. That means no matter what you're facing, they've probably got someone who specializes in exactly what you're struggling with. Betterhelp is totally online, which makes it easy to fit therapy into your busy schedule. To get started, just answer a few simple questions, nothing scary, and they're going to connect you with a licensed therapist who fits your needs. Plus, if it's not the right fit, you can switch anytime for no cost. Betterhelp has been matching people with therapists for over 10 years, and their 4. 9 rating shows that they usually get it exactly right.

Find the right one with Betterhelp. Visit betterhelp. Com/ramsey to get 10% off your first month. That's betterhelp, h-e-l-p. Com/ramsey.

Dean is in Reno, Nevada. What's going on, Dean? How can we help today?

Hi, guys. Thank you for having me.

Yeah, you bet.

What's up? I was calling because I had a question. I have two properties. I'm 29 years old. I have two properties in Bozeman, Montana. And I have... One of the homes has about $260,000 in equity. I am $125,000 in debt, and I'm trying to decide what the best route is here, whether I sell and cash out, become debt-free, and invest the rest of that money, or if I hold that house for more long-term gains, because that would be an original plan.

Okay. Let me run the numbers out in a way that I can see them on paper. So the first property, tell me what you owe on it and tell me what it's worth, and what you think you'll pull from the sale on property number one.

So property one, I owe 188,000, and it's worth between $450 to about $470. So we can just say $450 on that. That would be $260,000 in equity.

Okay, that's the first one you spoke about. Okay, and then tell me about property number two. What do you owe on it?

Property number two is a joint property with my girlfriend. That one is... We owe 430,000, and it's worth about maybe five. Five if we're lucky. We just put it on the market, but it didn't go for what we were asking, and we were going to lose our bucks on it, so we decided to pull out of that and just keep it rented.

Okay, so you're renting that one now. Is it losing money? Is it breaking even? Tell me about the rental situation.

So we bought that at the peak of the market. That one is breaking even. The mortgage on it is $3,009 a month. We're charging $3,000 for rent. Got it. The other property is- Hold on, you're actually losing money on that then? Correct. Yes.

Okay. Okay. Because there's no upkeep, there's no emergency fund, there's no roof needs to be replaced. You're just barely... You're treading water on that one.

Yes, sir. Okay. Yes, sir.

So now that we see the picture here, one's got 260 of equity, one's got, I don't know, maybe after fees, 50 of equity. Is that fair enough?

I would say less than that. Probably around 20 to 30.

Okay, 20 to 30.

I mean, we're in at 30,000 with the remodel.

So in total, you're sitting on about 2,080 of equity.

Yeah, that's fair. Okay.

Now, in the beginning, you said, I'm 125,000 in debt. Tell me about that.

So on the first house- Is that consumer debt?

Because clearly, you're in more debt than that. So were you talking about consumer That's what you're doing now, is that?

Yeah. So the first house, I pulled a Helic on it, and that was for $55,000, and I still owe $54,000 on it.

And when you quoted me, the numbers, was that including the 55K when you told me you owe 188 on it?

No, I was keeping that separate for consumer. Got you.

Okay. So separate 55,000 and Helic, what else?

And then 20,000. I did a debt arbitrator. So there's $20,000 in a debt arbitrator loan. Okay. And then I have... So my dad, he gifted me $50,000 for the first house purchase, but that's been a huge problem. And I've listened to the show a lot, so I feel very guilty.

So you got to give dad back 50,000?

I did. I mean, it was never discussed under that, but it created problems. Yeah, get it back to him, dude.

And I would feel better of- Get it back to Getting it back.

Okay, so that's the 125. Okay, so this is pretty simple, I think. I think you need to sell both of these properties. Where are you living? Where do you live?

Currently, that's messy. My girlfriend and I, we have a son together, and we are working hard to try to figure things out right now.

I know, but where do you live?

So I'm back currently with my father.

Okay. So you're living with dad. Are you paying any rent? Basically, I'm trying to find out if you have living expenses.

Yeah. So I do pay rent. My living expenses total about 3,500 a month. Okay.

And what's your income?

3,500 a month?

Yeah, because of- You feel like that's high?

Oh, child support and all that? Okay. All right. You're right.

What's your income for this 3,500 a month expenses?

It's It's roughly 8,400 or 84,000 a year, but I'm starting a new job September 22nd. That'll push me to 100 to 120,000, depending on over time.

So here's the problem that's not the problem. The problem is not your money, okay? Because it's really easy for you to go ahead and sell these properties, kick out this heelock, pay back your dad, get out this loan arbitrator. You make plenty of money to support your $3,500 of every month. The problem here is choices. And John can talk to you about that because you're just creating a life of chaos. You're going out and getting properties you can't afford, and then you're buying them with your girlfriend, and then you're having a baby with somebody that you're not fully in a committed... You're doing things that's just creating drama, and that's really where the problem is.

And you know that, right?

Absolutely. And I don't know if this is necessary to mention, but I just got sober. I'm proud of you. And that was a very big struggle.

How far along are you?

I'm coming up to two months.

You're about to get 60-day chip?

Well, I'm not an AA. I'm just doing this by myself.

All right. Today, you go to a first meeting, okay? Okay. Yes. All right, good. How old are you, brother?

I'm 29.

29. All right. Here's the deal, dude. You're about to cross the threshold today. And if you go to your first meeting today and you call a realtor, and you can go to ramseysolutions. Com and find a trusted realtor in your area. I'm going to put both these properties up today. You make a financial plan within 90 days to get out of your dad's house and get your own place, even if it's a one bedroom apartment. You're going to cross that threshold at 30, sober. You don't owe anybody any money. You make six figures, and you can begin to wrap your head around becoming the dad that you didn't have and the dad that you want to be. You and your girlfriend can work on your relationship. If it's worth investing in, you'll go get a marriage counselor and see if we're going to make this a run of this thing or not or whatever. But I want you to hear you're underwater and it feels like you can't see and you got all this debt here and you're trying to do this. You owe this guy money, your dad's gone. Jay We and I are seeing a guy who is right on the threshold of being completely and totally free from substances, from the demons, from the identity crisis, and from the money.

Do you see how close you are to the edge?

Yes, sir.

You're right there, man. You are right there. You've got all the tools, and you're making six figures, which tells me if you've been able to do that with all the chaos in your life- Yep, yep. Bro, when you get these chains off you, you're going to be at 250 $30,000 in the next 24 months.

Unstoppable.

You're right there. But I will tell you this. It's my promise to you. You cannot white-knuckle this. Yeah, it's been tough. I know. You got to walk through the doors of a meeting and sit down and say, Hey, my name is Dean, and I'm struggling. That's today, okay? Okay. And I promise there'll be a meeting in your for you. Game on, brother. Day one. It's day 30 or day 60, but we're going to give you day one today. I'm proud of you, man. Proud of you. And Jade, I love what you said. It's not the money.

It's not the money. He's making money. He's a smart guy. He can clear this debt. Literally, it's the moment these houses sell.

But he's so smart that he fell for, You're stupid if you don't have rental properties in this false truth called passive income. And you're stupid if you don't have this, and you're stupid if you don't have that. And then you wake up and you're almost and you're struggling with substance, and you live with your dad. And it's about doing the next right, wise thing.

Hey, you guys. More than 100 million Americans carry medical debt, and that is so scary. And it shows that traditional coverage often leaves people to face big bills alone. Families need more than just coverage. They need community. So what if your health care costs less and you are actually supported by other believers in the process. That's why I love Christian health care ministries.

Chm is a budget friendly, faith-based alternative to health insurance that's been serving believers since 1981, and they've paid over $12 billion in medical bills.

You all, that is faith in action. So let me say it again. Chm is not insurance. It's a nationwide health cost-sharing ministry. It's Christians helping other Christians with their medical bills. With CHM, you get to choose your providers. There are no networks, no surprise bills, and no insurance headaches. Whether you're just starting out as a family or you're looking for something that fits your budget better, CHM is where your faith and finances agree. Programs start at just $98 a month. So go to chministries. Org/budget to learn more and take the leap of faith today. That's chministries. Org/budget.

Listen, when you're tackling debt or building wealth, people can often forget about one important step to reaching their goals. Insurance. Duh. Having the right coverage as opposed to too little or too much can really impact how long it takes to accomplish those goals. Skimping out on insurance might seem like saving money, but trust me, when life happens, it's easy to fall back into debt without a safety net. The right insurance acts as a shield around your loved and your wallet when disaster strikes. In some cases, it can even save you money if you're paying too much for insurance or if you got bogus insurance, like the cell phone insurance or warranty insurance, that deal. How do you know if you have the right Coverage. Take the Coverage Checkup. It's a free online resource that creates a personalized insurance action plan that's unique to you and your situation. It makes an overly confusing topic, easy to understand, and gives you very clear next steps. Steps. So go to ramsey solutions. Com/checkup to take the coverage checkup or click the link in the description if you're listening on YouTube or podcast. I love talking about this, John.

I've told you before, when Sam and I used to rattle through life with no insurance, just living on the edge like Aerosmith with nothing. You're crazy. And then my husband broke his finger and I was like, Listen, head on over there to CVS.

We're doing this- Get you some tape, bro.

That's all you have. Oh, my gosh. Yeah, you need Yeah, it's insurance. It's important. All right. Amy is in Wisconsin. Amy, how can we help today?

So I'm wondering, how can I nicely tell my fiance that his parents' financial Shortcomings aren't his job to solve?

I'm looking at John. Yeah.

I mean, my first answer would be just to read back what... I mean, to say back what you just said, to sit down and say, Hey, honey, your parents' financial challenges aren't yours to solve. I'm assuming that you've tried that in 1,700 other iterations of that. I think the deeper question is less about you asking him. It's you asking yourself, Do I want to, here at the doorstep, do I want to be married to somebody who will put his parents' financial shortcomings ahead of the family that we are about to start co-creating together? That's the real question here.

All right. I understand some of it, but it's At some point, we were paying their mortgage.

Tell us how the conversation goes. When you say what John said, which is, Honey, dear, I can't live like this. Your parents, their struggles, they're not your fault. We can't solve them. We've got to solve our own for our own financial piece. What does that conversation look like, and what does he do?

It's usually... I mean, it never really ends in a fight or anything like that, but it's usually like, You're still my parents. I don't want to see them fail. I get that. I do. But at what point do you let them learn for them Theirselves.

Yeah. Listen, you're right. You are correct. So you don't have to convince us that there's a point. He's beyond the point. My question is, is he an only child? Is there some hardship that's caused them to have financial struggles, or is it truly just misbehavior with money, and he's the responsible sibling and feels like he's the hero?

He's the oldest of four, and no, there isn't really anything that's causing them to lose money. It's like they have a bunch of pets, and they can't pay their light bills, so they go out and get a dog.

But you have to metabolize that the bigger issue here is not your future in-law's financial situation. It's that you sat down with your fiance and said, Hey, this is a big deal to me, and your choices are impacting our life together. And he said, No, I don't care. I'm going to keep doing what I'm doing. That, to me, is the bigger issue here. It's a big deal. And by the way, this will show up again when you'll get married. This will show up again when you'll buy a house. This will show up again when you all start having kids. This indifference to you saying, Hey, this is really important to me, and him going, Yeah, I don't care. That's going to keep showing up. And you have to ask yourself, Am I going to sign up for this for the rest of my Listen, what John is saying is so true.

Amy, I'll tell you a piece of advice that my mom gave me when I got married. She said, The behavior you allow now is the behavior you'll allow for the rest of your marriage. And so it was basically saying, If I let this slide now, to John's point, I'm going to keep seeing this type of behavior play out, play out because I've allowed it. And I said, This is okay. And people treat you the way you allow them to treat you. So if you say it's okay, then it is okay. So I would not... This is hot take. I would not marry this person until we have figured out how to solve this, and I have seen how he enters into and solves conflict.

Absolutely. And by the way, neither Jay nor I are against supporting parents at all. But I want to do it in the right order. I want to put our oxygen mask on first to make sure, as for me in my house, we've got our four walls taken care of. We are able to financially support somebody else. And my guess is that you all are struggling, too, financially. Do you all live together?

We do. Actually, we got engaged, and then recently after, found out that we were pregnant. Okay.

You all have your own financial challenges ahead of you, and you're concerned that he's putting money in their account, and they're being irresponsible. It's not even a matter of them struggling with poverty or health issues. They're just making bad choices, right? Jade is so right. You have to have the deeper, harder conversation Because right now, your fiancé's parents' financial situation, that's just a proxy war. That's not the real issue. The real issue is you said, Hey, this matters to me, and he said, Yeah, I don't care. Or they're more important than you.

And in many ways, he's now also continuing that same chain of bad financial behavior and making bad financial choices. Because choosing to pay for something that's neither your responsibility or priority instead of what actually is, yeah, that That's how you get in the situation that the in-laws are in. So he's starting to repeat that behavior, which is a red flag.

All right. All right.

Listen, this is tough. Listen, let me say this. You're not crazy. Okay? You're not crazy. And by the way, this isn't the only thing he disregards what you want or feel, is it?

No.

No. These things don't happen in a vacuum. People don't work together, and they're not aligned on vision and goals and values and priorities. And then there's one weird thing over here. That's just not how people operate. And so you have to be honest with yourself. And by the way, you're in his life forever because you all created a human together, right? There's going to be some peace-making here, but it's not too late to not bind this thing together legally and get into a bigger mess, if you will. You all are already connected forever. But I want you to be honest about the of your relationship and how he dedicates his life to service to you and vice versa, or how he is just dragging you along through whatever he gets good and ready to do in the world.

All right. I guess, do I stop asking nicely at this point? Do I just say, Hey, dude, get your head out of your butt?

I think when you enter into those conversations with the word you, Y-O-U, When you start those conversations with the word you first, you're starting a fight, you're declaring war, and he's going to defend himself. What's more important here is for you to come up with your or what statement. I am going to fill in the blank. I will not be married to somebody who puts other people's priorities ahead of ours. I will not marry somebody who doesn't care what I want or what I feel or what I want to co-create. I will not engage in. And so it's not about you need to get your head out of your butt. It is gently and firmly and in full control. I will not fill in the blank, or I am going to fill in the blank. That's the declaration. And then he gets to decide if he want to be a part of this thing or not.

Tough stuff, John. Tough stuff. We're rooting for you, Amy.

Trying to organize your important documents shouldn't feel like another full-time job. With Knockbox, it isn't. Knockbox, that's N-O-K, as in next of kin box, is a simple physical system that helps you get your life in order so your family isn't left sorting through a mess after you're gone. It's got everything you need to organize your will: passwords, account info, insurance policies, and more, all in one place. No guesswork, no complicated apps, just peace of mind in a box. You all, this is one of the most loving and practical gifts you can leave behind.

So go to knockbox. Com nokbox. Com/ramsey today.

That's N-O-K, box. Com/ramsey.

The Question of the Day today is sponsored by YreFi. Private student loans in default can feel like a dead end. But YreFi works with borrowers when other lenders won't, creating fixed rate plans tailored to your ability to pay. So go to yrefi. Com/ramsey today. That's the letter Y-R-E-F-I. C-e-f-y. Com/ramsey. Remember, may not be available in all states.

All right, today's question comes from Veronica, Ms. Veronica Vaughn. In California, she writes, My husband and I are less than a year away from being debt free. We are self-employed and have been married for 28 years. My husband is a hustler who works seven days a week. I'm worried that when there's no more debt, he won't be as motivated. As he's leaving the house in the morning, he'll often ask me, How much do I need to make today? How do we continue the hustle when we get to the investing-saving part and we, quote, unquote, don't need the money?

I love this question. I like this question a lot. I see what you're saying, Veronica, about you're wondering if he's going to take his foot off the gas or lose motivation. But I think it's actually the opposite. So let me explain that. I think, John, that when you are in debt, Debt rules all. It is the driver of everything.

I'm working all day for that guy's money. Yeah.

You're right. It is a driver. I've got to make money so that. And the so that is so that I can pay off debt, so that I can keep making more payments, right? So your mind in many in many ways, is very limited to that thing. When the debt is gone, in many ways, it's like when you've been wearing a pair of tight jeans all day or you get home, you take your wig off, you're like, Oh, I can breathe. I can finally just be comfortable, and I can look and see other opportunities and other things. It's not just tunnel vision goggles on my debt. And so there's part of this that, yeah, when you're out of debt, things will change. Priorities will change. You guys might look at your life and Oh, my gosh, we thought this was the goal, but now that we can see and we're comfortable and we can actually afford to have options in life, right? You start to look at other things that might be important to you that you never could have even thought about before. So I do think you might see a shift, but it doesn't necessarily have to be a bad thing.

It really is Dave Ramsey, John says all the time when he's talking to small businesses, he's like, Yeah, move at the speed of cash, because when you have debt, It changes the decisions that you make. It changes the spirit in which you do things because there is a lot tied to debt. Now you've created this pressure in your life to pay the debt. And it's the same thing in personal life. When that pressure to pay that debt is gone, yeah, you can look up and go, You know what? We see it all the time on the show. I want to be a stay at home mom. Or you look up and go, You know what? We thought that what we really wanted was to buy a bunch of new cars right after the debt was gone. But really, what we want is to just enjoy life. And suddenly, maybe you don't want to take a vacation. Maybe you just want to sit at home and enjoy your home, right? There's so many things that shift and change because that barrier that was on your heart and mind is just gone. So I would say, Let's see what happens.

Let's not make it a problem. Or let's I need to talk about it now. Or let's talk about it now. Yeah, we need to talk about it now. That's good. But you won't know.

You won't know. But also, your husband needs to stop working seven days a week in hustling when you don't have any debt, Veronica. That's what I'm saying. So if you're already Hating on him in the future. Like, he's not going to want to work seven days a week. No, he shouldn't. You all are running for your lives right now. And so what is it always... We're going to shift to being intentional with this, right? But I think there's a... Man, there's such a problem in modern, it's probably all marriages, but modern marriages, which is I need to have a conversation. I imagine a future where this thing happens, and then you're going to do a thing, and I start getting mad at you about the thing or frustrated with you about the thing that hasn't even happened yet, that I don't even have proof it's going to happen. So just spitting out the conversation now and not with, Are you going to be as dismotivated? We don't own any money. Not that way. But, hey, we're getting really close to being out of debt. What does our life want to look like then? Like you were talking about, what do we want this thing to look like?

And he probably is going to say, I'm tired of working seven days a week, 365 a year. I want to exhale. And you might say, well, I like how much money you make when you work seven days a week, and I can't wait to spend all that money on me and us. And you only have that hard conversation. Yeah, I agree.

But this sounds like It's an imagination.

But it's an imaginary character assassination. You know what I mean? It's very close to contempt. It's very close to like, I'm up here and I work really hard, and I'm afraid he is just going to stop.

It's almost like, have you ever had a dream about your spouse doing something? Oh, and you wake up- And you wake up mad, and you're playing it out, and they're like, What's wrong with you?

I have walked in the kitchen in multiple times to get a cup of coffee, and I can feel My wife is mad. I'm like, What happened? And she's like, You know what she did in that dream. I'm like, What? And she'll say, I know it's irrational, but I'm still mad. And I'll be like, okay. This is that, though, right?

It's a scenario that played out in your mind, and You have told no one about it to even see if it's real or not. So yeah, John, I agree. Have the conversation. And, yeah, there's going to be a lot of unknowns. That's okay. But at least say what you're thinking, which is, how do you think you're going to feel when we're out of debt? You don't have to say it in an accusatory way.

What do we think our work life is going to look like? What do we think this small business is going to look like, this self-employed business? What are we? Like, whatever. And if you've been hanging on to something for almost three decades of marriage, because I'm also seeing how many wives would love for their husband to turn around as they're leaving the house and say, How much money you want me to make today? Okay. And she goes, This much. He's like, I'm on it. Got it. It might be that he thinks he's loving you every morning, Veronica. And if you tell him, Hey, when you ask that question, it freaks me out. It makes me think you're trying to do the bare minimum. And he might say, No, I'm trying to show you that I'm all in for it.

Or he might think that the only way that he can earn her respect is, yeah.

Because he's working seven days a week, and I I didn't seem to be getting it. Anyway, it's having those bigger conversations that I think are awesome. But yes, I found, to your point, I found myself, I worked really hard to get out of debt, and I thought peace would be taking my foot off the gas, and it was actually an opposite. Once I realized, Oh, now I can earn money forward, not just paying some other guy that I already took it from. I wanted to work so much more because I realized, Oh, I can do it, and it's going to be mine. It's going to be ours. And so that changed the whole trajectory there.

Oh, good stuff. All right. Thanks for the question. Really, really good. Let's go to the phone lines. We got Brett, who's in Maine. Hey, Brett, what's up? How can we help today?

All right. Good afternoon. Hope both are doing good. My question for you is, I've been dating this girl for a little bit now, and we both came into this with the idea of weird dating for her intentions to marry.

And I'm very much a planner.

And so I'm curious what your thoughts are for budgeting for an engagement ring and where the best source of... Because I have pulls of money in different spots. Where the best source, whether it's drawing from investment accounts or if it's better just to start saving up and so you don't have to hamper or touch the investments at all. What the best route to go for that.

Yeah. Excellent question. Listen, congrats on the successful relationship. I 100% would not pull the money out of any investment accounts. Those are plugged in for reason. They're there to build wealth for the future. So don't rob yourself by draining those accounts. Plus, you don't want to get hit with fees and taxes, right? It sounds like this is something that you can cash flow over time and just save up for what you're looking for. We would say 30 days of work is probably a good place to start. Some people might argue that and say it needs to be a little more, or some people might say it needs to be a little less. At this point, it really is about what you... I mean, obviously, you want to get a ring that you think she's going to like and that thing. But it's pretty simple. Save up 30 days' worth. What do you say, John? What?

I say, Don't call strangers on a podcast and ask them this question. Save up what you think the ring is a good amount. I've taken calls on the show where it's like, Hey, I'm spending $25,000. And my personal was like, You're an idiot. And Dave was like, No, he's not. And so everybody's different on this deal. And so it's what you can afford You can pay cash for. What is it? It's two months salary. No, it's not. But it might be one month. It might be four months salary. It just depends. It depends. And some of you guys can go put a quarter in one of those little turny things in front of a pizza parlor.

Please don't do that.

Whatever. You do you, boo. Just pay cash.

That's it. Oh, that does it for this hour of the show. Keep on listening. We got more coming at you.

Hey, you guys. Back to School Season is here.

And if you have kids, You know what that means.

Your grocery list just got tougher. So here is a fantastic tip to save money. Start your grocery shopping at Aldi. When you make Aldi your first stop, you can stock up on breakfast favorites, school lunch essentials, snacks for after practice, all the things without blowing your budget. A family of four can save up to $4,000 a year by making Aldi their go-to for groceries. Find a store near you at Aldi. Us. That's Aldi. Us.

Savings based on regional analysis of Aldi versus select competitors.

Prices may vary by location, product availability, and the market.

Normal is broke. Common sense is weird. So we're here to help you transform your life. From the Ramsey Network in the Fairwinds Credit Union Studio, this is The Ramsey Show. I'm Jade Warshaw. Next to me, Dr. John Deloney, taking calls about your life, your money for the next couple hours. 888-825-5225 is the number that gets you on the line? Let's go to the phone lines. We got Darby in Nebraska. What's up, Darby?

Hey. Thank you guys for taking my call.

No problem. How can we help?

So I have a unique situation. Tell us about it. Tell us about it. I was a stay-at-home mom. I'm sorry.

No, you're good.

I've been a stay-at-home for the last seven years. We found some issues with the current home that we're renting. There's nowhere else to rent in our area, even towns 20, 30 miles away. So we saved up money. We are in the middle of building a house. And I went and got a job about four months ago to just give us some extra cushion. We have no debt, but But I have lost several childcare options due to my son's unique medical condition, I guess you would call it. We don't know what to do.

What's his medical condition? What's his challenge?

We moved into this house when he was one. He just turned five. Last December, he was so nonverbal. I was like, Is he autistic? They did a random blood test and found out he had extremely high lead levels. And And it's in the dirt around the home that we live in. And he's a boy, he eats dirt. He didn't think anything of it. So, yeah, his lead levels were through the roof. I did a detox with him. He has finally started talking, but he's only been talking for the last, oh, six months or so.

So at this time, he's pretty delayed, right?

Yes. Okay. Yeah. Like, Basically, he's fine. Sure.

Have you gotten neurological testing done?

No, we've done- Or have you gotten him psych evals or developmental evals? No. No. They think that he's good because he can count all the way to 20. He knows all his ABCs. He recognizes numbers and letters. It's just verbal that he is behind.

Is he in a speech path program?

Yes.

Okay, very good. What is it about his speech challenges that make childcare impossible?

Because he's very independent, because no one's been able to understand him for the longest time. So he will ask, and if he's not being understood, he just goes and does it. Sometimes he's a little rebellious, and he gets very frustrated and mad when he's not being understood, and he will repeat over and over a word, which I love his stubbornness because that's what's got us this far. Like him constantly receiving- Are you underselling it?

Because what you're telling me, that's a very... I mean, it's just working with four, and five, and six, and seven-year-olds. Or does he start smashing stuff? I'm trying to figure out- No, he never gets destructive. Okay, here's what I hear. I hear a mom who is underwater with guilt. That somehow you did something wrong to this little boy, and I want to free you from that. You didn't. Okay? You're a good mom. Your husband's a good husband. He's a good dad.

Yeah, he's a very hard worker.

I know. And you are, too. And this is a hard, messy situation because nobody likes to uncover, oh my gosh, the home we live in, our one safe place, actually is responsible for making our kids sick. Nobody wants that. And here we are, okay? My fear is you guys have boxed yourself into an either or situation, and now you're building a house that you can't afford or that you can barely, barely, barely afford. And maybe you couldn't rent a house. But I would have suggested if you'd called us a few months ago, get a two bedroom apartment. This is a very short term situation right now. But there's other solutions. But here we are, you're all building a house. I'm assuming you're all under contract and everything. This thing's going forward?

Yeah, we've got started on it. We have three kids. He's our middle.

Okay. Are you able to make this payment? My owner is in school. Are you all able to live comfortably without your salary?

We can, yeah. So without my salary, our monthly payment will be right at that 25 %. Great. I just really want the extra cushion because we have livestock and our lives are very unpredictable. And if there is something else that my middle child needs... I had to go do a bunch of research on this because there was no research on kids with lead poisoning.

There is countless, countless reams of research on lead poisoning in children. And if your physician doesn't know, you got to move on from that physician. It is... I mean, there's so much literature out there on it. Tons. And it is a big deal. It's a very, very big deal. That's why they removed it from paint, except an older... I don't want to derail us. It is out there a lot, okay? But also googling everything can make you... It can trap you, right?

Yes.

So here's the bigger situation. You and your husband need to sit down and say, Hey, we've created a life with a ton of variables in it, and we have three kids, and we're building a home, and we're moving. There's anxiety alarms ringing all throughout your house because you all have put too much on this plate in this particular season. It may be for this season, we're going to reduce the amount of livestock we have, or we're going to move our cows to another field for two years, and we're going to take that hit so that we have some margin to be with these three little kids, especially the one in the middle with special needs. I'm just making something up. But anytime somebody calls me and says, We have this problem or that problem, neither or, I want you to at least go through the exercise of putting three or four other variables on the table just to see. Let's move from Nebraska. What would that look like? We can't do that. Okay, we at least want to put that on the table. We are going to sell this house that we just put a thing in because I think we found a rental house.

Well, we're not going to do that. I want you to at least go through that exercise. Do we have to have all these cows? Do we have to? Do we have to? Do we have to? And sometimes you can clear away some of the nonsense. You clear out that closet a little and it's much easier to breathe in there. Okay?

Okay.

And is there any other question we can help you with? I feel like I just talked over you the whole time.

Well, yeah, we were just looking at different I was trying to think of creative opportunities for me to make some income from home. I do a little bit of custom leather work already.

That's amazing. There's never been a better time in history to sell custom leather work all over the planet if you can get it done and get up a nice e-site.

Yeah, I think that's great. I think anything that you're looking for, it sounds like right now you need money right away. So I'd probably look for something that's already contained that you can just get started in. And then on the side, I'd start the leather thing. And yeah, e-com, that's the way to do it.

Or next door app or somewhere down the road.

Statistics show that half of Americans don't have enough life insurance, or they don't have any at all.

I don't understand this, John. Why don't people want to take care of their family? They think they're going to die or something?

Well, I used to be one of those guys. I didn't even think about it. One of my buddies said, Hey, the only reason to not have life insurance is if you hate your wife and kids. I immediately went and got term life insurance. That's a gut punch. You're telling me for decades, Dave, I've sat across people who've lost a spouse, they've lost somebody in It's important to them, and they don't know what to do next.

Me too. It's terrifying. You're going to have a crisis here. You got two options while you're sitting and talking to a young widow. She's concerned about how she's going to invest all this money properly and not mess this up, or she's concerned how she's going to eat tomorrow. That's exactly right. These are the two options. Take care of your dadgum family, man.

Term life insurance can replace income, pay off debts, cover funeral expenses, so your family can actually have the opportunity to just be sad, to just miss you.

That's exactly what it's supposed to be. It's I love you to your family. Term Life Insurance. Jeff Zander and the team at Zander Insurance makes it easy and affordable. I've used them personally for 25 years. They're the only people I trust. Go to zander. Com or call 800-356-4282.

If you enjoy The Ramsey Show, let somebody know about it. Take the time to share an episode of the show, or if you're watching on a platform like YouTube, take a moment to like, maybe make a comment. If you're watching on Instagram, maybe watching one of those clips that we put out, use a little paper airplane and send it to somebody else. All of that is so, so important. When you like, subscribe, and share, it helps us in the algorithm, and more people get this life-changing content. We appreciate it. All right, let's go back to the phone lines where Brenda is waiting in California Hey, Brenda, what's going on? How can we help today?

Hello. How are you guys? Great. Let me just say, John, you're one of my favorite people on the radio right now, and I haven't had the gets to actually call your show, and I'm so glad that you're on because this question I have a little bit of emotion attached to it. All right, let's do it. The question in its most simplicity is, I wanted to know if selling my business property would be a smart move to pay off debt and give me a jumpstart towards saving for retirement. I opened my business when I was 20 years old. I've had it for 35 years now. And over the last... Since 2019, I was diagnosed with a medical... Well, with a blood cancer, I'll just say, there's no cure. However, I do feel fantastic right now, and so that's not really holding me back at the moment. And then COVID, the shutdown with COVID. And then in 2023, my salon was flooded in the California flood. And And so I was... This is my second go around on trying to get on the baby steps. And so I had to live off some credit cards pretty much from about 2019 to now.

Wait, Brenda, why?

How come? Well, I'll say with the flood, when the flood happened, when our community was trying to save it, I'm a one-woman show, so I was literally trying to put 50-pound bags around a I had a span around my... Oh, you did it because... There's a long bag of sand around my salon, and I injured myself. I heartrated myself. And because I have this type of blood cancer, when I went to have it operated on, they gave me too much blood dinner, and I was I'm internally bleeding. So I had a long recovery before I was able to just go and win another chair and start working.

I got that. It was a five-minute- I got that. Did you file a malpractice against these people who poisoned you?

No, I Okay.

Here's what I'm trying to give you back. I'm trying to give you back some agency. A flood will take everything from you because everything's going okay. And then a natural disaster, it literally falls from the heavens, and it takes everything, right? Yeah. And it feels powerless. And then when your body gets cancer, the very instrument that you walk, and breathe, and talk through, and love through, goes to war against you. And it's scary, right? Yeah. It feels like you lose ages. You don't even trust your own body anymore. And then it's easy to make the next statement, which is, I had to, for the last six or seven years, live off credit cards.

No, I didn't live off credit cards for six or seven years. I lived off credit cards for five months.

Oh, for five months? I thought you said 2019. Okay.

No, for five months during the flood time, because I was already on trajectory.

During the flood, it was five months. Okay. All right. So you're off the sauce now.

These credit cards are like, Okay, thank you.

No, I'm asking you. You're not using credit cards anymore.

No, I'm just trying to pay them down. But with 29. 9% interest, it's been really hard.

How much do you owe?

I owe $24,000 in credit card debt, and I have a... Most of the cash flow of my son's college, and so I owe $14,500 to a parent plus, and then $10,000 at a super low interest rate that I 10,000 during COVID just to survive during that disaster also.

Okay, so a couple of things right off the top. Let me ask you more question. How much do you make a year?

Okay, so there's a little trick on that. Normally, up to maybe... Right now, currently, I'm about at 55,000. Normally, I make close to 100,000. However, over the last two years, being in business for as long as I have, my clients are either starting to retire and moving where their kids are and moved out of the area, or two, they're passing. And so as I try to rebuild, I'm not able to rebuild the clientele as fast as they're dropping off, and then they go and leave to other areas. So That's where I'm at right now.

So here's a couple of... This is me sitting with you at the table, okay? Not accusational. This is me sitting with you, okay? Sure. We're going to choose reality here. The reality is, number one, you cannot afford to be paying for your son's college right now. You don't have that much money.

I'm done with that. He's out of college now.

Okay. And so we're going to exhale. We're not going to pay for anything that we can't afford. The second thing is, you have to ask yourself, do I want to continue to be in business doing hair? Because part of your business is going to require you to really hit the streets to get new clients. You've been doing it for a long time, and it feels like you're going all the way back starting to square one to go get new clients. And that's what it's going to take And you're going to have to learn all the new technology, and Instagram, and next door app, and whatever. But your clients are leaving. So you have to ask yourself, do I want to be in this business and take the cycle all the I'm going to have to wait around and start this thing again and get new clients? Or am I done with this?

No, I'm not done with it. I have a good 15, 20 years of harming me.

Okay. Then that means you're just going to have to choose reality and say, okay, cool. My people are dropping off. Then I'm going to have to take one less client a day for the next two months, and I'm going to have to hammer the streets getting more people. This is what I'm going to have to do.

I have been doing that. I have been posting. I have more visits to my website now. I've been every day doing that. That's it.

You're just going to have to keep going. There you go. Okay, so you're working on that problem. And so talk to me and Jade about the bigger issue, which is, do you want to sell your property?

So the business that... My one woman show, like I I said, in the business business, the trigger is the fact that I rented this building from my father for many years. And then about maybe, I want to say 10 years ago, he was in some financial struggles. And so He basically debated it over to me. There's nothing owed on the property at all.

What's it worth?

As of 2023, when I looked, it was at 380.

380,000. Okay. So I'm going to simplify this a little bit. My screen says, I'm living off credit cards, is selling my business a good idea. So are we talking about just selling the property? Are we talking about selling the property along with your salon book of business? What are we talking about specifically? What are you thinking about off floating to pay off this $48,000 of debt, if I understood correctly?

The property, the business property and building, not my actual clientele.

Okay. That would go with me. Okay. And so where would you do hair if you were not doing it out of this building? What would be the plan?

Oh, God. It would be a dream just to rent a chair and not have... So what I've always said is I'm one person, two households. I have two light bills, two gas bills, two of everything, and people can barely live with two and come to one house all these days. And so that's where I'm stuck.

So you want to be out of the building business anyway?

How big is the building?

Property-wise, the land and everything is about 3,000 square feet. Actual building properties, maybe 1,500.

See, here's the thing. Here's my question. You own it outright. You don't owe anything on the property, right? It's just an asset. And it sounds like you might not be this person. So if I'm putting this on, you're like, Hey, I'm just not that person. I feel like you have a great opportunity here because you've got the space that if somebody wanted to rent a chair from you, you could allow somebody in space, I don't know, that does nails or somebody in your space that does eyebrowsing or an anesthetician, all of those things. You have the ability to house those items and therefore make more money. And with you, I don't know what your cancer, the foresight is on that and what that looks like. But on down the line, that might be really good for you. I don't know what the doctors have said, but if you come in a season where you're not able to be on your feet as much or you're doing a treatment, there's still something there that's earning money for you. So that It feels like a move to me, along with hitting the pave, like John said, to try to build your book of business.

But one way to build your business is to add pieces to it that don't require as much of your personal time and personal effort, because you're going to hit a ceiling with that really quick. There's no way to scale out of that until you add people. So there's part of me that doesn't think this is the move. I don't think so at all. Yeah, I think if you can just keep building your income above $4,000 a month, you can pay off this $38,000 to $48,000 of debt. And I think that's the That's what I would do. Hold on to the building. It's a wonderful asset, and it's going to continue to go up in value.

We've told you for years, debt is dumb, cash is king, and the borrower is slave to the lender. So when we find a bank that actually gets that, we shout it from the rooftops. That's why we've partnered with Fairwinds Credit Union. These guys aren't pushing credit cards or auto loans like your current bank is. Fairwinds is on your side, and now they've taken it to the next level. They worked with us to create a high-yield savings account that gives you a great rate without the junk. No bait and switch rates, no credit score games. Just a simple, powerful way to help you build your emergency fund fast. It's part of what Fairwinds calls the Smart Bundle made for Ramsey fans. You get high yield savings, a no fee checking account, and zero gimmicks. Just common sense banking that works with the baby steps, not against them. Coming soon, they're launching a brand new Ramsey debit card. It says, Debt is normal, be weird, right on the front of it. That's not just a card. That's a daily reminder that you do money differently. So check them out at fairwins. Org/ramsey.

Fairwins is federally insured by the NCUA.

We have a fun segment here that we like to call Asking for a friend. You know what this is, John. Whenever there's something that you feel embarrassed about asking about.

I get that all the time. Hey, just asking for a friend. What if my friend's wife doesn't like him anymore. I get that all the time. Yeah.

Asking for a friend. What is a rash that looks- James is always like, Hey, I'm asking for a friend.

Do these really short pink shorts? Do they make my thighs look... Or my friend wants to know if it makes his thighs look... It does, James. It's Okay.

Oh, boy. All right.

James is always asking for a friend.

I don't want to ever hear the word James and Thies in the same sentence.

The single grossest thing that happened in Western fashion in the last 20 years, is the increasing creep up- Of shorts? Of the male shorts. Limp Biscuit did it right in the late '90s. Shorts should be mid-shin, and that's it.

Oh, you are so wrong.

And they're getting higher and higher and higher.

I am the one who is buying shorter shorts for my husband because- Gross. Show me the thigh. No. Okay, here we go.

No. The upper male thigh is the grossest thing.

No more. It's the worst. Please, let's talk about asking for a friend. All right, ask for a friend. Asking for a friend. What is an asset? Why is asset coming after short shorts?

Not.

Man, we could have set that up better. Okay, this is going off the road. Okay, what is an asset in the way of money? Okay, so assets, let's just talk about that for a minute, because a lot of times you hear from the dude bros on TikTok and on- And their short shorts, I need some assets, dude. You need to be making money in your sleep, bro. Basically, an asset is something that has a value on it, a monetary value. It's money that if you were to sell it, you would earn more money. That's the best way to think of it financially anyway. And so One example of that would be cash money. That's an asset. It's money that you have. When you cash flow everything, you don't need to rely on debt. It is something that is of value to you. Something else, real estate. That's an asset. It's something that, well, if it's done correctly- It can also be a liability.

That's true.

If you have equity in a piece of real estate at that point, yeah, it is an asset.

Can we tell everybody what equity is?

Equity is if you pay money for something, and as you're owning it, it continues used to go up in value. Let's pretend you buy a piece of real estate for $400,000, and you bought it for $400,000 in 2024. Then if you look up next year and it's worth, I don't know, $460,000.

You've paid $40,000 down on the principal.

Mm-hmm. Now you've got $100,000. You have $100,000 in equity. Yes. Did we do that in a way that makes sense? I hope we did. So that's the idea there. So a lot of times on the show, you'll hear someone call in and they'll say, I've got this real estate property, and we'll say, What do you owe on it? And they'll tell us. And then we'll say, What do you think it's worth? And then we'll do that subtraction, and that will tell us what the equity is. Another form of asset would be an investment. Yeah, that could be your 401(k), that could be a Roth IRA. Any money that's sitting in any type of investment account that is gaining interest is an investment, and it is an asset. Getting out of debt and having a fully funded emergency fund is the quickest That's the right way to build wealth. You would invest 15% of your income in a tax-advantaged retirement account. Like I said, that's an IRA, a 401(k). And yeah, that is an asset. It's a way that you're building wealth. Next, tax-advantaged accounts, another type of asset. These accounts let you keep more of your money by reducing taxes now and later.

So again, examples of this, a traditional IRA, a Roth IRA, an HSA. Even the 529 savings account would be an example of that. And other types types of assets, your car is an asset. As long as you're not upside down, if you could sell your car and pocket the money, especially if it's a paid-off car, that's an asset. Your wedding ring. If you sold your wedding ring today and you got a couple of thousand dollars in cash, that is an asset. Boats could be assets. Again, if you sell it and you receive money and you're able to receive more than what you paid for, it is really what we're looking for. You hear this a lot when we talk about networth, John. A lot of times people People don't understand the networth equation. They think, If you're a millionaire, it's because you made a million dollars. And that's really not it. It is your assets, which is what you own minus what you owe, must be X amount of dollars, in this case, a million dollars. Assets play into that equation. It's what you own that is of value. Did I cover it? I think you got it.

Did I get it? If you have questions, you can email James Childs. I'm just kidding.

I love that you snuck asking for a friend into and asking for a friend with the equity question. That was good. I was just trying to get a little bit meta here. And by the way, short shorts, the upper male thigh, not an asset.

I think you need to bring back the Jinko shorts.

Oh, gosh. I'm working on it, man.

It depends on who you ask about that.

No, not the Jinko ones. I'm talking about actual real car hearts that people cut off to make them shorts because that's all they had. The real social deep punks back in the day. Those are the guys. Hey, we saw New Found Glory the other night at a local club here in town, and they had the long dickies, and it made me happy.

Okay.

Shorts should go past the knee, gentlemen.

I'm going to go straight onto these phone lines where I got Kerry in Phoenix, Arizona. Tell us what you think about the shorts, Carry.

Don't.

It's just like a man wearing pink. If he owns it, if he isn't ashamed of it, he can pull it off.

I love that. The clothes make the man, the man don't make the clothes. Wait, the man makes the clothes, the clothes don't make the man.

No, it's the other way around.

The short should go past the knee, right?

For a guy, yeah. I feel like that's not only modest or inappropriate, but otherwise, some guys take it too far and they get a little bit of swimming trunk, if you know what I mean.

James Child.

No, like speedo.

We don't want that.

They need to come down a little bit. Definitely James Child.

That's more George Campbell, but that's a different show. All right, so how can we help you, Carrie?

How can we help you?

Okay, so did you guys hear about the storms that rolled through Phoenix a couple of weeks ago?

I did. Yes, ma'am.

Okay, we got hit pretty hard, and I took some damage to my home, which is bringing up the question about whether or not we should do a particular remodel that we have been thinking and planning about for the last six years. Wow. If we did the remodel, we would have to obviously pay for everything, including the roof. Well, now my insurance is covering the roof, making the remodel a little bit cheaper out of pocket for me.

Okay. So what will it cost you to do the remodel without the roof cost?

Okay. So it's not just the roof. It picked up my trampoline and hit my back porch and tore my back porch off of my house. Yikes. In order to put the back porch back on, we have to move our septic tank in order to build the new back porch to code.

Will insurance cover the back porch because of the trampoline, because of the storm? Yes. Okay, nice. Yeah.

So there's a lot of other stuff that it's going to cover. Now, here's the nitty-gritty numbers, okay? We owe about $450,000 on our home, but our home's value is $1. 2 million. We got locked into that $2. 5 years ago. But since then and after COVID, my husband got really sick with COVID, and we were on top of every single one of our bills. We were paying everything down. And when my husband got sick and some of our bills went delinquent, our credit took a hit. So we have a total of 68,000 in medical debt. We have approximately 90,000 in other loans between two cars and a horse trailer, personal loans, solar panels. We only have 10,000 in credit card. Between my husband and I, we have about 150,000 a year in income. I'm an at-home mom, but I make the land work for me. So we're on two and a half acres. I board horses, I sell chicken eggs. I have 54 chickens.

Right, so we'll get right to your question. We're up against the clock here.

The question is, should you do this renovation?

Should I do the renovation? But should I do it with an H-E-A or a Heloq?

Please don't. No. Please don't. Listen, you're already in $178,000 of debt. Here's the thing. You have great opportunity, and I see the opportunity you're talking about. You're like, Hey, the insurance will pay for the roof. It'll pay for the back porch and some other things on the list. That is going to cut down on your renovation costs. If you were in a position to be able to cash flow the rest of the renovation, I'd be like, Yes, I'm on your side. Go do this today. But the truth is, you're just not in that position, Kari. You owe a lot of money in debt, and the income is great, but you're not there today. So no, I would not do this renovation. Have insurance Please don't. Please don't. Have insurance, fix the things that need to get fixed. In 2026, don't just set goals, okay? Learn how to actually reach them. And the 2026 Goal Planner is here to help you. And it's packed with monthly content from myself, from Dr. John Deloney here, and from Rachel to help you stay on track with your money, with your faith, with your relationships, and actually follow through on your goals.

Now, we sell out on this every single year. So seriously, guys, please do not wait to order yours. You can get one today for a very specific civic price of $49. 97 at ramsey solutions. Com/store. Or if you're watching on YouTube or in the podcast, you can go ahead and click that link in the description, and you, too, can get your 2026 goal planner today. All right, let's go to Jay. He's in Charlotte, North Carolina. What's up, Jay?

Hey, thanks for taking my call today. What's up, brother? Yeah, you bet. What's up, brother? Daily listener, love the show, and appreciate all the advice that you guys offer on the interwebs and the radio.

Thank you, Jay.

Absolutely. I've got a question for you. It's short to the point. My wife and I We are in our own home, and we're still working a little... I'm working full-time. My wife works part-time, and we have two grown sons, and one of them recently went overseas to go to school. And we, along with him, put together some money for him to go over and start going to school overseas. And now he has asked us to help again and just wanted to get some advice and see what you guys would recommend.

What's he studying overseas?

That's a good question. We're not really sure.

Yeah, I would not put another penny in this.

You I don't know what he's studying.

None. I am as pro-high education as anybody in this building. I promise, maybe the top. I'm probably the most pro-high education person I know. I would not fund my kid to leave the country to go do a thing that I don't know what's going on or what they're doing, what they're studying, and what they are expecting to gain. And by the way, if my kid goes to college, one of my rules is you have to study abroad. I even believe in sending kids abroad. I'm a huge believer in that, but I don't even know what you're putting money into, so not one more penny.

Jay, how much have you given him so far?

It's between, let's say it's around 10,000.

Okay.

His mother probably knows a little bit more. We think it's visual art, but we're not sure. I'm not sure.

To answer me this, is the uncertainty on your or is it on his part? Has he been telling you, and you guys are like, Okay, yeah, and just not taking it in? Or is he being ambiguous and not being clear?

Yeah, the second. The latter.

Did he have grades and end of semester? If you're a VA student, you would have a visual arts student, you would have a portfolio that you've started your freshman year. So he would have examples of art and examples of all different sorts of- Who did that? Have you seen all that stuff?

Some of it, yeah.

Have you seen the grades? It's been a while.

No, I have not seen any grades.

Level with us. Level with us, Jay. Do you think he's still in school, or do you think something else- I do.

Okay. I do think he's in a situation where he is up against the wall. He told us he got sick during the first the first semester there, and he got behind in some of his classes. I believe that he did get a job. He never had a job before when he was here, but he has a job now, but it's not enough to generate. We did recommend maybe looking into other options, like a small student loan or something like that, but really without an income, I just wasn't sure whether or not he was going to be able to pass the formalities of getting a student loan when he didn't have a job, but he does have a job now.

I don't know if you can get a federal student loan to qualify for an overseas university. Overseas. Jay, this is not... I worked with college students for 20 years. This is not passing my smell test.

Yeah, it's not sounding good, but there's two sides of it. I want to confirm that there's two sides of this here. I agree with John. I would not keep shelling out money for purposes that you don't know of or what it's being for. That's thing one. But thing two is, it sounds like there was a lack of expectation and lack of clear conversation on how we're going to school, who's paying for it, what's on the table, what's not on the table, what my responsibility is, what your responsibility is. That conversation clearly was never had. And so when you do come to your son and say, Hey, son, I can't give you any more money for this. Here's why. But I also want to go back and say, Here's what I should have done that I didn't do.

You have to own it 100 %.

Yeah. Does that make sense?

He did a lot of it on his own. 75 % of it was done on his own. And- I know, but you still don't even know what it is. We did help. Right.

What I'm saying?

That has been a source of bothering me and his mother for over a year now.

So if my kid came to me and said, Hey, I'm spending 35 of my own money that I saved up. Would you help me with the last 10 grand to go to college? I would be thrilled. Absolutely. Sure. But we'd still sit down before I wrote a check for $10,000 a semester, 40 grand over the course of four years. I would still sit down and say, What are you studying? What's your plan with this? What is your day-to-day going to look like? How can I love you here? And by the way, again, every college is different, and I can't speak for overseas colleges. I know I spent a ton of my time taking students students who got sick psychologically, physically, like cancer, psychiatric issues, all of it, helping them get back on their feet and be successful that semester and/or the next one. Just It just doesn't... Something's not adding up for me.

Something ain't right. Yeah.

I love Jade. What Jade said is so important, though, because if you sit down and say, Hey, I don't know what's going on, then He's got to have to defend himself. If you sit down and say, Hey, I blew this whole college thing, and I want to start over. I need some more information. I didn't do a good job. I wasn't clear up front. I didn't ask you what your major is. I didn't tell you I want to see some of the work. I want to know what the plan is. Why are we studying overseas? What job or life do you want to have? Are you going to live overseas when you get out of school? And is there a visa process? Are you going to come back? I want to know some of those questions because Jay, the question I'm hearing him ask beneath the real question is, I don't know where my son is and what's going on.

Yeah, and he's nowhere near me. He's in another country. All right. Yeah, there's a lot going on. I'm not going to lie. But I do want to make sure that I'm being really clear, not only for Jay, but for other listeners, too. When it comes to college, John, being able to pay for school, whether all of it or a portion of it, is really a privilege for both parties. It's a privilege for the child to receive it, and it's a privilege for the parent to have the financial ability to say, Here's this money for your education. That's an amazing thing. That being said, it's not a requirement. It doesn't make you a good parent or a bad parent if you can't afford to pay it. But the one thing, money aside, the one thing you must do that is so, so important, you've got to have these conversations before the fact. And you've got to have them more than once because you hear something and information gets lost and details get forgotten. It's up to us as the parent to have these conversations and say, Hey, here's what it is. When you go to college, here's what we're going to do.

We got to pick a place that you can afford. Here's what your mom and I are going to put in, or here's what dad and I are going to do. Here's what you need to do. We're expecting you to work. We're expecting you to earn $800. Be specific. We're expecting you to cover your room and board. We're expecting you to cover your apartment. We're expecting you to live on campus. We're expecting to give you $3,000 a month. Be so clear and talk about it as much as possible so that when the time comes, there's no question.

And start talking about it your freshman year of high school. Yes. It doesn't sneak up on you. It's like Christmas. It will be there in four years. And it's a simple reverse engineering math problem to say, We're going to have this many dollars in an account to help you. You're going to be responsible for this. And by the way, here's what the top three colleges in our state cost. This is reality.

Or like my dad said, Hey, you ain't got a college fund, so you better be good at sports or you better get an academic scholarship. And that's the expectation.

And tell them that their freshman year of high school, not their second semester senior year.

Facts. We'll be right back.

Hey, what's up? Dr. John Deloney here. The new dates have dropped for the money and marriage getaway over Valentine's Day weekend in 2026. This is your chance to hit pause on everything in your life and reconnect with your spouse over a long weekend in Nashville, Tennessee. Me and my friend, Rachel Cruz, will be digging into topics like sex, money, communication, and more. This weekend is happening on February 12th through the 14th and early bird prices start at $749 per couple, but the prices will be going up soon. Get your tickets today at ramsey solutions. Com/events.

Welcome back to The Ramsey Show, live in Fairwinds Credit Union studio, taking calls here with Dr. John Deloney. I'm Jade Warshaw What is this? Is this Ken Coleman producing the show today?

Yes, he's back there producing this segment.

All right, it's going to go off the rails. We got Roger, who's in Florida on the line. Hey, Roger, how can we help today?

Thank you for taking my call. I'm retired about four years now, and I have a sister who's been estranged from the family for a very long time. I've been sending her about $700 a month for about 10 years.

Oh, my goodness. Wow.

Yeah. Well, she's never really had a job. She lives in another state out West. Currently, my wife is about to retire, and the source that I'm pulling this money from is going to dry up. Oh, man. And so I'm in a spot, and everybody told me I was going to be in this spot. I'm not sure I can sustain her lifestyle. You can't. She's never had a job.

I know, but, Roger, she's never had a job because she's never had to.

Right. Yeah. She's never worried about tomorrow.

She hasn't had to because you did for a decade.

Yeah.

Right. Ten years is a long Man.

No, it's a long time. If you add it up, plus the incidentals along the way, it's a huge chunk of money in my world. I was a modest income guy, but I did the right things that allowed me to retire comfortably. I have a little royalty source, but that royalty source is going to dry it up, and that's what I use to fund this.

So that means it's over.

Yeah.

Well, I guess my question for you guys is, there has to be social services that actually can step in for somebody who's 75 years and really doesn't have means. And that's where I'm falling short in trying to discover those sources.

Yeah, they're there. She could be on Medicaid or what have you. But don't you think that's hers to discover?

I'd like to think so, but in some ways, she just doesn't have that ability to figure this stuff out.

Is something going on? Does she have any disability mentally that's developmental? Is something that's causing her, medically speaking, to not be able to do these things that you know about?

No, there's not really that. I think it's more of someone who's just been naive their whole life about this things, maybe doing hand runs around the system, whatever it might be.

And somebody who, for the majority of her adult life, has had other people just stepping in and taking care of it.

Well, I won't say that's the case. She's She's been married a few times, and she currently has a husband that's not well. They've always seemed to put things together in a very simple way.

She has a husband.

Yeah. Let me reverse this. If you called her and said, I have a hard conversation to have with you. Let me know in the next week when we can have this conversation. And you say, Hey, I've been sending you $700 a month for the last 10 years in 60 days, in two more months, that I'm unable to make those I'm not going to send you any more. I'm not going to be able to send any more money. I'm giving you two months notice. I've been doing this for a long, long time. I'm giving you two months or even three months notice. I'm going to send you... I'm going to Google I googled this for you. You can do this also. But I'm googling Florida Resources for elderly folks, and I'm just assuming that's where she lives.

Well, actually, she was out in Nevada. Okay.

Okay. Nevada Resources. 6: 30 AM after another. And I wish you the absolute best.

Yeah.

And here's the thing. Does she call you on a weekly basis and say, Hey, I need help with resources?

No, she doesn't. She's not a guilt trip type person in this thing.

Okay, then why do you take yourself on guilt trips that she's not asking you to go on?

True. I will say that, and I think it's a little bit of loyalty to her, although I've seen her like three 30 times in 30 years. It's a little bit of trying to be the good guy in this whole thing.

I know, but you've been solving a problem that it sounds like nobody ever even asked you to solve.

Well, no. Yeah, true, too. I stepped in. I I was in it a lower amount of money several years ago, and of course, life gets more expensive, so I increased it. If I still had the worthwhile to supply her and keep her whole, I would do it. Things Things are changing. That's the point around me and in my family.

You can do what you want.

Roger. I don't think we can help you, my guy, because you want to do this. And as long as you want to keep doing this, you're going to keep doing it. Like you just said, If you had more money to keep doing it, you'd keep doing it. And so I think we're at a bit of an impasse in the way that you feel the need to do this. Like you said, your sister, she's not coming to you saying, Help me figure this out. You're just up and doing it. And at that point, then, yeah, it's just your choice. We're not mad at you. But since you called and asked, How do I tell my sister that I can't be her lifelong safety net? We're telling you, you just up and call her and say, Hey, I know I've done this for 10 years. The money I was giving you is running out. And not only is it running out, but I've also realized I can't keep doing this. You're going to have to figure out a way to come up with that $700 on your own. And it truly is. The conversation truly is that simple.

I know it's harder to actually play out, but the bigger work is for you to figure out why you're having a hard time letting this go.

Yeah, no, you're absolutely right.

Can I ask a question? I have an inkling. I don't know if I'm right, but just listening to you talk, and John is here, so he'll set us both straight, but just listening to you talk, it almost makes me wonder if a long time ago, something happened that you felt like you were supposed to be there and you weren't, and you're just making up for it. I don't know the home you guys grew up in. I don't know anything like that. But I just wonder, are you trying to make up for something? Is there something that your sister, you should have been there for and you weren't there? I don't know. And you don't have to answer on this call. But it just sounds like there's something else there that's nagging at you and that's eating at you personally.

No, it's a fair question. I think the basic root of it all is she's family. And it's like, what desperation she'll go into if this money is not there. It's like pulling the plug, saying, Okay. Before, when I've talked to her about it, she goes, Yeah, and this is the guilt thing. Well, I guess I'm going to have to sleep in my car.

Well, where's her husband? You said he's ill. Is he just not able to contribute?

No, they're not at a point where... She's never had a job, so getting a job would be very difficult for her at 74. And he's ill where he really can't work. So they're living... And this is the point, you know.

Listen, if you want to be generous, to John's point, we're never going to stop you from being generous. If you feel, Hey, I'm called to this. This is what I feel like doing. But there is a component to this that you've also got to be able to afford that. And you said that you set yourself up to be able to retire, but you also said the source that you were pulling from to fund this is drying up. So the question you have to ask yourself is, is there another source that I can pull from that's not going to take away from my family's ability to retire and be comfortable in my legacy? And if you can do that, and if you want to do that, you know what? That's your bag. I do think that you're enabling her. I truly do believe that based on what you're saying.

And you can't enable somebody and then complain that they are- Failured or launched. That's right. If you're going to keep funding it, you have to do that with a glad, cheerful heart and stop talking bad about your sister.

We've all done dumb things with money. I've done them with zeros on the end. One of the The biggest mistakes I see people make with money is not having a plan for it. You got to have a plan. You got to be intentional, and you need to get a budget. You have to tell your money where to go so you're not wondering where it went. Our budgeting app, Every Dollar, helps you do just that. It's the easiest and fastest way to make a monthly plan for every dollar you've got coming in and going out. Now is the best time to get started before the ridiculous holiday spending season gets here and sucks you in because you didn't have a plan. Don't let that happen. You're done making that mistake. Go download every dollar for free in the App Store or Google Play today.

All right, back to the phone lines we go. John, are you ready? Let's do it. All right. Elijah, Dallas, Texas, on the line. What's up, Elijah? I like that name, by the way.

Thank you. I appreciate that. Thank you guys for taking my call. What up? Really good to be on the Ramsey show. Been a big fan for a long time.

Glad to hear it. How can we help today?

So I followed Ramsey's rule about buying a cash car and not getting into a car payment. So the car that I have currently, it was a 20th birthday present. Sorry about that. It was a 20th birthday present. I put half, and my parents put the other half. Lately, this car has become a nuisance. For instance, when we first bought it, we had to put a thousand into it to get a new engine. About a year ago, had to put another three thousand because the transmission went out. Yikes. By the way, all paid for it with cash, no financing. Good.

You've replaced the two big rocks.

Right. At this point, it's only up from here.

Thank you. I appreciate that. Now, when I was in college, we ran into some financial troubles after my father passed away. And I played a role in this as well, but I did run up about $5,500 in credit card debt. Okay. Recently, I paid off 1,500, and I was this close to rounding up all the money and then sending it for the biggest debt. Okay. Here's what happened. First, another $1,100 expense, engine amounts went out.

Engine mounted That's when it went out. Okay. So that's not the $1,000 for a new engine. That's a separate amount, $1,100?

Yes. Okay. And then I was able to pay that and still be able to set myself up to be able to send all the money to my biggest debt, which is $3,500 as we speak. Okay. 3,400 as of today. Okay. And then fast forward, now the starter and air compressor had gone out.

Oh, my gosh. So that is $7,500. Oh, my gosh. What car is this?

You won't believe me if I tell you. It is the infamous Nissan. It is the infamous Nissan maximum.

Oh, there you go.

Oh, there's the problem right there, my friend.

All right, so here's the bigger question, And you know what I'm going to say, what Jay is going to say. Here's a bigger question. Do you have 2,500 bucks? Do you have 2,000 bucks to go buy yourself another car that's going to get you six or seven or eight months more down the road, or one year down the road? Because neither of us are going to tell you we would be bad humans if we told you, You know what? After all this bad luck, you should go get a $15,000 car note and just get yourself a new Toyota, whatever.

We would not be good people if we told you to do that.

Because we'd It should be taking you way further back. You're so close to the edge. It sounds like you're getting super frustrated that you keep getting close to the edge and then keep getting slapped back by life. And I get that frustration. But the solution isn't... I'll give you this analogy. Here's what you're about to do. I have a buddy named Jordan Syatt. He's a fitness guy. He's a brilliant mind. He said people get on a diet and they start taking their nutrition really seriously. And then they have one night where they just blow it. They Somebody shows up with a bag of Oreos, and they just hammer it.

Are you talking about me?

I'm talking about myself. I literally, somebody dropped off a bag of Oreos the other day, and I crushed it. But he said, What people do then is they're like, Well, I'm already off, so The rules are off. And he said, That's like walking outside in the morning and seeing you have a flat tire and then pulling out a knife and going around and slashing the other three tires. And you have had a run of walking outside your house and seeing one of the tires flat, and you're just so frustrated by it. You want to grab your pocket knife and go punch a hole in all the other tires. And Jade and I are going to tell you, please don't do that. You're so close, man. You've worked so hard to get this close. Either pay the stupid money and pay off that crap, and just get a starter and get a whatever and get on down the road a little bit further, or go trade that car in. It's depreciated all the way to the bottom anyway, and put another 1,500 bucks on top of it and get yourself a $2,500 car.

Yeah. What'd you pay for this maxima?

So I paid $1,976. That hurts. If it's okay with you guys, I'd like to run a plan I put together once I get this car back.

Okay.

It's very similar to what you guys actually just said about the $2,500. Okay. After all the repairs are done, I know the car will last me at least two and a half, three years. Okay. Within that time, what I want to do is just put together 7,508 grand and then actually go the Toyota Lexus route, get a 2007, get a 2008, buy that, and then just get rid of this car and let it go for 4,505 grand.

Yeah, I love that. I love that.

Okay, so that's a good idea.

I love it. Yeah, that's a great idea.

I have an '06 Toyota that it will last longer than me. It won't stop driving. Yes, I think you're right.

The only caveat is because Now, I will say, so currently, in my personal checking that I'm using to pay for this, there's $2,400 sitting in there at the moment. The repairs are going to be about 1750, maybe 1800. That'll leave me with about six, $700 until my next payday next week. Now, I want to know if this is still a good option, because I like to keep at least 1500. Actually, really three grand in my checking account at all times. Why? But as you can see, I've had a few setbacks.

Why do you like to keep three grand? That's a big cushion for someone who's in baby step, too. Why is that?

I guess you can say I'm very extreme, and I like to have money laying around for the emergencies. Yeah, but- And I also- Okay, okay.

Here's the thing. You get to choose, are you working our plan or are you working Elijah's plan? Because if you are working Elijah's plan, that'll let me know I'm tracking with you on Elijah's plan. But if you're working our plan, which it sounded like you said you were, then I got to hold you accountable. So just let me know right quick, and that'll inform what we say next.

Because here's a weird thing, Elijah. How old are you, brother? Twenty-five. Okay. Here's a weird thing I figured out. If I have $3,000 in an account and a mechanic says it's 1750, it's annoying, and I exhale, and I got 1750. I'm going to give it to you. I only got 1,200 bucks left. This is the worst, whatever, or how much we got left, okay? 1,300 bucks left. If I only have that $1,000 emergency fund, that's all I got. A, I got $2,000 less of debt, which for you is a big chunk of what you got left. And then when that guy says 1750, I say, I can show you my checking account. I have $1,000. What can we do right now?

And you get creative.

And then he's going to go, I bet you I can get a good used part right here that will last you for another year. Hang on. Or I can't help you get out of my shop. And you say, Cool, I'll go find another person. And what happens is you force yourself into some creativity that You have to find a way, which humans had to do for all of human history until 50, or 60, or 75 years ago. That's the reason we stick to the plan the way it is. Yeah.

I couldn't applaud what John just said more. You got to decide how you're going to tackle this, because that $3,000 really is a huge catalyst in how this plays out.

For For the solution, would you say, as soon as I get it back, trade this in and get a $2,500 car?

No, I was with you. I'm with you on the idea that it's best to go ahead and do the repairs on this car, ride it out, because you said, Hey, if I do the $1,700 of repairs, I'm going to be able to ride this car for the next two, three years. And then during that time, yeah, save up the 8,000 and get you something more reliable. But what I really want to attack is having, and I want to talk to the masses on this, yes, doing a zero-based budget should never mean zero in your account. You need to have some form of cushion in your account. But what that cushion is does depend greatly on what baby step you're in, okay? If you're in baby step two, you need as much money at your disposal for debt as possible. So when you think through a cushion, you're really thinking, Okay, John, what is the worst that could happen that I would not have planned for in my budget? What, Amazon Prime subscription hits me? I don't know how much it costs these days. 160 bucks for the year. That's what it It's like, what's the worst could happen?

Grandma's birthday hits, Amazon happens. So when you're in Baby Step 2, that really is looking like 300 bucks, maybe a little bit more than that, because what it's not, the cushion is not an emergency fund. That's not what it is. Baby Step One was the emergency fund, or Baby Step Three is the emergency fund. The cushion is just there, especially in Baby Step Two, just to make sure those random things that happen to come out of your account don't overdraw you.

Buying and selling a home is a big deal, and you want an expert in your corner fighting for you to get the right deal at the right price. That's why we only recommend Ramsey Trusted Real Estate Agents. They're handpicked pros who know their stuff, listen to your needs, and have your back from the first call all the way to closing day. To find a Ramsey Trusted agent near you, visit ramseysolutions. Com/agent. Ramseysolutions. Com/agent.

So if you're tired of living paycheck to paycheck and feeling like you If you can't get ahead, you need to join one of our free every dollar trainings. There are new trainings that we do every single month, and they're all hosted by a Ramsey personality, one of the money personalities, myself, George, Camel, Rachel Cruz. And we show you how to stick to your budget and even find $3,000 of margin using Every Dollar so that you can actually get out of debt and start building wealth. Plus, you can ask us any questions during the live Q&A. So if you're interested in this, go ahead and sign up today for free at ramsey solutions. Com/webinar. All righty then. Scott is in Jacksonville, Florida. Scott, what's up, man? How can we help?

Hi, Jay, John. Thanks for taking my call. You're welcome. I have an estate question. I'd like to start some some fun for my six grandchildren. Two of the grandchildren have 529s, the other four grandchildren do not. And I'm just wondering the best way to start that fun for them. They're between ages one and a half to six years old.

You are awesome, dude. You are awesome.

I listen to your show a lot, and I haven't really heard any questions like this, so I'm glad I got through to ask you and Jade about it.

Yeah, for sure. So you got these grandkids. What's the intent of the money? Are you like, Hey, I want to help them with education. I want to buy their first car. Tell us a little bit more of what you're thinking here.

Okay. The two of the grandchildren, they have college-educated parents. All three of our adult The kids are married, and four of the parents are college-educated. So two of the grandkids have a 529 already in place. The other four aren't sure about what their kids are going to do. One couple isn't sure about what college will look like in 18 years. The other one is a single income couple, and they're living on one income, and I just want to be able to put money aside for whatever they might need. If they want to go to a trade school, if they want to buy a car, if they want to let the money roll and eventually help them with a down payment on a house, or if they get to 55, have some money for retirement. I'm not quite sure. I'm just wondering the best way to structure it.

Yeah. So if I were in your shoes, I'd probably talk to the parents first. So let me put myself in your shoes. I'd say, Hey, I want to give the kids money. What do you guys think? So my first thing would be like, Yeah, if you can help us get this 529 to where it's going to be, that would be amazing, right? And then the next thing would be, Okay, from there, we do up must for the kids every year. We contribute. If you can help us contribute to this up must, that'd be great because when they're 18, we're going to transfer that money over to them. Or the other thing could be, Hey, For us, one of the things we really want to do is help them with the down payment for their first house when they're 28 years old, that thing. So I would talk to the parent first and find out really what the need is, since for you it seems to be, Hey, whatever they need, we'll fund. Then from there on, I'd see, Okay, what do they have in place and how can I contribute this money to them? How much are you thinking of gifting every single year?

Well, I thought I'd start with maybe a seed gift of maybe two grand per child, and then go from there. Seeing how they're so young, I could put it in a more riskier investment vehicle that might grow quicker and still weather the ups and downs of the stock market, I guess, is what I was thinking.

Yeah. And you just placed them as the beneficiary. Is that what you're thinking? Because I feel like you could do- Yeah, beneficiary.

I've been told I can't do it a custodial IRA, Roth IRA, but I could maybe do something else like that.

I'd work with the parents and maybe do an upma, something that you can transfer that'll go over to their name when they're of legal age.

Okay. Like you said, two of the grandkids already have 529, so I could just with those parents, I've already talked to them. I'm sure They would just take the money and put in their existing 529s. It's the other four parents that really have nothing in place right now at all.

Oh, you know what? I misunderstood you. When you said before that the other two kids had 529s, for some reason in my mind, I thought you meant that they were fully funded, like they didn't need any more in the 529.

Oh, no, I don't think so. I think they would take any contribution we have.

Okay, then I would focus on that because here's the thing. Even if they overfund the 529s over time, that money can be transferred in other ways. Matter of fact, over time, it can actually be transferred to a Roth IRA or IRA over time. So I wouldn't be too concerned with overfunding it. And the truth is, with any 529, there's that risk of, well, what if the kid doesn't go to college, right? So I would start with a 529 for all kids, for the families that don't yet have them set up. I would say, Hey, I want to do the seed money of $2,000. Can I help set up a 529 for you guys? That's what my mother-in-law did for Sam and I, and it's been great. So I think it's a really, really great gift that you're trying to give, and that's the way I do it. Good call. I like that. Thanks for the call. All right, I think we have time to go to Mike, who's in Ohio. What's up, Mike?

Hey, thanks for taking my call.

No problem. How can we help?

So my question was, my wife and I recently bought a house, and the monthly payment with both of our income combined is pretty reasonable. It's a little less than a third of our income. But we just found out we're having our first kid, and the plan was we were going to have her quit working. But the problem is With just my income alone, it's going to be a lot trickier.

Yeah. What will that mortgage be with just your income?

So the payment is like 24. 75 right now. And then, So that would be like 45 % of my income. Okay.

Yeah, that doesn't work. So we have to solve for that, right?

Right. So the plan, hopefully, was I can refinance in a few months, and I'll get to All the fees and everything covered for that. But that would right around coincide when my wife is due. So my question basically is, should we go back to renting when the rent was like 1900 versus '24, so it's not a huge difference, or should we just stick with it and try to refinance the house?

When you refinance it... Well, I have a couple of questions. When you refinance it, what will the payment go down to?

So I'm trying to get a lower interest rate because it's really high. So I don't know exactly. I've looked at a few. If we got 5 %, it would be like 2000. So it's up in the air, but hopefully it would be better.

What's your take How much does that take home pay?

So I take home 5,500 a month after taxes and everything. Okay.

So 2,000 would still be way too much, right? Yeah. So that sounds like... And I mean, 5 %, that's a pretty good rate. So I don't think you're going to get anything lower than 5 %. So knowing that 5 % would get you to 2,000, and that's still not near 25 % mark, I don't think that that can be a plan. Would you agree with that?

Yeah, it does sound tough. Yeah.

I mean, that's a big old % when you're bringing home 5,500. So I think in this season, yeah, it could be that you guys are looking at selling your house because how are you going to exist on that small percentage of your income? Do you see what I'm saying? You got to hear me, Mike. I hate telling folks that they to sell their house. But when you tell me the numbers, I'm bringing home 5,500, and maybe we can get a best possible scenario, maybe we can get it to 2,000. It's tough, right?

How much have you paid down on this house? How much equity do you have in it?

We have, I think, 20,000 right now. We bought the house really recently, but we got it under the appraisal.

Because I was going to... Jay, I don't I haven't really heard us talk much on this show about this. I think I've only heard it one other time. But I was wondering if this was a moment for a recast where the length of the mortgage and your interest rate stays the same, but it basically recast your payment based on what you owe remaining. That can really drop your monthly payment down without having to go through all the rigmarole of a refinance and all that. But you don't have enough equity. You got 20,000 bucks. That wouldn't change your life at all.

Yeah, you would usually do that after you've paid off a big lump sum. Yeah. In this case, I hate telling you this, but I think for you guys, yeah, getting out of this house. Because the truth is, it's not like you've done something really irresponsible. Your life has just changed in a major way, right? You have a baby coming, and your wife is now saying, I'm not going to contribute by working outside of the home. I'm going to work inside of the home. So, yeah, your financial situation changes. It's okay if your living situation has to change as well. So don't feel any guilt or negativity.

You did everything wrong. Yeah. You have a new life now. You have a new kid, and so we have to readjust for our new life. Yeah. New house, new housing situation.

Ramsey shows scripture and quote of the day. Psalm 37: 23-24. The Lord makes firm the steps of the one who delights in him. Though he may stumble, he will not fall, for the Lord upholds him with his hand. Slash from Guns & Roses said, No one expects the rug to be yanked out from underneath them. Life-changing events usually don't announce themselves. Amen.

That's a fact. We wouldn't have jobs, Jade. If that wasn't... Life-changing moments are not a bug of the human experience. It's a feature. It's hurt and challenged and pain and unexpected things is life.

Man.

It's life.

And nothing lasts forever.

In a cold November rain. Booyah.

Just had to do that anyway.

And by the way, just as a callback, Axel didn't, but Slash wore long shorts as he should. Axel wore very, very, very short- He did.

You know, Slash has aged very well underneath that hat, I might add. You really can't tell what's going on underneath there.

Hey, he's done a good job.

Trace is in Salt Lake City, Utah. What's up, Trace? How can we help?

Hey, how are you? We're doing good.

What's up with you?

Good. So me and my wife, we're 21 years old. We have a combined income of $130,000 a year. We're in baby steps four and six with no kid yet. We started investing into our retirement in July and wanted to know if we can put more into each one of our Roth IRAs to get it up to the 7,000 for each one of us instead of putting more on the mortgage until April. So then... Does that make sense? So we can max out that Roth for both of us before April, so we can do it again for for the next year.

Does that make sense? Yeah. Maxing out the Roth, so putting the 7,000 or 7,500, I can't remember what it is this year, does that put you over the 15 % of your income?

Yes, but We'll max out my Roth at 7,000 or 500. And then we want to also mix up my wife's, which I think we could do another 7,000, right?

Yeah, I understand that. But I'm saying that 14,000 together, is that more than the 15 % of your take-home pay? It would be. Of your gross pay?

It would be. And we are still paying the house off the 15-year mortgage. We still have on the 15-year. So just for the six months, I don't know, like I said, just to take advantage of the tax-free growth.

Okay. So you told me- Why would you do that? You told me you make $130,000 a year. So 15 % of that would be $19,500. That's what you have for the year to put aside. So you're wanting to put $7,000 in hers, $7,000 in yours. That's $14. So technically, you still have another 5,500. What are you going to do with that?

And that's another question, too. Do I do the traditional or do I just put it into a brokerage account? We had just recently started making 130,000 a year.

Are you self-employed or do you have 401(k)s through your job?

I work for the state, so I have a pension in a 401(k). She doesn't. And so we just do the individual Roth IRAs for each one.

Okay. So I love that you're doing Following the individual Roth IRAs. I'd love for you to put the remaining 5,500 into your 401(k).

Okay.

Yeah, that's what I would do because it's tax-advantaged in a better way than just a typical brokerage account. So I would do that. Now, what percentage your pension... Do you know what percentage that is? What does that look like? Because that's part of this equation as well.

Yeah, I get 60% of it when I retire at 35, but they don't take anything out of my pay. If it is, it's not much at all.

Okay, then I wouldn't really add that in then. Okay, so yeah, do the two Roth IRAs and then put the rest into your 401(k). Do you know... I'm guessing the 401(k) is traditional or is it Roth?

Just curious. It's either. So I can do a Roth 401(k), or there's a 403(b).

Yeah, definitely do the Roth 401(k) option, okay? Okay. That way you're paying the taxes now instead of later.

Okay. Sounds good. I appreciate it.

All right. I love that. And then, yeah, beyond that, any money that you have extra, you're going to throw that onto, since you're in baby steps four, five, and six, you're going to put extra payments or extra money, I should say, towards your house. And you and your wife can decide what that looks like. It can change throughout the seasons. It doesn't have to be double payments every time, right? You're in a season of intentionality. You don't have to be as intense. So that's up to you guys to discover what the rhythm of that looks like in your life. Very good. I like it. All right. Kevin in Houston, Texas.

H-town.

What up?

How's it going? Can you hear me fine?

Got you, dude. What's up?

Hey, I just had a general question, pretty much. I'm trying to figure out where should I draw the line whenever it comes to spending a little bit of extra money on things that aren't necessary, but add a little bit of extra comfort in your day to day or just overall life. I can give you a couple of examples of what I'm I'm trying to talk about here. Yeah, tell me.

If that helps. Do this one.

Yeah. So for example, I recently bought my first Economy Plus seat on a flight. It was never something that I couldn't afford. It was just something that I didn't really want to spend extra money on. I'm 6'1, for reference, and a lot of these airlines are getting criminal with how little leg room they give.

Amen.

I decided, Okay, I'll spoil you a little bit. And the flight was just 20 million times more comfortable. I could kick my feet out a bit. I could lay back, and it was so much better. But it wasn't necessary to achieve the goal.

Okay, let me ask you this.

I have a feeling a bit guilty about it.

Where's the story? That you picked up, where's it from that anything above necessary is wrong or morally bankrupt?

So I guess my position isn't that. Wrong, I'm really bankrupt. I guess what I'm trying to avoid is just going down the slippery slope of, I just end up spending a lot of money on the things that I don't need, right? Just because it makes me feel better. Okay. So I guess that's my question is, what are some things that I should spend extra money on just because it has a little extra comfort?

Feeling better is okay. That's what I'm trying to get to. For me, I crossed the line When I start thinking, I deserve this. Okay. That's when it crosses. That's a moral line in my head that I don't ever want to cross. But you know, if you are going to a work trip and you pay that extra $100 or whatever it is to get extra leg room on that flight, and it lets you stretch out and lets you sleep versus being cramped, then you walk a little bit taller, you're a little bit more rested, and you can go handle yourself in that meeting a a little bit better. And that's just a fact. That's the truth. Yeah, I agree. Okay? And so if you want to get tactile about it, we can put an ROI on that. I think it's a waste of time and money and effort. The reality is, if you can pay You get for it and you have it, and it's something that will make your day a little bit better. Do it. Do it.

I mean, I'll give you a little bit more practical because I get it. I have a checklist that I go through in my brain, Kevin, that is the green light, to quote Andre 3000, if I can do this. Number one is, am I a person who's out of debt? If the green light is yes, check it. Then I say, am I a person who budgets their money? Am I on a budget? Can I make this part of my budget? Yes? Green light it. Do I carry the proper insurances? Have I done the things that I need to make sure I'm taking care of my family? Life insurance, term life insurance, that thing. Green light. Am I saving for the future? Do I have three to six months set aside? Am I saving for a down payment for a home, which is also a form of savings? Am I doing those things that are important? Yes. Finally, have I prioritized generosity in my life? If I'm doing those five things and have five green lights, yeah, buy the upgraded seat. Do those things. They're fun. Matter of fact, if you want another piece of this, this is for anybody listening, if you've checked those five green lights, you should spend money on fun, F-U-N.

That is upgrade your food. You're not eating Top Ramun anymore. Spend more on groceries is what I'm saying. You should spend money on upgrades. That's the U. Yeah, upgrade your plane seat, upgrade your furniture, upgrade your jeans. And finally, the N is for new experiences. Yeah, go on vacation. Go to a concert you've never been to. We want you guys to enjoy spending money because that's what it's there for. You get out of debt and you do all of this, John, so that. So that you can increase your leg room, so that you can have a better life quality with your money. That's the whole point of this whole thing.

Remember- Being comfortable isn't the worst thing.

You're right. Remember, there's only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.