Transcript of Your Financial Stupidity Has To Stop Today!

Brought to you by the EveryDollar app. Start budgeting for free today. Normal is broke and common sense is weird, so we're here to help you transform your life. From the Ramsey Network in the Fairwinds Credit Union studio, this is the Ramsey Show. Rachel Cruz, Ramsey personality, number one bestselling author and co-host of the Smart Money Happy Hour. My daughter is my co-host today. Open phones here at 888-825-5225. Shelby is in Springfield, Missouri. Hi Shelby, how are you?

Hi, I'm good. How are you guys?

Better than we deserve. What's up?

Well, thanks for taking my call. I'm calling today, um, with a bit of a moral and financial question, and I'm calling to see what is the best way for me to help my husband pay off his credit card debt that we have discovered recently.

We have discovered? What does that mean? Well, you have discovered?

Yeah, I found, um, unfortunately, uh, I found some screenshots of sports betting, and he ended up having to come forward with 3 credit cards, um, that added up to about $17,000. And unfortunately, this isn't the first time that I— the last time I didn't find it, he came to me and told me about it. But this isn't the first time we struggled with credit card debt.

Was the other time regarding sports betting?

No, it was not. The last time, um, his company had used his credit card for on a trip and they paid him back and he just never paid the card off. He just spent the money.

And how old are you?

So We're 25.

How long you been married?

Uh, going on 4 years.

Okay. All right.

I'm so sorry, Shelby.

Uh, what's his reaction to having lost $17,000 of the family money sports betting?

Well, he was hiding it from me for a really long time. Um, and then when I found it, I grabbed our 2 babies, and I got in the car and I left and I told him to fix it. And, uh, we came back pretty quickly, but, um, he has gotten— he's doing great, honestly. He's got 2 jobs. He's working a full-time job during the day and then a job in the evening, a part-time job in the evenings. And he's been working his butt off. I found it about 6 months ago, so he's been working his butt off for 6 months. And he's got 3 cards down to 1, and there's still quite a bit left on it.

But, uh, so it was originally $17,000 or now it's $17,000.

It was originally $17,000. Now he's got it down to, um, under $15,000, just under $15,000.

Okay.

But in 6 months he's only paid $2,000 of it.

Yeah. Uh, because of, uh, the issues that we were having, we were really behind on, um, bills and payments. And so we spent a couple months catching up. Okay. And then we had just a couple of things. Our hot water heater went out. We got in a car accident. We had to go get a new car. There's just a few things those first couple of months that took up the extra income that he was starting to bring in.

Shelby, when you just mentioned that you guys were behind on bills, were you aware of that or did that come out with this secret credit card and the gambling and everything?

Yes. Yeah, I was aware of how short— so he was actually unemployed at the time. I was the only one bringing in income. I work from home, and usually I work from home and I keep our kiddos, but he was, um, he was in between jobs. And, uh, so I knew we were short. I just didn't know how short we were. And I didn't have access to the bank account. I used to, but I just hadn't logged in in so long that—

what does he—

what does he do for a living? Well, right now, um, he works out of school, and then in the evenings he works a retail job.

At a school?

Yes.

Doing what?

So he, he does, uh, um, he's a teacher's aide at a school.

Okay. All right.

So part of the reason I'm calling is because I was approached by, um, my in-laws and they were kind of telling me that it would be better for us all around if I just took out a loan and we paid off the card because the interest on this card is over 30%. And they said if I take out a loan and cover it, and then we just pay back the bank with a lower interest rate, it would be better all around. I make $50,000 a year.

And what does he make?

Um, now, uh, within the last few months he brings home, um, with the two jobs combined, about $4,000 a month. Okay.

So you've got about $90,000 coming in. And you said you bought a car in the middle of this? Did you take out a car payment in the middle of this?

I actually have just recently found you guys and I've just realized how dumb that was.

Okay.

Um, but we, um, no, you already knew how dumb it was.

You were behind and you had a 30% credit card and then you went and took out a car payment. You already knew that.

True.

So how much do you owe on this stupid car?

It's— we've got $30,000.

Okay. Okay, so there's a lot of things that need to happen here for you guys to get healthy financially and relationally and career-wise. There's a whole lot of negative things going on in this house, and the 30% loan interest on the credit card is not your problem. It's the symptom of all these other problems. So what would I do if I woke up in your shoes? Well, I'd do a lot of different things. The first thing is, is the two of you are going to start an EveryDollar budget. Budget tonight on our app, and we're going to give you a free trial on it so you guys can put it all together. And you're going to lay out exactly where every dollar of your income is going to go this month before it comes to you. You're going to have a plan for every dollar. You're not going out to eat. You're not going to see the inside of a restaurant unless you're working there as an extra job. You're not going on vacation. You're not doing anything. You are broke and screwed with your money, and you both have got to lean into this and clean it up as fast as possible.

Okay, that's thing one. Thing two is, with your marriage counselor, you need to get commitments from him that he's never, on threat of ending your marriage, going to do any betting, sports betting, ever again, and he's never gonna hide any debt from you ever again. And we're going to be working together. So it's going to be very difficult for him to hide anything because we both are going to see every single thing that's going on.

Yeah. And pulling credit reports every year. You know what I mean? And I would almost have him, I mean, I don't know how engaged this is because that, I mean, the sports betting world, it can be such a downward slope so fast. But what I would be wondering, Shelby, too, maybe you guys have talked about this. I just want to make sure that he's healthy in that way, that there's not some level of addiction there. And that, and that itch he was trying to scratch, that excitement that he was doing sports betting, like, what is that about? Right? So, like, that doing that work in the marriage counseling office is—

could be that you were behind on your bills, and he was trying to make some money fast to get the bills paid.

That's true, too.

He could have been desperate stupidity.

Yeah.

Okay.

Yeah.

So, I want a solid foundation laid, the things he's never going to do again, and the two of you see every single dollar every month for the rest of your lives. Neither one of you are in control. Both of you are in control. Okay? Lastly, you need to sell the car. That was suicide. You put a bullet in the gun and put it to your head. You need to sell this car immediately. Stupid on steroids. You cannot afford a $30,000 car. You have got to get rid of this now. Oh my gosh, girl. That makes his Sports betting looks smart when you put it up beside this car. Oh my gosh, neither one of them are smart.

I hate sports betting.

Oh, I hate them too. And who, who's it— who's the number one victim of sports betting? 25-year-old males.

Yes, you got this. 25-year-old males, you got this.

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Hi Dave, thank you so much for taking my call today.

Sure, how can we help?

Um, so I'm gonna do my best to get through this without crying. Um, I am 46 years old and my husband and I were married for 27 years and he passed away suddenly in a motor vehicle accident this past June. Oh my God.

I'm so sorry.

So we have been Dave Ramsey fans for a very long time. I homeschool and we're actually graduating our last child this May, and they've all been through, you know, Financial Peace University. So the question that I have is I'm looking to probably having to go to work this summer now with the loss of his income, and just I feel like with my age it's probably the most responsible thing to do. But I do have some life insurance insurance we received from his employer, who was a, he was a Franklin firefighter. And then we also had a personal life insurance policy and he was never super trusting of investing. And so I don't really have a lot of experience with it, but I have a family friend who is a financial advisor. And so he suggested that I invest like $100,000 back in October just to start kind of learning on. But, you know, a lot of people say not to make any big decisions for that first year. And so I'm coming up on that year mark and needing to start making some decisions about, you know, going back to work. And, um, well, it's not really going back to work, it's really going to work full-time for the first time.

So I'm just a little— need some reassurance that, you know, the markets right now are a little Scary, but markets are always a little scary.

Um, how much is the total life insurance proceeds?

Um, the total was $500,000. Um, and right now I have $100,000 invested in mutual funds. Um, and then I have the other $400,000 in a high-interest, um, account. Um, do you have any debt gaining? Um, we have no debt except for the car that he actually bought me just before he died. Um, and I owe on the car $20,000.

Okay. And, um, you don't owe anything on your home?

No, we actually paid our house off in 2015. Um, he was in the Army and we did a lot of house flipping when he was military and were able to just keep, you know, getting more and more, um, equity. All did the work all ourselves. So Wow.

Oh, well, it's— I mean, it takes a year to even breathe well, and you're just now getting where you can take a deep breath. And so you've been very wise and very careful. Good for you. And, you know, you've walked through this last, last child through the graduation, which is getting ready to come up here, and a lot of milestones and a lot of tears.

Yeah.

So Yeah, I think your family friend gave you some good advice to dip your toe in the water and kind of get used to it a little bit. With $100,000, that's not a bad idea. And the second thing is— there's two things that come to mind immediately. One is pay off the car today. Okay, you don't need to be carrying a car payment, not when you've got that money. So you should take a little bit of that money out of that high yield and pay that car off today. Okay, that's easy. You're not going to regret that. Very few people would say that was dumb. Okay.

So yeah, that payment has been like choking me every month. I'm like, oh my gosh, this is—

Exactly. Now when you, um, start your career, what's your plan there?

Um, I'm hoping to get into, um, some sort of a like high school counselor for homeschoolers, um, potentially. Um, I do have some background with, um, Working from home is in medical transcription, so I could possibly even do just the medical office.

Okay. With what you've investigated so far, do you think you can make enough to live on without touching this money?

Um, I think so. I think, um, if I can get something that were to pay about $20 an hour, I think, um, working full-time I could do that. Um, I do get a small pension, um, which is about $500.

How have you been living during this year?

So we had some savings, about $50,000 is what I have in there right now. And so I get Social Security survivors from my son and that will end in May. And that's where my biggest stressor is, is that $1,800 is gonna go away. And that's really been what's kind of been carrying me so that I don't have to really dip into our savings or—

Well, I would make plans to create an income large enough to at least live on as your first stage, and then your second stage, create a career for this next phase of your life for you. So, you know, what do you want to be when you grow up? You know, I mean, this is chapter 2. It isn't a chapter you wanted to write, but it is chapter 2. And so, you know, let's make, you know, not just survival, let's go flourish. And, you know, that'll be part of your healing and process and everything.

00:16:16

Yeah, and the wild thing, Christina, is just like high-level math, kind of, it's that, what is it, the rule of 72, that your money doubles every 7 years? And so, you know, the $500,000 in 7 years will be $1 million, if you don't touch it. And then, in 14 years, it'll be $2 million, right? So, if you could find something that you really could put your heart in, that you're passionate about, that you love, that you're good at, you have a good work environment, you're excited to go, right? And you do that for the next, you know, 10, 15 years, this money is going to serve you really well at that point, right?

You know, you're going to get into 65 and have $2 or $3 million if you watch what you're doing. Now, that assumes that the money is invested better than it is now, and that's what you're calling about. So let's go finally to that, okay? Now, when you're investing, it's— I always think about the very first time I got behind the wheel of a car. And my dad told me to push down on that to go and push down on that to stop, you know. And I didn't know what I was doing, and I wasn't very good at it. And I threw gravel from the driveway up against the house and everything, spinning the tires, you know, everything. But that didn't last long. That was 5 minutes of that level of inexperience. And then within 10 minutes, you know, we're learning the a little bit. And then, you know, obviously by the time you're 16, you're driving the car on the road and passing a driver's test. And, and, you know, now I'm 65 and I don't have wrecks. And so, you know, I mean, you know, so what's that mean is the first time you do something, it is natural and wise to be fearful.

That's normal. But it doesn't mean it's bad to learn how to do it. The first time you rode a bicycle, but then when you were teaching your children to ride a bicycle, they were afraid, but you weren't because you could hold the seat for a minute, number one, and then number two, when you let them go, you knew their life was not going to end. They were just going to fall over maybe. Now they might act like with a drama, but still. So this is like your financial advisor is holding your seat for the first $100,000 here going. And then as you learn more and personally, emotionally experience more of the markets going up and the markets going down, then you're gonna get used to riding a bicycle. You know? And so I would have you learn as fast as you can learn and get comfortable by sitting with the financial advisor that you're using or getting a SmartVestor probe at RamseySolutions.com, because they're gonna have the heart of a teacher. Whoever's helping you with your money must teach you. You must learn. And it's not complicated. That's the good news. It's because in that knowledge is going to give you comfort.

And high level, that he just put $100 grand in mutual funds.

That's good.

Was that, was that your, was that you, Christina, saying that? Or was that his advice?

No, that was, yeah, that was his advice.

And that's great. So, it's those types of accounts of diversification that you want, Christina. You always want to stay away from anything single stocks or something new like crypto or something like that. Like, you want to— okay, something that is very diverse. So index funds, you know, ETFs, good mutual funds, anything in that category is really going to be a safe bet overall.

Just get you some good growth stock type mutual funds, but learn about the fund that you're putting the money in. Like, has it been open since 1932 and in the last 27 years has had 2 down years and 25 up years? That gives me a lot of comfort.

Oh, okay.

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Good, how about yourself?

Better than I deserve. What's up?

I am calling to ask your advice on if I should keep working my part-time job in order to pay off our debt faster, or if I should stick to my plan of quitting my job probably in the next month so that I can focus on being a stay-at-home mom and homeschooling our kids.

Was this the original plan? Is this what you are—

are you already homeschooling?

I was homeschooling. This year we put our kids in because we moved at the end of August, so it was a bit too chaotic, and, um, we stopped homeschooling, put them in school. I work remote, so I'm at home. But yeah, the original plan has always been That—

I'm sorry, if you work remote and you're at home and it's part-time, how many hours do you work at home?

Probably 12-ish a week. And I'm on—

why does that prevent you from homeschooling? It doesn't.

It doesn't. I just— I'm— well, I'm pregnant right now. I'm 17 weeks pregnant with our fourth child. So it's more managing the home, homeschooling, being able to focus on that. I kind of hit a point where I felt like I'm being pulled too many different directions, which is partly my own doing. I do a lot, but this is the first time my husband just got a new job. So this is the first time that his income is like pretty settled, like he's in his career. It feels really good.

And what does he make?

I'm working right now. He makes about $47 an hour. So I think our take-home, we don't know, he just got the job, but I think our typical take-home is going to be around $83,000 to $85,000.

Yeah, that sounds right. Okay, good.

Yeah.

And how much debt do you guys have?

What was the question?

How much debt?

How much debt? We have about $28,500, not including our home.

On what?

We have a personal loan for $14,500 that we used to buy him a car. This was about a month ago, and to pay off a little bit of credit card debt. And then we have one credit card that has about $12,400 and the other one that has about $300 on it. And then we own a rental home as well. So we owe about, um, $257 on that.

If you sold that, what is that worth?

It's probably worth around $360,000 depending on what the market does over the summer.

If I had, uh, 3 kids with one on the way, and I don't have time to work 3 hours a day, I don't have time to manage a rental property. I'm gonna sell that property and use that money to clean up everything.

Pay off the debt, yeah. And Stephanie, could you work through this?

That's been my husband's plan.

Yeah, I'm on board with him. I would do that, 'cause that'll take stress off you guys, and then that gives you the ability to stay home with no bills.

And here's the other thing.

And I would work too.

You also have to stop being inconsistent in your approach, okay? Here's what I mean. Dave, we've been working hard to get out of debt. 2 weeks ago, my husband bought a car on a loan.

Yeah, and then he— Hello!

That doesn't come out of the same mouth, does it?

Yeah, and then he also went and bought a mower this last weekend for like $1,200. So I forgot that one. We also had that.

Okay, this stupidity has to stop, otherwise it's going to bleed out.

Yeah, that's— I think my struggle is that I feel like with our income, he thinks, well, we'll just sell the rental and we'll get out of debt. But I've just watched a sort of pendulum, like, we'll do the first 3 weeks.

Selling the rental and getting out of debt is only smart if you stop borrowing money and buying crap you can't afford.

Yeah.

So it does not justify him buying a mower and a car.

Yeah.

So you guys have other issues that aren't just debt issues here. The two of you need to get aligned on where we're going to spend our money and that we're not borrowing money anymore, period.

Yeah. And I think that I'm more on that side.

I know, I can tell.

Eventually we'll get there.

No, no, you're not either.

I'm a spender too. Honey, you're not going to eventually get there.

Oh, she's saying that's what her husband is saying. Yeah, so Stephanie, what I would do tonight is I would have you two sit down, put the kids down, and just say, "Hey, where do we wanna be in 2 years? What's a perfect world for us in 2 years?" Okay? Perfect world is we have no debt, we have very little stress financially because he's making a great income, we're budgeting it together, we have goals, you're home homeschooling your kids, you got a 2-year-old at that point running around. Like, you guys need to paint a picture of where you guys wanna go. Because here's the thing, here's what the red flag, honestly, that during this whole What was the one single call that got me that I'm like, well, crap. It's the $1,200 mower. So to me, that's saying that this isn't a big expense like we need, not that a car loan is justified, but I can see how people are like, my car broke down and I panicked and it was in crisis and we needed a new car. That was a flippant $1,200 purchase that was just kind of made. That's the mindset that has to change between you guys, that we have to be so focused and so buckled down that we know exactly where every single dollar's going.

And if we pay off this rental, we are agreeing for the rest of our lives that we are not going back in debt. 'Cause you're exactly right, Stephanie. If your habits don't change and you guys just have a little fairy wand that sweeps this debt off, which is the equity of the home, of the rental.

Oh, you're gonna put it back in.

100%. And I don't want all that hard work to go backwards. So, there has to be an agreement. The agreement is we never borrow money again. And so, when we sell this rental and we pay off this, and yeah, that's the end of it. And then, Stephanie, if I were you, what else I would do, is since you're only working 12 hours a week, I probably would work up until baby comes because you're not gonna be homeschooling the kids in the summer. We're in April now, and so, you know, May's coming, kids will be out of school. Like, I just know it's hectic with kids in May. It's just nuts. So get done with the school year, continue to work, work through the summer a few hours a day, and then when baby comes and starting in August, then say, I'm not gonna be, you know, if you guys choose to not work in August, then do that. But I would keep your job job personally through the summer if I were you. Okay, what did you want to say, Dave?

Okay, so another way of— I know, it's okay. Another way of, um, looking at this is the reason you're having to ask a question about whether or not you need to work while you're pregnant and you're homeschooling is not because of the income. It's because you continue to buy lawn mowers and cars you can't afford.

Yeah.

So you're actually working for those things.

Yeah, and I don't want to work for those things.

And so if you don't want to work, those things have to stop. Yeah, permanently. And so that's the two of you saying, Sharon and I had this meeting, and, you know, you know, Zig Ziglar used to say that if you want a good marriage, you got to figure out that you're both on the same side. And so, yeah, we're both on the same side, and the side is we want to be where Rachel painted 2 years from now. And in order to get there, we have to be in agreement on what the path to get there looks like, and it's no more borrowing. If we're going to sell this rental house and wave the fairy wand and clean this up, then there's no more borrowing, because I'm not going to be sitting here thinking about, I need to work part-time while homeschooling because we can't control our spending. And that's exactly what's going on. And that's what has to stop.

And you know what that is? That's the part of debt that is so frustrating when you talk to people is that they're working and they're working for crap. They're working for stuff, not for the value system at which they want to live.

You know, the number of times I've talked to a lady who wants to quit and go home, be with her kids.

Yes.

And I'm like, how much? You know, we work with the work, the math all the way down. It's $400 is all it is. And the van payment's $400. Sell the stupid van. The only reason you're working is for the van.

It's to pay the van, right.

That's all you're doing. Sell the stupid van and go home with your kids.

Yes, yep.

You know, and so it's, "Well, I need the van." Well, you can't have it both, okay? You gotta decide which one you want. You want the van or you wanna work?

And work for your values, people. Do that. Let that be the driver and not stuff and all this crap.

Set that desired future out there 2 years like she was talking about. Paint that in detail and then work to get there. There.

Yes.

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That's fairwinds.org/ramsey. Insured by the NCUA. Lucy is with us in Detroit. Hi, Lucy, how are you?

Good, how are you guys today?

Better than we deserve. What's up?

So, um, I wanted to know what kind of student loans I should be pulling out for school, um, and how should I be financing for school?

How old are you?

I'm just turned 20.

Okay, are you in school?

Yes, I'm in school currently. I'm, uh, finishing up my prerequisites for nursing.

You're finishing out your what?

My prerequisite for nursing school.

Okay.

Yeah.

And then you've got a long— you got 4 years left after that, right?

Yep. Yep.

Okay.

How are you paying for it now? Just the prereqs?

Um, it's a lot of it. I'm going to community college, uh, to save money. Um, and, uh, a lot of it, almost all of it is covered by, um, like FAFSA, financial aid. Okay. So, um, I was just got done with talking to an advisor, um, and she told me I could do like the Bridge to BSN program, um, at a local university, and it'd only take like, uh, 2 years to get my BSN. Um, and that might be a lot cheaper instead of just transferring, um, just transferring straight into university.

How much would that program be, do you know?

Um, for that program, it's around $8,000 to $15,000.

Uh, a semester or year or total for 2 years?

For per semester.

And it's 4 semesters?

Yes. Okay.

All right. Are you working at all?

Yes. Um, I'm currently a pharmacy technician. Um, I make about $22 an hour. Um, right now I'm working 20 hours a week only because the classes are getting pretty hard. So, um, I'm just kind of trying to balancing out with the, like, homework and stuff that I have.

Yeah. Are you— how are you able to live on 20 hours a week? Are you living at home?

Um, so I just actually moved back in with, uh, my dad. Um, he was closer to the schools. Um, and we kind of came to an agreement that, like, you know, nothing is gonna get in my way and, like, you know, he's gonna be chilling everything so I can just finish school and then, um, save up to move Okay, so you're going to be able to live there for free while you go to school? Yes, that's good as of right now, but he has brought up, um, rent, so that's been kind of an issue as well.

Okay, well, I mean, that, you know, first thing we have to do is be able to eat and have shelter, okay? Then the second thing we have to do is be able to pay for school. And so, uh, what I would do— I think your counselor is probably giving you pretty good advice— I'm going to look for A lot of different ways to get that degree and any possible grants, but we're not going to tell you here at Ramsey to get a student loan of any kind. We're going to tell you to avoid that at all costs, okay? Because even if you don't graduate because something happens and you're not able to graduate, you still have the student loan. Student loans are forever. You cannot get rid of them. They're a pain in the butt. I will tell you that your career choice of nursing is incredible as far as upside potential, lots of flexibility. You're going to be able to do a lot of different things. You'll be able to take a 40-hour work week plus ER on the weekends and make $150,000 to $200,000 a year if you'll watch what you're doing as you, as you grow this career over time.

So you've got a great field that you've chosen for a lot of reasons. So I want to encourage you to do that. The other thing is if you can get any kind of nursing certification the cheapest possible way and get employed at a hospital or a large medical practice, they'll probably pay, pay for your tuition to continue.

Yes, yep, absolutely. Um, I was— I, I know some people that work in the local hospitals in the area, um, and have already been offered positions as a pharmacy tech.

Um, only issue is that they're not really flexible on scheduling I don't care if you're a pharmacy tech at the hospital and they're paying your tuition, you make the schedule work, kiddo. Yeah, you go do it. That's a $15,000 raise per semester, right? So you suck it up and make the schedule work.

That's great money for 2 years, Lucy. And it's—

you do anything.

You can be working nights and go— I mean, you can, you can do anything for just 2 years. You know what I mean? Like, that's how I would look at it is, I mean, how quickly 2 years goes. You know, you think about we're in 2026. 2024 was just like, just a snap. I mean, it was just so fast. So do that. But if you have to cash flow any level of it, I mean, on the low end, I know $8,000 is what you said per semester, but oh my gosh, if you could make, which I wouldn't want you to do this, but I'm saying you could make $2,000 DoorDashing. You know what I mean? Like, you could find the cash to be able to cash flow and just talk to the financial aid office and say, hey, can I pay per semester, right? And look at it. But when you can get a job, what you're saying, in your field, working in any level of institution that is in there that's going to help pay for school, like that's A1 for me.

Dive in.

That's it.

And then get that degree and then get the next degree. You know, go LP, go RN, go all the way through the whole process and, you know, keep moving up and keep moving up, keep adding to your education as long as they're paying for it and you just work. And you're gonna be able to do so well as you do this. And so my point is you're making the least money you're ever gonna make right now. If you'll stay on this track. But roll up your sleeves and do what it takes to get this for free. Yes, take that pharmacy tech over there at the hospital and they pick up your tuition to be a nurse. Absolutely, all day long. And, "Oh, I can't go to happy hour." Well, you didn't need to be at happy hour anyway. You need to be doing this stuff. So this is good. Yeah, absolutely. And if your dad wants to charge too much rent, then go get you a roommate and move out. But if he's giving you something reasonable, $50 or something, just to whatever. But if you're hustling like that and he's able to help you by just providing housing, that's a big help.

And you just take every one of these little tidbits and you put them all together and it keeps you from borrowing. But no student loans. No student loans. You gotta figure out a way to work around that. You have to slow down your process or you have to change your number of hours you're working or you have to change where you're working or how you're working or something, but no student loans. You can do this. You can figure it out. And when you do, you're gonna look back and the 27-year-old version of you is gonna really like this 20-year-old version of you. Because we talk to the 27-year-olds with $100,000 in student loan debt every single day, and they don't like their old self. They're pretty pissed at their 20-year-old self, and you don't want to do that. So good question, really good. I'm excited for you, Lucy. Jane is in Phoenix. Hi, Jane, how are you? How are you?

I'm doing well, Dave and Rachel. Thanks for taking my call.

Sure, what's up?

All right, so we are on Baby Step 2. We have about $36K left in consumer debt. My husband makes about $6K a month and I'm a stay-at-home homeschool mom. We have had just kind of a crazy series of events happening and our emergency fund is drained due to our fridge, range, dishwasher, both vehicles all breaking within the last 2 months. And my husband got a new job, which praise God, you know, has brought in money to to help with some of those things, but his stepdad passed away and the funeral is out of state, and just for him to get there, it will take about $500, $600 due to flights and then a hotel. So I'm calling to see— I want to honor our parents. Um, he wasn't extremely close with his stepdad, but we want to honor our parents, and I don't want to, you know, encourage him to go or not go if that is not wise financially. And then Yeah, and he's also just kind of wrestling with it too. We're really trying to stay on track to get this paid off.

I would go.

I would go.

You got the $500, right?

We can sell one of our beater cars is what we can do. Yeah.

Yeah.

I would do that.

I would go.

Man, you guys made it so easy. All right.

You never regret going to a funeral.

Well, especially something like that. It's not $5,000 and we're not flying 16 people to Italy. I mean, it's $500 and you're sending just him to be really near his mom, near his mom, because his stepdaddy wasn't that close to, to start with. But, and he's not going to be there very long.

But yeah, I, I hear you. I think it just, I wanted to make sure because we, like I said, emergency's gone and we have like my dish, my whole kitchen is torn apart still. So just, we wanted to be wise and not say, oh, emotionally.

Yeah, but in 4 months your kitchen will be fixed. You guys will be on the track, you'll be on track paying it off. And you, you don't want to look back and think, golly, what we could have done.

You can't unring this bell.

Yeah.

So yeah, you've got to do that one.

Yeah.

It's a good question though. I appreciate the dedication, Jade.

Yeah. The way you framed up the question and the amount and the situation is why we gave the answer we gave. Running a business is hard work. You're the CEO, the accountant, and the sales team. You don't have time to moonlight as your own benefits department. That's where Health Trust Financial helps. In fact, health insurance is one of one of the biggest and most confusing line items in your budget, and most of you are overpaying because you're stuck figuring it out alone. You don't have time to figure out all the fine print about networks and deductibles. My friends at Health Trust Financial have been helping Ramsey listeners for over 20 years. Their focus is simplifying health insurance and serving people with empathy. No pressure, no games. They give you clear unbiased advice that fits your life and your budget. Most of their clients save hundreds of dollars every month. That's real money you can put back in your business or into the Baby Steps. So stop wasting your time, your energy, and your money. You run the business. Let Health Trust Financial handle finding the right health insurance. Go to healthtrustfinancial.com today. That's healthtrustfinancial.com. Welcome back to the Ramsey Show in the Fairwinds Credit Union studio.

I'm Dave Ramsey. Rachel Cruz, Ramsey personality, my daughter, is my co-host. Sadie is in Rochester, New York. Hey, Sadie, what's up?

Hi. Hi. Um, so I am currently about 3/4 of the way done with Baby Step 2. Um, I've kind of worked my way out of a little over $150,000 worth of debt. Wow.

Good for you.

I have a job and a half. I like to say I do have a full-time and a part-time job. Um, I'm ready to move. I'm ready to get out of New York. I would like to move south. Um, with the sale of my home, I could finish off Baby Step 2 and 3. My question is though, um, after that, I mean, I do have a lump sum after both of those items are completed of about $75,000. I could either buy a house and have that comfort but have it be gone, really, the 20%, or I could rent and invest in a rental property. The location that I would like to head is tourist nation. So an Airbnb or a rental or even an apartment home would not go unrented. My problem is I feel like I'm a bit of a control freak and I want that comfort of having something that's mine, but I am also losing that half job. Um, I do— my full-time job is a remote job, so I'm able to—

so what do you make at your full-time job?

So I'm at $67,000-ish.

And what do you make at the part-time job?

Uh, roughly $25,000.

Doing what?

Uh, so I'm admin, admin for a church office, actually.

Okay. And you're talking about moving— where's your ideal place if you bought a home bought a home and settled in, not Airbnb, but you just bought a home, what would be your ideal location in the South?

I really want to be on the beach somewhere in South Carolina. I mean, we, we, we have joked Myrtle Beach, um, just outside of Myrtle Beach though. I mean, somewhere like Conway or somewhere like that would be my ideal living situation.

Okay. I like that. Um, you said we, who's we?

Um, so I do have a little bit of a muddy situation. Um, I, I have, I have been married for a year and a half, um, but we've never combined finances, not for lack of trying on my part. Um, there just is that hindrance and we've had the discussion of perhaps we just, you know, we continue on. I mean, the relationship is great. You know, we don't have any questions. Um, I carry the financial the household finances. He is on the road a lot. He's got his own business. He's got a lot of debt of his own that he handles. So when I say we, I do mean my husband and I and his two girls. Both will be college age here fairly soon. He does have college accounts set up for both of them already. So that is not something that out of the proceeds of this house. I—

do you guys have—

I know you're, you're probably making a face at me. I'm not taking into consideration combining.

Do you, Sadie, do you guys both own that home? No, any of mine premarital, it's yours. Okay, so yeah, when you buy the home in South Carolina, is the plan that you are just going to be buying it and he'll just be living in there? Under your name without any—

I, I believe at that point I have kind of given a smidge of an ultimatum to say there will be a combined account, there will be a combined finance, you know, home account. I mean, it can't just be— especially because I am losing income with the move. I'm not saying I'm, I'm losing the income to be able to adequately—

he's not got any, he's not got any, um, money to add to the down payment.

No, no, he does not.

Okay. All right. Yeah, I think I'm selling it and I'm buying a home in South Carolina. And I think you already know that what's best for you is for the two of you to combine your finances and have full transparency and full weight together. You know, and whether his name is on the title or not, in most states, a married couple that buys a home, the spouse has marital interest in the house anyway. In the event of a divorce. And so, you know, you're probably putting that $75,000 at risk, so to speak, potentially. I mean, you could show a paper trail that you brought it from, that you brought that money to the table from the thing in the event of a divorce and probably work it out. But I don't know. But anyway, I think the better answer is to combine and go buy your house, kiddo. And I think you'll also pick up some side work work, because I don't think you're gonna— you know, it's not like there's no churches in South Carolina that need some admin help. Like, there's a church on every corner in South Carolina.

So I'm open to gig work. You know, I did a lot of Uber and, you know, DoorDash and things when I was first starting out on the baby stuff. And we actually have a Ramsey-approved realtor that we're talking to down in South Carolina already. So I mean, I think we're taking the right steps.

Yeah, but I would worry of letting go, pay off all your pay off debt, use whatever's left for your Baby Step 2 and 3, and then use the balance for your down payment. And yeah, take all your proceeds and do that and combine your finances. And I think you're setting up a good life.

Yeah. And ideally, with what he's making a year, right? In a perfect world, as you combine, that's the power of working together financially. Not only do you get the relational benefits of— we really do think your marriage gets better when you become one in every area of your life, including your money, but also the financial, because yes, he does have debt, you said, If you guys together combine both incomes, worked to pay off debt, you're funding retirement together, you're just gonna get ahead financially so much faster when you're working together. Even if he does have some debt and you guys may have to pay some of it off, but gosh, both of those incomes working in one household and looking at it as a household income is gonna be so helpful.

Yeah, that's incredible. So guys, we keep telling you this over and over, and she's obviously heard us say this too, so we're not talking to her anymore at this point, but just to remind everybody out there, there, that, um, that when we did the largest study of millionaires ever done in North America, airtight research, what we found over and over and over again is that 82% of the millionaires say that one of the reasons they became millionaires is working together in tandem, full disclosure, full transparency, pulling the wagon together with their spouse. That means that only a handful of millionaires become millionaires in spite of their spouse. And so, as I said earlier, you know, Zig Ziglar used to say, marriage is best if you understand we're both on the same side. And so we're on the same side. The enemy's not in the house. The enemy's outside the house. If we're gonna have a fight with something, it's outside of here, and we together are going to go conquer that land. That territory, and we together are going to expand, and we together are going to grow, and we're gonna set a vision of what we want the next 5 years to look like and then take the steps to get there, the desired future and what must be true to get to that desired future together.

That alignment is not only so healthy for your relationship, it also is the highest data point for you to become wealthy.

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Buying or selling a home is a big deal with all the clickbait headlines and TikTok discussions out there. You get a lot of bad info. It's hard to know what's really happening. Well, we're here to make the latest trends easy to understand. Median house prices went up a little to $403,000 last month, which is typical as we head into the spring season. Mortgage rates are down a little bit more, down to 5.43, down from 6.1 that we saw last February. To learn more about the housing market trends and to get free tools to help you buy or sell with confidence, go to RamseySolutions.com/market or click the link in the show notes. Sarah's in Seattle. Hi Sarah, how are you?

I'm great, thanks for having me. Sure. I'm kind of, I'm recently in a divorce. I've been divorced for about a year now and have 3 kids all going to college next year. I'm financially, I'm doing pretty good. I own my home outright. It's a million-dollar house. I have about $8,000 in the bank. I make $85,000 a year. I'm kind of nervous about college. Each kid has a college account with about $60,000 in it, but you know, even, even though they're all three are going to a state college, that's $120,000 for 4 years. And I'm responsible for half of half. So a quarter of that is $90,000 for all three. And I just, I really don't know how I'm going to do that.

I'm sorry, the college— you're responsible for half of half, not counting the college funds?

No, including— I mean, yes, yes.

So because you're responsible for $90,000 but you have $60,000?

No, I'm responsible for $90,000 because, you know, it's, it's $30,000 a year for each kid, um, and they're going to each be there for 4 years, right? So that's $120,000 each, and then we have $60,000 for each. So that leaves them $60,000 for their dad to pay half and me to pay half. That's 30.

And so they're not, they're not planning on doing anything? The kids aren't?

Well, I mean, like working? Oh, well, of course they work. They all work. They pay for all of their activities, all of their— we pay for their tuition and their food, um, and of course the where they live, and that is more than tuition nowadays. So it's, it's And it's kind of putting me in a rough spot because I thought we did good planning financially for their college. And come to find out, it's not even really half. It's almost half, but—

Well, Sarah, there's a little bit of me that's like, well, if we can't afford the college, then I don't know if that's where they can go. So maybe they go to a community college for 2 years and then transfer, and that cuts it in half or more than half. And academic scholarships. I mean, I don't know what else to do because—

I mean, they can work while they're in school, was my point.

Yeah, they definitely can, and that will pay for part of it. It will. Yeah, you're right, it will. Um, my, my question is, because I own my house, and, um, would you, would you ever think about, should I refinance and just pull a little bit of money out and pay for it? No? Okay.

We need to work this out. We need to buy a college that we can afford between what you can put in, your ex-husband can put in, the college funds can put in, and the kids can put in while working while they're there. Those are your 4 numbers that you can enter into the equation, and then that will tell you where we can afford to go to school. Oh, and by the way, where they live— are you talking about the dorm or getting off-campus apartments or Oh, the dorm.

We're going the cheapest route, so the dorms. I mean, that's, yeah, $15,000 a semester including food.

Yeah, um, yeah, that sounds right.

It's, or, or no, $7,500 a semester.

So what school are we talking about?

Washington State, the cheapest school, one of the cheapest schools in the state.

Yeah, no, so that's in-state tuition. No, I didn't, I didn't think it— yeah, the numbers you were giving me weren't some kind of crazy numbers. They're, they're very reasonable. But it's just, it adds up because, as you said, the tuition— I mean, the dorm and the food is as much as the tuition, and that's normal.

Yeah.

Yeah.

Okay.

And so they're not within driving range of either one of you, are they, where they could live with y'all?

No, unfortunately, no. It's like 5 hours away. Yeah. Okay. But would you ever, like, if I were to get married again and and, you know, move out of my home into another home. Would renting out my house and using that be something? I mean, 'cause I'm kind of, I am dating somebody pretty seriously now, and I mean, that was another option. Well, I could do that.

I don't think a million-dollar house is a rental house usually.

Well, in Seattle it is. It's a small house. I mean, you'd be shocked at what a million-dollar house looks like in Seattle.

Oh no, I'm not shocked at all. I'm just saying that's a fairly expensive rental property even in Seattle. Okay. I'm not unaware of the Seattle prices, they're very expensive. But you have $1 million on the table there. If you had $1 million sitting in the middle of your table, kitchen table, and you were getting married, and you had kids going to college, and you were thinking about buying another home, you wouldn't say, "Oh, I'm going to use this money to buy a rental." You would say, "I'm going to use this money for the next home and the kids going to college." Rental wouldn't even be on the list of options. The only reason rental's on the option is by default, because you already own it, it makes you think about that.

Correct.

Yeah, and Sarah, I would say too, you know, when you break it down per semester, what extra they're going to need, you know, because they're going to be able to get through this $60,000 for the first 2 years. So you saving some money and that, you know, you don't have to have that money tomorrow, right? It's in 2 years. So, I understand, you know, you make $85,000 a year, but what can you set aside for 2 years, right, to contribute?

And what can they set aside?

And then what can they, yeah. And then your husband, right? So, your ex-husband. And so, as you guys all kind of form this together, the good news is, again, you have some time on your side. This is not $60,000 that you have to have tomorrow. It's really in 2 years is when it's all gonna be due.

Yeah, so, and all of that is reduced by the $60,000 being used up is reduced by they don't need as much because they are working.

Right, that they don't even use it all. Yeah.

Hey, Sarah, you got a 4-year degree?

I do not.

Okay. Now my ex did. Yeah, okay. I have one, my wife has one, and everyone that I know just about in my personal life that is successful that has a 4-year degree worked while they were in school. It's like a normal thing.

And my kids do work. All 3 of them do. They've worked since they were 14 years old.

I'm not suggesting they're lazy. I'm suggesting there's actual mathematics that they're able to help this solution, help you with this solution. And it's really good for their character. And Rachel, we found when we were doing a bunch of the studies and some of the research when we were putting together The Borrowed Future, The Student Loan Debacle, which she's not talking about student loans, but the Borrowed Future documentary that we got all the awards on. One of the things we found was that kids that work actually end up with higher grades.

Yeah, higher GPAs. Yeah, and Sarah and I would be asking them at Washington State, what can they be doing? Could they, because by the time they're a junior, and again, this is when the money kind of starts to like, okay, by junior year is when we're going to need some cash. Can they, you know, be an RA in the dorm, right? And part of their housing is paid for because of that. Like, what creative things in the next 2 years while they're on campus can they figure out that they can plug into the university to help pay for some of this for the last 2 years of their school? So, there's some ways around it to get creative, but—

I just ran into a family member the other day that I hadn't talked to in years and reminded me that he went to college free because he was a janitor. They hired him as a janitor and employees got free tuition.

Yep.

It's like, unbelievable. I mean, that's so simple. The RA thing, a lot of people do that. That's what I did, right? Yeah, the resident assistant, right? A lot of people did that.

And even scholarships, I don't know, like just getting—

Your brother worked in a mattress store selling mattresses. He's currently our family—

Talk about a conspiracy.

All these years later, all these years later, he's still our family advisor on mattress purchases.

I know, and I need a corner. You know the conspiracy about mattress stores?

About mattress stores?

Yeah, like the whole thing is like, is like, who literally goes to a store to buy a mattress? Now, most people don't, but they're everywhere. So it's like, what's really happening? What's really happening?

Oh, now it's a Rachel conspiracy theory.

Conspiracy. That's a good black hole to go down.

They're all laundering mafia money. You never know. No, I don't think so.

Everywhere. That's the weird thing. How many people you see going into a mattress store?

I've gone in there and purchased mattresses That's what I'm saying. Your mother bought a couple of the Daniel works, and I—

he's a great source with my conspiracy. I need to corner him.

He'll never— he's a member of the Illuminati. He'll never tell you. You know, one of the first things I discovered working in the financial world is how absolutely devastating it is when the breadwinner of a family dies and there's too little life insurance or none at all. Grieving families are suddenly left behind scrambling to pay bills and trying to make ends meet. Meet. I also discovered that there are a lot of rip-offs in the life insurance world, like that whole life crap posing as an investment opportunity. What you need is level term life insurance, usually 10 to 12 times your income, which is the smartest, most affordable way to protect your family. The key is finding an independent broker who represents a ton of companies and works for you, not for the insurance company. This is exactly exactly what my friend Jeff Zander and his team at Zander Insurance are all about. They shop the term life companies to find you the best options, and they've been around for over 95 years, so you know they'll be there when you need them. Zander is the real deal, and that's why they've handled all my personal insurance for over 25 years.

I trust them, and you can too. Visit zander.com for instant online quotes, or for a more personal touch, give them a call at 800-356-4282. The Ramsey Show question of the day is brought to you by Yrefy. Defaulted private student loans don't define you, but dealing with them does. Yrefy helps you refinance into a low fixed-rate payment you can afford so you can take control of your money and get back to working the Baby Steps. Go to Yrefy.com/Ramsey. That's the letter Y, R-E-F-Y, dot com slash Ramsey. In New Jersey, might not be in all states.

01:05:54

Today's question comes from Dave in Massachusetts. My wife and I have 2 kids. Our oldest is currently in college at a state school, so we are paying in-state tuition. Our youngest is a senior and is looking at colleges in a different state, which means higher tuition. We own a second home in that state, but it's not our residence. Should my wife and I get a divorce so we can change one of our permanent residences to that state and keep the other permanent in our state. Doing so would save us over $100,000 by paying in-state tuition for both kids. My wife and I love each other very much, and the paperwork wouldn't change our relationship.

Wow.

I don't know if I've ever heard this question before.

I've heard it for different reasons.

Get a legal divorce to pay for the out-of-state college. College tuition. Oh Lordy, no Dave, no Dave. I think if you can't afford the out-of-state tuition, y'all can't afford the college.

So here's an idea, tell your kid no. Oh, there's a shocking concept. You're— before you divorce your wife, maybe you just tell your kid no. Oh my gosh, how about no, you can't go, you can't go to school "Over there." "No." "That's a lot easier." "No." Dude, you're weird. I mean, who talks about divorcing their wife to get in-state tuition?

For a kid for 4 years.

Because you can't tell your own spoiled kid no. That's whacked.

Oh man. Yeah, Dave, I don't think that— sorry, Dave in Massachusetts, not you, Dave. That could get confusing quick. Quick.

No, both of us are whacked, but for different reasons. Oh my gosh.

Oh yeah, Dave in Massachusetts. Nope, nope, nope. I would not go through a divorce.

Um, I wouldn't even tell your wife you had that thought. That would be dangerous. You could wake up dead.

Oh my gosh.

Oh man.

I wonder how many people do that though, try to scam the system and like—

well, people do it. I've heard of people like, they don't want to pay alimony. They want to keep getting the alimony from the previous marriage. And if they get married, they lose the alimony. So, they don't get married. So, they just act like they're married and never get married.

Sure, sure, sure. I hear that.

Or, "If we get divorced, we get— her disability insurance will double. So, we're gonna get divorced so that we get twice the money from disability." Whatever.

Well, I've heard the opposite.

All these different things happen.

Like, "We need to get married for military purposes," like, to have whatever spousal thing, you know what I mean? Like, I've heard that kind of stuff. Yeah, but never for a kid's college.

Wow.

Wow, you know, Dave, you never, you know.

Dave, you have your priorities really screwed up.

And so, let's just start with telling your spoiled brat child, "No." I don't think the spoiled brat 18-year-old's asking his parents to get divorced. This is the dad.

He's asking him to pay $100,000 to go across a state line.

But this is the dad's idea. Dad wrote it in.

I know, dad wrote in the divorce.

I'm blaming dad. I'm blaming dad.

Dad.

No.

Yeah, the whole thing. I agree, the whole thing. The child's behavior is the father's fault too. So, let's just go with that.

The child wanting to go to an out-of-state school is not— probably over the course of, probably over the course of 4 years. But I'm just saying, this is the dad. Don't you blame this on that 18-year-old. This is the dad's idea. Idea.

So no, I'm gonna blame it on the whole dysfunctional family. Yeah. All right.

Wow.

Hannah's in Rochester, New York. Hey Hannah, what's up?

Hi, I'm just calling, uh, to ask a question about my student loans and what I should do.

Okay.

So, um, I'm currently a registered nurse and my work actually pays $150 a month towards um, my loans.

What's the balance on your loans?

Uh, $4,500. Oh wow. I just have to pay the minimum for them to keep paying it, which is only— it's about $62 a month. So I didn't know if I should pay off— pay it off and not have this and like keep doing the minimum payment.

You have the $4,000 in there.

Uh, no, not right now.

You're an RN. Why not? You make good money, don't you?

Yeah, we, we have a, um, we bought a house and we are getting back to doing better budgeting.

Okay, good. So your question really is, when I get back to better budgeting, do I put more on the student loan than the minimum payments given that the employer is paying some of it? Yeah, yeah, I would put all, I would put all I can, you know, I'm going to work out, list all of my debts. Do you have other debts other than your home and the student loan?

We just have about $1,000.

No car payments?

Nope, no car payments and our house. Okay. Okay.

So I'm going to list the two debts, the $1,000 and the $4,000. First thing I'm going to do is pay minimum payments on the student loan and attack the $1,000 and get it gone in about a month. Month, and then I'm going to attack the student loan aggressively. But during those several months that you're knocking the student loan out, you're still going to get some of the benefit. But no, I'm not going to keep the loan around like a pet for 4 years for an $1,800 a year benefit.

Okay.

Yeah, the biggest thing is you want to be clear of this thing, and you know, you want to have a, you know, complete fresh fresh, clean start. Okay?

Okay.

Good for you. Thanks for asking the question. Open phones at 888-825-5225. Roger's in Branson, Missouri. Hey Roger, what's up?

Good afternoon. I've got a question for you, Dave.

Okay.

I've got $750,000 in cash. I've got $1 million in an IRA, and every year I gotta take money out of that, anywhere from $43,000 to $47,000.

Required minimum distribution, so you're over 73.

Yes. I'll be 76.

Gotcha.

I just paid $14,000 in income tax, which is fine. I have no debt. I have 2 credit cards. The only thing I get on there is gasoline, and I pay that off soon as the bill comes.

Gotcha.

I never paid interest on a credit card. I got a house, about $900,000 it's worth, that's paid for.

How much of your million— so you got a couple million dollars net worth. Way to go, man.

About $3 million total.

Yeah, congratulations. How much of that did you inherit?

None.

So it's called—

I take that back. My mother passed away. I got $60,000 about 4 years ago.

Wow.

And I put that right in the bank.

So you're one of the great American millionaires that did it starting from nothing without inherited money. Congratulations, sir.

Well, you're at fault for that. I listen to you. Uh, my question is what do I do with the $750,000? I have no children. My newest car is a pickup truck.

It's 10 years old.

My wife's car is 23 years old. We live very well on 32 acres of beautiful land. And I just don't trust banks with this bail-in, bail-out. Stock market to me is like Vegas.

Well, what's your, what's your 401(k) in?

Honey, that's, uh, it's with an insurance company, a major insurance company.

And you trust insurance companies more than banks?

Uh, no, the financial part of it. I put a million dollars in there 20 years ago and I've been getting this money back and back and there's still over a million dollars in it. Yeah, so, uh, it's worked out pretty well.

But I mean, insurance companies are less stable than banks.

Well, according to the report I get from the insurance company, they're loaded with money, billions and trillions of dollars.

Well, that would be true, but so are the banks. Yeah. So anyway, the answer to your question, sir, is I do not have any money in insurance companies. All of my money is invested in mutual funds and the stock market and in banks, in high-yield savings accounts. And so, uh, if you're literally sitting with that money stacked in your bedroom, you need to do something with it.

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Aria is in Phoenix. Hi, Aria, how are you?

Hi, I'm doing good. How about yourself?

Better than I deserve. Is it Aria? Is that correct?

Yeah, it's Aria.

Okay, cool. How can we help?

Um, I just kind of had a question. So a couple years ago, I got into a car accident that wasn't my fault. And we should be settling here soon. I don't know the exact amount of money that I'll be getting, but I know it'll be close, if not over $100,000. Wow. I'm 22. Yeah, it was a pretty bad accident. Um, are you—

are you recovered? Are you okay?

Um, I didn't break anything, but I do have long-term damage, and I had a traumatic brain injury because of it.

Okay, so is it affecting your income potential or anything like like that?

Um, not anymore. I was out of work for about 4 months, but since then I've been back at work. Um, so like I'm physically capable to work and like mentally capable to work, but I do have issues with like my long-term and short-term memory. Um, and then I have some issues like with my spine and some, uh, like nerve damage around like my back and my neck.

Do you think you're going to need any of this money to take care of you?

Yes.

Okay, for in what regard? What would you use it for?

Well, probably like more like chiropractic care, because like I said, I'm pretty okay for the most part, but I do still have like chronic pain basically for the last 3 years. Um, so bad, bad wreck after my accident. Yeah, it was. So I got T-boned. Um, I got hit in my driver's side. I was I was taking a left on a green light. The guy was going about 40 miles an hour, and he— and I was his brick wall, and he hit right into my driver's door.

All right, so, um, what's the chiropractic costing you?

Um, well, I'm not going there right now. Through my attorney, I was in care for about a year and a half. Um, so this was back in 2023.

And I mean, if you're going— going forward, if you're going forward, if you need some chiropractic care, what's it going to Um, I don't know, because I don't—

I can't afford it right now, like copays and stuff through my work. Um, I don't even know if my work covers chiropractic care. I know I can do it independently for like probably $100 a month.

Okay, so, and you make what?

I make $21 an hour.

Okay, all right. So what I'm going to do is look at your budget if I'm you and, and look, find out about the chiropractic care, what it's going to cost you, what it's going to cost you out of pocket, because you're going to need some adjustments apparently as you go forward. Right?

Yeah.

Okay, if you can cover that out of your income, then that frees up the $100,000 or whatever to invest. If you can't, then as you invest that, you're gonna have to consider that you're gonna need some off of it for your care. Best case scenario is you don't need this money and you can invest it, leave your hands off of it, and let it grow.

So my question with that is is after my accident, I was out of work for about 4 months, um, and I didn't qualify for any, like, disability or anything. And so I got into some debt. And then the car that I got after my accident, I had it for about a year, and the transmission went out on it. And so it got repossessed because I couldn't afford the car payment and fixing it. So I have about, like, $18,000 in debt from the car because I didn't have it for very long. And then also having to take out like personal loans and using credit cards just to survive. So I know there's—

So how much is the car repo of the '18?

I owe, I think, just under $11,000 on it now.

They'll probably settle that for around $3,000 cash. But you need to get that in writing. Call and say, I got, you know, I can make you a cash offer to settle this. I can't pay the whole thing. Would you take $3,000? $8,000, and they're gonna argue, and you're gonna argue back, and you're gonna come in, you know, back and forth, and then give them a check and be done with it. But it'd be pennies on the dollar, okay? And then your other stuff, you can clean up for how much?

I mean, that would be like the remaining $8,000. Now, some of it is in collections, though, so I don't know how that works.

I would just— I would call and get a payoff and pay it off when you get the money, okay? So somewhere around $12,000 of of your $100,000 is going to go and you're going to be debt-free. Now, what are you driving now?

I drive a 2006 Hyundai Tucson.

Is it paid for?

Yeah, I got it from a family friend. So it's in my name, it's paid for, and then it has some fixes I need to do on it. But I do want to get a new, like—

you may need, you may need to move up, but you may need to move up a little in cars. So you may want to take some of this money to move up car. So if you sold that car and put $10,000 with it, then you'd have a pretty decent car. Okay. And pay cash. No, no more debt. Okay. But so now we've used $22,000 of your $100,000.

Okay.

And then you need to set an emergency fund aside that you don't touch except for rainy days. So you need probably $10,000 to do that. So now we've used $32,000. 2. All right, and so you're going to have somewhere around $70,000 or so to invest long-term, but you'll have an emergency fund, an upgraded car, zero debt. And that— and that— if you don't have anything hovering over you, then you probably can cash flow your chiropractic. Okay, that makes sense.

Yeah, one of my goals, like, just because of the money and I'll be able to with it, is I want to go back to school, um, And I want to get my associate's license, but I want to move back to my home state where all my family is. So good. I don't know if it's smart for me to use part of that money to move there, or—

well, a little bit, but keep it very, very conservative. This money is going to go away quickly because we've almost spent a lot of it already just you and me talking. Okay, so you have to be very careful because it'll, it'll $4,000 and $5,000 itself away.

How much is the school, do you know?

So I have a $12,000 school fund from my grandparents that I'm able to use. Okay. When I was looking online just at current prices, it's probably gonna cost like total price because it's a 2-year program, about $23,000.

For all 2 years?

For the 2 years, yeah.

Okay, great.

And then what does that, what does that career pay when you get that completed? Completed?

When I was looking at jobs in the area, it's anywhere from $25 to $32 an hour.

Hmm, not much return on that. You get $25 to $32 an hour at Target without getting the degree?

Not really, because I want to get— I have to get a certification license, and I have to—

You can work at Target without getting the certification license. And make as much as you will after you pay $23,000 for this license. So maybe you need to tool up and school up in something else that pays better. It doesn't pay much.

I mean, that was like starting though, because what I would like to get my— like I said, license in laser hair removal. But once I get my advanced esthetics license, I mean, there's other avenues I can go. That's kind of just like my pinpoint.

You need to have a $40 an hour goal here. If you're gonna spend money for education, it needs to take you to $40 pretty quick. And I don't know if that— I don't know that world, so I don't know if that's possible. But yeah, I mean, you're gonna have to really— because you can't just spend $25,000 on a certification and then make $25 an hour when you can make that without a certification at Target That's what I'm saying. So don't, don't— that's, that's not a good investment. If it's $25 and it puts you into a program that in a few years you're making $40, okay, I'm with that. Okay, but I don't— you have to make $40 out of the gate, but you got to be thinking this through long-term as to where this is taking you. But yes, generally speaking, if you think through education and it's going to cause your income to increase substantially due to the education, education would be a good use of this money.

Yeah, and I think thinking long-term too, saying, okay, you know, a goal would be in 5 years to be making $60,000 or $70,000, you know, whatever that is. And then you back out from there. So yes, to your point, all right, you may be starting at a position that's $28, but there's, you see a path forward that's very clear that after a year of this, I can step up to $32 an hour and then I step up to $35 and then I, you know, you, it may take you a year or two, but don't let the end goal be making $35,000 a year for the rest of your life.

Yeah.

So you want to be making, you want to be making more. And again, for that certification purposes, make sure you get the ROI out of it. But, but yeah, my biggest word of caution is plan all this out because just like you said, Dave, I'm like, you can, you'll spend $10,000 here and there and within 5, 6, 7 transactions, it's gone.

Yeah.

So, stretch it as far as possible with a, with a really strict plan in place and put yourself on that strict plan. So if you're going to move, I'm only going to spend this much moving, so a moving company that's going to help me has to stay within this, this budget range.

Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. Rachel Cruz, Ramsey personality, my daughter, is my co-host today. Elizabeth's in Wichita, Kansas. Hi, Elizabeth, how are you?

Good, how are you?

Better than I deserve. What's up?

Well, um, I'm thinking about selling my house.

Okay.

I have $150,000, around $150,000 in equity. And I'm thinking about finding a house to buy cash.

For $150,000?

Mm-hmm.

You can, what's that look like in Wichita, Kansas? Kansas?

Well, around, you know, smaller towns around. It's not, it wouldn't be a shack. It would be, it would be nice enough.

Like a step up from a shack? It would be a shack that's nice enough. Is it good? Like a good, like a good house that you'd be happy in for the foreseeable future?

Yeah.

Okay, good.

Yeah, yeah, something that we would be happy in.

We?

Or I would.

Okay. Oh, I. So is there a we or an I?

We, um, my husband and my 4 children.

Okay, 4 kids and $150,000.

Yeah.

Wow.

And what's the motivation for this, Elizabeth? What's called— what's the— what's the home you're currently in that you're not satisfied with?

Well, we are very satisfied with our home. Um, it's beautiful, it's, it's big. Um, but I'm, I'm looking for ways to simplify. Okay.

That's, yeah, that's great.

How old are your kids?

14, um, 11, 6, and 2.

And how many square feet is in the home that you currently live in?

Uh, we've added a couple bedrooms. So as of right now, around like 3,200 square foot.

And the $150,000 cash home will buy what kind of square foot?

Um, I mean, I would say probably around 2,000 square foot, so it would be a big downsize, but we can also— we're good at adding square footage.

Your husband's in the construction business?

He's not, but he is— he, he works well. I mean, he can do those things. I grew up with parents who did rentals, so they know everything. This house, we added 2 bedrooms, we added egress windows. And yeah, so we can do those kinds.

So I'm just curious, Elizabeth, why would you downgrade to add-on if you already have—

I wouldn't, I wouldn't necessarily. I mean, as long as we were comfortable, as long as we had enough bedrooms.

Okay.

Um, I've got 2 girls and 2 boys, so, you know, uh, we can share bedrooms and, and whatnot. Yeah.

What's your household What's your income?

My husband makes $130,000, and that's gross. He, he's a UPS driver, so he works from home.

And the balance on your current mortgage is what?

$205,000.

And you guys are how old?

He'll be 36 and I'll be 34 in June. Okay.

All right. Well, there's a lot of windows through which two ways in which you could analyze this when someone says they want to simplify. Okay? If you want to be debt-free and have no mortgage and you're willing to give up the extra comfort that the $3,200 versus the $2,000 house has to get to that goal, that's one version of simplify. Another version of simplify is more of our friends the Minimalists, and you're just like, we want a simpler life in and one of the benefits of that is we don't have any debt. That's fine, because what you're describing your current life as is not anywhere near out of control. It's definitely very conservative. There's nothing here, you know, like—

I'd say y'all could buckle down and pay this off in 2.5, 3 years if you wanted to, you know.

What if you put $50,000 a year on the debt and you were done in 4 years?

Yeah.

Yeah. Yeah. And I think my motivation is that with, with 4 kids and, um, my husband working so much, I really, I want to live more. I want to have more, I want to have more room to just spend time together and, you know, go to the lake, go fishing.

And that means he doesn't have to work as much, is that what you mean? He, so he, he could pull back on work hours?

Yes.

And be home more if you do. Okay, that— okay, that's starting to make sense. That's a piece of the— okay, I get that. Okay.

Yeah. And I stay home and I homeschool the 4 kids, so we're always together, but he's not there. And it—

how many hours a week does he work?

That's a good question. I mean, he definitely— he, he doesn't get home before 8 most Most nights he's out, he's out driving till 8.

Okay, could he back off his hours, Elizabeth, and you guys still financially be okay?

I'm sure that we could. It would just, you know, like for a season.

It just sounds like it would probably— I would think from a logistical standpoint, it probably would be easier to cut back on some hours for a few years and be present at home while there's the kids going and then maybe pick it back up.

He's working, he's working two jobs.

I'm— he, he works UPS.

Oh, you said that?

Really?

Okay.

Yeah.

So he doesn't have the option, he doesn't have the option of cutting back then. He's got to finish the truck run.

He's— yeah, he's, he's working what he has to work.

So he's working 12 hours a day, 5 days a week, approximately.

Yeah.

So you got Saturday and Sunday to lake.

Yeah, yep. You know, the house— I will say the house is a lot of upkeep. That's another, that's another con for it. I think that it just takes a lot of our time.

So will the other one, right? The 2,000-square-foot house is going to have as much upkeep as the 3,200-square-foot house.

I really thought I was going to call you guys and you were going to be on my side.

I'm not against you. I'm not against you. I'm just still I'm still looking for the root motivation. For a minute there, I thought you were trading the $3,200 for the $2,000 to get your husband back, but he doesn't really have that option. He can't— unless he quits his job, he can't cut his hours.

Yeah, I mean, you know, he kind of—

he could take a different route?

Yeah, yeah, for sure. He could take— he, he cover drives most of the time, so—

okay, so he could take a different route and back his hours down. Why don't we just do that?

Do it for 6 months, Elizabeth, and just see how it feels. And if it's off and you guys are like, no, then you can ramp back up and then put the house for sale. And that's great. It just feels like a lot of work.

If you want to do it, what you're proposing is not evil. I'm just trying to figure out if it's going to give you what you want, or if you're out of the frying pan into the fire. Here. And so, you know, like, "Yeah, I got my husband back, but now these kids are all crammed in the shoebox and I can't breathe." And I don't have a pantry and I don't have all this stuff. The stress level of 4 large teenagers in this house that's approximately half the size is different. I mean, I'm okay with it, but I'm not sure if the trade-off is what you think it is. That's what I was trying to dig stick around and find out. We were not against your idea. We're just trying to figure out why.

The Debt Free Show. She's like, Dave Ramsey's gonna love this. I'm gonna be debt free. It's gonna be an automatic yes. And we took the whole segment for you, Elizabeth.

There you go.

Either way, you're great. Hey guys, I've got big news. The Ramsey Show is going on tour, and this is your chance to be more than just a listener. You get to be part of the show. So hear questions asked live and experience the kind of momentum that only comes from being in the room. We'll be in Charlotte, Denver, Phoenix, and Anaheim with a limited number of seats. Seats in each city. So, last fall, we completely sold out in 72 hours. So, do not wait. Get your tickets at ramsaysolutions.com/events or by clicking the link in the show notes.

Chances is to have a really good tax pro in your corner that you trust. They'll help advise you the best moves to make your situation for your small business, especially if you've had some big life changes. Check it out. It's that time of year, folks. Go to RamseySolutions.com/taxpro to find CPAs and enrolled agents who are Ramsey trusted. They've been vetted by us. You'll love it. RamseySolutions.com/taxpro. Pro, and you can find a pro in your area to help you if you've got a complicated return. Scott's with us in Casper, Wyoming. Hi Scott, how are you?

I'm well, Dave, thank you. Listen, my wife and I got married 45 years ago with $200 in the bank and we owed about $15,000. I just— we're 69 now. I just retired. I've got about a little over $6 million in a traditional IRA. Traditional IRA, and I'm not clear on exactly what I should do with it. I can defer it until I'm 73 and take smaller or just take normal distributions at that point. I could just cash out, cash it out and pay the taxes, or I could cash it out, I believe, and roll it into a Roth IRA. And my question is very simple. Which, which one of those might be the best for my situation?

Well, as you know, at 73 you've got required minimum distributions, RMDs, okay, that they're going to require you to begin to pull down a certain percentage every year on your 401(k)s, and that's going to create a huge income for you because you've done so well. Congratulations. I mean, wow, look at you, man. Well done. Very well done. Okay, so that we know is coming, Rick, unless we go some kind of scorched earth thing, which I'm not going to recommend. So I would just brace yourself and get ready for that. Do you need any of the money in the meantime?

We don't have any debt.

Okay, um, do you have any other money other than this $6 million 401(k)?

Yes, sir, um, probably around $14 million in U.S. equities and ETFs. And roughly $20-some, $25 million in real estate. All of that debt-free.

Good night. What did you do for a living?

Uh, that would be a story. Many different things.

Okay.

So to be honest, what we did was we just saved money.

Okay. Here's your offer. Congratulations. You have absolutely slayed the dragon. I mean, this is amazing. Beautifully done. So starting with, you know, $15,000 in debt and we got married 45 years ago and this is where we So you're a classic American millionaire. I'm just so proud of you. Well done. Now, if you roll the $6 million all to a Roth IRA, 100% of it you will pay taxes on that year, ordinary income. And that's going to make you puke, all right, when you see that tax bill, because it's going to be a $2 million tax bill. Okay? And so sit down with your tax professional, and I'm sure you have one, one and start unpacking how we can move some of the $6 million for a few years to some period of time to get it all to Roth. I don't care if it's 10 years, 5 years, 20 years, to where you can stomach the tax bill. You can actually pay the tax bill and roll all of it, pay the tax bill out of your other assets. And that's what I would do. And so if you rolled the $6 million, hmm, this is something to think about.

Look at this with your tax guy. You might go scorched earth on this one. If you roll the whole thing over and pay $2 million out of your equities and pull it out and pay your taxes, you now have $6 million growing for the rest of your life tax-free. And when you place a beneficiary on it and you and your wife die and you leave it to your kids, they don't pay taxes on on it, and it's not an inherited IRA that has to be withdrawn, uh, like, still under a traditional— if they get a traditional— if your kids get a traditional IRA handed to them, they have to withdraw it over the next 10 years, and under the Biden Secure Act. And so they're going to pay taxes on it within 10 years.

I see.

Okay, if you roll it all to Roth and you pay the taxes now, the growth on it tax-free will cover the tax bill within just a little while.

That's right.

And so I have moved mine— I did it more gradually than that, but I've got all of mine in Roth, and I did it so that it grows for me tax-free. But I'll probably never use it, and you'll probably never use this, and so it will go to Rachel and her siblings when I die, completely tax-free, and they have no required distribution on it. So they can let it grow tax-free. It can just sit there and it could get really awesome because that $6 million in 7 years, your only $69,000 will be $12 million. And in 7 more years, 14 years from now, which is statistically you're likely to live that long, that $6 million will be $24 million. All tax-free. So it might be worth, you know, having a little bit of throw up in the back of your mouth and writing a tax check out of your other assets right now and doing it all in one year.

So visual.

Well, I just— it makes me puke to think about giving the government $2 million because they're so freaking stupid. But, um, but yeah, it's just— and it's my freaking money. It's not theirs.

And then that you've already paid taxes on.

Pay taxes like the rich, kiss my butt. And so liberals. And so anyway, the, um, you know, you got— it's just ridiculous.

So anyway, we welcome everyone to the show.

I do too, because you need to be educated. But the, um, wow, the— so yeah, I want you to sit down with your tax guy and look at that idea, because when I move this stuff to Roth, I So he did it for the reason of it grows tax-free for me, but the actual huge benefit is that it's a great estate planning tool then, to have your stuff in Roth, because your kids don't get hammered with the required distributions.

They still have to pay— what's the estate tax though? Over $25 million, would they start to have to pay?

Yeah, he's got estate tax problems that are different.

Yeah, but as a Roth— but if a Roth moves over—

Roth is taxable on estate tax also.

Even estate tax.

Both of them are. Estate tax is different. This is income tax that we're talking about. Yeah, but he's got an estate tax problem. I'm sure you've got an estate tax planner, and if you don't, you need to get one tomorrow, because you're definitely over all your exemption levels. But yeah, way to go, dude.

That's amazing.

Man, you have absolutely killed it.

I love the subtlety of, "I've got $6 million here." And you're like, "You got anything else?" He's like, "Yeah, $25 million in real estate." Another $40 million. Another $14 million in ETFs.

Cash for Wyoming.

There you go.

Scott.

But that's— these are the millionaires. These are America's millionaires. And when you guys are watching political stuff and they say that the rich should be taxed, that's the guy you're talking about. And it's not your money. It's his money. He worked his whole life starting from nothing and invested wisely and built this. And so taxing him on his death and taxing him on his growth and tax him and tax him and tax him and tax him and tax him, and he didn't do anything to you. You know? But this guy right here is my hero. I mean, this is amazing. This is what we teach all of you to go be, but then you need to be aware that there are forces in the marketplace that don't like that, don't like you to be successful. So you have to fight against the estate tax problem, you have to fight against the income tax problem, and you have to fight against— you have to make all these decisions on your investments to keep the stinking government's hand thieving hands off your money. And so, but Scott, I'm just mad for you right now because it's a $2 million bill you're getting ready to pay.

I think you're going to want to do it all at once though.

And it would be ordinary income. So what would it be? 35%? What is that?

35%? Yeah. So it's going to be $2 million. I mean, it's going to be every bit of it, I bet you. It's a lot. But the thing is, I mean, if that $6 million grows—

Oh, 100%.

You know, 20%, like last year the market was up 24%, right? So if it's sitting in just S&P 500, so that'd be $1.2 million next year that he got back, and it's all tax-free. And the sooner you get tax-free started, the sooner it benefits you. So I think I'm gonna wanna do it now. I gotta crunch the numbers a little bit more, but I think I'm gonna wanna do it now.

Hey guys, Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles. Principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to ramseysolutions.com and try Ask Ramsey today. That's ramseysolutions.com. Theresa is with us in Washington, D.C. Hi, Theresa. How are you?

Hi, Rachel. Hi, Dave. Um, so my husband and I are in Baby Step 3, and, um, I want to spend $400 on a new kitchen compliance. Um, and my husband and I talked about it. He's listening right now. Hi, my love.

Um, hi, Teresa's husband.

If it was a good idea or not.

Um, okay, how much do you guys have saved?

We have $1,800 right now in our, in our savings account, and we have the cash in our checking account to cover it just fine.

Okay, and what's the full— what's the goal for the 3 months? Emergency funds, how— like $1,800 to what?

Saying that we needed to write down a number for that. Um, we only just finished Baby Step 2. Um, okay, probably around $20,000.

And what's your household income?

About $50,000.

$50,000, okay.

Yes. Hopefully that will be increasing soon, but like Why?

And how much?

Changing jobs and changing career situations.

Okay.

Yeah.

So how much do you think it'll change?

I don't know. We would have to start before we could predict that.

Okay. All right.

What's the appliance? I'm just curious.

It's a flour mill.

Oh.

So it like mills wheat into flour.

Yeah. I got one. I'll show you. Used. Um, oh, I got a 5-gallon bucket of that stuff in the, in the closet from 2 years ago when Sharon had this fad.

Um, I promise I'll use it.

Yeah, that's what she said.

Um, I believe you will.

I will.

I promise.

It's all, it's all healthy too. It's all healthy. It is. They don't let any of the little glutens in it. There's no little glutens and no Covids. So yeah, it's all, it's all COVID and gluten-free.

Oh my gosh, Teresa, you should have called Sharon.

Put her on, put her on.

I know, I know, I'm gonna represent her.

I'm serious, I'm gonna go home and get the thing before she gets home and send it to you.

Um, you should, that actually would be a great—

that would be so funny. And Sharon wouldn't miss it because she hasn't— she wouldn't even— she would not— she wouldn't know what's going on.

That would be funny.

8 months from now she'd be going, hey, where's my little bread thing? Give your address to Kelly.

Gave it to a lady in Washington. I'm going I'll go, I'll sneak it for you, Teresa.

So, here's the thing. Here's the thing. The thing that we always have to manage when we're managing these decisions is not the actual little issue of $400, but what it represents in our behavior, in our standards, and in who we are. Okay? And so, you know, what Sharon and I would have said when we were at your place, is we would have said, "If this isn't an emergency, we can't do it because we don't yet have an emergency fund." And it is very odd that I actually own one of those things.

How long did it take y'all to get out of debt, Teresa? How long were y'all doing Baby Step 2?

4 years.

I know, see?

Almost to the day, actually.

So much sacrifice.

No, but it's just, the point is that you have to have your filter system that says, "I'm going to make my decisions based on this set of, on this framework, and on this value system." And so, you know, you've been using the Baby Steps as your framework for making the decisions, and it would say that this is not an emergency, don't do it. Although, mathematically, it's not that big a deal.

You guys could, and you're gonna be fine.

You could do a lot of stuff that people could do.

But you don't want it to derail you, is what you're saying.

The thing is, I don't wanna— I just don't— you've reset the way your brains work on money in a positive way, and this messes it up. I mean, this is falling off the wagon.

Wow, you think it's falling off the wagon?

Yeah, for sure.

They're not going into debt for it though.

No, but I mean, they're not going to make the decision through that framework. I wouldn't do it. I would not buy it because it's not an emergency. It's not an emergency.

But it's—

And you don't have your emergencies funded, so you should not be buying luxury items that aren't an emergency.

It's not $4,000, it's $400.

It's not $400,000 either. It doesn't matter.

But I'm saying, for 4 years of their lives, they've been sacrificing to get out of debt. Okay? And then we always say, when you get out of debt—

So, we have a tie. Rachel says buy it. What are you gonna do? I say don't. I've got one in the closet.

Oh no, there's— hold on, we have some audience. Who's a yes?

The audience is saying don't buy it.

Oh no, oh, I got one.

Oh, I got one thumbs up. We got a bunch of thumbs down. We got a lot of thumbs up. Participation. Rachel, you're losing.

Shoot.

You're losing. You're so kind and gentle.

It's not that I'm kind and gentle. It's that I like the hard work and the exhaustion of what they've gone through.

Which means I need a homemade bread machine.

Listen, I'm just saying.

That's what all this hard work was for.

Listen, I don't do it, but people that do it—

They don't. They put it in their closet.

They love it.

You can stop. I know someone personally.

Shoot. I wish this was something that—

pancakes and muffins galore for about 90 days. Hadn't seen them since. Oh man, we lost the enthusiasm on the latest health fad, man. Oh yeah, Teresa, it's fine. That's fine. We're not making fun of you, we're making fun of me.

Okay, but it's not, it's not It's a want.

So, if your emergency fund was completed and you could put it in the budget, yes. Your emergency fund isn't completed, I wouldn't do it. I also wouldn't upgrade your couch for $400. I wouldn't upgrade your anything else for $400. It's not an emergency until you get this done. We stay gazelle intense until we finish Baby Step 3. And that's what'll get you to where you want to be. You've lived like no one else so that later you can live like no one else and buy a bread maker, buy a mill. It's a mill. It's a mill. You mill your own grain.

Yeah, I don't even want to ask questions. I don't want to— I'm so not in.

You're gonna have to get your mom to get it out and show you.

I know, I will.

She might give it to you. You never know.

And I'd give it to Teresa.

You might need it. Well, you could get Teresa's address and just ship it on over there.

Get it just in case.

And, you know, that's, that's funny. And the grain, it's like a 5-gallon bucket of paint. It's a 5-gallon bucket, plastic bucket full of grain in the closet.

And the grain, it's not like—

it's like grain. It's like grain, like you went out in the field and picked the grain.

Yeah, like the stem?

No, it's the seed.

It's the seed of the grain.

It's green. Yeah, it's real. I mean, it's— but it— and it's apparently pretty dormant because it's been sitting there a while.

Oh, man. It's so hard for us to think, though. It's hard when you—

this is first world problems on steroids right here.

It's the thing when It is when people are very passionate about it and it's like they're—

For a minute, for a minute they are.

They're there.

And then they're not.

This is what they do, you know?

We definitely got the fever for it for a minute.

'Cause I bet she does sourdough. I bet she makes sourdough with it, right? Can you do that or is that different?

No, no.

No, that's a feeder. Sourdough's a feeder. Yeah, shoot. Okay, I'm gonna stop. I'm terrible at this stuff. Oh, Teresa.

It's fun. It's not gonna kill you if you do it, but it— Not to sound— But if you're calling us to break the tie between you and your husband, Rachel's on your husband's side and no one else is. I mean, Rachel's on your side and everybody else is on your husband's side.

But we do say sometimes to families that have kind of been done a debt-free scream, we're like, "Well, what are you going to do now that you're debt-free?" You know what I mean? Like, we do ask that.

Buy them bread milk.

Well, I'm just saying, the idea of getting past Baby Step 2 is an event. It is a thing. And so, if there's something that is reasonable that you can pay cash for, that you're like, Okay, yes, we're saving at the emergency fund side, but in the checking account, we have this, and I could do a little splurge to like celebrate that we're debt-free.

I don't know. Yeah, you got, you know, you have a tie on the air and off the air, you lose. Yeah. The audience is not with you.

I'm trying. Trying, Teresa.

Oh, Teresa, that's fun. I would have guessed wrong. I thought she was gonna buy the the $400 expensive blender, the Vitamix.

Oh, the Vitamix. I don't know if that's—

that's about $400.

I will say we got an air fryer. Okay, that's pretty life-changing. It wasn't $400, but it was pretty great.

Okay, well, there you go.

Wow, that's the kitchen. Uh, yeah, the kitchen.

I remember when I was a kid and we moved and we had a box that said on the side of it, "Seldom used kitchen appliances." James, I bet you Y'all have a mill. Sign you need to be a minimalist.

James, do you have a mill?

Not yet, but it's probably going to happen soon.

Okay. Yeah, I feel it.

You spend hours researching before making a major purchase like a home or car, but it's also a good idea to put in the work searching for the right insurance coverage. Coverage. To protect your biggest assets, I recommend using Ramsey Trusted Pros. Whether you're looking for car, home, or any other type of insurance, Ramsey Trusted Providers have been coached and vetted to serve you like we would. Find what you need at ramseysolutions.com/insurance. Scripture of the day, Luke 11:9-10. So I say to you, ask and it'll be given to you, seek and you will find, knock and the door will be opened to you. For everyone who asks receives, the one who seeks finds, and the one who knocks, the door will be opened. Tony Robbins says successful people ask better questions, and as a result, they get better answers. So, question: it's April Fool's Day when we're recording this.

I was about to do a thing.

You were? Okay. And I'm just wondering if the bread-making thing was an April Fool's joke.

No, I was gonna be like, "Guys, during the break, Dave's talking about how he loves taxes and he just wants to pay more taxes." I wanna pay more in taxes.

I'm a closet liberal.

Or you show me your credit card or something, you know what I mean? That could be a good April Fool's joke.

No, I don't believe that. It's not even— it won't work.

I should have told you I applied. I don't know. I should have. I should have come up with something.

There's no telling what you might have done.

There was such an opportunity today, America, that I missed out on. So I apologize.

Well, I think the breadmaker thing was a complete— I think that lady was completely—

No, it was. No, Teresa wanted a breadmaker.

She really did.

I believe it.

Or a mill. She wanted a mill. Okay.

Lisa. Let's see if Lisa's anything.

I may have got punked there. No, but I may have thrown my wife under the bus, which is something I don't do on the air too, so that's not good.

But you know, you'll have to apologize later.

That's a problem. Lisa in Springfield. Hey Lisa, what's up?

Hi, um, first I want to say thank you because if it hadn't been for me listening to you for the last, I don't know, decade or so, I would be in a much worse situation than I am now. Um, I am trying to figure out where to start. Start, I'm a little overwhelmed with my finances. It's not bad. Um, so, um, my husband and I have listened to you for a long time. We had Zander Insurance, and the only thing I regret is that I didn't up it when his pay was upped, because he probably doubled his pay by the time— by when we first signed up for it. And then he died on our vacation in an accident.

Oh wow.

Um, this past summer.

Um, sorry. Why?

And so we are Baby Step Millionaires. We're in good shape, so I had some life insurance. I have a business that started as a hobby. I homeschool my 3 kids and I started my business while homeschooling my kids. And I am very good at what I do, but not necessarily good at all the stuff that comes with business that you don't, you know, know about until you're like in the middle of it. And then you're like, oh, you're supposed to do this. Oh, you're supposed to do that. So I've been untangling that, but it was never a priority between homeschooling, running a farm, and my husband made a very good income. We have no debt, our home's paid off. Um, it didn't matter. Mine was like a lucrative side hustle, but now I lost his income, the insurance, the health insurance, and all I have is my side hustle. And I don't want to just burn through our life insurance money.

So how much life insurance money did How much did you get?

$800,000.

Okay, and everything's paid for? Or are there other investments?

I paid off, I used some of that because I have an investment house that I owed $120,000 on, which I totally regretted taking out that loan after I did it. We cash flowed it, total remodel of it, but I used some of that life insurance. So I have like $600,000 or $700,000 I think in cash, and then $1 million in 401(k)s, but I'm only 50, so I can't touch any of that. Um, my business, like, I've been overwhelmed. I've not been doing a great job taking care of my business. Luckily I have some great employees, um, and I've always needed to get it a little more under control, but between homeschooling and everything else, it just—

how old are you?

It felt too overwhelming. Um, well, one of them's engaged to be married. She's going to be 21 in a few weeks, and then 17 and 14. They were, yeah, 17 and 14 boys.

And so what happened to the, uh, $700,000? Where is it?

So I, I got a SmartVestor Pro.

Good.

To help me put together all the investments. So right now he's got it in a mutual fund. There's like $600,000, I think, and I have like $100,000 in my bank account, which I didn't realize And so what does it take you a month to live?

What's your—

that's my problem. I don't even know. Like, at first I was like, we're just going to breathe. We've got money. We're going to— and now I'm starting out 8 months in. I'm like, okay, we've got to figure it out. And I don't hardly even know where to begin. I know it sounds terrible, but I've never actually budgeted. I only did it in my head and kept a running total. And we've always lived so far below our means that it was Let's start.

What do you need in food? What do you need in food a month?

I don't even know.

Oh yeah, you do. Tell me what you need in food.

I'm advised maybe—

You got 2 teenagers and you. No, $400 is not enough.

You probably spend $200 to $300 a week, do you think, on groceries?

Maybe, maybe. Yeah, I don't know.

Okay, so you need $800.

All right.

And you don't have a house payment. Payment. And how much does your electric bill run?

Well, when it's real high, it's about $1,400.

Okay. And how much is your water bill? It's on well, right?

Yes.

I don't have a water bill. Okay. Do you have a gas bill?

Um, no, only on the rental house and the rental property.

The rental house is a separate issue. I'm asking what it takes to operate your home.

Okay.

Okay. Rental house will support itself. It's got a renter in it. Doesn't it?

Yeah, it's a short-term rental.

Good, okay. And so you just begin to ask questions like I was asking you, and you fill out the form on EveryDollar in the budgeting app, and you look up and see how much you've got. And so I think your $600,000 can create $60,000 a year pretty easy, and I think you might be able to live on that. And then your business creates some more.

I think I'll probably untangle my business because some of it, like my Venmo and my PayPal, that's how my clients pay me. Money. Sometimes they use it for personal.

They shouldn't.

They use it for—

you need to completely separate your business from your personal. Two separate accounts. I have a personal account and a business account. Personal Venmo, business Venmo. Personal debit card, business debit card. And don't do anything in business with the personal, and don't do anything in the personal with the business. Keep them completely separate, and then you get less confused.

That's your home gets like more confusing because the business is at my home.

It's not confusing at all. When something happens in your home that's business, you know what it is and you know what's not. Put it in the business account if it's business. If it's not, do it out of the personal account. Where it's located doesn't matter.

What kind of business is it, Lisa?

What do you do, Lisa? I raise dogs.

You what?

I raise dogs.

You raise dogs?

Yeah.

Yeah, I raise dogs.

You're a breeder.

I think I— yeah, I gross about $500,000.

Okay, what kind of dogs?

That's not what I net. Rhodesian Ridgebacks, Cavalier King Charles Spaniels, and Cavapoos.

Okay, yeah, these are expensive pups. Okay, and so— Yeah, we do all the health testing And all of that is a business, and you have the cost of the breeding and the vet bills and the food and the cleanup and everything else and the cost of your staff. And you have the income created by the sale of the dogs. None of that is at home. It happens to be on your location there at the farm, but that's all. So you can separate this out and run it separately, and you need to, to make sure you're making a profit. Make sure you don't have this $500,000 hog No, it does make a profit. How do you know? You don't even have a set of books.

Well, I do have QuickBooks.

Okay, but what's going into that? Are you putting personal stuff in QuickBooks?

Not my— I have somebody that does all that for me. We started doing that about 3 years ago. She helped me untangle everything. Well, almost everything. I'm almost there.

Yeah, I think you're close to the easy part.

Yeah, okay, so here's the thing. Your stress level is gonna go way down when you get this cleaned up, when you get the tangles combed out of this hair. But there's still a few tangles left, and they're tied into your grief story and into this tragedy, and they're adding to your pain. And so the cleanliness of organization, extreme organization, is gonna lower your anxiety level.

Yeah, and stay on the line, Lisa. Kelly will pick up and we'll get you EveryDollar for a year to start doing just on your personal side of running your home.

Yeah.

To start putting in those numbers.

That puts this hour of The Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.