Transcript of Your Life Won’t Change Until You Do

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 and the Fairwinds Credit Union studio, this is The Ramsey Show. I'm George Campbell. My co-host today, Dr. John Delony, taking your calls at 888-825-5225. Kylie kicks us off Hi there.

I'm doing okay.

How can we help?

So I reached out because I am in crippling, overwhelming debt. I've been— I read the book, Total Money Makeover, and I was really inspired, but I'm just trying to crunch the numbers myself, and I feel like even implementing Ramsey's solutions, I feel like I'm going to be in debt for the rest of my life.

Wow.

So even after reading the book, you're going, there's no hope for me.

That's, that's how it feels.

What does your math tell you?

So my math tells me, I mean, that we just don't have enough left over at the end of all of our bills, even though we have a high income. It just looks like we've made a lot of bad choices and it's going to be really hard to rebound back from that. If I were to put $2,000 a month on this debt extra, I still feel like I would be paying off this debt into my 50s and 60s.

Is that what the math actually says though? You said, I feel like it'll take me till my 50s.

Oh, well, it's hard for me to actually do the math, the math as accurately as I'd like to, because of course the interest is just eating me alive. So even if I'm putting an extra $2,000, it's hard for me to like—

Okay. So give us the numbers. Maybe we can help with this. How much debt do you have?

So, um, I can break it down. I have $411,000 in student loans between myself and my husband.

That'll do. Okay.

Okay.

Anything else?

I have—

does a 401 loan count?

Sure.

Yes.

If it has the word loan in it, it for sure counts.

Okay. So we have a $36,000 401 loan.

All right.

I have a $15,000 car loan.

Okay.

And then we have about $80,000 in credit card debt.

Wow.

What do y'all do for a living?

So I, um, have 2 jobs. I work for the state of California and I also have a business. Um, and my husband, he works for an investment bank.

What were the degrees in?

Um, believe it or not, it's finance, accounting. We both have MBAs.

Okay. So what's your total take-home on an annual basis?

So my total take-home, oh, I don't have it broken out on an annual. It's, it's $9,650 a month.

Is that for both of you?

That's for both of us and the business. And that's because, you know, the 401 loan's pulling out $860 a month.

Okay. The 401 loan you're saying?

Yeah. So we don't get to take that money home. It's like automatically pulling out that $860.

Are you guys doing any investing right now?

Um, my husband has a 401 and I don't have anything going towards retirement. I'm in my 30s.

How much does your husband make?

Um, he makes about $100,000 a year, but he brings home only $4,600 a month.

Tell me about that.

I know you're in California, but you're talking like 60% in taxes.

I mean, he's got taxes and the 401 loan is $860. So he's got what he's putting towards his 401, his, um, what he's pulling out for like the childcare reimbursement. Um, you know, which is probably another $400, um, a month. And then this gigantic 401 loan.

What are the minimums on all of your debts between the student loans, the 401, car loan, credit card, all of that? Um, just to get by on those.

I mean, it's, it's about $4,000 a month, like, cause we've got $860 on the 401 loan. We've got $2,000 minimum in credit card payments. And then our student loan payments, even like with our income-based repayment, is it's actually down to about between $600 and $800. We're still working on getting into repayment on our student loans.

Yeah. But if you're paying that, that small of an amount, it's growing faster than you're paying it.

Exactly.

You've got like $1,000 in interest while you're making $600 payments.

Um, where do you live? What's your housing situation?

So we rent.

Okay.

How much is your rent?

$2,800.

So let me ask you this. Uh, can we ask you just like some more probing questions? Is that cool?

Of course.

Yeah.

Yeah.

Uh, and trying to get a picture and some of these questions might sound like they're indictments and they're not. Okay.

Okay.

Um, tell me about a guy who's got a degree in finance and an MBA that is, and I'm saying this in quotation marks, right, is only making $100 grand. Why isn't he out making $250 or $300?

I think that the problem that he's having right now is he's working in more of an analyst role for this investment bank and doesn't have a lot of management experience. And he doesn't work directly on investments and portfolios. So it just doesn't seem like he has a lot of transferable skills. We thought the NBA would get him to that next level in his career promotion, and we just don't have a guarantee of any of that.

No, I think that's one of the big myths of the NBA is that it's some kind of golden Willy Wonka ticket. I'm not gonna let you, I'm not gonna hire you to manage my portfolio unless you've got experience managing portfolios.

Right?

Like, I don't, I don't care what your education is.

So he's likely overqualified for a lot of the roles and underqualified for the ones he actually wants.

Yeah.

What's he, what steps is he taking on nights and weekends to get that experience so that he can begin getting pieces of these giant portfolios?

Um, it's, that's just, it's just, that's just not his lane.

He's working on like back office. Um, he's working like with managing projects and working on like international teams, but he's not doing any actual portfolio managing or working as a director.

What about you? What's your day job?

So my day job is I'm working as an auditor. Um, and I use my CPA to get that job, um, basically from working in public accounting. And then my business does accounting and like finance. Advising for small businesses.

And what do you bring home in that? It sounds like you bring home about $50,000 or $60,000?

Um, so my, my, um, state job, I'm bringing home about $70,000. I'm not bringing home, that's like my, that's my gross. And then—

So in California, you're bringing home about $40,000 of that $70,000?

Um, yeah. I mean, like it's only $3,000 a month after my pension.

$35,000 of that $70,000? God Almighty.

Yeah. Yeah.

I, I, the solvable problem for me right now is you two are very credentialed and very qualified, and you're not making nearly enough money for all of the investment you've put in the car. So basically, another way to say this is y'all went and bought a really, really fancy, fancy fast car and put the most premium gas and all the greatest additives into it, and y'all are driving in first gear. And that means complete disruption of the stability of a state job, complete disruption of— he's comfortable and he gets to say cool things like international clients and Like that kind of stuff for, we've got to go max. We've gotta get a way, way bigger shovel to fill this giant hole that we dug for ourselves.

Mm-hmm.

You get what I'm saying?

Yeah.

And that might mean leaving one of the most expensive, overtaxed places in the United States, if not the—

Because your debt stays the same no matter where you live. But if you can get your double your income and go to a cheaper cost of living area and then throw 10 grand a month at your debt, now we have a fighting chance to get this done in less than 5 years. But you're right. This is a huge math problem. The only way out is increasing your income. It's the only variable we can control right now.

Yeah.

So that's why I'm trying to grow my business and my, my job, my day job doesn't pay like as much as I wish it did, but I do have the flexibility to be able to work and grow my business and do my marketing.

But here's what I'm saying. You don't have the luxury of flexibility right now because like you're, y'all make a good, a good income, but, and I say this lovingly, y'all are broke. Y'all don't have enough money to pay the bills that y'all have already Hang on the line, Kylie.

We're gonna send you EveryDollar, the premium version. You said you were struggling to figure out the debt snowball piece and all the interest. That will lay it all out for you and show you the true numbers. And hopefully that gives you a semblance of hope as you guys tackle this debt.

Y'all gotta get radical.

If you've ever thought, I don't even know where to start with life insurance, you're not alone. And that's exactly why I recommend Zander Insurance. Because the insurance world will throw everything at you. Confusing words and add-ons like riders, whole life crap called an investment, return of premium, and it's all total junk. And most of that confusion you feel is by design. When you're confused, you make bad decisions. Expensive decisions. But Zander doesn't play that game. They cut through the noise and help you get simple, affordable term life insurance that actually does what it's supposed to do— protect your family. They shop the top term life companies to compare your options on the coverage that your family needs. No more, no less. No pressure and no upsells. Just clear answers and the protection you If you've been putting off getting term life because it feels overwhelming, stop worrying and get it handled the right way. Call 800-356-4282 or go to zander.com. That's zander.com.

Michael is in Miami up next. Michael, welcome to The Ramsey Show.

Thank you very much. Sure.

For taking my call.

Absolutely. What's going on?

What's up, brother? Hey, how are you?

Good.

So today I'm calling because I find myself in a bit of a head of my life. I have about $35,000 in debt, about $33,000 in private SoFi loans, and about $2,000 in credit cards. Right now, my annual working income is about $38,000 on the low end. And I I have 2 jobs currently, a retail associate full-time, and I'm an Army reservist part-time.

Okay.

What are you doing in retail?

I sell guns.

Okay.

Did you get a degree? Was there any education?

Right now, I am currently taking about a class a semester towards my business degree, and I'm also doing a minor in data analysis.

What are you going to do with those?

I plan on getting further into the firearms industry, more on the administrative side, so I can earn more income.

Okay, so that's the goal, is you want to stay in the firearms world but work in a corporate sort of environment?

Exactly.

Is there a different path than the one you have right now, which is just working retail?

Is there a different path? I— potentially becoming an officer in the military after I get my bachelor's degree, most likely on the reserves or National Guard side, so I can continue to do that full-time because I do enjoy that quite a bit. It's a, it's a good getaway from everything else. Um, but I'm currently a single dad. My wife and I, we separated almost a year ago. So right now a lot of things are going on and I'm kind of pulling up my bootstraps and I'm putting my army helmet on and, uh, I'm just trying to pray and, uh, have faith.

So I— George is going to walk you through a plan, okay? But I want you to hear me say this. Um, I remember back in the day, um, when I used to train jiu-jitsu with a bunch of dudes, and we used to have a drill which was essentially, you're stuck. You're stuck for the rest of this round, the rest of this time period. And the drill was literally protect yourself until this thing is over, until the bell rings and you can reset.

Yeah.

And you've probably run drills. I've never been in the military, but you've probably run drills where you are under fire and you simply have to survive until they run outta bullets.

Fair?

Fair.

Okay, I want you to keep that mindset right now because you're not— you haven't been beaten, you haven't lost, you're just in a bad season. And you're— it's winter right now, you got the coats out, you got long johns on, and your heat's out. It's miserable, but spring is coming, okay?

Absolutely.

And I want you to hear, like, remember George and I telling you there's, there's a light coming and it's not a train, man. You work too hard, you're too, you're too smart, you got a vision for your future, and You're doing what I think is the most important thing, which is putting your kid at the top of your priority list. That tells me you're a good man. Okay.

Thank you.

Same team? Same team.

Absolutely.

All right.

Just trying to do my best.

All right.

So are you doing a monthly budget right now? What's actually coming in every month? Is it $2,500?

About $2,500 to about $2,800 at the moment. Maybe a little bit more with, with my Army income, and I make a tiny bit of commission from my current job. So most of it's going towards my current credit cards. I'm using the debt snowball at the moment.

I have about—

I already made my savings, my emergency fund, and I'm—

You got $1,000 credit card.

What's your custody arrangement?

Custody arrangement, we do not have one. We are not officially legally separated. We are simply on sort of a break, essentially.

So who's keeping the kid?

We're both in the same house. We just sleep in separate rooms. We have separate finances and that sort of thing.

Okay. I'm going to be willing to bet all the money I have that that is the epicenter of the chaos and it just radiates from there.

It does.

It does.

You, my bro, listen, listen. You have to have the courage to take whatever the next right step there is.

Absolutely.

Because you're living Your situation's not good. It's not good for you. It's especially not good for that kid. It's not good for your wife. It's not good for anybody.

No.

So we have to make some grownup decisions and not just keep punting this, punting the ball down the street. We gotta make some grownup decisions about what are we gonna do? We're gonna legally separate, we're gonna get divorced. We're gonna be adults about this and we're gonna take care of this kid because what you need is some margin and some space, and you can only get that if you have peace.

Absolutely.

Okay.

I agree.

Are you cash flowing school? How are you paying for that?

Right now I'm using Army tuition assistance, and I also have some federal loans that are getting paid off by loan repayment through the military as well. I had originally joined the military to fulfill a lifelong dream of mine of serving in uniform and also to pay off those SoFi loans, which were originally Sallie Mae loans. I refinanced to get my parents off. had originally co-signed together, and I refinanced as a courtesy to them so that their credit wouldn't be impacted by those loans.

Well, those SoFi loans are probably killing you. What's the interest rate on those?

Interest rate is about 9% right now, so it is— it's, it's pretty rough.

So do you have any money left over at the end of the month if you got real serious and looked at every single dollar, or are you just barely making it by?

I'm barely making it by right now.

What's your rent or mortgage?

My rent at the moment is about $776 personally.

What is that?

Yeah.

What's your wife putting into this deal?

The same. We're essentially roommates with a kid.

Okay.

Okay, man. Well, the one variable that can change here is your income. And so my question is, can you go do something full-time that pays you more, even if you keep this military stuff on the side?

I am working towards— I would very much prefer not to leave my current job. I enjoy it quite a bit. My solution was to probably find a third job that's a little bit more flexible.

What does it pay, the retail one?

The retail one, it's $19 per hour plus commission.

Okay.

And can you make any more income on the side with the hours you have?

With the hours that I have, yes. I work 10-hour days, 4 days a week. And so I have those— I have 3 days that I could potentially Potentially. I'm currently working on getting a third job that I'm just finding flexibility to do so. It's a little bit different when you have a kid, unfortunately.

It is. But Michael, I'm hearing you, brother. I get you love the job and I get that you like the industry, but I feel like I'm reaching my hand out to pull up a guy out of the water who's drowning and he's like, no, no, no, no, no. I like the temperature.

Right?

That makes sense.

And if for 18 months, for 24 months, you got out of there and you were an assistant manager at Starbucks and doubled your income, It like, it look like future you would thank you for stepping out of this for a minute and getting back into it. And by the way, that time won't be wasted either, right? Or going to work at a construction crew and making $25. I, I don't, I don't know what the, what the thing is for you. I just know you're drowning and you, the, the water feels warm and so you don't want to get out. And you're talking to 2 guys here. We're listening to you. You're a good man and you work hard.

Yeah.

Um, but you're trapped by circumstances. Unfortunately, that you directly are choosing.

You know what I'm saying?

That way.

So enjoyment right now is a luxury. That's for future Michael one day when he has some peace, when he's got some margin. Right now it is sacrifice, it's hustle. And so even, even if that means you pause school for a season to clean this up, I'm okay with that. Because I don't know at the end of, you know, you getting the degree that they're magically going to hand you a corporate job in the firearms industry.

And you're trying to do a bunch of things all at once. You're trying to Like figure out a marriage in ash, trying to figure out how to be potentially a single dad, plus go to school, plus be in the reserves, plus work a full-time job. Like you're trying to do everything all at the same time. And so picking 1 or 2 or 3 things that you can do and just get after it, man.

That's all I know how to do is get after it.

But when do you want to be debt-free?

I know, but you're getting after it, but you're swimming in circles, right?

If I waved a magic wand, how long would it take for you to get debt-free?

To get debt-free at the moment?

2 years?

No, no, it would probably take me a lot longer.

I'm saying if I could wave the magic wand, if you're like, man, I want to get out of debt in this amount of time.

I would like to be out of debt in the next 2 years.

Boom.

Okay, now we have a number. See how much closer we got to facts? Now we have a goal. $35,000 paid off in 24 months. That's about $1,500 a month. Now you have a number to go after. If I can make an extra $1,500 a month by working my tail off, I throw all of that at the debt, I'm done in 2 years.

Or quitting my current job and getting a new one, or working Friday, Saturday, Sunday, whatever you gotta do there.

So that's what you're, you're gonna solve for instead of just, man, I don't know how to squeeze more outta the budget. You can't. You need to make more and then throw all of that extra at the debt. And John's right, this is gonna be so much harder to do when you're going through a life crisis and a storm right now. So we've got to take the right next step there, get the income up, and I hope you're debt-free in 2 years, my friend.

If you're in a really bad debt situation, I know how scary that is. You might be getting harassed by debt collectors every day, threatened with lawsuits, and maybe you think bankruptcy is the only way out. I've been there. I remember feeling so scared I couldn't breathe. But it's not too late to get out of this mess. Contact Guardian Litigation Group. Guardian is not a call center. They're a real law firm. You get a real attorney assigned to you. So if a creditor sues, you're protected from day one, not scrambling to find legal representation when you're already in the middle of it. And Guardian only gets paid when your debt is negotiated. negotiated and you accept the settlement. Guardian has helped over 55,000 people settle more than $600 million in debt. That's why I trust them and send people their way. The longer you wait, the fewer options you have, the more expensive it gets. But it doesn't have to end that way. Guardian can defend you. Go to guardianlit.com/ramsey. That's guardianlit.com/ramsey, or click the link in the description.

Attorney advertising. Results may vary and no specific outcome is guaranteed. Big week around here at Ramsey Solutions. John Delony's brand new book, Building the Marriage You Want, is officially available for preorder You can get it. John's book addresses one of the biggest myths couples believe, that if your marriage feels hard, it must be broken. And that is a lie. And so he wrote this book, Building the Marriage You Want. He explains why marriage can feel so hard, why yours still matters, and what you can do to make it great. And John, as much as he is theoretical and up in the clouds, he's so practical too. He's going to give you practical tools to help you reconnect and build a stronger marriage. And John, you guys threw in a whole lot in here. You can get the enhanced audiobook with the preorder for free, early access to the ebook delivered 2 weeks early, and an exclusive video with Dr. John Delony on connected Communication, all for $24.99. And it is read by the author, if you're wondering.

Yeah, of course.

That audiobook.

Here's the truth about pre-orders. Pre-orders are, quite honestly, you helping me out. Um, it helps the publishing industry, it helps the, the retailers, it helps a whole bunch of things. And I understand right now, like, hey, send me $25 and, uh, in a few months I'm gonna mail you a book. Um, so I, I get that. I get the ask, I get the, I don't have time for that, it's not in the budget. I get all that. But it is a gift for folks to preorder it because it just helps so much, put so much more gas in the engine that is getting the book out to as many people as possible. And if you're going to get it anyway, you can get it and have it there. We'll send you a downloadable thing that you can print out and wrap for Christmas or whatever so you can let somebody know. And then the book will come in January and then you'll basically get credit for 2 gifts.

It's kind of awesome.

Boom.

There you go.

They'll be like, oh, I forgot. Thank you for that.

All right.

You can get it at ramseysolutions.com/store, Building the Marriage You want. Miguel is in Los Angeles up next. Miguel, welcome to the show.

Hi, how are you doing?

We're doing great. What's going on with you?

All right, perfect. So my question is, so me and my girlfriend have been trying to discern the future. And so my question for you guys is, should I propose and get married before finishing Baby Step 2 or after finishing Baby Step 2?

I want to ask you about this discerning the future.

So deep.

Do y'all have like a crystal ball? What do y'all, how are y'all doing this?

Prayer.

We're asking the Lord for guidance and then talking to different people and seeing what the Lord is saying.

Sounds like he sent you to 2 random podcasters.

I love it.

Your lucky day, Miguel. Your lucky day.

So how long you guys been together?

We've been together 13 months now.

Okay. And if you were debt-free today, would you go ahead and propose?

Oh, definitely.

Then do it!

What are you doing?

You already have the ring?

I do not have the ring yet, no.

Okay, what's that gonna cost? How fancy is she?

Uh, she's, uh, not super, super fancy, praise be to God.

Um, she is—

she—

we went ring shopping, and the ring she wanted I think cost about maybe like $1,500.

Listen, girls don't even like rings anymore, they like high fives. Give her a— actually, I'm looking at Tara here in the booth. She's I'm blinded by how big her ring is. So I was wrong on that, Miguel.

So how much money do you have right now?

Uh, saved up?

Yeah.

Uh, just the $1,000, um, baby step 1 emergency fund.

Okay.

How long would it take you to save up another $1,500?

Um, I can probably do it, um, no more than 3 months, but even less. I just started Uber Eats this week.

On top of your full-time job?

Yes.

How much debt do you have?

Just $9,000.

$9,000? What kind of debt is that?

A car.

Okay. What's the car worth?

Probably like $5,000 or less.

Okay. Well, you're telling me you have about $500 in margin right now every month without your extra Uber Eats job?

Yeah.

Yeah.

My minimum on my car is $450 and I have about $500 in margin every month.

Okay.

Because here's my math on that. Even if you get this ring, beyond that, it's still going to take you 18 months to knock out $9,000 in debt. That kind of sucks, right?

Yeah.

So if we can up this income, knock out the debt before we're married, that'd be a cool goal and cash flow the wedding. Are you guys going to be paying for the wedding yourselves?

Most likely.

Well, we haven't had that conversation with mom and dad yet on either side. Okay. Um, so as of right now, we're planning ourselves nothing super fancy. We— I think we talked about it briefly and we said maybe a $10,000 or even less. I do work at a church, so that helps significantly.

Hey, all right.

How much do you make at this church, Miguel?

Um, before taxes, uh, I think my form last year said $45,000. After taxes, maybe $40,000 or a little less.

And how old are you two?

I am 30. She is 23. Okay.

What does she do for work?

Uh, she does, um, um, ABA. She works with children with autism.

Awesome.

Cool.

And she's gonna be the breadwinner for a while if y'all get married.

For a little bit, yes. Yes.

Are you living on your own right now?

I am not living on my own. Um, I currently live with my parents, and my plan was to, as soon as I got out of debt, was to move out. But now I'm looking into the possibility of marriage and just going straight into that. Okay.

I'm just wondering, have you done a budget to see if you guys can actually live together once you're married and rent somewhere if it's expensive in your area?

Yeah, actually, 2 weeks ago, we decided that every month we're going to start looking at our monthly expenses to kind of compare and see where we're at. So 2 weeks ago, we had a mock budget as if we were married. And it is a little hard, but I know we can cut on things. I know a big thing that I personally been working on is just eating out. I've been struggling a lot with just being overweight. I've lost £61, so I'm trying to cut down on eating out. Good job.

Excellent. Way to go.

I know that plays a lot.

Thank you.

Thank you. Yeah, I know that plays a big part in money spending, but also my health.

Can I challenge you because I love you, Miguel?

Yeah.

I want to see you get fanatical. I'm going to say this and I'm going to say, I'm saying it harsh on purpose just to be provocative. Is that cool?

Yeah. Okay.

You're a 30-year-old man living with his mom, making $40,000 a year.

In California.

In California.

Yes.

I would, I would have a hard conversation with my daughter if she told me that's who she was going to marry. It says nothing about your character, but it tells me a lot about drive. It tells me a lot about, um, priorities. Okay, now I know you're being a minister and I know you're taking a significant pay cut to do that because it's a, it's a values-laden thing. I totally get that. But I want to see you get fanatical about getting on under your own two feet. You've lost £61, bro. That means you've been keeping your promises to yourself for a long time, and I'm so proud of you. I would hug you if you were sitting here. Okay. But I want you to step outside of the little cocoon you've built for yourself, which is I can work here and I love this place. It's comfortable. I know everybody and they're gonna pay me barely, barely enough to eat in California. And to do so, I'm gonna be a 30-year-old man living with his mom. I wanna see you transform in front of the mirror as you transform physically. I want you spiritually to transform in front of the mirror and stand up and say, I'm gonna be a guy who's got his own place, who's making enough to provide for myself.

And if my new wife wants to stay at home one day, I'm going to be able to provide. I want you to get fanatical about that vision of yourself. You get what I'm saying?

Yeah.

Because right now you're thinking small ball, which is how do I scrape together enough nickels to get a $1,500 ring, which is awesome. I love rings that aren't crazy expensive. And how do I pay off $9,000 over a year and a half or 2 years? I want you to think bigger than that. You get what I'm saying?

Yes, I know exactly what you're saying.

Okay. It's, man, you've proven it to yourself. You can light the fire and get going. I want to see you get fanatical about the kind of man you're going to become and create this world for this wife of yours to co-create with you once y'all are married.

Do you think you can make us a promise that if you go and save up for this ring, you're not going to eat out until after you're debt-free?

I, I can make that promise.

Whoa, dude, that's a— you just promised in front of America if you eat out, even go to Arby's, you're getting struck by lightning. Probably, probably not, but I just made that up. But there you go.

But that— I, I like a little bit of a dangling carrot there. And I think if you go, man, this is that important to me that I'm willing to sacrifice over here to get this other thing that I want, which is marrying this wonderful woman, I'm willing to sacrifice financially, I'm willing to sacrifice to lose weight and hit my other goals, I think you're going to hit it because you're a guy who Once he sets a goal, he's going to stick to it.

I might have to sacrifice the current comfortable job I have. I might have to sacrifice my current vision for my life and this job I want to have as a minister one day because I dug myself a hole. And so I'm going to get fanatical about getting out of it and we're going to go from there.

If your business is making 7 figures or more, you should be proud of that. But that growth probably brought a mess with it— systems that don't talk to each other. It's impossible to track down your numbers because they're scattered everywhere. That's a visibility problem, and NetSuite has solved that problem for more than 44,000 businesses like yours. NetSuite brings financials, inventory, CRM, and more into one place. And their AI tool, NetSuite Next, builds AI into everything, automating busywork like forecasting demand and chasing down overdue accounts. It's not complicated to use. You just ask it questions like you're talking to a person. And you're not starting from scratch because NetSuite is built on leading practices from thousands of businesses, preloaded and ready to go. Ramsey Solutions switched to NetSuite years ago. It helped us know our numbers and And we've never looked back. If your revenue is at least 7 figures, try NetSuite Next for free at netsuite.com/ramsey. That's netsuite.com/ramsey, or click the link in the description.

If you're new around here, welcome. We answer every question through the lens of the 7 Baby Steps. So if you haven't seen those yet, you wanna know more, that's the best place to start. We'll drop a link in the description of this episode for you to learn more about those baby steps. Alex is in Boston, Massachusetts. What's going on, Alex?

Uh, hey guys, thanks so much for, for taking a few minutes outta your day for me today. Um, my question is basically, uh, I was affected by a corporate layoff, uh, after about a decade at my company.

I'm sorry.

And, uh, I'm scared.

Yeah.

And I don't really know where to go from here. Um, and I just wanna make sure I'm doing the right things to, to help ensure that my wife and I's future is not tremendously derailed because of this.

We'll talk about the finance part, but, um, I wanna shout you out and tell you I'm proud of you for saying the words, I'm scared. Most men won't, don't have the courage and the strength to say that.

Thank you.

It's awesome. That actually will help you regulate what you do next, which is important.

Okay.

Um, and also there's some psychological data out. About the type of job loss you've had, you've experienced. Um, your body feels it as though it's a death. That's how heavy the grief is. And so I don't want you just to blow by this. I lost my job and I gotta move on. Like, this is a heavy, heavy loss. Probably feel betrayal, probably feel angry, probably feel all sorts of things. All those things are right and good, man. Okay.

I think I whiplashed through all 5 stages of grief 6 times the day I found out.

Well, you'll, you'll find it coming out later when you get a new job and you're You're doing better than you were, but then your supervisor says, hey, I want to meet with you at 4 o'clock. And all of a sudden your body will go to DEFCON 1, right? And like, you'll process this for years and that's okay. That's normal and that's natural. What matters is you being able to say the words, I'm scared. I'm going to get some support and some help from people, and then I'm going to go do the next right thing, man. That's, that's, that's the path, brother. So I'm proud of you. So what's your financial situation right now? Absent— did you get, did you get a severance package? Like, what's your debt load?

Tell us, give it, paint us a picture here.

Yes, sir. So all things considered, I do consider myself pretty fortunate because of longevity at the company. My severance is about 6 or 7 months.

Okay.

They are offering career coaching and the like, which I've already started to engage with those resources. My wife and I are in a pretty good spot. In terms of debt, could be better, could be worse. I have about $10,000 in student loans. She has about the same. Um, other than that, our only monthly liabilities outside of our mortgage are her car payment and standard utilities and groceries and things like that.

What's her car loan? What's left on it?

Uh, it's a lease. Um, it's about $300 a month and it's got another year on it. Um, that's our primary vehicle. It's, it's, you know, Uh, you know, she's got a longer commute to work, and, you know, living in this area, you need something that can handle all weather because New England will throw every season at you in a single week.

Um, well, isn't a lease the worst way to do that? Because they'll nickel and dime you for going over your mileage. She's got a long commute.

Yeah, we, you know, I, I've listened to the show enough to know that, though, how you guys feel about leases, so I'm not too surprised to hear you say that.

Um, I'm just saying, if it's for the I don't buy that.

I think we just wanted a nicer car to have a nicer car, and byproduct, it'll get her through that commute. But neither here nor there. But I am from that area, so I feel you. It is, it's some rough terrain out there. So you've got the car loan, the 2 student loans. How much do you guys currently have in savings?

Um, we probably have about $70,000 to $80,000 and then could liquidate a little bit more.

Why do you have $80,000 in savings?

I mean, not in savings. I mean, some of that's in like money markets, CDs, and stuff like that.

But you're saying it's liquid. It's not retirement money.

Correct. Retirement savings would be a much bigger number.

So what is 3 to 6 months of expenses for you guys?

Uh, 3 to 6 months. I'm actually looking at my, my little spreadsheet here that we keep to keep track of these things. 3 to 6 months of our expenses, we'll do the high end of that, would be about $50,000. So we have that emergency fund and then we've got that, you know, a little bit of extra cushion.

So you could pay off all of the student loans today and probably buy out the lease and still have a full emergency fund left over.

And then a 6-month—

We'd have to see.

A half a year salary check coming your way.

Uh, it's paid out as, as continual, but yeah.

And is your wife working?

She is, yes.

So technically you could double dip for 6 months.

That's the ideal. That's why I'm sitting here looking at job postings and working on my resume while I was waiting to talk to you guys.

I would love to see you getting on the phone and talking to real people and having cups of coffee with folks.

Yeah, I've got networking conversations lined up with former colleagues and, and various connections over the next couple of weeks. Excellent. I'm not, I'm not one to rest on my laurels.

No, I, I, I got that. I got that. I, I just don't want, often people sit down and they make a, a fancy resume and they use one of the AI tools, LLM tools, and they make a fancy resume and they send it out to a million people and they never hear back. And then they're like, oh, nobody wants me.

And it's like, I applied to 4,000 jobs.

Right. It's really difficult. Nobody, nobody hires like that. Um, almost every job is, do you know somebody that will vouch for you? Um, and so yeah, getting on the, getting on the phone and going out and having more cups of coffee than your digestive system can handle. That's the path, right? But it—

I—

George, tell me if I'm wrong, brother, you're in the best possible situation I can imagine a guy in your situation finding himself. Like, like you keep saying you're fortunate. I want to say you've planned for this exact moment subconsciously.

It seems like it.

Yeah.

What was the $70,000, $80,000 earmarked for?

It's just that fund, that savings. It just sort of kind of built up over time. And we both had been saving for retirement separately and just, it just kind of happened. We're both pretty attentive to what we're bringing in and how our finances look.

But what was the plan for the student loans and the lease when you have all this money on the sidelines? I'll take that as there was no plan.

I mean, Not specifically. You know, let me ask you this.

What are you earning on your CD?

Um, that one is, is a preexisting one from her. She, I think it's just a couple of percent. Would have to double check on that.

And what are you paying out on your student loans?

Um, my student loans are— the interest rate, you mean?

Right.

Sorry.

Yeah.

Yeah.

Uh, highest, um, highest interest rate that I have on mine is about 4.5%. Okay.

There's no way you're making that on a CD. And so every, every, every month, every minute that that money sits in a CD, you're actually, your net worth is going, you're losing, not to say your net worth's going down, but you're losing money. You get what I'm saying?

Yeah.

So regardless of the job loss, if you just called in and said, hey, I've got $20,000 in student loans, I've got this car lease and I have $80,000 We would tell you, dude, pay off the loans yesterday and even maybe even do a buyout on the lease if she likes the car and it's a reasonable part of your income. It sounds like you guys had a great household income. Was it 6 figures?

Yes, sir. Okay.

And tell me about the, the, the $16,000 a month, $17,000 a month on, um, expenses.

Uh, I think that was maybe, uh, you might have misheard. On, on that, the monthly expenses were about $8,000 a month.

Okay. So, oh, so over 6 months, my bad. I thought you said 3 months. That's, that's my fault. Yeah. Okay. So $8,000 a month times 6 is about $50,000. Gotcha. Okay.

And how much does she bring home a month?

Uh, her monthly net is about $6,000. And before I lost my job, mine was $7,500.

Fantastic. So you only need $2,000 of your severance each month to float the bills. Because you said the expenses are $8,000, she brings home $6,000.

Yep.

And if you get rid of those student loans, that gives you even more cushion, doesn't it?

Yeah, actually, I guess this kind of gets to my— to another question that I had, because I know a lot of times I hear, you know, you guys and Dave and Rachel say, you know, when an emergency hits or, or when something like this happens You know, hold onto your liquidity, hold onto your savings.

Yeah.

Go to storm mode.

Well, you're beyond storm mode. Most people in Baby Step 2 are doing it the Ramsey way and they got $1,000 to their name. You got $80,000 plus a 7-month severance, plus a second income, plus a full emergency fund. So you're not gonna get permission from me to hang onto this debt any longer. Let this be a wake-up call that if you want true peace in your life, whatever comes your way, don't owe anyone money and have money in the bank and be building wealth for the future. And live on less than you make. And you guys have done a great job, but I would just finish the job and get rid of these loans once and for all and never lease a car again. If you're living like no one else with your money, you're probably being smart with your entertainment choices too. And the truth is, finding entertainment that's high quality and aligns with your values is not easy. That's where Angel comes in. They make movies that check all the boxes— values-driven, quality, and as I'll get to in a minute, affordable. And it's why I'm excited to see Angel's latest movie, Angel and the Badman, in theaters now.

It's a classic Western with a big-name cast. You got Tommy Lee Jones, Zachary Levi, Neal McDonough, and it's all about redemption, love, and second chances— values the world needs more of. And speaking of value, when you become a premium member of the Angel Guild, you'll get 2 free tickets to see Angel and the Badman in theaters, plus access to Angel's entire family-friendly streaming library and free tickets to every future Angel theatrical release. All that for $20 a month or just $179 a year. I'm a premium member of the Angel Guild myself, and I can attest to the fact that the content, the movies, the TV shows are values-driven and highly entertaining. So to become a premium member of the Angel Guild, click the link in the description or go to angel.com/premium. Get all the details at angel.com/ramsey.

Limited time offer. Visit angel.com/ramsey for details.

Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. Anthony is up next in New York, New York. What's going on, Anthony?

Hey guys, uh, thank you for taking my call. A longtime listener. I appreciate the show a lot. Um, so yeah, I'm just right now I'm in $1.1 million in debt.

Whoa.

I'm just looking for some advice to see how to get through.

Is this business debt?

Uh, no, it's 2 mortgages.

Okay.

Um, no consumer debt?

Kind of feeling underwater. Uh, no. So one of the houses, uh, was my childhood house, which I After a long series of messy 2025, I ended up becoming the owner of—

But you bought it off, or did you just acquire the mortgage and refinance?

I acquired the mortgage and refinanced. So there's $500,000 on that home. That money went towards paying off the original HELOC on it of $147,000. My mother ended up surprising me with some credit card debt. And a personal loan totaling about $103,000.

Wait, that was in your name?

No, it was in my mother's name.

But how did you get surprised with it? What does that have to do with you?

She never told me about it. There's a cultural aspect where we have to take care of our parents and—

No, I'm calling BS on that. I don't throw $103,000 at my kid and say, well, It's in the Bible, bud. You know our culture.

Man.

That's crazy.

So what, what, what's this house worth?

Uh, about $800,000.

Okay. Why isn't it on the market right now?

Uh, it's my childhood home, um, and I— the original plan that I wanted to have for it was, because it's a 2-family home, um, my mother currently lives in it, but she'll be moving in with me and my wife soon.

Which is the other mortgage?

That's the primary residence for my wife and I, which is also another 2-family home, which currently generates us $3,000 in rent every month from our tenants.

So you've already got this figured out. How can we help, man?

Just trying to see if I can get some advice.

I mean, the advice I would give you, George, tell me if I'm wrong, is I would sell your childhood home.

And who's living in it?

Right now, my mother, who's going to be living with us—

Yeah. So she's about to move in with you. Then you put her on the market. What's wrong with that?

And then I would take— then that would leave you with $500,000 left in mortgage debt. And then I would take the $200,000 that you just cleared and I would put that towards your house. And suddenly you went from $1.1 million to $300,000, a regular mortgage, actually a great mortgage for New York. And then you're off to the races. That's what I would do. Or I would sell my primary home and move into my childhood home.

What's the goal with this childhood home? Are you gonna keep it for just sentimental value?

So I primarily, but then also I wanted to keep it because it generates about— it has the ability to generate $7,000 a month. So I just wanted to keep that and grow a financial portfolio with my wife, which was our original plan when we first got married.

But you're calling us telling us— you're saying you're stressed about this debt because you still have to service $1.1 million in debt. Every single month.

Right.

So what does that cost?

There is $4,060, so about $10K a month.

Okay. And what do you make outside of this real estate?

$80K.

$80K a month?

Oh, sorry. A month, about $4K.

Okay.

So you make $4K a month. And that's— and does your wife work outside the home?

Yes.

Okay. How much does she bring in?

About $130,000.

So is that take-home pay like $6,000?

Roughly, maybe. Yeah.

Okay. So you're basically bringing home $10,000 a month and just the mortgages alone are $10,000 a month if no one's renting is what you're telling me?

Yeah.

That's a lot of risk. All it takes is some vacancy, a repair issue, a bad tenant who won't pay, and all of a sudden you're gonna get foreclosed on.

Yeah.

So you're not in a position to be a real estate guru quite yet.

Why isn't somebody living in the other side of their, your dual-family home that your mom's in?

So in the two-family home, there is somebody currently living there.

Okay.

Which we get, which we get about $3,000 a month from.

Okay.

And my mother is the other occupant of that home.

What about your— what about your home? Is somebody else sharing your home?

Yeah, yeah. My wife and I have one unit and we're currently renting out the other unit.

But then mom's about to move into that one?

Yeah.

So you're not gonna make anything from that one?

No, no, sorry. She's not moving into the other unit. She's moving in the same unit with my wife and I.

Got it. Okay, and you'll continue to rent the other side for 3 grand?

Correct.

Which brings your take-home pay to somewhere around $12,000 or something?

Uh, yeah.

Okay.

I would crunch the numbers to make sure you guys are clear on, on what this budget is gonna take each month, but I still would not keep the childhood home. 'Cause first it was, well, it's my childhood home. Then it became, well, it'll cash flow $7,000 a month while strangers destroy it. So it can't be both. It can't be sentimental and also it's a money-making scheme.

Not to mention the air con. You got 2 air conditioners, you got multiple bathrooms, you've got like 2 ovens, 2 kitchens.

It's only going to get more expensive.

Yeah, man. If you came to me and said, I got, I got $500 grand and I can buy, write a check for a duplex here in New York and cat, I would be, I'd be all for it. Like, go, go for it. I mean, imagine waking up tomorrow and all you have is $300,000 or $400,000 left on your primary mortgage. Yeah.

And you still have your $12K coming in between what your other side rents for and both of your incomes. That feels a lot more peaceful to me. I'm just saying, if I was in your shoes, I would sell that other home. It sounds like you're not wanting to do that. You're wanting a different scheme to pay these off. I don't know.

Well, yeah.

What's your plan? I'm interested. I mean, you know who we are. I mean, you knew we were going to say this. What's your plan?

I mean, so originally my entire thought process was I would— so I refinanced my childhood home and got $500,000 from it, mainly because I needed to help my mom pay off my mom's debt so she can come into my home with my wife and I because we're trying to have children. So she'd be debt-free. I wouldn't have to deal with that.

How is your mom gonna live? Do you have to fund her life?

No, no.

She has her own income?

She has her own income, and then she's gonna retire in about a year or so, and she'll be living off of her Social Security.

That's enough? Because it sounds like she went $100 grand into debt while working.

Yeah, I had a long conversation with her, and we went through a plan of how I'd be monitoring her finances, and she's cutting up every credit card once it's paid off.

How big is this 2-family home that you can have your mom move in plus start having kids?

So it's a 2-bedroom with an unfinished basement, which we're going to currently convert into an in-law suite.

With what money?

How much is that going to cost?

Savings.

So right now, I have about $103,000 sitting in a brokerage account.

And you're gonna cash that out to do the remodel?

No, no. I, and I also have $20,000 in my savings, uh, which is, which is what I was gonna use for, um, some heavy renovations on the basement and some reno in the childhood home.

$20 grand. I don't think it's gonna get you very far. I think you're gonna have to cash out part of this brokerage to make it happen.

Guaranteed. If not all of it.

You got so much flying around right now with mom moving in and And you want to have a kid, create some peace in your life and simplicity. Get rid of the childhood home, use the equity, use your savings to create some actual foundation that you can stand on.

When you take your car to the shop, you're probably thinking 2 things: how much is this going to cost me, and is it going to get done right? What you need is a mechanic who will give you transparent information so you can make the best decision for your car and your wallet. Christian Brothers Automotive is the official auto repair shop of The Ramsey Show because you can trust them to take care of your vehicle the right way. Their digital vehicle inspections let you see exactly what their technicians see, giving you confidence on which repairs are urgent and which ones can wait. Plus, every repair is backed by their Nice Difference Warranty, 3 years or 36,000 miles. With a guarantee like that, you can walk away knowing that your car and your wallet are taken care of. Schedule your service today and get 10% off your visit at CBAC.com. cbac.com/ramsey or click the link in the description. That's cbac.com/ramsey.

10% off up to a $250 value. See store for details.

Edgar's up next in Boston, Massachusetts. What's going on, Edgar?

Hey, how you guys doing?

Doing great. How can we help?

Um, so I got a quick question and I'm just— and I just kind of want some advice for it. Um, I was wondering if I should stop retirement contributions to save for a down payment a little faster than what I'm doing now.

Great question, man.

I love it. So you're in Baby Step 3B, you're out of debt, you've got the emergency fund. And you're sort of going, do I save? How much should I invest? Do you have an employer match?

I do not, but I do have a pension.

Okay.

How much are you currently investing per month?

About $1,200.

Okay. And how soon is this house purchase going to happen?

Play it out.

If you keep investing, when would you have the down payment? If you stopped all investing, when would you have the down payment? That gives us sort of the spectrum.

Um, 22 months if I keep investing, around 16 months if I stop.

Okay, cool. So that's— that helps us get some facts instead of just the emotions around it. And are you married?

Yep.

Okay. What does your spouse think about this? Do they have more urgency toward getting into a house?

Yeah, yeah.

She wants out of the apartment.

When's your lease up?

Um, well, right now we live with her parents and in-law.

Okay. The lease is never up and it might end abruptly. You never know.

Yep.

Okay. So that makes sense why she wants out urgently. I'm with you on that. Are you guys going to be on track for retirement if you pause investing for a couple of months to get this down payment saved?

Um, I did, I did the retirement calculator on the website and I did it. 2 years from now. So I think it's like 27 years and it was on track to, at 10%, I was a little like $3.4 million.

That'll do.

By the time we're 60.

That's fantastic.

So I was just thinking, I was like, maybe 18 months without retirement, I think would not be that bad.

Okay. So if you pause investing, it'll take you 16 months and then you can get back to investing 15% for the rest of your lives. That's what you're telling me.

Yep. Yep.

I like this plan. You know what'd be even cooler? If you said, hey, let's do a stretch goal. I like a goal that scares me a little bit. So what if you said 12 months from now we're gonna have enough? And that might mean cutting the budget way down. I mean, if you're living with family, I'm guessing your expenses aren't that high.

Um, no, it's about like, uh, $5,400 a month.

For your total expenses?

Yeah, and that's including food, gas, For the cars, everything.

And what do you guys take home?

$12,200 a month.

Fantastic. And so if you cut down investing, you would take even more home and you'd sock all of that away in a high-yield savings account?

Yep.

Yep.

Wonderful. What's the total down payment? I'm curious. What's the goal?

$100,000 for around this area.

Awesome. And what's the house going to cost?

Probably like $500,000, $600,000.

Okay. So about a half-million-dollar house?

Yeah, probably.

Okay. What area of Massachusetts is this?

Around East Coast. So up near New Hampshire a little more.

Okay.

Cool. So kind of North Shore area. All right. I mean, I like this plan. You guys have crushed it. You have a great income, you've kept your expenses low, you're gonna be on track for retirement. So that's the kind of thought process I go through, is getting all the numbers down on paper to go, okay, it's 22 months versus 16 months, we're gonna be okay pausing investing for those 6 months.

Okay.

All right.

Way to go, man. That's fantastic.

Thank you.

I appreciate it.

And for whatever it's worth, brother, I did this exact thing.

Yep.

It's a struggle for people who wanna do good. They're both really good things.

Yeah.

They're both awesome goals. And you're like, wow, the power of compound growth, home ownership.

You're just dragged in both directions. Yeah. I, for my part, just got a home and haven't looked back. So get outta your parents' house, your in-laws' house, and as quick as possible.

And a good reminder, if you're in that Baby Step 3B zone, we always say if it's gonna take you longer than 2 years to save the down payment, you can go ahead and invest some. You don't want to go without investing for years while you're trying to save.

Maybe just take the match.

Yeah. Maybe some people go just take the match, 3 or 4 or 5%. But you can really go anywhere from 0 to 15% while you're saving up the down payment. And so that's what I was walking Edgar through is just look at the timeline and go, yeah, that one feels a lot better. I'd rather be in a home 16 months from now and I can forego investing for a short period of time and get back at it. Great question. Mark is in New York up next. Mark, welcome to the show.

Hey, how's it going? Glad to be here.

We're happy to talk to you.

What's up?

So I'm in a bit of a I don't know if I should quit my job or if I should continue doing what I'm doing, as in working the full-time job and my side thing that I do fixing cars. Wow.

Okay. How much have you made fixing cars in the last 12 months? Or this year?

I would say this year, I would say somewhere around $6,000 to $7,000.

Total?

Yeah.

Around there.

What do you make at your full-time job?

Monthly, on average, I make around $3,600 after taxes. Okay.

And you're saying you would want to quit your job and go all in on fixing cars?

Well, my full-time job is also fixing cars.

Oh, so you want to open your own shop?

Yeah. Well, I would do mobile repair now.

Okay.

Is what I'm doing right now. Um, but the reason why is because so much of my time goes to the full-time job and I'm only making $3,600. And if I feel like— I feel like if I had more time to do the side business, I would probably be able to get more customers and also do a lot more repairs.

And does the idea of being HR and accounting and the guy doing the work, does that excite you? For it to all fall on your shoulders?

It scares me, but it doesn't sound impossible.

Here's what I want you to make sure you don't do. I don't want you to do something based on a feeling and you saying, I feel like I could... I love it when people are working side hustles and the side hustle overwhelms their day job.

Where you almost have to quit your day job, right? Or else they're gonna fire you.

You're not at that position yet. I mean, you've brought home $7,000, and so even if you tripled it, you're at $21,000 for a year, right?

Yeah.

That's—

you can't, you can't feed yourself with that. And so you're looking at having to 5, 6, 7, 8x your business. And so I would want to see you get like to where every minute you get off of the— as soon as you clock out, you're, you're driving to somebody's house and beginning this process. And maybe you're not doing full repairs, mobile repairs, but you're doing mobile oil changes. You're doing mobile tire changes, and you can, that way you can get in and out with customers quicker. And then you're all day Saturday, all day Sunday, and do that for a year, brother, before then you make this jump because you've got to learn about the business side of it, the marketing side, the customer review side, the person whose fender falls off after you fix it. And then they come not after your boss, they come after you for like all that insurance, all that stuff. That's, that's what you're walking into saying, I wanna be a small business owner, which I'm a huge fan of. Um, I just don't wanna see you, um, bite off more than you can chew and end up right back in the same shop, just underwater $50,000.

You know what I'm saying?

Yeah.

Yeah.

Well, um, do you have any debt right now?

Yeah, I do. That's what I was about to say. Um, I have around $6,400.

What kind of debt is that?

Um, a couple of credit cards between me and my lady.

Um, is it a girlfriend?

We, we have a kid together, but yeah, I intend to marry her before the end of the year.

Okay, so is she working as well?

No.

Okay, so she's at home with, with the kiddo?

Yeah, with, uh, with our son and, um, my stepson.

Okay, so that puts even a little bit more pause.

Yeah, you 100% can't quit. You have 2 kids.

So you need some stability right now.

Yeah.

Because it's going to add some pressure when didn't get many clients this month and one didn't pay and it's all on you.

And kid needs to go to the doctor. I— you might consider getting a job at another shop.

Yeah, I had a second job and, um, wasn't, wasn't the best situation. Not necessarily that I couldn't do the job, it just Got a little risky.

Sure.

For my health.

I, I, I'm saying maybe your primary job that sounds like it only pays you what, $48,000 or $50,000 a year. Is there another automotive shop you could go get a job at $65,000 or $70,000 in and then do the side hustle on the side too? Maybe not, man. I'm just spitballing here.

Right now your side business brings in about $500 a month on average.

Yeah.

We need to get that thing way closer to $3,600 before we jump ship completely, but I think you can do it over the long I just wouldn't do it today.

This episode is brought to you by BetterHelp. Every year you tell yourself you're going to handle the holidays differently. You're gonna stay calmer, you're gonna feel more peace, and then it's the same old pattern, the same family tension, and you're cranky and you're tired and you find yourself snapping at people that you love. Listen, you still have time to get ahead of everything and understand what's behind your reactions. Therapy can help you build a healthier plan before you actually need it. When you're ready to have that conversation, I recommend BetterHelp. BetterHelp is an online therapy platform with more than 30,000 licensed therapists across its network. If your first therapist isn't the right fit, you can switch at any time for no extra cost. And get this, if you've thought about trying therapy with BetterHelp, insurance options may now be available nationwide through participating providers, and eligible members have an average copay of just $23 a session. Listen, you know what's coming this holiday season. This year you have time to make a plan before the holiday chaos. by preparing differently. Go to betterhelp.com/ramsey to check out your payment options. That's betterhelp.com/ramsey, or click the link in the description.

Paul is in Philadelphia up next. Paul, welcome to The Ramsey Show.

Hi guys, thanks for taking the call. Appreciate it.

Sure.

Um, so a little bit of a, a, uh, predicament, I guess, maybe emotionally and financially. My in-laws have, uh, graciously, uh, gifted my wife and I $100,000, um, wow, with the wishes that Yes, very, very, very kind of them.

What are the strings?

The wish— oh yeah, there we go. The, the, uh, the wishes are that we install, um, about $80,000 to $90,000 of solar panels on our roof to offset our utilities cost.

And so they're buying you solar?

Exactly.

Okay.

Well, yeah, what do they want after that?

That's it. Um, and, and in the note that they, they shared with us was obviously we don't have to uphold their wishes, but that's why the money was given to us. And so they said, you do what you do with it. We would love to see you guys install.

What is the obsession with you getting solar?

Do they think it's all coming down?

Uh, maybe possibly they have solar.

Um, you know, I think they Without getting political, they, they are—

they want— they believe in renewable energy.

And so anyway, okay, that's what I was gonna say. If this is their like, hey, we'd love for you guys to sort of like live by these principles that we live by, or not even that.

Like, if my, if my in-laws gave me— said, hey, we want to buy y'all solar panels, I'd take that. Yeah, but my in-laws are awesome too, and they wouldn't then come back next week and be like, well, you know, since we gave you this, what would you guys do with the money?

Well, that's, that's where the— you know, I, I've been following y'all for a while, and I would love to put it towards All towards our mortgage.

How much is left on the mortgage?

$700,000.

Oof, that's a big mortgage. You guys must have a fantastic income though.

Yeah, we make about $450,000.

Heck yeah, man.

And so it's— we're obviously in a— we're very lucky. And so I just want to do the right thing at the same time. I don't want to throw $100,000 away. And so I'm, I'm looking for advice on—

You know them better than we do.

Yeah.

I, I'm more concerned about the, not that they, cuz take it for what it is. They didn't give you $100,000. They offered to buy you solar panels for your big fancy house. That's what they offered to do. I think the question before you is what are, what relational strings are gonna come attached to this? That's my bigger concern. There are certain people in my family that I would not take a dime from because it would cost me my soul on the back end. And there's people in my family I take a ton of money from 'cause they're awesome and generous and great. You know what I mean? So what, what, what relational cost will this incur?

Yeah, they're, they're amazing. I don't, I think if we had a hard conversation with them, they would listen. It's just, you know, there's so many other things that would, we could put towards our 529s. We could, you know, this solar panels would be 10th on the list, 12th on the list, you know? And it's—

Yeah.

But you'll make, you'll make half a million dollars a year. It's not like, You're having to make big, hard choices about what you're going to— how y'all going to eat, right?

No, we don't. Would this change the answer if we have to refinance in 6 years because we did a 15-year ARM?

Oh, geez.

I don't know that it would matter all that much. I mean, with the money you guys are making, and are you throwing extra at the mortgage right now?

Yeah, we are. About $1,500 extra a month.

Nice.

So, you know, yeah, yeah.

I mean, in the baby steps, if you're like, hey, I could attack Baby Step 6 or I could get solar, I would go mortgage. But again, is Thanksgiving going to be awkward when they went, hey, so what'd you guys do with the money? Uh, we knocked— put a dent in our mortgage.

Yeah, now we only owe $600,000 instead of $700,000, right? Hey, how are you only putting $1,500 a month extra towards your mortgage when you make $450,000 a year.

Um, we're also putting into other investments.

Outside of retirement?

Outside of retirement, yes. That's good.

So like 529s, a taxable brokerage account, all that stuff?

Yep.

What else are you investing in?

Um, it's the 529s. Um, we have a brokerage account that we monthly deposit into and then they allocate for us.

Who's they?

Our 401. Edward Jones.

Oh, okay.

How much is in that brokerage account?

$400,000.

Whoa.

Is that like a retire early fund? What's that about?

Yes, I think so. Some of it we've been reserved on continuing investing in the 529s. In part because maybe kids don't want to go to school. Who knows where we're going to be in 10 years? And so we could use some of those funds to pay for kids.

So sort of a flexible account that can cover any gaps and potentially help you guys create a bridge account if you wanted to retire early.

Tell me if I'm nuts, George. Paul, if I'm in your exact seat right this second, I would withdraw 100% of that brokerage account. Well, I wouldn't refinance my house actually, because the rates are so ridiculous right now. But I would take all that money as soon as I could, put it towards my house and get my mortgage, what I, the balance so obnoxiously low. And I would take my in-law's gift and get on with my life. Like you're overcomplicating your world. You make a half a million dollars.

Yeah.

Yeah.

Okay.

You know what I'm saying? Like, y'all make too much money to be this stressed.

He said you sound like his wife.

But here's why I asked you what you're investing in. You, you have— and dude, I am, I am so like, like, I'm a jerk for how I'm judging you right now. You sound like a guy with schemes. And I was waiting for you to say, I've got money in crypto and I got a closet full of Beanie Babies also. Like, you sound like a guy who's like, no, listen though, listen, listen. Like that guy.

No, I'm very, like I said before, I follow you guys and I'm very by the book.

Okay. So I was wrong in my judgment and I will apologize in front of America. I was wrong there. Okay.

Yeah, it's okay.

So if we're doing it by the book, you guys are investing 15% of your household income. And we're funding the retirement accounts first. If we've run out of options there, then we can move to non-retirement. That's $67,000 a year, correct?

Mm-hmm. Yeah.

So beyond that, any extra money, let's put some in the kids' 529s, might be a couple hundred bucks a month. Then beyond that, let's put any extra toward the mortgage. And I would count that windfall of the $100,000 towards that. And maybe in the future you guys get solar, but who knows how long you're gonna live there?

Yeah.

Because you're not getting all that money back out of the house when you move. Solar's not going to ROI like that. So that's the other factor.

That's what you think, George. If the grid goes down, it's going to be so much more valuable.

It takes a long time to ROI on solar.

Yeah.

Even when you pay cash.

We've been seeing about 10 or 11 years. And so—

So you might just say, hey, we don't know how long we're going to be in this house. I don't know if I did a breakeven analysis. I don't know if it's going to make sense. So right now we're just focused on paying off the mortgage.

Wait, hold on. I, I got, I wanna hear something you just said. What'd you say about 10 or 11 years, Paul?

That's the break-even for, um, the solar.

Oh, solar.

Okay.

Okay.

You put 90 in, you got it back out through savings, and now every dollar after that, you're, you're sort of making the money.

You guys are reading the wrong Reddit threads. Y'all don't understand what's actually going on out there.

You didn't listen to the guy who was selling the solar, John.

He said it.

You guys need to listen to Darker Podcast, man.

So for that reason, Paul, I would just say, hey, I appreciate it. And you might just straight up tell 'em, hey, we're going to use this on the mortgage for these reasons. We love the idea of solar.

Yeah.

But right now it just doesn't make sense for our family and our goals.

I, I'm gonna disagree with, with, with, uh, George on this.

John's doing solar.

I would take the gift for what it was intended unless, and here's the big unless, if you could sit down with your father-in-law and your mother-in-law and say, look, I've got this money in a brokerage account with this $100 grand, I can pay my mortgage off.

Yeah, that's not a bad idea.

And if, if I gave you $100 grand and I, if I gave my daughter and her husband $100 grand, 'cause I wanted them to get solar panels, 'cause I never wanted them to have electric bill again. If I did that and they sat down and said, we are so grateful for this gift, but we could be completely 100% mortgage debt-free, then I would be like, dude, okay, I, I'm in on that. I'm in on that. And that's only if there's no relational strings to this deal.

That's the part we just can't know until we do it. I kind of like the excitement of it, of them using it toward the mortgage and then just see how Thanksgiving goes.

I just like having electricity when it all goes down.

It's almost annual enrollment time, and you wish you could save money on healthcare costs, but every year it's the same story. Premiums go up again, and yet you can't even control your choice of doctors. CHM is not insurance. It's a health cost-sharing ministry where members literally share each other's medical bills instead of paying into a big uncaring system. CHM programs start at just $115 a month, and while insurance premiums keep climbing, CHM isn't raising their prices this year. And you're not locked into an enrollment window either, so you can sign up right now before you watch your premiums jump again. Y'all, Ramsey has trusted CHM for over 15 years because their mission is simple: Christians helping Christians cover their medical bills. Visit chministries.org/budget and use promo code Ramsey for 50% credit towards your first month's membership. chministries.org/budget or click the link in the description.

Our question of the day is brought to you by Ask Ramsey, your free AI money tool that provides personalized money answers based on Ramsey principles. Visit ramseysolutions.com/askramsey to check it out.

All right, today's question comes from Robin in the great state of Texas. Robin asks, what's the best way to show our 4 adult children how to become millionaires? They're all independent, work, and they have their own homes. I sent them a link to the Ramsey Investment Calculator, but I don't know if they have tried it yet. Okay. When they visit us for Thanksgiving, I thought I could demonstrate the calculator for them and show how they can become millionaires by retirement. I've been accused of being too intrusive about their finances. Is there a better way to bring up this topic?

Woof.

That's an interesting one. I mean, as much as I love that calculator, I have not sent it unsolicited.

I know. I just— you didn't— y'all couldn't hear this, but George was whispering, I wish this was my mom.

I truly— I mean, that— she's a great mom. Clearly she wants a good thing, and she's going about it in a way that is off-putting to them.

Yes.

Because they said, Mom, we didn't ask you for financial advice. Uh, pre— we just helped you fix your Wi-Fi and get back into your Netflix account, and now you're telling us how we can retire millionaires. So there's, there's one issue is that it's unsolicited. That's some of the hardest advice to give.

Well, if I back all the way out of this, I got to make some suppositions here because Robin's not on the phone with us. But if you're the kind of mom that's going to take time during Thanksgiving with your adult kids who don't live with you when they come to have a meal, and you're going to pull a sheet down in the living room and be like, let me show you this.

I've got a presentation.

I got a presentation for you, how you too can be I can— my guess is they've lived with this their whole life. And so yet again, you're coming to them saying, you should be, and you should be, and y'all need to, and why aren't y'all? And look, look, I can prove it, I can prove it, I can prove it. And what the data says, um, there's some great research on this, that if somebody is convicted about a thing and they don't like you and you come at them with facts, it weirdly actually emboldens their conviction in the wrong thing, right? So to me, the path here is show it to 'em. Be somebody that they would feel comfortable sitting down and talking about money with. And, um, versus trying to continually up the ante and force feed 'em this information. Or to put another way, when it comes to my friends or family, and I've learned this the hard way, cuz dude, I was the worst. I only answer questions that I'm asked, and people know what I do for a living. They, they like— I only answer questions that are asked because I've ruined too many dinner parties.

I've made family events too uncomfortable.

You try to interject.

Oh God, I was the dude. I was the worst. Like, oh yeah, well, y'all all need to be, man. Um, but I, I've, I've had way more impact and my relationships have gotten deeper by just keeping my stupid mouth shut. And when somebody asks, they know I'm gonna tell 'em the truth. I'll, I'll, I'll tell you what I think, but That to me seems like the path here. And Robin, it sounds like your heart and spirit are great. Sounds like they're awesome.

Yeah.

But the point Jon's making, create an environment where they actually just naturally want to share and ask these questions. And that might start with you sharing your own story and asking questions, but just straight up telling 'em, hey, you should go do this thing. I think that's where it's going south.

Or here's what would be more convicting to me, more so than a spreadsheet. is somebody sitting down and saying, hey, I want to tell you what my life feels like at 60, 55, 60, 65, however old Robin is. I don't have any bills. I don't have any payments. And I'm watching my friends struggle with their knee replacements. I'm watching my friends struggle with job layoffs. I'm watching my friends struggle with the adoption of AI. And I want you to know I've got peace. And so if you're ever interested in that, I would love to pass it along to you. Give me a embodied experience, not just a bunch of numbers.

And part of that might be, hey, I want to give to the kids' college funds for all my kids. I want to— every grandkid's going to get $500 in their 529 plan at Christmas. You show that example and now they want to follow.

Here's what you get to do with like, yeah, because that, that like the finish line there, I want to be a millionaire.

They may not care. That's not a goal they might have.

Not for them.

Yeah.

Yeah, it's a good question, a good discussion, Robin, and I think your heart is in the right place. Wish you the best with that. Rebecca is in Houston, Texas, up next. Rebecca, welcome to the show. What's up?

Hi, hi there. Thank you so much for making time for me. Um, my question is, I feel like, just kind of dumb.

Uh, have you met me and George?

No dumb questions, only dumb answers.

We promise we're the dumbest people on this call. You're good, you're good.

Okay, well, just wait. Okay, so back in 2022, I stopped paying all my credit cards. I haven't looked into it until right now. I think one of them was charged off to just zero. I don't know what that means.

Okay.

So my question was, I don't know what to do. And for a long time I thought I'll just do Chapter 7, but I don't know.

How much do you owe?

It's just $17,000.

How much do you make?

Um, it's, um, hard to say because I do freelance work, so it ranges from, let's say—

What'd you report on your taxes last year?

Um, like $35,000.

Okay.

Something like that.

Can I challenge a word you used? It's my trigger word. Just. It's just $17,000.

Okay.

I want you to feel like, I'm $17,000 in debt and I haven't even looked at it in 4 years and it's in collections and I'm getting mail, people are coming after me for this money. I want I want you to feel some urgency versus, eh, I might start looking into it. Not because I care about the credit card companies, but I care about Rebecca. And I think you have that same lack of urgency towards life, I'm guessing.

Yeah, that's definitely what happened there.

So what happened during this phase?

It happened in 2020. I just kind of stopped caring about a lot of things, including—

So why do you care now?

Um, looking into the future, I might need my credit maybe in 2 years.

So for what?

I've been buying everything cash. I suppose buying land or a home or something like that.

Are you single?

I am dating my boyfriend, but we are not married.

Okay.

So your goal is to buy land or buy a home one day?

Yeah. Ideally, I wanted obviously to be with someone that could just Do it and I tag along, you know, like a man that has enough money.

Oh, okay. Like a sugar daddy situation where you're just along for the ride. They fund your life. That's what you said.

Well, I didn't mean it like that. I just meant like, I hope that they had their life together, which I mean, he does, but—

All of the things you've told me, Rebecca, and I think this is what George is getting to, all the things you told me are that you have this kind of vague sense of how you kind of hope things might work out.

Yeah, for sure.

And what I want you to do is get a crystal clear, like 4K picture of what you want your life to be, where you want to live, what do you want to be doing when you wake up in the morning? What do you want the evenings to feel like? And reverse engineer that picture and go get it.

Okay.

Because I mean, George and I, we've spent years sitting with people having these conversations. I'm promising you right now that at the lack of intentionality with which you're approaching your money, your relationship, your home maybe, or land or something, and I hope that you're going to end up in a place you don't want to be. Or you're going to end up saying what I think is one of the most dreaded statements in the English language. This is just the way this is going to be.

Yeah.

I want to give you agency. to stand up and fight for your life.

Okay.

Because it's yours. You get what I'm saying?

Mm-hmm.

There's a Zig Ziglar quote I love. He said, if you aim at nothing, you'll hit it every time. And currently our aim is pretty loose. It's sort of just toward the sky. And so here's some homework for you that will help you crystallize this. Like John said, number 1, jump onto this website, annualcreditreport.com, and pull your credit report from all 3 bureaus. That is the best way to get a clear picture on how much debt is owed, what is out there, what's in collections. Then you can begin to make a plan.

Okay.

And the plan's going to be what debts are currently out there that aren't in collections? Okay, let's make sure we're current on those and work on a plan to attack those. Then all the ones that have been charged off that are in collections, let's make a plan to settle those and come up with a lump sum that we can throw at it. Let's say you owe 7 grand on one of the cards and you go, hey, I got 3 grand in cash. Will you take that and call it paid in full? And don't give them direct access to your checking account. So that's the process to take to actually get out of this mess. But I don't want you to do all of this just to up your credit score. I want you to do it because you're done lacking intentionality in your life and you wanna start controlling it. You wanna start happening to your life instead of it happening to you. Hang on the line. I'm gonna send you a copy of my book, Breaking Free from Broke. I hope you and your boyfriend Have your friend read this thing and start making plans for the future that are crystal clear.

Welcome back to The Ramsey Show in the Fairwinds Credit Union studio. I'm George Co-host is John Delony. We're taking your calls at 888-825-5225. Michael is up next in New York City. What's going on, Michael?

Hey, John and George, thanks for taking my call.

Absolutely.

What's up, man?

Hey, so I just got to give you a little, uh, background.

Um, so I got married last year. Um, my wife is from out of state. Uh, she has a property there. And she's also a cosigner on a family member's loans, her mom's mortgage, sorry, for her mom's house. We got married, came to my state. We have a baby on the way and I'd like to purchase property, but I don't want to be on the hook for 3 mortgages. So I didn't know if there was a way to separate those mortgages from each other. She has 2 and then I have mine, if that makes sense.

I'm confused why we're keeping all these properties.

I am too, and we've talked about it, but, uh, they don't seem to be going anywhere.

So your mom— her mom lives in a different city and your wife is on that mortgage and she's going to stay on it?

Correct.

Okay. And then you currently have a mortgage?

I do not. Um, she has a property that she bought prior to us getting married that is currently being rented out out of state, uh, in Rhode Island.

And you guys are definitely keeping that?

Uh, I don't want to.

She wants to.

It's her first house. I think there's kind of an emotional attachment there.

It's not a first kiss. It's just a house. I mean, we're going to be long-distance landlords by default.

Correct.

Yeah.

So here's the thing. If y'all are already married.

Yes.

All right. So you've signed up for this. I would not, as a husband or as a wife, I would not engage in another mortgage while this mess is going on.

Okay.

Because— and, and George, correct me if I'm wrong, you know this way better than me— if she is just on the deed of her mom's house, that's one thing. If she co-signed for the mortgage, she's on the hook, brother.

Right.

And if she had to co-sign, I mean, mom couldn't afford this house, right? Which means she can't refinance out of it because mom can't afford it on her own.

So either they have to sell that house and mom has to be realistic about her financial situation, or, um, she's gonna have to be prepared when mom can't make the payments that she's gonna have to cover the payments.

I got you. So I mean, it's kind of like at a standstill, I guess. I would have to wait until that changes to—

Well, it's just, it's, I mean, think about the You, you can do whatever you want. You're a grown man. Okay. I, I'm my, the metric I use in my home is my wife and I solve for peace.

Mm-hmm.

And peace for me is having a whole bunch of guitars and hunting gear that does not bring my wife peace. And so there's gonna be times we, um, we like take one for the team, right? And that's, that's all well and good. This is a big deal. And what I don't want you to do is to think I had this dream of buying a house. And so I can just do away with math. Mm-hmm. Because you're gonna have a very stressed out wife living in your, in the home that y'all owe, owe a mortgage on.

Yeah.

You get what I'm saying?

Yeah. Yeah.

No, I, I hear you.

And so she, if she's drawing a line and saying that house is mine, not ours, it's mine. It will always be mine. I will never sell it. Okay. And you choose to live in that. You chose to marry her. You chose to be a part of that. Okay, cool. That's a choice you made. So any other anger, frustration, resentment you choose to have towards that decision you made is a choice for you to be miserable.

Cool.

Then you get to say, moving forward, I'm not comfortable engaging in a third mortgage with one and/or both of us in this house. And so we're going to rent.

Right.

And again, I want you to own that choice.

Is her mom currently paying the mortgage on her own?

She is because it's so low, the mortgage rate. I think it was during COVID time where the interest rates were very low.

You're saying the payment is low?

The payment, yes.

Sorry.

So why couldn't she qualify on her own with her income?

I think she got a low interest rate because my wife cosigned. If she didn't cosign, I don't think she would have the same interest rate.

Okay. Well, my fear is mom can't pay for some reason. There's vacancy or the tenant stops paying in the other home. And now there's real stress in this marriage because I'm guessing at some point your money's combined.

That's the plan.

So you're kind of on the hook for these other mortgages, even if your name isn't on it.

Right.

If it's our income. So that's the part I'm not sure your wife is seeing clearly, is that you're getting dragged into this mess.

What is—

what's her net profit on the property in Rhode Island each month?

Um, I'm not sure each month.

Um, all right, here's my bigger concern for you because she's not on the phone. You're already married and you're saying like, yeah, I hope to get here one day. Like, I want you to know everything about the household finances, and I want your wife to know everything about the household finances. Will she not participate with you? Does she have her life and she wants you to have yours, and then y'all can have this little shared sliver in the middle of this Venn diagram?

I mean, and, and that's how it's been playing out because of this, right, with the property and just other things. That's kind of how it's been playing out.

So did she tell you before you guys got married, hey, this is my house, so if I ever sell it, it's my money? What's that conversation been like?

No, no, it wasn't. I mean, I think there was more of a willingness to be open to it, um, to selling it, but after we got married, we spoke about it, um, it kind of changed.

Well, I think you guys, uh, you need to come to Jesus conversation, not just about mortgages and real estate, but just about our values with money as a family.

And combining our lives together. Are we going to be 2 people who are roommates who run side by side and Venmo each other for dinner? Or are we going to be a couple who builds this amazing thing together? We co-create this world.

Shared goals, shared wealth, shared vision.

Shared laughter, shared warmth, shared silliness, shared grief when one of your family members passes away. It's all about doing this thing called marriage together. And I've seen people, Start to have what I call proxy wars about, well, that's mine and that's this and I need my account. And I've seen that, that kind of ice cube melt when somebody says, I want to do life with you. And that would be the place to start. People get stuck in the spreadsheets and they get stuck in the mine and yours. And what really people want to know is, I want to connect with you.

Mm-hmm.

That, that would be my move if I was in your case, brother. But I, I, I can't in good faith, and George, you might disagree with me, I, I could— I can't tell you to go get another mortgage with the opportunity that your household, not you, not you specifically, but your household would be responsible for the potential of 3 mortgages at the same time. Um, that, that would, that would not bring me peace in my home. Sorry, sorry, my man.

There's going to be a conversation. I hope out of that the byproduct is, you know what, We do want simplicity. We do want some unity here. And then the byproduct is, all right, we gotta sell one or both of these properties.

And ask your wife this question. Tell me about what the home means to you. Tell me about your reluctance to sell it. I wanna learn more about you. I wanna get to know you as my wife. And you might uncover a deeper story there.

People ask me all the time, George, what's your number one money-saving hack? I'm glad you asked. Nothing makes me happier than helping another frugal friend. So here's the hack. Get on a budget. Seriously, how are you supposed to save money if you don't know how much you're spending in the first place? And that's what makes the EveryDollar budgeting app a game changer. With EveryDollar, you'll get a clear picture of your spending, and from there, it's easy to see where you can get more intentional, cut back, and save more money. How much money are we talking? Well, the average EveryDollar budgeter frees up $395 in their very first budget. And if you ask me, I think you're way above average. So why are you still listening to me? Go download EveryDollar for free and start saving more money right now. Everyone needs insurance, but it can be hard trying to find pros who aren't just looking to make a buck and agents who know their stuff. Ramsey Trusted Insurance Pros are vetted and coached to make sure they're market experts who have your best interests at heart. So check it out, go to ramseysolutions.com/coverage to find the type of insurance you're looking for and connect with a Ramsey Trusted Agent.

Kelly is in Danbury, Connecticut. What's going on, Kelly?

Hi guys. Hey, um, I was one— I'm between Baby Step 3 and 4, and I was wondering if I should I would like to pause Baby Step 4 to update my home.

Wow.

Are these needed updates or are these just kind of wants?

I will say some of them are needed in the very near future and a lot of wants because my home hasn't been updated since the '80s, I think. Wow.

Okay.

What is this going to cost?

Hold on.

You just said the '80s. That's my childhood. You just said the '80s like it was 1,000 years ago. I mean, I know there's like cave dwelling drawings on the wall or something. It hasn't been touched since, I don't know, God, the '80s.

It's got an old wood stove that we make all the food.

Exactly.

Are you married?

I am.

What's your household income?

It's about $200,000.

Fantastic. And where are you guys at with your emergency fund? Is it fully funded yet?

It's, I will say it's about 4 months.

Okay.

And now you're saying, hey, before we move on to Baby Step 4 and invest 15%, should we instead use that cash to cash flow these home renovations?

Yes.

What does it look like to invest 15% and cash flow them? How, how, How much does that slow you down?

It would, it would take a long time to do the updates that we would like.

How much is this going to cost total?

I haven't gotten exact numbers, but I'm estimating maybe $20,000 to $30,000.

To begin with.

And you guys make $200,000 with no debt.

To begin with. That was good.

I'm just wondering, even if you did 15%, why would this take years to save up $20,000?

Um, I think that we are enjoying the extra money right now.

Aha.

So that's why we've been pausing, pausing Baby Step 4.

But you'd rather sacrifice retirement than the current enjoyment to do these renovations?

It feels like we haven't— we've put it on hold for so long, and it just feels like now would seem like a good time.

What was the— how much debt did you pay off?

Um, throughout the years, probably $40,000.

Okay. And how old are you now?

45.

45.

Okay.

So I 1,000% understand your frustration. I want you to consider the fun y'all really want to be having right now. Y'all had it in bits and pieces. You dripped it out over a period of years.

Yes.

And if you think of it in that way, my concern is that 65-year-old you looking back at 45-year-old you is going to do the exact same thing. Is going to choose a kitchen now, which by the way, a new kitchen is amazing and awesome and great, and I hope you get one, over 65-year-old you being able to pay your medical bills. You get what I'm saying?

Yeah. Yeah. That's my concern.

And y'all, you and your spouse have a history of let's just do it. Let's do whatever the thing is, whether it's going out to eat, going on vacation, whatever. Let's just buy the car. Let's just do it now. And we'll pay for it later. And now you're about to, that's, that problem is magnifying too. Let's just spend, and by the way, in like a contractor can't sneeze at your house for $20,000. Like the rug will cost, not, well, it shouldn't cost $20,000 unless you're in Georgia's house. But like the, like you're gonna spend 30, 40, 50 grand on this reno when you're all said and done, if not more. I want you to have done that and taken care of 65-year-old you and your husband. In the process. And it does, it slows it way down, and that stinks, man.

But you guys make an incredible income. So what are your monthly household expenses to cover everything?

Oh, I was afraid you were gonna ask that, George. Um, I have— we haven't been very good at budgeting. Like, we, we used to be super good when we were paying down debt, but now lately, um, it's just— I— we haven't been.

So if I looked at your, your bank account, I would show— it would show that you guys have been spending like 20, 30% more than 4 without really paying attention.

Probably.

Because I'm wondering if you invested 15%, even after taxes and healthcare premiums, could you take home about 10 grand a month? That's my math.

So, so, um, can you say that again?

After, if you invest 15% of your income, your take-home pay would be around 10 grand a month. Does that sound about right?

Um, so 25% of our income would be— see, I, you know what, I don't know the numbers.

Well, that's what I want, because can I show you that? I'll just give you some napkin math here to help you out. If you guys take home $10,000 a month and your monthly expenses are $5,000, that means you could set aside $5,000 a month into a high-yield savings account and have these renovations paid for. In less than 6 months?

We probably could.

You just told me earlier it's gonna take you years to do these renovations.

We're gonna be living like this forever. We're always gonna have cave drawings on our walls.

Have you ever heard the phrase, Kelly, if they wanted to, they would?

Mm-hmm.

I think if you wanted to invest 15%, you would. If you wanted to cash flow these renovations, you would. Something is holding you guys back. Where you're going, you know what? That's just not a priority for us right now. And until you make it a priority, it's just simply not gonna happen.

And let me, let me give you some peace here. Like the intensity of baby steps 1, 2, and 3, it's hard, man. And over a long enough period of time, I'll even go as far as say it's a nightmare. It's really tough. And you're not crazy or it's not something wrong with you that y'all cross that finish line. And you've seen marathon runners do this on ESPN, like on the clips, they just fall across the finish line and they lay on the And they just roll around for a while. That's what y'all been doing. It's fine. But now it's time to get up and be intentional.

Yeah.

It doesn't mean you have to go caustic like you were. That just means we gotta be thoughtful about where we're spending money and what we're spending it on. You'll make a great income, but not that much. If you make $2 million, all right, y'all can be silly, but y'all make $200 grand, which is amazing and awesome. And y'all have paid off all this debt. Amazing and awesome. Now we wanna do some, like some, some big kid stuff. We wanna renovate this whole house and make it like ours. That's awesome. I love that. Um, just don't forget about 65-year-old you in the process. And for you, that doesn't mean working Saturdays and Sundays. It just means being intentional.

Yeah.

This, what I'm so excited about is there's so much hope here based on your income and the fact that you guys don't have any debt payments. So what's your mortgage payment?

$2,000.

Amazing. It's less than 25% of your take-home pay. So let's say you bring home $10,000, $2,000 is gone for the mortgage. You still have $8,000 to cover everything else. But currently, if that sits in checking, it's going to disappear, isn't it?

Yes, it will.

So instead, let's make a plan before the month begins with your husband and say, listen, we're allocating $5,000, which means we have $5,000 to do the rest of life. $2,000 on the mortgage, $3,000 to cover food, utilities, all that good stuff. Could you do that?

Yeah, we could do that.

Open a high-yield savings account today. Go to fairwinds.com and open a high-yield savings account with them and move. Is that their address?

fairwinds.org/ramsey.

I was wrong there. fairwinds.org/ramsey and open up a high-yield savings account and just commit. When that check deposits, we're moving $5,000 over, we're paying our mortgage, and then we're gonna live off the rest. Y'all could for sure do that.

So the priority is we're gonna set aside 15%. You don't even see that. It disappears before it hits your paycheck. That's why I love a retirement plan through an employer. Then the first $5,000 we're gonna allocate to savings because we know we have enough to cover the bills. The bills have to get paid. Then if there's money left over to get the pedicures or to go out to eat, great. And the budget will tell you exactly what could be if you followed the plan. So hang on the line. I'm gonna gift you guys EveryDollar Premium, not because you can't afford it, because I think this is the kick you need to finally pay attention to this amazing income you have and get it all done.

done.

Future you will be thankful, current you will be thankful, and past you will go, wow, look at you, Kelly, look at you go.

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 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 ramsaysolutions.com and try Ask Ramsey today. That's RamseySolutions.com.

If this show helped you think differently about money, share with somebody else. Let us know your thoughts in the comments. All of that is super helpful in spreading the word and helping our team know what you like. Tim is in Chicago up next. Tim, what's going on?

Hi, John and George. Uh, my wife and I are looking for you to settle a little bit of a debate here.

Yes, we love doing this.

Okay, I'm on your wife's side.

I'm on your side. Let's do this.

Uh-oh.

Well, so I'm 29 and my wife and I were already in the live and give like no one else phase, and we're so blessed. Um, so we're doing some planning around, uh, estate and future. And we're debating, one, how much money to give our kids. And then secondly, do we make our kids sign a prenup to, one, protect the assets? But that's one side of the equation. And then the other is, do we let them make that decision for their own marriage and sort of the leave and cleave principle?

How much wealth are we talking here?

Uh, it's probably gonna get up there. We already are at a couple million dollar net worth, and I mean, projections It's $50 million 30 years down the road. But yeah, we're so blessed.

Way to go. Do you guys have kids currently?

Yeah, we do.

How old are they?

They're very young, like 1, 3, and 5. So 3 of them.

Great.

So we're making decisions that are like 20 years out currently, at least.

Right. But if we establish an irrevocable trust, I mean, that's when we kind of have to make some decisions now.

What's your goal with the irrevocable trust? For tax savings?

That, and I would rather pass down values, right? Biblical values and values of hard work. That sort of, uh, is how we got here today, um, to our kids rather than money necessarily, right?

Okay.

Do you want to help them with their adult life, like launch gifts, a car, wedding down payment, or even a home in cash?

Yeah, all those. Yep. And the Ramsey Principles. Yeah.

Cool.

All of the above.

It feels to me like y'all are trying to solve— one of my working definitions, it's not a clinical one. One of my working definitions of anxiety is projecting out future issues and dragging them way into the present to solve them today. I'm more concerned, and I don't remember, it's been a minute since I did I sat down with my estate attorney, did the whole trust thing. Can you not change this once you're in it?

You can for a living trust, a revocable one, but not an irrevocable one. So that's where the dilemma is and why this is at the forefront.

I don't see a need for an irrevocable trust at this stage.

Yeah.

I'm not smart enough on this, so teach me. Why are you choosing an irrevocable trust?

To basically put money into it and grow. And there's IRS limits on the max life lifetime gift that you can give your kids before you get taxed heavily. So it's partially from that standpoint.

Currently it's $30 million, if you remember.

Right. Yep. And, uh, I'm trying to be wise, you know, 20 years down the road and establish that. And, um, the post— yeah, or the prenup discussion came up. And, uh, Ramsey, listening to your show, you always advocate for them, um, when it's You're in the circumstance, but I'm debating if it's a future circumstance, right? If we pass that on to our kids.

Man, we take a different stance on some of these things. And for instance, she's not here to say this story, so I'm going to just do partial what she's said on air. But Dave putting Rachel Cruz, his daughter Rachel, in the will, didn't make her sign a prenup, that Winston is cut out. You get what I'm saying?

Yeah, I see what you're saying.

And so the, the, like, because Dave doesn't want that, his money to divide a brand new marriage. And so it was a matter of bringing the, the spouses into this conversation, not making sure that the kid is protected in case the spouse screws something up. Which means the investment is gonna have to be heavily relational. Right?

Right. That's what I'm getting at. And my wife is on the other side a little bit here.

And, and I'll also say, uh, James Sexton, the, the, the New York, uh, divorce attorney, he changed my personal mind on prenups through this one statement. Everyone has a prenup. Every single person who gets married has one, and it's whatever the government in your community or state says it is. And so do you want one or do you want the, do you want to have one that you craft when y'all still like each other? Or do you want the government to decide plus a couple of hired gun attorneys to decide down the road? That, that was a, that, that made me think through something, through, think, think through things differently. Um, and so yeah, if you're, if the potential beneficiary, I hope you live a long, you and your wife live a long, long life. The potential beneficiary of your kids when they get married in 20 years, Um, I hope it's years later that— and they've grown together and they have a family and whatever. You get what I'm saying?

Yep, that's exactly what we want it to be, a blessing for generations to come.

Okay, and you can do that with a trust that isn't irrevocable, and you can have it staggered payouts based on milestones.

That's the way mine is.

Based on working full-time, and when they're 35 they get 25%, when they're 45 they get another 25%. So you can do it in all kinds of ways. But I personally wouldn't have that conversation until we're crossing the bridge when they're older. And even then, I would not set up an irrevocable trust unless you have a real good reason of why you must have one right now.

Okay.

Because it's irreversible.

Right.

Yeah.

So revocable living trust allows you to do a whole lot. And yes, you're not moving money out of your estate by doing that like an irrevocable, but I would say it's wise to just hold off. You guys have done so well. I can tell you're very future thinking, and I'm the same exact way where I'm looking out 20 years from now trying to make decisions. But I found that I just already have too much anxiety about the present to be worrying about 20 years from now problems that might be.

And I'll tell you, I am not a huge fan of legislating from the grave for me, which means I have to have an incredible executor and I've got to be really clear about the staggered payouts and what that money's going to be used for. But man, I just don't know what the world's going to look like in 20 years. I don't know what the world's going to look like in 40 years. You know what I mean?

What if they all marry billionaires?

Yeah. And they're like, oh, how cute. Tim's little pittance. Right? Who knows?

Do you have a will in place currently?

That's what we're working on right now. Hence why these questions are coming up.

Okay.

What's your estate attorney saying?

They can say it's sort of up to us. And in our state, putting it into a trust protects it from ex-spouses, right? But, and it's only the income that could be considered in alimony. So it's, it's a pretty minimal risk, but I just don't want someone coming into our family getting served legal paperwork to join our family. I want to give them a big hug, take them fishing, and welcome them to our family.

There's some, there's some truth to that and some, some Like, you know, there's some naivete there, right? Things get messy, right? And I think if you have a $50 million estate, having like more than fishing conversations is important, right? Um, this, the Dave's children, the spouses are all involved in the annual conversation to discuss the estate. Like, that's important, I think, cuz they're, they're gonna be a part of the, the, the entire family. I think the bigger question you and your wife need to wrestle with, not just now, but over the next 20 years, is anytime I'm going to mandate something from my kids in exchange for dot, dot, dot, I'm already shifting the nature of our relationship. You get what I'm saying?

Right. And that's ruling from the grave. It's kind of a conditional gift rather than an unconditional gift in a way.

It's less— it's an ethos more than it is a principle. Does that make sense?

Yeah. Yeah, that makes sense.

And so I, I— there are certain things, and my kids are younger, my kids are 10 and 16. There are things I say, you have to do this if you want this. You get to choose.

Right.

And so I, I— but I like, man, I like to use that as sparingly as I can. I want to walk alongside and model this, what this is going to look like. through relationship and through investment in time and boredom and frustration and conversations over a long arc, um, then I'll have so much more peace handing over my wealth when I pass away.

I wouldn't worry too much about it. Get the basics in place. Get that will done, your healthcare directive, your financial power of attorney, guardian. Get all that chosen. We can worry about those other problems way on later down the road.

I finally get to announce that my brand new book, Building the Marriage You Want, is available for pre-order. If you and your spouse have been feeling like roommates lately, like maybe this thing called our marriage has just run its course, Like, this is just the way marriage is. I get it. This book is me sitting at the table with you and you and your spouse, helping you both take the next right step towards the marriage you both want. Marriage is still worth it. Order now for $24.99 and get over $100 in preorder bonus items at ramseysolutions.com/store.

Our scripture of the day, Philippians 2:3-4. Do nothing out of selfish ambition or vain conceit. Rather, in humility, value others above yourselves, not looking to your own interests, but each of you to the interests of others. Meatloaf, John once said, I know you're looking for a ruby in a mountain of rocks, but there ain't no Coupe DeVille at the bottom of a Cracker Jack box.

I'll tell you, RIP, of all of the adventures I've had in this crazy little job I have, hanging out with Meatloaf for an hour one night, that'll do it.

Takes the cake.

I'll remember that forever.

Wow.

Forever.

Yeah, I was really sad to see him go, man. He was a character. He was a— it was a, it was a great time.

That quote is a great example of that character. Wonderful. Nico is in Raleigh, North Carolina. What's going on, Nico?

Hey, how you guys doing today? Great.

How can we help?

Hey, so I'm a 21-year-old over-the-road truck driver and, um, I'm about $30,000 in debt. $23,000 is my car, uh, $6,000 is my CDL tuition, uh, My studio school, and I have about like $2,000 in credit card debt. I should be debt-free at the end of this year. So I live with my mom when I'm not working, so I don't have that much expenses other than my car right now. So I was just wondering, what should I do to save up for a house? Should I put it in index funds, or should I put it in aggressive mutual funds over the course of 5 to 6 years when I'm ready to buy a house in full?

Man, you're really thinking ahead here. How are you gonna pay off $30 grand in 2 months?

So I make $1,750 a week, and so I was gonna pay off my car. I have $10,000 saved. I was gonna put— I was gonna just buy it in full and then just sell that for about $20,000 and then put the rest of my debt And keep the rest for my emergency fund.

So you're gonna sell your car?

Yeah, I don't use it right now.

And you don't need anything to get around?

No, I don't.

So that gets rid of the car debt. What's the car worth?

It's worth, uh, I'd probably— I think on CarMax it was $19,000.

Okay, so you're about $4,000 underwater.

Yeah, $4,000 underwater.

If you sold it to CarMax. I would do your due diligence to see where you can get the most money for it. It might be private party. And I would also get a bid from all those, the big guys like Carvana, CarMax, local dealership, all that.

Yeah.

You might be able to get pretty close to even Steven on that one.

Because my guess is private party, you could sell it for $23,000 or $25,000.

Yeah.

But then you're saying future income plus the rest of the savings, you can knock out the rest of the debt by Christmas.

Yeah.

Then we need an emergency fund of 3 to 6 months of expenses. I know you have very little expenses now, But I would still have you save a minimum of 10 grand before you save up a dime for a house down payment.

That's the plan. Yep.

Okay. So how much are you gonna save for this house? What's the goal?

Uh, I'd probably wanna save 400 grand.

Whoa.

For a down payment?

No, no, no. Not for a down payment. Just to buy it in full.

I don't wanna, I don't wanna borrow.

Oh, you wanna? Okay. So this is, are we talking like 10 years out?

I'm thinking 5 to 6 years. I make around $80 grand right now, and I was thinking about just stashing around $65,000 to $70,000 a year because I don't need that much to live on right now.

What about taxes? Are you saying that's your take-home pay?

That's—

well, $65,000 would be after taxes. Um, well, it kind of depends because I'm in the truck industry, so it makes— I make a little bit more than $17.50. Depends on the miles I get, but—

And the plan would be to live with mom until you're 27?

Yeah, well, I don't live— I live there now, but I'm only there once a month when I'm on home time, so it's not like I'm there a lot.

Okay. And you're gonna continue to do over the road for the foreseeable future?

Yes, exactly.

But 60 times 7 is what?

That'll get you there.

Yeah, I guess that's true. If you can, if you can live On an annual income of $5,000. That'd be pretty impressive, brother.

What happens—

I mean, I could do that.

I know.

What happens if you meet somebody?

Um, well, it's a little bit harder to meet somebody when you're over the road a lot, so that's not really in the cards for me right now.

So the plan is to stay single during this time and get you a nice old house for yourself?

Yeah, I was thinking that you'll be in one day a month.

Why, why buy a house if you're never gonna be home?

No, I was thinking about buying a house cuz I don't wanna be in the truck industry for 20 years. I would, I was thinking about doing it for 5 to 6 years, save up cash for a house and then buy it in cash. And then I'll probably just, uh, probably I want to go into sales in the future. That's, that's what, that's what my career want.

I want to go into sales. Crazy idea, Nico. Why not go into sales now?

Um, shout out George.

Uh, I never thought about that, but—

The cool thing about sales is you can just go do sales, and if you're good at it, you get to keep your job.

Yeah, exactly.

What do you want to sell?

Well, I was thinking about medical device sales. I know they make a lot of money, but it's hard to get into.

So you're gonna go from one job that you hated for the money to another job you hated for a little bit more money.

Well, I don't hate the job, but it's just, it makes me a lot of money now. And I was just thinking about spending all that money that I'm making now into a house, and then I can get a little bit riskier about my career once I have the house in full.

Well, I mean, you're just doing it backwards from how I would do it, which is find work you enjoy doing, then you'll make good money doing it, then you can get the house. Instead of save up like a maniac for 5 years, pay cash so that you can go do something you don't really enjoy, but then get more money for. I just, it just seems backwards to me.

I would love to see you, brother. And I know you've already invested in, in your CDL school and all that, but man, I would love to see you get really fired up about sales at 21 years old and go have some friends, go on some dates. Um, go experience relationships so that when you turn 30 and you're crushing it as a salesman, um, and you've found a special somebody to spend the rest of your life with, or you, and you got a gang of, of people in your life that are friends that like, you, you're talking about a full, a whole full life. And all the data I've looked at, man, like from that longitudinal study that Harvard put out over however many decades to just the, the marriage material I've been looking at over the last couple years. The thing that matters is relationships, man. And I'd hate to see you wake up after burning almost a decade in your mom's house with this single-focused obsession is I gotta get a house, gotta get a house so that I can get another job, start from the ground up in that new job at 27, 28, learn how to do that just so I can make some money so then I can start doing the things that are actually gonna make my life rich and full and good and whole.

Man, I, I just— I hate to see a young man just burn his 20s like this.

Okay, yeah, I get that.

So I think you have some great goals. I just want to have the right motives behind it and do it in the right order. So to answer your question, to make sure we at least hit that, if you're going to be— if this is a 5+ year goal, it's fine to invest that money in some index funds in a taxable brokerage account. But if this is gonna happen in less than 5 years, that's where I go, I might put it in a high-yield savings. Rates are great right now, and that way you're a little more flexible. But it sounds like this is a 5-plus-year goal, and there's nothing wrong with taking on a small mortgage and knocking it out, cuz it's a moving goalpost. That $400,000 house today, 6 years from now is probably gonna be $600,000. We don't know. So that's another piece of the puzzle to look at.

Or if it all comes down, George, maybe $100,000.

Let's see if we have another 2008. I'm not hedging my bets on that, but—

I'm not either.

Nico, I think you're a really sharp guy. You got a ton of drive. I just, I'm, I'm seeing like a younger version of myself and I just want to give you a hug and say, dude, do the thing now that you want to do. Now you can take risks. You're home once a month. You don't really have expenses. You have mom's place to fall back on. If you want to go into sales, just go into sales and try it. You might find out you hate sales. Because it sounds like the only reason you want to go into sales, because you found out you can make a lot of money, right?

Yeah.

So instead of taking all that time, just find the thing you want to do. And I'll send you a copy of our friend Ken's book, Find the Work You're Wired to Do. It comes with a Get Clear career assessment. Take that and just take a beat, take a step back and go, if money was no object, what would I do that would actually fill my cup and not just give me a big paycheck?

But in the meantime, be debt-free by Christmas.

Deal?

Yes, sir.

And then no more debt ever again after that?

Deal?

Yes, sir. That's the plan.

I'm proud of you, brother.

I got it.

I appreciate it, man.

You're a hard worker, brother. You're a hustler. It's good to talk to you.

Can't believe you got this stuff at 21. Took me way longer.

I'm still figuring out what he was talking about just now.

Way to go, Nico. Hey, that puts this hour of The Ramsey Show in the books. Remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace. Christ Jesus.